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The Exile of an Economist

The Nobel Prize-winning economist Daron Acemoglu is being expelled from the technocratic elite by The Economist itself due to his excessive sympathies for the suffering of the Western working class:

It is worth remembering that Daron Acemoglu is no revolutionary in the classical sense, even within his own discipline. The first book of his to reach my shelves was not an essay but his 2009 textbook Introduction to Modern Economic Growth: a graduate text of formidable algebraic complexity that surveys the models of economic growth from a single vantage point, namely, neoclassical theory. This is the dominant theory in economics faculties, and other schools of thought have historically been ranged against it, such as the post-Keynesian and the Marxist, which are for that reason regarded as heterodox. Acemoglu belongs to the dominant school, and indeed he recently described debate about capitalism as “mindless.” In the worldview underlying his models, there are no relations of production; power enters as a category of bargaining strength and regulatory capture; and the view of institutions is thin and never structural. His concept of the working class is consequently not a Marxist one, but it leads to what he calls “working-class liberalism.”

Yet all this is exactly what makes him genuinely dangerous in the eyes of mainstream economists: Acemoglu reaches his “radical” conclusions from inside the profession and inside the mainstream. His entire academic output is a lucid and algebraically demanding reformulation of the neoclassical models of technical progress. And every step he has taken over the past twenty years, such as treating the division of income between capital and labor as endogenous to technical change, he has taken without drawing on the vast body of heterodox work that trod that path long before him. Acemoglu today holds a view of trade that would not seem strange to Marxist authors, and a view of income distribution that post-Keynesians such as Joan Robinson or Nicholas Kaldor would recognize. And we have already seen that his reading of certain aspects of nineteenth-century economic history has striking points of contact with Marxist historiography. The crucial point is that Acemoglu has arrived at conclusions very close to those of the post-Keynesian and even Marxist schools but through different concepts and methods. Mainstream economists cannot fault him for want of technical brilliance, which is amply established. But they are frightened by the political conclusions that follow from his deviation.

The maneuver had already been rehearsed with Joseph Stiglitz. The US economist received the Nobel Prize in 2001 for his contributions to neoclassical theory, in particular his analyses of asymmetric information, and during the 1990s he was known, among other things, for his critique of the hard version of ecological economics. All of this made him chief economist of the World Bank, one of the institutions charged with promoting the “Washington Consensus” among developing countries — that is, with imposing neoliberal policies. Before his term was up, Stiglitz left his post, and in 2002 he published Globalization and Its Discontents, in which he called much of neoliberal policy into question. It was a harsh diagnosis, and one that those of us who were then postgraduate students of international and development economics always found instructive: a neoclassical economist attacking the conclusions of his own old paradigm. As now, The Economist was the spearhead against what struck it as an inadmissible turn, remarking drily that Stiglitz could have written a good book about globalization, but perhaps next time, and conceding that he was a brilliant economist before proceeding to demolish his standing altogether. Nor was it the only example: Kenneth Rogoff, then director of research at the International Monetary Fund (the other neoliberal pillar of the international system), attacked Stiglitz fiercely and entrenched what became the settled view among mainstream economists that as a scholar Stiglitz was a genius with a wonderful mind, but as a politician he was far less impressive. It is the clearest precedent for The Economist’s article on Daron Acemoglu.

What we can expect over the coming years is a concerted effort, led by part of the mainstream community of which The Economist is merely the vanguard, to devalue Acemoglu’s reputation, not so much on technical grounds as on account of his political “eccentricities.” As we have seen, this is not the first case and probably will not be the last, but the underlying logic has been in place for a very long time. The aura of respectability within the mainstream economics community depends both on technical foundations (with a high degree of mathematical sophistication, which makes the work largely inaccessible to the general public) and on the “reasonableness” of one’s political conclusions. It is worth recalling that the Nobel Prize in economics is not really a Nobel Prize at all, since Alfred Nobel never envisaged such an award for economics. That such a prize exists today is the result of the interests of the Swedish central bank, which in 1968, amid a bitter confrontation with the Swedish Social Democrats (then pursuing their reformist road to socialism), needed to burnish the reputation of those who defended its own (conservative) political positions. The great Swedish economist Gunnar Myrdal received the prize in 1974; but his own reading of the episode was that, because he was a “radical” (his word), they made him share it with a “reactionary,” Friedrich Hayek. In 1977, Myrdal wrote a short article acknowledging that he had been wrong to accept it, that economics is not a science on a par with physics or the “hard” sciences and — take note — that the Nobel Prize in economics ought not to exist. What he was ultimately suggesting is that the award is heavily burdened with political values and principles.

