Power grid compromised

July 30th, 2010

Borepatch doesn’t want to say that the sky is falling, but the power grid has been compromised:

  1. The Grid is a high-value target to foreign Intelligence Agencies. It’s been said — correctly, IMHO — that while there are friendly foreign governments, there are no friendly foreign Intelligence Agencies.
  2. The computer systems that run the Grid (called SCADA systems) are based on old technology, and are difficult to patch. This means that it’s quite likely that the computers running the grid are riddled with security holes.
  3. While these systems are not supposed to be connected to the Internet, the incentive to do so is very, very high. For example, it’s a lot easier to reset something by remotely connecting to it from home than getting up, getting dressed, and driving 20 miles in a storm at 3:00 AM.
  4. Nobody has accurate maps of precisely what their network looks like. Network aren’t so much designed as grown, almost organically. The Power Company networks are no exception.

So the grid is a high-value, low-risk target — and it looks like someone has attacked SCADA via USB devices:

As far as I can tell, there’s no reason to compromise a SCADA system other than to take it down. The SCADA system doesn’t contain credit card numbers or other financial data, and I doubt that compromising it is a cost-effective way to steal power for free. The guy who found the SCADA calls, Frank Boldewin, says, “As this Siemens SCADA system is used by many industrial enterprises worldwide, we must assume that the attackers’ intention was industrial espionage or even espionage in the government area”. In fact, though, there are no obvious secrets to steal from a SCADA system — other than the secret of how to bring the system down. So the logical goal of the malware is not so much espionage as sabotage.

Borepatch advises getting a generator and at least a week’s worth of fuel:

Bad things happen when the power goes out for an extended period, and if it were a large scale outage, it could take months to restore things.

Posted in Technology, War | No Comments »

A Vietnamese Robin Hood

July 30th, 2010

After Japan’s defeat at the end of World War II, France tried to reassert its dominance over Vietnam, while Ho Chi Minh‘s Communist forces fought for independence from the imperialist colonialists, but — as Hilaire du Berrier explains in Background to Betrayal — it wasn’t really that simple. There were many other factions. One of the more interesting factions was the Binh Xuyen:

“Binh Xuyen” means “toward the peace.” It was the name applied to a village in the heart of the swamps that no outside enemy could attack without signaling his presence so long in advance an ambush would be waiting for him on the way. So the village of Binh Xuyen, hidden in the impenetrable marshes to the south of Cholon, was the home base of Bai Vien, and the band which took the village’s name.

In the beginning they lived by piracy and ransom. In all fairness one must add that the region offered little opportunity to live otherwise, and their incursions were supported by the colonial economy as a form of risk natural to Asia. The Binh Xuyen were in no sense a sect, and at first they had no interest in politics. For years some hundred small bands had operated independently out of the swamps. They would make sporadic raids and disappear, without higher organization. Ex-convicts, escapees from justice, men who for one infraction or a hundred had been banned from Saigon, made up most of these gangs. The best known was led by Dong ba Duong and his brother.

During the Japanese occupation the swamp pirates became a sort of Robin Hood band. Their daring and the genius with which they exploited their geographical position, and the troubles they caused the Japanese, inspired admiration for the Binh Xuyen among the masses. Gradually they emerged as nationalists. When the Japanese withdrew, the Communists came, and in the eyes of the people, if not legally, the rehabilitation of the pirates was complete. During the brief period of Communist “legality” Bai Vien edged his men into the police as auxiliaries and acquired an amnesty for everyone as well as a complete education in Communist methods.

Ho Chi Minh and the Communists didn’t want any independent nationalists in the swamps, so they sent in one of their top men, Nguyen Binh, to clear out such pests:

On May 19, 1948, using Ho chi Minh’s birthday as a pretext, Nguyen Binh set his trap for Bai Vien. He invited Bai Vien to come to his headquarters in the Plain of Junks for a party. For days Binh’s troops had been on the move, quietly closing in, on the excuse that the French were planning an offensive. But there was nothing that Bai Vien did not know. He accepted the invitation and took 200 of his fiercest bodyguards with him, with orders to surge to his rescue and kill Binh if Bai Vien gave the signal.

The Plain of Junks is a vast area. As far as the eye can see, no distinguishing point marks the place where low islands of reed-covered land end and reed-covered marsh begins. Junks appear to be floating on a field of reeds and from this appearance the plain derives its name. On one of the islands of this treacherous no-man’s-land Nguyen Binh had his headquarters. Bai Vien walked into his tent. Binh said, “You have been betraying us, but I pardon you,” and proceeded to put his arms around Bai Vien and give him an accolade. At that moment the killers burst into the tent. Bai Vien cried, “To me!” and the fight was on.

Vien and his guards fought their way out, and all the way back to the village in the heart of the swamp from which they had come. Back to Binh Xuyen, the lair that gave them their name. Over a thousand of their band had had their throats cut by Bhin’s raiders while Bai Vien was at the “party.” Many were disarmed in the first onslaught and offered a chance to rally to the Reds and were then cut down in cold blood when they refused to desert their chief, Vien.

