The market for new PhDs in economics is wonderful and getting better.
I haven't looked at figures in over 7 years, but the general trend has been there are ~900 PhDs minted per year, about 100-200 academic tenure track jobs, and about 1200 industry jobs (that number has probably increased now that NABE, not just AEA/ASSA, handles recruitment conference at-scale for the techonomics/industry roles). I expect the PhD minting is approximately the same and the economists roles have boomed because economists make for great data scientists, with some reasonable onboarding and tech training.
Am in a top PhD program in economics, can confirm for the most part, although the past two years have been relatively tough. Hopefully the Job Market the next couple years will return to trend.
Or said another way, economists are making a rational decision and choosing the highest paying industry, technology, which happens to be HQ'd in Silicon Valley.
Or maybe businesses see more of a need for causal reasoning, with or without a controlled, randomized experiment. If you're making a decision, you need to have some model of how your decision affects outcomes you care about. But that model needs to be causal--predictive models can be useful starting points but may also lead you astray due to spurious correlations.
Economists are trained to approach these kinds of problems methodically, so it makes total sense to me that there is high demand.
I remember Marginal Revolution talking about this a while ago (2016):
For the moment, Amazon seems to be the most aggressive recruiter of economists. It even has an Amazon Economists website for soliciting résumés. In a video on the site, Patrick Bajari, the company’s chief economist, says the economics team has contributed to decisions that have had “multibillion-dollar impacts” for the company.
Another Amazon jobs site lists openings for economists. As of Friday, there were 34.
Seeing this emerging job market, the National Association for Business Economics held its first meeting for technology company economists in April in San Francisco. Another is set for October in Silicon Valley.
> The prize, which this year comes with up to two years’ worth of university tuition and a $42,000 stipend, has gone to computer scientists, engineers, physicists and statisticians.
Not much better than a PhD stipend in a lot of places.
I'm really skeptical of your argument. To start with, you mention that many presidents majored in History-- but the prestige came from the law degree that followed, not the history B.A. (which maybe is popular due to history's focus on political events).
Secondly, you suggest that the study of History centers around high level decision-making. I'm not really sure about that. Assuming you're right, this is also the case in business school, where the decisions being analyzed happen to concern private enterprise rather than the government.
I do like your point about the relevance of Silicon Valley history. But I suspect that it's much more important to be obsessive and passionate about a piece of technology than to know the story behind previous attempts. Palmer Lucky rebooted VR with incredible dedication to the product, not an academic understanding of the field.
The basic assumption of history being made by decision makers is wrong. Such history is made - under good circumstances, yes. If a surplus exists and no internal oppossition rears its head, due to economic stress.
As soon as the economic limits of a system are reached though, leaders are just as the population under the influence of the "physics of the situation". Which is shaped by human instincts, retardations reacting to a percieved "world turned hostile". Meaning, as soon as things go bad, the decision space is very harshly restricted and the consequences are often very much out of control for those in power deciding.
If humanity were a vessel, as soon as storm draws closer, the steering wheel breaks.
This is broadly correct - the truly great leaders of history are rarely studied, because they noticed the current situation well in advance and adjusted things to avoid it.
Same how the best ship captains are the ones who never entered the storm, not the ones that somehow survived.
Frankly, this sounds more like wishful thinking to me. The sort of extremely high-level positions you're talking about there is maybe going to affect a handful of individuals, if at all.[0] But that's irrelevant for the average graduate. We might still see more history grads in tech, but that's purely because tech has become a sizeable portion of the US economy and is attractive to graduates of all disciplines - ie, it has (nice) jobs.
[0] I'm even skeptical of your argument that studying the history of technology is the best preparation to lead a tech company. The people who study past business decisions most in-depth are arguably MBAs, and I think they're far more likely to make it into senior management positions.
Taleb would say it's time to short the whole SV tech market due to the wrong party being set up to be rewarded for economic disasters present and future.