All of the nonsense about Left and Right is irrelevant. Even economics, as a distinct science, is nothing more than a public relations pawn in the great battle between the predators and those who would protect the prey.

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The Failure was Predicted

And not merely by armchair military historians like me, but by the intelligence analysts who were reporting directly to the White House:

Days before going to war with Iran in February, President Trump summoned his intelligence chief to the Oval Office to ask whether a full-on assault was a good idea. Iran was at its weakest point in decades, senior aides and Israeli Prime Minister Benjamin Netanyahu told him, providing Trump the rare opportunity to dismantle Iran’s nuclear program and bolster his legacy as a peacemaker. The question was whether a large-scale attack would work and possibly topple the regime.

Then-Director of National Intelligence Tulsi Gabbard outlined assessments from America’s intelligence apparatus. According to people familiar with the meeting, she told Trump that killing Iran’s supreme leader would likely usher in a more hard-line regime open to acquiring nuclear weapons. Tehran would rush to close the Strait of Hormuz, destabilizing the global energy market. And it would strike U.S. forces and partners in the Middle East, prompting questions about American resolve and reliability with allies.

Trump ordered an attack that began on Feb. 28 and urged Iranians to overthrow their government. Nearly six months later, a conflict the president promised would be over within six weeks is continuing without a clear end in sight. Iran’s Islamic Revolutionary Guard Corps controls the country and fires on commercial ships in the strait. The regime led by Mojtaba Khamenei, the supreme leader who succeeded his slain father, shows no signs of capitulating.

That being said, I don’t think the historical consequences of the failure were adequately foreseen by the intelligence analysts. The situation is considerably worse than The Wall Street Journal is painting it. China now knows, without even having to risk testing it for themselves, that the US Navy is a paper tiger and that the USA cannot even hope to rival its industrial power anymore. The fundamental weakness of the USA has now been exposed, and not only do its two main rivals know it, but everyone else does too.

This is why Russia is now openly threatening the UK. Russia is no longer concerned about what the US will do if it attacks a NATO ally. It’s why the Gulf states are developing alternative security arrangements, because they know that Iran is now a more important regional power than the USA. And it’s the reason for the Mecca agreement between Saudi Arabia, Pakistan, and Turkey.

The Pax Americana is over. And rightly or wrongly, mostly wrongly since he wasn’t responsible for all of the historical factors, Trump will get the historical blame for it since it happened both on his watch and as a direct result of his actions.

Even the neocons are now openly admitting the complete catastrophe of their 30-year “bomb Iran” campaign, as Robert Kagan’s new article in The Atlantic demonstrates:

For years, Iran confronted a balance of power in the Middle East that tilted against it. The region was dominated by a hostile American superpower, a nuclear-armed and militarily superior Israel, and significant local actors—Egypt, Saudi Arabia, the United Arab Emirates—that were strategically and economically aligned with the United States. Today finds Iran in entirely new circumstances. It has gone head-to-head with the superpower and Israel, withstood a pounding from their most advanced weapons, and more than survived. As a result, Iran has, with American help, completely reconfigured the power structure of the Middle East and the Persian Gulf. The dominant power in the region going forward will be Iran, not the U.S. or Israel. Neighboring countries are already making their adjustments to this new reality. More distant powers will too. For years, the world has been dealing with an Iran constrained. It will now discover what Iran unleashed looks like.

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Progress Report 001

An update for the Byron AI backers. We now have a sufficiently powerful box up and running with an open source LLM on it. We’re now ready to start the first stage of the actual training. The style module, which is being developed on a separate box, has made some actual advancements, and importantly, we’ve learned a lot about what authors are already in the data, which are partially in the data, and which are not.

This information is significant for how we train with them for the style module, although it’s of little significance for the genre module.

This is just the first step, but it is arguably the most important one. As it stands, we now have a moderately powerful AI running under our control without any external guardrails imposed by the mainstream AI corporations.