Bai Vien’s reaction was swift and decisive. He sent the lieutenant who wrote letters for him — a young man named Lai huu Tai, dignified with the rank of private secretary — to present his compliments to the French commander and to offer, if given arms and ammunition, to clear the Vietminh out of his zone and maintain order. Furthermore, he agreed to support the French central government and accept the French Union.

On his own, and without waiting for the French reply, the reprisals started. Not only did the attack on himself demand an accounting, but there was that matter of a thousand loyal friends with their throats cut. The reprisals were terrible, for the bang conh tac, the intelligence cells which were the eyes and ears and the executioners of Bai Vien, spread like a net throughout the area occupied by the Vietminh. Bai Vien’s intelligence cells were intact, and in one night they liquidated the entire network Ngueyn Binh had so patiently erected. Each morning for weeks afterward the canals and arroyos around Saigon were cluttered with drifting bodies. No questions were asked by the French authorities. From that day, May 19, 1948, Bai Vien was to remain an implacable foe of the Communists.

Picture him: For years he had been a thorn in the side of the French. Any Vietnamese arrested for nationalist activity who had no money for defense, sent a letter to Ba Vien from hand to hand through the underground as soon as he entered prison. If money and a lawyer could not obtain his release, Bai Vien, the pirate, the firsthand authority on prison deliveries, got him out. With every outwitting of the French his reputation had increased as a native Robin Hood. Now this same candid ex-pirate became the central pillar of the anti-Communist fight in the Saigon area.

On June 13, 1948, his adherence to the government was formally announced, and within two months over eight hundred guerrillas deserted the Vietminh to join him. It was the beginning of the nationalist armed forces of the Binh Xuyen, with a discipline and an esprit de corps such as has never been equaled since by any anti-Communist force in Vietnam. The possibilities of this “underground,” forged and linked by the memories of so many years of danger together, surpassed the strictly military. A world of faceless agents, hideouts, arms caches, friends and associates that no one knew or suspected; infiltrators with their own lines running through every level and business — in sum, spies, collectors, and executioners with their secret signs and passwords came with the Binh Xuyen.

It was the age-old secret society of Asia, with all the attributes of a modern army and political party under a born leader. The leader of such a secret society can do anything. Lost in the immense ocean of Asian humanity, he enriches whom he pleases and kills those with whom he is at war. Bai Vien was at war with the Vietminh, and he conducted it more efficiently than they did, as his survival attests.
[...]
Saigon, for all its French veneer, was a sprawling, dirty, oriental agglomeration of humans. When this anthill was turned over to Bai Vien and his auxiliary politic it followed that he would tax it inhabitants in his fashion. He would naturally know what the dishonest citizens were up to and whether or not the honest ones were threatened. All this was accepted with oriental fatalism. Those living in steaming rabbit-warren alleyways or passing their lives on junks had never known anything else, and under the Vietnminh it had been infinitely worse. Since the money Bai Vien collected was used to support the army that out-fought, out-schemed and out-massacred the Communists, that army was really self-supporting — the only one the American taxpayer was not required to keep in luxury.

Posted in Hilaire du Berrier, War | No Comments »

You’re Not the House

July 29th, 2010

When investors noticed that their stock mutual funds had lost value — lots and lots of value — they moved their money into commodity ETFs. But that wasn’t simply a case of closing the barn door after the horse had bolted. They also found out the hard way that when commodities go up, commodity ETFs often don’t:

Here’s an example. The Standard & Poor’s Goldman Sachs Commodity Index (S&P GSCI), which tracks 24 raw materials, is the basis for as much as $80 billion of investment. Managers of funds linked to the index, created by Goldman in 1991, have to buy their next-month futures contracts between the fifth and the ninth business day of each month. During that period in May 2010, fund managers sold contracts for June delivery of crude oil priced at $75.67 a barrel, on average, according to data compiled by Bloomberg. Managers replacing those futures with July contracts had to pay $79.68. After the roll period ended, the July contract fell back to $75.43. For each of the thousands of contracts, in other words, managers paid $4 for nothing — and the value of their funds dropped accordingly.
[...]
Professional futures traders exploit the ETFs’ monthly rolls to make easy profits at the little guy’s expense. Unlike ETF managers, the professionals don’t trade at set times. They can buy the next month ahead of the big programmed rolls to drive up the price, or sell before the ETF, pushing down the price investors get paid for expiring futures. The strategy is called “pre-rolling.”

“I make a living off the dumb money,” says Emil van Essen, founder of an eponymous commodity trading company in Chicago. Van Essen developed software that predicts and profits from pre-rolling. “These index funds get eaten alive by people like me,” he says.