If you really want to understand economics, his books are a must read.
I find that while he makes good points, he also misrepresents the views and histories of the people he attacks. It is the standard "The common knowledge is wrong, trust me" tactic for establishing yourself as an expert on a topic.
For example, he got famous for picking on Black-Scholes. Claiming among other things that he was smarter because he was a trader before he became an academic. Conveniently not mentioning that Black and Scholes also spent time trading the markets both before and after their famous 1973 publication.
Indeed, Myron Scholes was on the board of LTCM when they blew up and kicked off the Asian financial crisis. LTCM could be a poster child for fragile financial systems.
Depends how deeply Taleb understands his own theories.
You build antifragile systems by creating networks where the failure of any one component is not just expected, but actively welcomed and designed for. Distributed systems engineers understand this intuitively; any highly reliable system is constantly failing internally, but the system is set up with multiple independent paths to success, such that failure just routes traffic to the non-failing components.
Silicon Valley as a whole is also set up according to this principle. Startups are supposed to fail; big companies are supposed to fail; individual municipalities are supposed to fail. The genius of Silicon Valley is in rapid experimentation and routing all the raw materials for these entities into new configurations that are succeeding. When a giant like Sun Microsystems or Western Digital goes under, the engineers all quit and work for Google. When Google goes under, they'll work for whatever the hot company of 2030 is. Same goes for capital (the early investors in Google have long since cashed out and are actively looking for the next big thing, while the bagholders will be retail investors in the rest of the country who don't know any better) and geography (the center of Silicon Valley has historically moved around between roughly Scotts Valley to San Francisco on a 5-10 year timescale).
And California laws & culture are setup to encourage this, with the ban on non-compete agreements, lax enforcement of trade secret laws, people always searching for the next big thing, customers willing to try the next big thing, lawyers/accountants/engineers willing to work for stock, etc.
> You build antifragile systems by creating networks where the failure of any one component is not just expected, but actively welcomed and designed for. Distributed systems engineers understand this intuitively; any highly reliable system is constantly failing internally, but the system is set up with multiple independent paths to success, such that failure just routes traffic to the non-failing components.
Antifragility is benefitting from things breaking, not just coping with things breaking.
He didn't. He was sentenced to 18 months but never actually served; he was pardoned by Trump before then, and is currently serving as CEO of Pronto, a new autonomous vehicle startup.
You'll note that Alsup's comment at sentencing was "this is the biggest trade secret crime I have ever seen. This was not small. This was massive in scale." He downloaded 10G of confidential files from his employer onto a thumb drive and then founded a startup that was immediately acquired by one of his employer's biggest competitors, with evidence that the startup was only founded as a front for the theft of trade secrets.
Those who are less brazen not only don't end up in court, but they often end up with $100B+ companies. You don't see any prison time for the Traitorous Eight who left Shockley to found Fairchild, Moore & Noyce who left Fairchild to found Intel, Jerry Sanders who left Fairchild to start AMD, Morris Chang leaving Texas Instruments to found TSMC, Marc Andreesen leaving Mosaic to start Netscape, or Steve Jobs's visit to Xerox Parc to see the Alto and bring all its innovations to the Lisa & Macintosh.
Taleb is certainly one of the writers of all time. But this blind worship of him is puzzling. His writing has so many obvious flaws. Here are just a few of them from just one book of his - Skin in the Game.
He insults "interventionistas", meaning those who advocate military interventions in other countries. He calls them stupid, of being ignorant of reality. He doesn't need to actually examine the facts for and against foreign intervention. He doesn't need to look into past interventions that have been succeessful (WW I and II come to mind) and compare them to interventions that were disasters (Libya). Nah, all that isn't necessary. We've already dismissed these idiotic interventionistas with insults and have won the argument.