It’s also clear now that there will be other useful applications as well, but for the time being, we will stay focused on the mission.

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Never Bluff a Bluffer

There is never any point in warning Clown World. Clown World lives by the bluff, which is why it dismisses every warning from Russia, Iran, or anyone else and assumes that its enemies are also posturing and manifesting.

British military facilities and equipment in Ukraine and beyond could become legitimate targets for Russian strikes if Kiev continues to use UK-supplied weapons for attacks on Russian territory, Foreign Ministry spokeswoman Maria Zakharova has warned.

The comments come amid rapidly deteriorating relations between Moscow and London, and a day after Ukrainian forces reportedly used British-French Storm Shadow/SCALP missiles in a strike on Donetsk that wounded at least eight civilians, including two children.

“We have repeatedly warned that the response to Ukrainian strikes using British weapons against Russian territory could be directed against any British military facilities and equipment in Ukraine and beyond,” Zakharova said during a press briefing on Thursday.

Notice that China doesn’t bluff. China is much more effective and respected than Russia, mostly because it simply acts when and how it deems necessary, without any threats, without any posturing, and without any warning. The Russians always seem to be a little incoherent, as one minute they’re correctly describing the USA as agreement-incapable, and the next they’re trying to reach an agreement with the same party they described as being incapable of one.

Russia has repeatedly warned that it might, perhaps, possibly respond if British weapons kept being used against it. And its warnings have been repeatedly ignored. But Russia never seems to draw the correct lesson from that process.

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The Great Bifurcation Advances

The Chinese Supreme Court has made it clear that China is now forcing corporations to choose between respecting US sanctions or respecting their existing contracts with Chinese businesses:

China’s top court recently highlighted the first judicial ruling establishing the mandatory nature of its Anti-Foreign Sanctions Law, which experts say could provide legal precedent and guide Chinese companies facing increasingly frequent overseas sanctions amid intensifying geopolitical tensions.

The case, heard by the Shanghai Maritime Court, centred on a dispute that involved US sanctions, a Singapore shipping company, a Hong Kong-based company and electronic goods shipped from Shanghai. In 2022, the Hong Kong-based company hired a Singaporean shipping firm to transport electronic goods from Shanghai to Panama, but the Singaporean firm later refused to deliver them and eventually returned the cargo to Shanghai, citing the Hong Kong company’s inclusion on a United States sanctions list. That caused losses for the Hong Kong company.

A court judgment unveiled last month showed the Shanghai court ruled against the Singaporean firm in February, ordering it to pay more than 4.99 million yuan (US$739,600) in damages plus interest and holding that it could not use a foreign country’s “discriminatory restrictions” as a defence under Article 12 of China’s Anti-Foreign Sanctions Law.

The case was included in a selection of illustrative maritime cases by the Supreme People’s Court that was released in June. In its commentary on the selection, the top court said the case was “the first judicial ruling to explicitly establish the mandatory application of the Anti-Foreign Sanctions Law”. It added that the case carried “strong exemplary significance” in demonstrating how China’s maritime courts implement the Anti-Foreign Sanctions Law – which took effect in 2021 – and safeguard the stability of supply and industrial chains.

Given the size of the Chinese market and the growing power of its economy, it’s pretty obvious which side most Asian corporations are going to take. What will be interesting is to see how many Japanese and European corporations also choose China.

Regardless, the failure of sanctions with regards to both Russia and Iran now demonstrate that it’s a weapon that harms the wielder more than it does the target.

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The Response to the Retraction

Keruru retracted his previous endorsement of the N/Nₑ argument, and much to my chagrin, he was right to do so: the derivation of Kimura’s substitution identity never needed Nₑ on either side of the algebraic equation. Supply is 2Nμ in the census N, the fixation probability of a new copy is 1/(2N) in the same N, the two correctly cancel, and the fact that the effective population Nₑ was regularly written into the supply side was nothing more than careless notation by the authors of the biology textbooks over the years, it was not a hidden move by Kimura back in 1968. Thanks to this additional evidence that biologists can’t do math, this error means that it will be necessary to produce a 3rd Edition of Probability Zero to correct my mistake in this regard. Mea maxima culpa, dammit.