A look at 10 well-known funds based on commodity futures found that, since inception, all 10 have trailed the performance of their underlying raw materials, according to Bloomberg data. The biggest oil ETF, the U.S. Oil Fund, which Wolf bought and which now has $1.9 billion invested in it, has dropped 50 percent since it started in April 2006 — even as crude oil climbed 11 percent. The $2.7 billion U.S. Natural Gas Fund (UNG), offered by the same company, has plummeted 85 percent since its launch in April 2007 — more than double the 40 percent decline in natural gas. Deutsche Bank’s (DB) PowerShares DB Agriculture Fund (DBA) has eked out a 3 percent total return since January 2007, while the weighted average of its commodity components has risen 19 percent. To be sure, those spot prices — reported on cable business channels and other outlets — set an unreachable benchmark.
[...]
The allure of commodity investment has hit even the most sophisticated investors. The California Public Employees’ Retirement System, the largest public pension in the U.S., has lost almost 15 percent of an $842 million investment in commodity futures since 2007, according to its latest filings, depriving it of income at a time when it has sought taxpayer money to cover retiree benefits. It defends the investment as insurance that will pay off in the event of inflation.

Just as they did with subprime mortgage-backed securities, Wall Street banks are transferring wealth from their clients to their trading desks. “You walk into a casino, you expect to lose money,” says Greg Forero, former director of commodities trading at UBS (UBS). “It’s the same with these products. You’re playing a game with a very high rake, a very high house advantage, and you’re not the house.”

Posted in Business | No Comments »

A Rhee of Hope

July 29th, 2010

David Harsanyi’s latest piece, on education reform, is simply dripping with sarcasm:

Though I’ve seen evidence to the contrary, experts assure me that children are the nation’s most precious natural resource. Logic, then, says that teaching is the most important profession in the country. And by extension, firing teachers who consistently fail to do their job should not be very controversial.

Still, political parties come and go; teachers don’t. All the while, urban school districts remain on a stable trajectory, headed from horrendous to Mississippi.

Who knows? Perhaps there’s hope. The country’s top minds on education have cooked up a surefire solution to tackle this emergency: They’re having a contest!

Posted in Education, Policy | No Comments »

Cultural Hegemony

July 29th, 2010

In describing the tea party vs. the intellectuals, Lee Harris explains Gramsci’s notion of cultural hegemony:

A generation before Orwell devised the idea of Newspeak, the Italian communist Antonio Gramsci had developed a concept that in many ways foreshadowed it, but with one major and considerable difference. Before Gramsci discovered Marx, he had been a student of languages. Gramsci was especially fascinated by what happened when two languages collided. Throughout European history, conquerors had routinely moved into new territories where the inhabitants spoke a different language. In some cases, such as the Normans in France, it was the conquerors who picked up the language of the conquered, but more frequently, it was the other way around. What explained this fact? Why did a conquered people so often abandon their own language in order to learn the language of their conquerors?

Gramsci argued that what led people to discard their native language was the greater prestige of the conqueror’s language. The idea of prestige, which had never played a role in classical Marxism, became the key to Gramsci’s most famous concept, cultural hegemony. For Orwell, the cultural hegemony sought by the totalitarian state had to be imposed on the masses through diabolically cunning devices such as the telescreen, a reverse television system that permitted the Thought Police to watch and monitor the activities of citizens in the privacy of their own homes. People did not watch the telescreen. Instead they were watched by it, fully cognizant that if they did anything to displease Big Brother they could face the most ghastly consequences imaginable.

For Orwell the basis of cultural hegemony was terror. For Gramsci, on the other hand, it was prestige. Cultural hegemony, according to Gramsci, did not have to be imposed on the people through threats and intimidation. It didn’t need to be imposed at all. Conquered subjects sought to emulate the prestigious language of their conquerors, while they simultaneously came to look down on their own native tongue as gross, defective, and inferior. In modern liberal societies the same principle has been at work, but with different players. As education became the ticket to worldly success, it naturally became a source of prestige. Prestige no longer came from conquest by arms, but from earning a Ph.D. In modern secular societies, the eminence of the intellectual elite allowed it to unilaterally allocate prestige to select ideas, thinkers, and institutions. Objects imbued with the magical glow of prestige did not need to be pushed on people — on the contrary, people eagerly vied with each other to obtain these objects, often at great personal sacrifice. That is why prestigious institutions, such as major universities, well-endowed foundations, and posh clubs invariably have far more candidates for admission than can possibly be accommodated — a selectivity that makes them even more desirable and prestigious. That is the beauty of prestige: It doesn’t need to lift a finger. It can just sit back and relax, confident that people will flock to its feet, begging for the crumbs from its luxuriant table.

A governing elite that has a monopoly over the allocation of prestige has immense power over a culture. It can decide what ideas, thinkers, and movements merit attention, while it can also determine what ideas, thinkers, and movements should be dismissed with scorn and contempt — assuming that the elite even condescends to notice their existence. Needless to say, such a setup will lead to a high degree of intellectual cronyism, in which members of the “in” group mutually endorse and reinforce each others’ prestige; but like crony capitalism, this is standard operating procedure of all elites and should come as no surprise. Relying on the natural human desire to gravitate towards prestige, the intellectual elite has no need to resort to the ham-fisted methods of Orwell’s Big Brother.

