prior probability

Following up on my previous post, I want to share three timeless ideas that I learned from Book 1 of Adam Smith’s The Wealth of Nations as well as three open questions that I have for my fellow Smith scholars:

1. The key to economic prosperity (and to the production of knowledge) is the division of labor. Question: What effect will A.I. models have on the division of labor?
2. Economic growth > economic equality. Question: What effect will A.I. models have on economic growth?
3. Beware government regulation, which often has the effect of erecting barriers to entry, and beware the merchants, who are constantly lobbying the government to erect these stifling barriers. Question: Should the government regulate A.I. companies, and if so, how?

Today (20 de mayo) is Cuban Independence Day (Día de la Independencia), which commemorates the historic date in 1902 when the Republic of Cuba was officially established, marking the end of Spanish colonial rule and the transition out of U.S. military occupation following the Spanish-Cuban-American War of 1898.

To commemorate the 250th anniversary of the publication of Adam Smith’s Wealth of Nations, I will feature a different book of Smith’s magnum opus starting every Wednesday for the next few weeks. (The Wealth of Nations consists of five separate substantive sections or “books” in all.) To begin, below is a compilation of my previous blog posts on Book I of Smith’s treatise:

1. Adam Smith and the division of labor: cure or curse? (Book I, Ch. 1)
2. The timeless wisdom of Adam Smith (Book I, Ch. 2)
3. The Adam Smith theorem (Book I, Ch. 3)
4. Adam Smith’s evergreen critique of the avarice and injustice of princes and sovereign states (Book I, Ch. 4)
5. Adam Smith’s apology (Book I, Ch. 4 continued)
6. Adam Smith on real versus nominal prices (Book I, Ch. 5)
7. Adam Smith’s general theory of price (Book I, Ch. 6)
8. Adam Smith’s three laws of market price motion (Book I, Ch. 7)
9. Adam Smith: champion of the working classes (Book I, Ch. 8)
10. Adam Smith versus Karl Marx (Book I, Ch. 9)
11. Adam Smith pop quiz: is it better to be a worker or a capitalist? (Book I, Ch. 10)
12. Adam Smith’s damning indictment of absurd laws and regulations (Book I, Ch. 10 continued)
13. *The first thing we do, let’s kill all the … landlords?* (Book I, Ch. 11)
14. Smith’s digression on the value of silver: footnote or essential reading? (Digression on Silver)
15. The Adam Smith paradox (Digression on Silver continued)

Following up on my previous post, here is a new set of “assorted links” from my neck of the woods, the erudite world of the ivory tower:

1. At Harvard, there are 2,600 more administrators than undergrads (Terrance Kible, Duquesne Law School)
2. Does ‘flipped learning’ work? A new analysis dives into the research (Jeffrey R. Young, EdSurge; the short answer is “no”)
3. Don’t let Silicon Valley turn education into [A.I.] slop (Christopher Hanlon, Arizona State)
4. How I learned to love ChatGPT (a tongue-in-cheek defense of A.I. in higher ed by yours truly)
5. U.C.F. students boo commencement speaker for A.I. comments (NYT)
6. Why pedagogy ‘experts’ are wrong (Paul Schofield, Bates College)
7. Bonus link: in the interest of fairness, here is a direct reply to link #6 (Benjamin Mitchell-Yellin, Sam Houston State)
8. Bonus link #2: Governing AI Agents (Noam Kolt, Hebrew University)

Full disclosure: I have admired the daily “assorted links” feature of polymath Tyler Cowen’s Marginal Revolution blog (see here) since I discovered MR in 2006, so if imitation is indeed the sincerest form of flattery, below are some of my own assorted links:

1. A theoretical question about [UFOs]
2. Apocalypse Early Warning System
3. Are markets coercive?
4. New York Times report on sleep trends
5. Why Hayek needs Coase
6. WTF happened in 1971?

That is the title of my most recent work-in-progress, available here via SSRN, which is currently “under review” at a refereed journal, Review of the History of Economic Thought and Methodology. By way of background, below is the Introduction to my paper (footnotes omitted):