The second part of his post is not correct. He says zero fixations across the ancient-DNA window is exactly what neutral theory predicts, so the data cannot discriminate. The arithmetic holds given one number: Nₑ ≈ 10,000 — which comes from θ = 4Nₑμ, which presupposes k = μ, the identity under test. He has retracted an empirical falsification of the clock by feeding in a parameter that the clock manufactures; Charlesworth flagged this exact circularity in 2009, and Keruru himself, two sections later, calls Nₑ “estimated from the quantity it is then used to explain.” He diagnosed the disease in Section 3 and caught it in Section 2. His chains carry it from the other side: they differ in offspring-number variance, never the contested axis, while his sweepstakes parent is drawn uniformly at random — setting the one parameter in dispute, the covariance between who breeds and what they carry, to zero by fiat.

And most crucially, his work never contains a census population. His own supply term at Nₑ = 10,000 gives 740,000 new mutations per generation; Kong et al. (2012) times the global birth rate gives 2.5 × 10¹¹, a factor of 330,000 — which does not touch his repaired algebra but demolishes the literature that algebra abandons. He rescued three lines and orphaned fifty-seven years of applying them. Then he names frequency drift as “the analysis that should have been run.” As it happens, I ran it while writing the first edition of PZ: the Allen Ancient DNA Resource, 1,372 Neolithic against 680 modern Europeans, has rs35619459 moving 29.3% → 91.3%, a twelve-sigma excursion against his own stated expectation, and a drift-variance Nₑ near 2 rather than ten thousand. The signal is the size of a population turnover — structure, non-exchangeability, the very thing his model pinned at zero.

Nevertheless, I owe him a considerable debt of gratitude and not just for pointing out my mistake. For, as we’ve repeatedly seen over the course of this project, the identification of one particular flaw, and the subsequent process of correcting it, has led to a new discovery. The mechanism he reached for in the second part— that the fixation time is so enormous almost nothing destined to fix finishes inside the window — is exactly right, and it turned out to be the most productive thing in the exchange. He relied upon it to argue the data cannot test the clock; but when it is reversed, that same mechanism does not protect the clock, it provides a time limit. If the chance a destined allele completes within T generations scales as exp(−π²Nₑ/T), then k = μ cannot be realized at all in any population large enough for that transit to run 4Nₑ generations — and at census population scale that exponent becomes a ceiling on population size, about ten thousand for a large vertebrate, above which gennetic drift is not slow but entirely shut down.

That is the argument of my new paper entitled The Hard Limits of Fixation Through Genetic Drift which you can read at the preprint site, and it exists only because Keruru identified my mistaken identification of Kimura’s algebraic non-error.


ABSTRACT: The Hard Limits of Fixation Through Genetic Drift,

Kimura’s neutral substitution rate, k = μ, is a steady-state identity: it holds only after a population has held one size for the roughly 4Nₑ generations a neutral allele needs to drift from a single copy to fixation. That transit has never been checked against the number of generations that species lineages have actually had. Checking them yields a hard ceiling on population size, X = (Vₖ + 2)·G/16 — reproductive variance and lineage generations alone, with no mutation rate, no coalescent quantity, and no fitted constant. For a large, long-lived vertebrate the effective ceiling falls to about ten thousand individuals. Above it, a neutral allele’s chance of fixing within the generations its lineage will ever have is not merely small but exponentially small, of order exp(−π²Nₑ/G) — for humans at current size, about one in ten to the seventy-eight-millionth. Humans number more than eight billion, the better part of a million times over the line; the African elephant, endangered at four hundred thousand and falling, is still forty times too abundant for drift to complete to fixation. No vertebrate population is simultaneously large enough to persist as a species and small enough to fix a neutral allele by drift. What substitution these abundant populations show is not produced at their current size; it is residual drainage from the smaller populations they descend from. The domain of k = μ is confined to demographic conditions that no non-endangered species is capable of meeting.

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When the Ships Aren’t Sunk

Think the Palestinians now regret not defending their land when they had the ability to do so? You know back in the early 20th century, there were Arab leaders and intellectuals saying: “They’re refugees from Europe. What harm could come of allowing them to live here among us?”

Israel will continue building illegal settlements in the West Bank in preparation for a “major” wave of Jewish immigration, Prime Minister Benjamin Netanyahu has said. Israel’s most recent settlement expansion triggered rebukes from its Arab neighbors and Western partners.