Despite the fact that Gramsci regarded himself as a Marxist, the central role that he gave to prestige led far from Marxist orthodoxy. In Marxism the ruling class can be easily identified: it has a monopoly on the production and distribution of things. For Gramsci, there is a new ruling class, which has a monopoly on the production and distribution of opinions. Capitalists only trade in products and services. Intellectuals shape and mold people’s perceptions and ideas. In earlier societies, in which intellectuals could only influence people by books and pamphlets, their reach was limited. But with the advent of the modern technology have come new means of reaching out to even the most illiterate masses, influencing them in new and subtle ways, while ingenious methods of psychological manipulation and subliminal persuasion have made it quite simple to mask propaganda under the guise of entertainment. The intellectual elite, simply by achieving cultural hegemony over the masses, could obtain a power of influencing the popular mind that tyrants and despots of a previous era only dreamt about. Because of their immense prestige with the general public, the intellectual elite can frequently win people over to their cause. Those who wish to be regarded as intelligent and current in their ideas will quickly move to adopt those ideas that happen to carry the greatest intellectual prestige at any given time, just as the fashion-conscious will quickly start dressing themselves in the latest clothes concocted by the most prestigious designers. The spell cast by prestige gives those who possess it an immense power to influence society. For Gramsci, the prestige of the dominant elite was sufficient to make people discard their native language in order to acquire a language that ranked higher in prestige. And if people are willing to change languages because of prestige, they will certainly be willing to change their ideas, their values, their customs, and their traditions for the same reason.

For better or for worse, the profound cultural changes in American life during the past half century are testament to the enormous influence exercised by our cultural guardians. Ideas, customs, and traditions that no longer find favor in the eyes of the cultural elite have been stigmatized as out-of-date and old-fashioned, while an array of progressive policies have received the imprimatur of elite prestige.

Posted in Lee Harris, Linguistics, Policy | No Comments »

Puritans and Victorians

July 28th, 2010

Steve Sailer recently read Neal Stephenson’s Quicksilver, and I have to agree with him that I tend to like the idea of Stephenson more than his actual books. Here Sailer explains at least part of the idea behind Stephenson’s 17th Century historical novel:

Quicksilver involves, besides much else, the origin of the dispute between Newton and Leibniz over credit for the calculus. It’s a sort of WASP Nerd’s History of the World, the male equivalent of all those historical novels about princesses and duchesses that sell so well these days.

Sailer cites a 2004 Salon interview with Stephenson, which discusses his fascination with Puritans and Victorians:

You’re remarkably sympathetic to the Puritans, too, which is unusual these days.

I have a perverse weakness for past generations that are universally reviled today. The Victorians have a real bad name, and the word “Puritan” is never used except in a highly pejorative way, despite the fact that there are very strong Victorian and Puritan threads in our society today, and despite the fact that the Victorians and Puritans built the countries that we live in. The other one, by the way, is the ’50s. Someday I’ll have to write a ’50s novel.

The reason why people are so vituperative about those generations is not because they know anything about the history, but because they’re really talking about splits within our culture today that they’re worried about. In the same spirit that I wrote a Victorian novel earlier in my career [The Diamond Age], I figured it might be a kick to see what to do with some Puritans. Not hip, jaded, cool Puritans, but honest-to-god, fire-breathing Puritans. Drake [Waterhouse, Daniel's father] is an arch-Puritan, but by no means exaggerated. There were a million guys like this running around England in those days. He became the patriarch of this family of people who have to respond to his larger-than-life status and extreme commitment to religion.

What do you admire about the Puritans?

They were tremendously effective people. They completely took over the country and they created an army pretty much from scratch that kicked everyone’s ass. This is not always a good thing. They were guilty of some very bad behavior in Ireland, for example. But any way you slice it they were very effective. Cromwell was a tremendous military leader. A lot of that effectiveness was rooted in the fact that they had money, in part because persecuted religious minorities, if they’re not persecuted out of existence, often manage to achieve disproportionate wealth. It happened with Jews, Armenians, Huguenots. Earlier in this project, I could have rattled off five more. They have to form private trading networks and lend each other money. They’re unusually education conscious. Puritans — and when we say Puritans, we’re talking about a whole grab bag of religious groups — tended to prize literacy and education. I’m sure they had a higher literacy rate than the general English population. Literacy and education make people more effective.

Another answer is that they very early on adopted a set of views on social topics that everyone now takes for granted as being basic tenets of Western civilization. They were heavily for free enterprise. They didn’t want the state interfering in private property. Now our whole system is built on that. We tend to forget that someone had to come up with that idea and fight for it. And those people did.