“One of the most fascinating sessions at the 2025 meeting of the History of Economics Society (HES) was a roundtable discussion on ‘The 50th anniversary of the Buchanan-Samuels Exchange.’ The roundtable panel featured an all-star roster of economic historians, including Marianne Johnson (Wisconsin), M. Ali Khan (Johns Hopkins), David M. Levy (George Mason), Steven Medema (Duke), Gary Mongiovi (St. John’s), Scott Scheall (Austin), and Emily Skarbek (Brown), all of whom illuminated various aspects of the original exchange of letters in the early 1970s between James Buchanan and Warren J. Samuels. As it happens, this intellectual exchange was motivated by an old takings case—Miller v. Schoene, decided in 1928—and takings law is one of my areas of expertise. [See, for example, my 2021 paper ‘Lockdowns as Takings.’] The remainder of my paper reframes the Buchanan-Samuels exchange as a three-act drama and is thus organized as follows: Act I sets the stage of our story by revisiting the dispute in Miller v. Schoene. Next, Act II compares and contrasts Samuels’s framing of this case with alternate Buchanan’s framing. For Samuels, Miller v. Schoene is a textbook case of reciprocal harms, while for Buchanan, this case is about the sanctity of property rights. Lastly, Act III concludes with the climax and Buchanan’s denouement.”

On this day (15 May) in 1536, Anne Boleyn, the second of King Henry VIII‘s six wives, is condemned to death after standing trial in London on charges of adultery, incest with her brother, and treason (plotting to kill the king), and she will be beheaded four days later. Alas, for what it’s worth, most historians dispute these charges and have condemned her show-trial as a sham proceeding with a pre-determined guilty verdict. (See, for example, the sources in footnote #146 of Anne Boleyn’s Wikipedia page, including Chapter 22 of Eric Ives’ 2004 book The Life and Death of Anne Boleyn.) One revisionist historian (George Bernard), however, claims that the queen consort may have been guilty of some of the charges against her. (See, e.g., this provocative article in The Guardian.) More details about Queen Anne’s trial, including the orders for her execution, are available here.

🇮🇱 Happy 78th birthday to the State of Israel! Here are some Independence Day reflections (via JPost). 🇮🇱

Never, right?! Alas, what has motivated this blog post is this report (Kathryn Palmer, Inside Higher Ed, 11 May 2026) that Instructure (the company that owns Canvas) has paid an undisclosed ransom to a gang of black-hat cybercriminals that hacked the company’s learning management system (twice!) earlier this month. Here is some background:

1. “ShinyHunters” (a black-hat criminal extortion group active since 2019; Wikipedia)
2. “2026 Canvas security incident” (also via Wikipedia)
3. “The Canvas hack is a new kind of ransomware debacle” (Lily Hay Newman & Andy Greenberg, Wired, 8 May 2026)
4. “Visualization of nationwide Canvas breach” (Ajith Araiza-Singh & Luca Vicisano, The Daily Californian, 8 May 2026)

Now, to the business at hand: when, if ever, should ransomware be paid? Below are links to some of the scholarly literature (ungated or open access*) on the economics and law of ransomware payments, in alphabetical order by author:

1. “To pay or not: game theoretic models of ransomware” (Edward Cartwright et al., Journal of Cybersecurity, 2019)
2. “Should we outlaw ransomware payments?” (Debabrata Dey & Atanu Lahiri, Proceedings of the 54th Hawaii International Conference on System Sciences, 2021)
3. “Ransomware: to pay or not to pay?” (Cath Everett, Computer Fraud & Security, April 2016)
4. “Should the ransomware be paid?” (Rui Fang et al., ArXiv, 15 October 2020)
5. “Cyber insurance and the ransomware challenge” (Jamie MacColl et al., University of Kent, 2023)
6. Bonus link: “The average cost of a ransomware attack in 2024 was $5.13M …” (Jason Firch, 6 October 2025)

On this day (13 May) in 1846, the United States Congress approved a declaration of war against Mexico. As a result of this unjustified war of aggression (see here or here, for example), the United States would end up acquiring — “stealing” would be a more accurate term — 500,000 square miles of Mexico or roughly 55% of her territory, including present-day Arizona, California, Nevada, and Utah, as well as portions of New Mexico, Colorado, and Wyoming! Two bonus links: Manifest Destiny and Mexican Cession.

Yes, today (12 May) is National Limerick Day, which falls on the birthday of English artist and poet Edward Lear (born 12 May 1812), who popularized the five-line humorous poetic form in his Book of Nonsense, first published in 1846. (More details here, via The Smithsonian.)

In addition, as blogger and writer Richard Bist explains (see here), not all limericks are naughty. Below, for example, is a little limerick I wrote about Adam Smith’s “invisible hand”:

Markets may appear quite unplanned,
But by a hidden force both subtle and grand,
Though each man seeks his gain,
It’s clear to explain:
They’re all led by an Invisible Hand.

And here is another one about the famous “Adam Smith Problem”, i.e. the apparent or real disconnect between Smith’s Theory of Moral Sentiments and his Wealth of Nations:

Adam Smith, two tomes did he write,
But the books made many scholars fight,
For one spoke of self-gain,
The other, of empathy’s reign,
Leaving critics to wonder who’s right!