He criticises the folks who regulated the financial industry before and after the 2008 crisis. No doubt you'd expect that he would analyse some of the salient features of the Dodd-Frank Act. He would point out how some of it's rules were flawed and how he would have improved it. You'd expect that he'd explain how he would shepherd this legislation through Congress while satisfying all stakeholders. No. He does none of those things. He dismisses all financial regulation by saying they "avoided considering skin in the game". That's it.
This aren't even isolated incidents. He devotes large sections of the book to demonising/satirizing "Intellectual Yet Idiots" (IYIs). He spends an entire chapter constructing a strawman of an IYI. Then he brands people IYIs and leaves it at that, like it's a complete, standalone, irrefutable argument. I've never read any books by Steven Pinker, so I have no opinion on him. But seeing Taleb repeatedly fling mud in his direction without dissecting Pinker's opinions was a red flag for me. The way I see it, if you agree with Taleb, you're good. If you disagree, you're an idiot. Tough luck for IYIs like Richard Thaler, Thomas Piketty, "Hilary Monsanto-Malmaison" and countless others.
All of his arguments are backed only by cherry-picked examples, if any at all. Taleb will claim that the best quanititative finance journal is so good because the person running it has their name on the cover. Apparently, this gives them SITG. But for me, data wins arguments. If he could point out even a vague correlation between explicit authorship and quality, that would be great. If he could address a notable example of a publication doing the opposite, hiding all authors' names like the Economist does that would also be great. But he doesn't. He simply states his opinion as gospel truth. Disagree? Cool, you're an IYI.
Worst of all is the complete lack of evidence. He makes the extraordinary claim that "10 percent of Americans will spend at least a year in the top 1 percent, and more than half of all Americans will spent a year in the top 10 percent". You'd think he'd link to a source that proves this. He does not. He doesn't even clarify if he's talking about income or wealth. This isn't an oversight, it's deliberate. As he explains, "just a little bit of significant data is needed when one is right". Of course Taleb is right, so he absolves himself of the need to prove his claims. He simply needs to state them for them to be true.
All of this could be forgiven if his central thesis was infallible. That applying the principle of skin-in-the-game will always yield the right results. But I can think of examples where it doesn't work. Take for example, the case of a hedge fund manager convincing you that a certain stock should be shorted. He has personally invested a lot of money to short that stock, so he has skin in the game. According to Taleb, this is the only factor that matters, so you should trust the hedge fund manager (famous last words). However, the case study of Fairfax Financial (https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-s...) shows that it isn't enough for a person to display skin in the game, even if they're betting millions of dollars of their own money. My take would be - do your own research, focus on actual evidence, not on signals like SITG that are meaningless in cases like this one.
But remember, I said this book has the appearance of a great book. Taleb manages it by making the reader feel intelligent and special. He subtly boosts the ego of the reader. Other folks are IYIs, but not you dear reader. You've shown great taste in picking up this masterwork, and you're getting smarter by the minute as you wallow in Taleb's wisdom. And people actually apply Taleb's tactics in the real world. I've seen "you don't have SITG" and "you're an IYI" being thrown around when it has no relevance or when applying it is illogical.
I worry that the popularity of this book will lead to this style of argument becoming more popular. Forget talking about ideas. Simply attack people instead. Don't provide any sources. Simply claim something, and it will be true.
I'm glad I read this comment. I had conversations with people who used "skin in the game" and "intellectual yet idiot" constantly, but I always had other books on my to-read list. The added context sheds some light.
Hiring economists into tech has also been going on for many years at this point. I roomed with a PhD candidate years ago who described fairly established hiring pipelines from Economics PhD programs into industry.
Exactly. People like Hal Varian or Susan Athey contributed nothing. That is why all this companies have Chief Economists and hire Econ PhD on a regular basis...
The time of innovation is over, the time of cashing in and preservation has come?
I think of the automotive industry.
Big tech will start to diversify, start banks, buy appliance companies, buy suppliers/vertical integration.
I believe that happened to Auto in the 60s and 70s, about 20-30 years after the boom.