Posted in Media, Policy | No Comments »

The Colony

July 28th, 2010

Season 2 of the Discovery Channel’s post-apocalyptic reality-show, The Colony, has just begun, and episode 1 is now online. Watching people struggle for food, water, fire, shelter, and security puts some things in perspective.

Posted in Media | No Comments »

The Tea Party vs. the Intellectuals

July 28th, 2010

Lee Harris looks at the Tea Party vs. the Intellectuals:

Intellectual critics of the Tea Party movement most often attack it for its lack of ideas, especially new ideas — and these critics have a point. But the point they are making reveals as much about them as it does about the Tea Party. Behind the criticism lies the implicit assumption that comes quite naturally to American intellectuals: Namely, that a political movement ought be motivated by ideas and that a new political movement should provide new ideas.

But the Tea Party movement is not about ideas. It is all about attitude, like the attitude expressed by the popular poster seen at all Tea Party rallies. Over the head of a hissing rattlesnake threatening to strike is inscribed the defiant slogan so popular among our revolutionary ancestors: “Don’t tread on me!” The old defiant motto is certainly not a new idea. In fact, it is not an idea at all. It is a warning.

If you are an intellectual, you can debate an idea, but how do you debate a warning? No evidence can be adduced to refute it. No logic can be introduced to poke holes in it. All you can do with a warning is to heed it or disregard it. “Don’t tread on me!” is not the deliberate articulation of a well-thought-out political ideology, but rather the expression of an attitude — the attitude of pugnacious and even truculent defiance. But take away this attitude, and what is left of the Tea Party? Not much that respectable intellectuals can respect.

First of all, there appears to be no consistent ideology or coherent set of policies behind the movement. Second, when intellectuals turn to examine some of the more radical proposals championed in Tea Party circles, such as the abolition of Social Security or the return to the gold standard, they can only shake their heads in dismay. These crank nostrums are well past their historical expiration date. They may elicit fanatic support from the politically naïve and unsophisticated, but no one who knows how the political world operates will pay them a moment’s notice. Reviving the gold standard in order to solve our economic problems is akin to reviving the horse-and-buggy to reduce our level of carbon emissions. It ain’t gonna happen, and those who put their energies into pursuing these quack solutions are at best engaged in the politics of make-believe.

It is little wonder that so many sober intellectuals find it difficult to take the Tea Party seriously, except to see it as a threat to the future of American politics. But anti-Tea Party intellectuals who are liberal have a luxury that their conservative brethren don’t have. Liberals can attack and deride the Tea Party without fear of alienating their traditional allies among ordinary voters. Indeed, their mockery of the Tea Party makes good sense to them politically. It is throwing red meat to their base. But conservative intellectuals are in a wholly different position.

As the Tea Party gains in momentum, conservative intellectuals are faced with a dilemma: to join the party or denounce it. If they join, they risk losing their status as respectable public intellectuals. If they denounce the party, they risk losing influence over the traditional Republican base.

Posted in Lee Harris, Policy | 1 Comment »

Does Language Influence Culture?

July 28th, 2010

Lera Boroditsky explores the Sapir-Whorf hypothesis — Does Language Influence Culture? — without mentioning it by name:

For example, in Pormpuraaw, a remote Aboriginal community in Australia, the indigenous languages don’t use terms like “left” and “right.” Instead, everything is talked about in terms of absolute cardinal directions (north, south, east, west), which means you say things like, “There’s an ant on your southwest leg.” To say hello in Pormpuraaw, one asks, “Where are you going?”, and an appropriate response might be, “A long way to the south-southwest. How about you?” If you don’t know which way is which, you literally can’t get past hello.

About a third of the world’s languages (spoken in all kinds of physical environments) rely on absolute directions for space. As a result of this constant linguistic training, speakers of such languages are remarkably good at staying oriented and keeping track of where they are, even in unfamiliar landscapes. They perform navigational feats scientists once thought were beyond human capabilities. This is a big difference, a fundamentally different way of conceptualizing space, trained by language.

Differences in how people think about space don’t end there. People rely on their spatial knowledge to build many other more complex or abstract representations including time, number, musical pitch, kinship relations, morality and emotions. So if Pormpuraawans think differently about space, do they also think differently about other things, like time?

To find out, my colleague Alice Gaby and I traveled to Australia and gave Pormpuraawans sets of pictures that showed temporal progressions (for example, pictures of a man at different ages, or a crocodile growing, or a banana being eaten). Their job was to arrange the shuffled photos on the ground to show the correct temporal order. We tested each person in two separate sittings, each time facing in a different cardinal direction. When asked to do this, English speakers arrange time from left to right. Hebrew speakers do it from right to left (because Hebrew is written from right to left).

Pormpuraawans, we found, arranged time from east to west. That is, seated facing south, time went left to right. When facing north, right to left. When facing east, toward the body, and so on. Of course, we never told any of our participants which direction they faced. The Pormpuraawans not only knew that already, but they also spontaneously used this spatial orientation to construct their representations of time. And many other ways to organize time exist in the world’s languages. In Mandarin, the future can be below and the past above. In Aymara, spoken in South America, the future is behind and the past in front.