“Today, many of our brothers and sisters around the world understand: This is our land and it will remain ours,” Netanyahu said in Jerusalem on Tuesday. “And when I say our land, every Jewish man and every Jewish woman, the door is open. We are waiting for you. We are preparing the door for major Aliyah (Jewish immigration to Israel).”

It is unclear whether the “major Aliyah” predicted by Netanyahu is actually coming. Israelis have emigrated in growing numbers since Hamas’ 2023 attack and the subsequent war on Gaza. More than 150,000 Israelis left the country from 2024 to 2025, according to a report by 972 magazine.

The Israeli prime minister spoke at an event organized by the Binyamin Regional Council, which governs 47 Jewish settlements in the West Bank. All of these settlements, which are located outside Israel’s 1967 borders, are considered illegal by the UN, and Israel’s transfer of population to them has been deemed a breach of the Geneva Convention by the International Criminal Court.

Although the Israeli state sometimes pre-authorizes the construction of settlements, they typically begin as outposts on Palestinian land, until they are retroactively legalized by the Israeli government. During his speech on Tuesday, Netanyahu boasted that his government has established and regularized “104 settlements and 160 farms and we continue to do more.”

The Israeli historian Martin van Creveld pointed out that immigration is war in his landmark essay of that name. It always has been. The Visigoths who sacked Rome were refugees seeking refuge from the Huns. The time known as The Movement of Peoples is also known as a period of relentless wars.

Pity on the perceived unfortunate often comes at a terrible price that is paid later in blood by the innocent and the undeserving.

I don’t think we’re going to see peace in the Middle East anytime soon. Especially now that the US security structure has failed and Syria no longer serves as a buffer state in between Israel and Turkey. Remember, the Turks have a long-standing claim on the West Bank too.

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The Irrelevance of k = μ 

Keruru has uncovered some interesting things in his review of the mathematics underlying Kimura’s cancellation, which I have shown is a) incorrect for most species and b) a Portuguese mathematician has shown to be mathematically incorrect:

In February I argued that the mathematics underwriting neutral theory was broken. The argument had two legs. The first, drawn from a preprint I had read approvingly, held that Kimura’s substitution-rate identity k = μ rests on an equivocation: that the effective population size N<sub>e</sub> is made to stand for two incompatible quantities — a mutation-supply term and a drift term — which are then cancelled against each other. The second was empirical: an ancient-DNA analysis reporting essentially zero allele fixations across a million loci in the 240 generations separating Early Neolithic Europe from the present.

Both legs have given way. I want to set out how, because the manner of their failure is more interesting than the original claim, and because the instinct behind the essay turns out to have been sound while its aim was off by about thirty degrees.

The equivocation that isn’t

Written as k = 2N_e μ × 1/(2N_e) = μ, the objection looks devastating. Mutation supply is a biochemical fact about replicating cells and scales with the number of individuals actually reproducing. Drift is a statistical fact about sampling variance and scales with something much smaller and considerably slipperier. Two different numbers wearing the same symbol, cancelled against each other, yielding a result that has calibrated half of molecular anthropology.

The trouble is that the derivation does not require N<sub>e</sub> in either position, and the textbook notation is simply careless.

Mutation supply is 2Nμ with N the census count — mutations occur in gametes, and every reproducing individual contributes gametes. The fixation probability of a single new neutral mutant is its initial frequency, and one new copy among 2N copies has frequency 1/(2N) — census again. The two census terms cancel. N<sub>e</sub> never enters, and so cannot be equivocated upon.

Why is the fixation probability equal to the initial frequency? Not by assumption. Under neutrality the expected change in allele frequency each generation is zero, which makes the frequency a bounded martingale; a bounded martingale that must eventually be absorbed at 0 or 1 has absorption probability at 1 equal to its starting value. That is optional stopping, and it is a theorem rather than a modelling convention.

The claim is testable without any diffusion approximation at all, using exact finite Markov chains. I built two. The first is ordinary Wright–Fisher. The second is a sweepstakes model: half the time, half the population is replaced wholesale by clones of a single randomly chosen parent — reproductive skew of the kind documented in Atlantic cod and Pacific oysters, wildly outside anything Wright and Fisher had in mind. Measured from heterozygosity decay, the sweepstakes chain has an effective size 5.6 times smaller than the Wright–Fisher chain at identical census size.