If we (irresponsibly) use that timeline, we should expect dark days for the next 20 years. Most innovation will be outside the US. Then comes the 1990s where tech companies will sober up, cut the free food, and become competitive again. By 2010s they will be innovating again.... 40 years from now.
Sorry for the doom prediction, I just saw a pattern.
On the contrary, I look forward to innovation that actually has to be profitable at the end. All these bright-colored-plastic startups without a real business model will die, and ageism will lessen as experience and the ability to make money takes precedence over "culture fit" and "vision". Maybe Silicon Valley can even consider working with... the GOVERNMENT!!! You know, those institutions that actually have the authority to directly solve the problems Silicon Valley tries to make money off of? There's already some signs of this, thankfully. But I still roll my eyes hard every time some SV engineer has a moral outrage/stages a walkout because they discover their company has a DoD contract. It's long past time for SV to be brought back down a couple of levels, maybe not so far as to force them all the way back into the real world, but tree-top-level might be a good idea.
That and no one is forcing you to work on said weapons. If someone has a moral issue with working for DoD, I think that's a little naive but that's their right. Demanding the company you agreed to work for, as a subordinate, comply with your personal vision of morality when you're not even in a leadership position is just childish.
Corporations by design are almost never democracies, you are working as a laborer for a dictatorship/oligarchy that's licensed by the overarching government for meeting certain legal requirements. That's it. If you want to dictate corporate values then gain authority within the company or start your own, or leave and go work for someone you see as more aligned with your values. As a rank-and-file engineer you have as much say in corporate values as a plumber has in his clients' choice of religion.
Exception to this is if you're a founding member of a startup, or working for an extremely small company where your contributions carry a lot of weight. In which case congrats, you're on the ruling council of the oligarchy by default, and if the company ever grows to a certain size maybe some idealistic low-level engineer will get indignant about your values :)
If rank and file employees don't have a say, then why do you care what they demand? It seems more like they actually do have a say and they're figuring that out, and that's what you're objecting to.
Thats a model for how the things work, but it's just a model.
In reality, corporations need labourers to get work done, and so labourers have the end say on what actually happens.
There's no need to religiously follow an ideology that says you are powerless when you are very obviously not powerless when you disregard the ideology
Nah, there is a ton of fantastic innovation going on, and more to come.
Consider that health insurers are now mandated to release their pricing.
Maybe the days of FAANG cool are sunseting, but the new availability of data sources (cubesats, etc.) gets the innovation synapses firing for this graybeard.
There's a lot to criticize the last 10-20 years of silicon valley for, but I don't inherently see it as negative that there's a continued concentration of diverse high-value labor in an area which has a lot of capital to deploy. It's worked out great in the past whenever areas pulled in a lot of smart people to work together.
I do hope that we move the goalposts closer to "value-creation" rather than "capturing value" but I think the way to do this is to glorify stories of value-creation and apply high taxes to rentiering wherever we find it. Although there is some non-global local value in supporting domestic rentiering of global products/services and ensuring that the outsized/unfair international revenues are re-deployed to domestic initiatives to chase novel value creation.
That type of diversification was common with lots of companies back then, not just the auto industry. For example, CBS (broadcast network) bought Fender (musical instrument manufacturer), Pepsico (soft drinks) bought North American Van Lines (moving company), Sears (retailer) bought Coldwell Banker (real estate franchise), and H&R Block (tax preparer) bought Compuserve (online network).
Are you thinking about management consultants (hatchet folks) and/or accountants? Economists are nerds that identify margins for improvement/opportunity cost -- they tend to fill strategy / marketing needs for quantification.
The whole area running out of fresh water. Not exactly the place even more people should be flocking to. It will be an absolute shit-show in the coming years.
As an economist, I welcome this turn of events! This will free up my work time to focus on better margins than the n'th iteration of a linear regression,
My pal with a masters in math writes R and Python. My MBA friend writes .NET at an investment bank. Econ PhDs are probably making machine learning models.