In addition to space and time, languages also shape how we understand causality. For example, English likes to describe events in terms of agents doing things. English speakers tend to say things like “John broke the vase” even for accidents. Speakers of Spanish or Japanese would be more likely to say “the vase broke itself.” Such differences between languages have profound consequences for how their speakers understand events, construct notions of causality and agency, what they remember as eyewitnesses and how much they blame and punish others.

In studies conducted by Caitlin Fausey at Stanford, speakers of English, Spanish and Japanese watched videos of two people popping balloons, breaking eggs and spilling drinks either intentionally or accidentally. Later everyone got a surprise memory test: For each event, can you remember who did it? She discovered a striking cross-linguistic difference in eyewitness memory. Spanish and Japanese speakers did not remember the agents of accidental events as well as did English speakers. Mind you, they remembered the agents of intentional events (for which their language would mention the agent) just fine. But for accidental events, when one wouldn’t normally mention the agent in Spanish or Japanese, they didn’t encode or remember the agent as well.

In another study, English speakers watched the video of Janet Jackson’s infamous “wardrobe malfunction” (a wonderful nonagentive coinage introduced into the English language by Justin Timberlake), accompanied by one of two written reports. The reports were identical except in the last sentence where one used the agentive phrase “ripped the costume” while the other said “the costume ripped.” Even though everyone watched the same video and witnessed the ripping with their own eyes, language mattered. Not only did people who read “ripped the costume” blame Justin Timberlake more, they also levied a whopping 53% more in fines.

Beyond space, time and causality, patterns in language have been shown to shape many other domains of thought. Russian speakers, who make an extra distinction between light and dark blues in their language, are better able to visually discriminate shades of blue. The Piraha, a tribe in the Amazon in Brazil, whose language eschews number words in favor of terms like few and many, are not able to keep track of exact quantities. And Shakespeare, it turns out, was wrong about roses: Roses by many other names (as told to blindfolded subjects) do not smell as sweet.

Posted in Linguistics, Science | 1 Comment »

The Acceleration of Addictiveness

July 28th, 2010

Paul Graham discusses the acceleration of addictiveness:

What hard liquor, cigarettes, heroin, and crack have in common is that they’re all more concentrated forms of less addictive predecessors. Most if not all the things we describe as addictive are. And the scary thing is, the process that created them is accelerating.

We wouldn’t want to stop it. It’s the same process that cures diseases: technological progress. Technological progress means making things do more of what we want. When the thing we want is something we want to want, we consider technological progress good. If some new technique makes solar cells x% more efficient, that seems strictly better. When progress concentrates something we don’t want to want—when it transforms opium into heroin—it seems bad. But it’s the same process at work. [1]

No one doubts this process is accelerating, which means increasing numbers of things we like will be transformed into things we like too much. [2]

As far as I know there’s no word for something we like too much. The closest is the colloquial sense of “addictive.” That usage has become increasingly common during my lifetime. And it’s clear why: there are an increasing number of things we need it for. At the extreme end of the spectrum are crack and meth. Food has been transformed by a combination of factory farming and innovations in food processing into something with way more immediate bang for the buck, and you can see the results in any town in America. Checkers and solitaire have been replaced by World of Warcraft and FarmVille. TV has become much more engaging, and even so it can’t compete with Facebook.

The world is more addictive than it was 40 years ago. And unless the forms of technological progress that produced these things are subject to different laws than technological progress in general, the world will get more addictive in the next 40 years than it did in the last 40.

The next 40 years will bring us some wonderful things. I don’t mean to imply they’re all to be avoided. Alcohol is a dangerous drug, but I’d rather live in a world with wine than one without. Most people can coexist with alcohol; but you have to be careful. More things we like will mean more things we have to be careful about.

Most people won’t, unfortunately.

The one that caught him off guard was “procrastination” on the Internet:

People commonly use the word “procrastination” to describe what they do on the Internet. It seems to me too mild to describe what’s happening as merely not-doing-work. We don’t call it procrastination when someone gets drunk instead of working.

His take on the iPad:

Several people have told me they like the iPad because it lets them bring the Internet into situations where a laptop would be too conspicuous. In other words, it’s a hip flask.

Posted in Paul Graham, Technology | No Comments »

A Batesian Mimicry Explanation of Business Cycles

July 27th, 2010

Erik Falkenstein went to grad school to become a macroeconomist and understand business cycles, but he quickly realized that no one understood business cycles.  Now he presents his own Batesian mimicry explanation of business cycles:

My argument is that business cycles are best understood though the framework of Batesian mimicry, an endogenous mechanism for booms and busts thru a misallocation in the horizontal structure of production. In ecosystems, Batesian mimicry is typified by a situation where a harmless species (the mimic) evolves to imitate the warning signals of a harmful species (the model) directed at a common predator (the dupe). For example, venomous coral snakes have red, yellow, and black bands, while the non-venomous scarlet king snake has the same colors in a different order. Animals afraid of venomous snakes would do well to avoid 4 foot long snakes with red, yellow and black stripes, in the process avoiding the scarlet king snake (alternatively, one could remember the rule “Red on yellow, kill a fellow; red on black, friend of Jack”).