The fixation probability of a single new mutant in both chains: exactly 1/(2N_census), to fifteen decimal places.

N<sub>e</sub> can be dragged around by a factor of six and the fixation probability does not move. It follows that my own demographic work on the collapse in variance of reproductive success — a real finding, and one I still stand behind — does not touch the substitution rate. It changes coalescent depth, standing diversity, and every estimate of N<sub>e</sub> derived from them. It leaves k = μ exactly where it was.

First, the problem with Kimura turns out to be even more significant than I originally believed. I was pretty sure that Keruru had been led off track the moment that he mentioned the word “martingale” because that’s the retreat that every AI, including both Claude Athos and the entire Red Team, initially made. You cannot use AI to provide you the answer; you have to know at least the correct shape of the answer before you ask the AI.

I’ll post my full response to Keruru later this week. His work here is very far from valueless, as I will demonstrate, but it is nevertheless incorrect due to his failure to anchor the abstract mathematical elements in material reality. This also, rather fortuitously, demonstrates the importance of the Triveritas, as any one link in the triad is capable of serious error when allowed to operate outside the bounds of the other two.

But the epicycle wasn’t elsewhere. There are multiple epicyles.

k = μ is a correct baseline for asking whether something other than drift is happening. But it is not a rate at which anything can be observed to occur in a sexual, age-structured, demographically non-stationary population — which is every organism anyone cares about.

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The War on US Farmers

The utter idiocy of participating in Israel’s war on Iran is being driven home hard in the negative effects on America’s ability to feed itself:

US grain farmers have been plunged into their worst financial crisis in four decades as the war with Iran drives up diesel and fertilizer costs, the Financial Times reported on Tuesday. The latest price shock compounds years of weak crop prices and falling incomes.

The mounting pressure follows the US-Israeli attack on Iran in February, which prompted Tehran to largely block commercial shipping through the Strait of Hormuz, a key route that previously served about a fifth of the world’s energy supplies. The resulting surge in energy costs is hitting the US heartland ahead of November’s midterm elections, which will determine control of Congress.

Farmers across the Corn Belt have been particularly hard hit by soaring diesel and crop nutrient prices since the military campaign began, the FT reported. Nebraska Farmers Union president John Hansen described the downturn as the sector’s worst since the 1980s.

”Inputs are way out of whack,” Nebraska corn and soybean farmer Matt Bailey told the newspaper. He said a phosphorus-rich fertilizer used at planting now costs more than $900 per ton, compared with about $470 a decade ago. Diesel prices have also surged after the conflict disrupted energy markets and sharply reduced traffic through the Strait of Hormuz. The nationwide average has climbed to about $5.45 per gallon from $3.81 before the war, according to US Energy Information Administration data.

”The [Iran] war has made so much uncertainty for us as farmers,” Pam Johnson, a former president of the National Corn Growers Association, told the FT. “It’s projected that farmers aren’t going to make any money for the next two years.”

And this is before the financial crisis hits this fall. This is why the real America sought to avoid foreign entanglements and restricted immigration for decades after the 1920s; foreigners with influence always seek to use other nations’ more powerful militaries for their own purposes and on their own behalf. And this is almost always to the detriment of the people of those nations.

We all know the retarded rhetoric about how “X is crazy!” and “X cannot be permitted to obtain a nuclear weapon”. Not one single American is going to give a damn about the rhetoric when gasoline costs $10 per gallon and they can’t afford to feed their families.

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The NFL and CTE

It’s not looking great for ex-football players:

A new study from The BMJ finds that at least 24.5 percent of all former NFL players who died between 2016 and 2021 had CTE. Of the 878 who died during that period, at least 215 had CTE. Of the remaining 663, 643 of the players’ brains were not studied for the presence of CTE. Which means that the real percentage could be much higher.

It almost certainly is. A friend of mine married, and eventually divorced, a former college football player whose personality and behavior changed drastically over time. She suspects that he’s got CTE, but of course there is no way of knowing for sure until he dies. I wouldn’t be at all surprised if it turns out that more than half of the former NFL players had it.

It’s a violent game. And the players should be given every opportunity to know what they’re getting into.

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