Will ChatGPT live up to the hype?

Tyler Cowen is making a big deal about ChatGPT and other similar sounding boards over at Marginal Revolution. I can see why now that I’ve tried it. Applied to my circumstances, it could have changed the trajectory of my adult life had I had access to its output thirty-odd years ago.

While still in my twenties it was hard to miss the observation that funds intended for the destitute were often siphoned off by intermediaries. The people at the top wanted to respond to a call to DO SOMETHING. (sometimes they were obliged to respond as in the lawsuits directed at banks for avoiding neighborhoods). But as someone who sat on the bank floor and disbursed money to the folks deemed responsible for the distribution, it was only a matter of time before a story of theft ricocheted back through the community.

I was reminded of stories from my childhood where gifts of equipment or food were made to foreign governments with the best of intentions. But the equipment was unable to be kept serviced and unusable tractors sat in fields where farmers tilled the earth with oxen. And unfettered dollars simply drifted away into this politician’s pocket or that one’s.

There must be an academic community, I thought, interested in these types of urban questions. Why poor neighborhoods stay poor despite all their various subsidies seemed like a pressing issue. I started perusing the urban studies sections of bookstores, but the selections were limited. It was on trips to progressive cities like Portland where Powell’s bookstore actually offered more than a few titles. It lived up to its moniker the largest independent bookstore.

Yet I still didn’t find what I was looking for because all these texts had a political bent to them. It goes something like this. Strong men/women ruin everything by building too much (sprawl), building too dense (greedy), and charging too much (gentrification). You can see the contradictions here. The lack of the (hopefully) now obvious premise that to get one thing you have to give on another. Choices are connected and results are not to be gained from fiction in our imaginations.

Freezeframe. Had I met a ChatGpt at this point I would have found Thomas Sowell much more quickly. It was a handful of years through distractions of work and young children before I stumbled upon his writing, I was in my thirties by then. His work encouraged and interested me in what I now know to be public choice. With Chat, I would have met Hayek and Mises and the slew of the Austrians within the year. Instead, it has taken twenty. Or maybe more. Time is a drifty thing.

I also would have figured out that the notion expressed here of a social value being an intrinsic part of price was a philosophical take and not an economic one. I had no time for philosophy as an undergrad because none of the writers wrote for an undergraduate audience. They were too difficult to read and rarely tied their thoughts to real examples. Had I had Chat I could have discussed this shortfall and become informed on the author’s references. With Chat all sorts of missing pieces could have been colored in.

All I’ve ever wanted to is to able to show that when the current politicians dump a whole bunch of the $18B surplus into North Minneapolis they will create more moral hazard than the public good. That the flow of dollars is only one part of a transaction and that social ties are the other. To ignore the very real choices of the intermediaries, whether they be the 501c3’s or the local politicians, flushing a whole bunch of cash through their channels without a marketplace connecting to the very real needs of disadvantaged people is hopelessly flawed.

James Buchanan got that. ChatCGT would have told me with a well-directed question or two.

As usual, Tyler is right. The AI tool eliminates geographic distances. No need to run to Portland to the big boy bookstore. No need to read volumes of philosophers you can’t follow. Just ask a question or two and the service will scan the material and report back. The interactive feature of Chat is much more powerful than a Google search where information is offered up with no context.

It was more than likely through Google or Amazon that I was introduced to Adam Smith’s The Theory of Moral Sentiments, a confirmation there were inklings long ago of the tie between markets and morals. Yet the notion that a decline in home values follows persistent crime, that a home in an outstanding school district will cost more, and all the other public good impacts on real estate, required some building blocks to explain. One missing piece to the puzzle (undoubtedly the most significant) is the divergent nature of work. For the ingroup, participants give in order to shore up. For the outgroup, participants request unfettered payment in order to gain and grow.

Two different types of work. One done for the public interest of your family, community, interest group, or passion. One done for a wage from your employer, investment earnings, a business. Two types of payment. One is connected through networks of reciprocity while the other is unfettered and free to flow. But just to make everything a little crazy- the two human actions do not occur in isolation but in unison. Sure there are some transactions we have with our children which are almost entirely personal. And there are transactions of financial instruments that are almost entirely pecuniary. But not.

Real estate is interesting because many interest groups are tied by proximity. So the sale of real estate is the perfect vehicle for analyzing the outcomes of human action in both the public and the private spheres. Even ChatGPT knows this. Check out yesterday’s post. It will thus be through the analysis of housing prices in relation to the efforts people invest in private and public functions in their neighborhoods which will tell how well the politicians are doing with all that public money.