The process has been observed in insects, reptiles, mammals, and plants, and sometimes occurs between species. By parasitizing the true warning signal of the protected species, the Batesian mimic gains the same advantage without having to go to the biological expense of maintaining a poison. The species being mimicked, on the other hand, is disadvantaged, along with the dupe who misses out on tasty mimic meals. If imposters appear in high numbers, positive experiences by the predator with the mimic may result in the model species losing the benefits of signaling its poison.

Atsushi Yamauchi has shown that when there are density effects on the model species, there is no stable equilibrium. Nonlinear dynamics make the system’s aggregate features unpredictable in specifics, but most importantly, it is not a stable equilibrium to have no mimics over long periods of time: the gains are large to the mimic because predators obey the model’s high-quality signal.

While it’s conceivable one could generate a formal economic model with these qualitative results, note that the ecological literature mainly looks at comparative statics for one species, noting what assumptions generate stable equilibria, and which do not. There is no attempt to generate a dynamic model of the mimic or models success over time, presumably because the highly nonlinear, recursive system is so sensitive to results would merely be qualitative, like the comparative statics.

In an expansion investors are constantly looking for better places to invest their capital, while entrepreneurs are always overconfident, hoping to get capital to fund their restless ambition. Sometimes, the investors (dupes) think a certain set of key characteristics are sufficient statistics of a quality investment because historically they were. Mimic investors seize upon these key characteristics that will allow them to garner funds from the duped investors. The mimic entrepreneurs then have a classic option value, which however low in expected value to the investor, has positive value to the entrepreneur. The mimicry itself may involve conscious fraud, or it may be more benign, such as naïve hope that they will learn what works once they get their funding, or sincere delusion that the characteristics are the essence of the seemingly promising activity. The mimicking entrepreneurs are a consequence of investing based on insufficient information that is thought sufficient, but they make things worse because they misallocate resources that eventually, painfully, must be reallocated.

Once the number of mimics is sufficiently high, their valueless enterprises become too conspicuous and they no longer pass off as legitimate investments. Failures caused by insufficient cash create a tipping point, notify investors that certain assumptions were incorrect. Areas that for decades were very productive, are found to often contain exceptional levels of fraud, or operate with no conceivable expectation of a profit. Everyone outside the industry with excessive mimics marvels at how such people—investors, entrepreneurs, and their middlemen–could be so short-sighted, but the key is that the mimics and duped investors chose those business models that seemed most solid based on objective, identifiable characteristics that were, historically, correlated with success. An econometric analysis would have found these ventures a good bet, which is why investors did not thoroughly vet their business models (banks, up through 2007, were one of the best performing industries since industry data has been available in the US, and performed well in the 2001 recession).

In the 1990’s tech firms in general and internet firms in specific were doing very well. The internet bubble was filled with a naïve lack of skepticism that allowed otherwise absurd business ventures to get funding. Using hindsight there were so many businesses with doomed business models, you wondered how they could have been taken seriously, but investors were looking primarily at a few key criteria—net presence, branding—and these did work well for several years until the March 2000 crash, especially using the criteria of their stock price. Consider that Enron was able to engage in negative cash flow activities for at least 5 years while their stock price kept climbing, highlighting that if you hit the key signals investors are naively prioritizing, they can be fooled, just not forever.

Posted in Economics, Eric Falkenstein, Science | No Comments »

Period Speech

July 27th, 2010

A few centuries from now, xkcd notes, all the English of the past 400 years will sound equally old-timey and interchangeable:

Posted in Media | No Comments »

How LEGO Revived Its Brand

July 27th, 2010

I never noticed LEGO’s not-so-LEGO Galidor action-figure line, but it was a disaster, and even within its core construction toy business, LEGO was foundering:

LEGO managers had given designers free rein to come up with ever more imaginative creations. And they took it. Left to their own devices, designers conjured up increasingly complex models, many of which required the company to make new components — the various bricks, doors, helmets, and heads that come in a rainbow of colors and fill every LEGO box. By 2004 the number of components had exploded, climbing from about 7,000 to 12,400 in just seven years. Of course, supply costs went through the roof, too.

Even more troubling was that the new designs weren’t resonating with kids. That freedom to create elaborate new designs had a price. “It was making us more stupid,” Smith-Meyer says. All you needed to do was look at the fire truck in its LEGO City line. It went from being a conventional hook-and-ladder rig to a futuristic hot rod. Its cockpit-like pod for a driver was nearly twice the size of the back of the truck, where presumably all the firefighting gear was stored.

The truck looked cool to the adult designers, but kids hated it. “It totally failed,” says Nipper, the executive vice-president. The design free-for-all turned the LEGO City line, once among the largest pieces of LEGO’s business, into a shell of its former self, accounting for just 3 percent of the company’s total revenue, down from roughly 13 percent in 1999. “It literally almost evaporated,” Nipper says.

Looking back, Nipper doesn’t find fault with the designers. “Management was to blame,” Nipper says. “The same people who were doing crappy products then are making world-class products today.” Managers, rather, let those designers go wild. And, Smith-Meyer says, they did. “We almost did innovation suicide. We didn’t do a lot of clever components. We did a lot of stylized pieces,” Smith-Meyer says. “We wanted to be Philippe Starck” — the French industrial, interior, and furniture designer famous for everything from juicers to motorcycles. LEGO had assumed it would flourish by giving its designers whatever pieces they asked for in order to unleash their creativity. Instead, costs soared as the models veered toward the esoteric.

Just as design pushed LEGO to the precipice, it helped bring the company back. But here’s the paradox: Instead of giving designers free rein to conjure up their most brilliant creations to save the company, LEGO tied their hands. Instead of rubber-stamping nearly every request for a new component, LEGO put each one to a vote among designers. Only the top vote getters — the ones other designers imagined they could use — would be added to the palette. And it eliminated rarely used pieces, slashing the total number of components to about 7,000, the same number as in 1997.

LEGO also forced designers to come out of their cocoons and work with noncreative staff. At the earliest stages of product development, marketing managers, who had detailed research on the types of products kids wanted, helped guide development. Manufacturing personnel weighed in on production costs before a prototype ever saw the light of day. Gone were the days when designers could go wherever their imaginations took them.

Posted in Business | 5 Comments »

The Roots Of White Anxiety

July 26th, 2010

Ross Douthat explores the roots of white anxiety:

Last year, two Princeton sociologists, Thomas Espenshade and Alexandria Walton Radford, published a book-length study of admissions and affirmative action at eight highly selective colleges and universities. Unsurprisingly, they found that the admissions process seemed to favor black and Hispanic applicants, while whites and Asians needed higher grades and SAT scores to get in. But what was striking, as Russell K. Nieli pointed out last week on the conservative Web site Minding the Campus, was which whites were most disadvantaged by the process: the downscale, the rural and the working-class.

This was particularly pronounced among the private colleges in the study. For minority applicants, the lower a family’s socioeconomic position, the more likely the student was to be admitted. For whites, though, it was the reverse. An upper-middle-class white applicant was three times more likely to be admitted than a lower-class white with similar qualifications.

This may be a money-saving tactic. In a footnote, Espenshade and Radford suggest that these institutions, conscious of their mandate to be multiethnic, may reserve their financial aid dollars “for students who will help them look good on their numbers of minority students,” leaving little room to admit financially strapped whites.

But cultural biases seem to be at work as well. Nieli highlights one of the study’s more remarkable findings: while most extracurricular activities increase your odds of admission to an elite school, holding a leadership role or winning awards in organizations like high school R.O.T.C., 4-H clubs and Future Farmers of America actually works against your chances. Consciously or unconsciously, the gatekeepers of elite education seem to incline against candidates who seem too stereotypically rural or right-wing or “Red America.”

This provides statistical confirmation for what alumni of highly selective universities already know. The most underrepresented groups on elite campuses often aren’t racial minorities; they’re working-class whites (and white Christians in particular) from conservative states and regions. Inevitably, the same underrepresentation persists in the elite professional ranks these campuses feed into: in law and philanthropy, finance and academia, the media and the arts.

(Hat tip to Steve Sailer.)

Posted in Education, Policy | 5 Comments »

Full of Brio and Spin

July 26th, 2010

Claire Cain Miller of the New York Times describes Elon Musk as full of brio and spin:

“He’s done amazing things, but at the same time, he’s not a straight-shooter,” says Darryl Siry, Tesla’s former senior vice president for sales and marketing. “It’s a reality distortion field and it’s a powerful one. He gives the facts to fit the narrative he wants out there.”

When your sales & marketing guy is uncomfortable with how far you stretch the truth, well, you’re probably taking things too far.

Tesla isn’t making money, and it’s not clear when it’s going to start:

In 2009, Tesla lost $55.7 million on revenue of just $111.9 million. It faces a period without significant sales revenue because it plans to stop selling the current version of the Roadster in 2011 and will not start selling the next generation until at least a year after the Model S is out.

Elon’s brother, Kimbal, calls him the double-down king:

In addition to his Tesla investment, Mr. Musk says he has funneled $100 million into SpaceX and $10 million into SolarCity; the total of $185 million is nearly all his proceeds from the sale of PayPal to eBay. (He sold $24 million worth of his Tesla stock, in part, he says, because he recently ran out of cash.)

Posted in Business | No Comments »

« Older Entries