Social Collapse

Wednesday, July 29th, 2009

I did not realize that Robin Hanson had studied social collapse and presented his thoughts a year ago at Oxford:

If you’re not already familiar with power law distributions, you may need to study the slides or Hanson’s written paper in more detail.


Wednesday, July 29th, 2009

Rory Miller (Meditations on Violence) talks about concrete:

If footwork is critical to your style (and I have yet to see one where it isn’t) then footing, the ability to trust your connection to the ground and to efficiently move your body when you press the earth is pretty damn important.

Most martial artists practice with good footing as a given. Not always — some take care to play outdoors and on uneven terrain. Some who frequently practice outdoors in all weather learn about slick wet grass and sometimes gripping mud. Knee deep snow. Broken rock. And good footing isn’t always good footing. Almost every judoka I know has broken or dislocated his little toes on soft mats.

Finished concrete with a light layer of dust is slippery. Very slippery if you are wearing good boots.

Finished concrete is also a good reflector. There is an element of hunting or ambush to a lot of fights. Practice in paying attention to shadows and reflections can give you the edge no matter which side of the dynamic you play.

Falling — You learn to fall on stuff that is much softer than concrete. I’m cool with that. With diligent practice ukemi work just fine on concrete. I’ve taken a full flip on asphalt at about 30 mph without a scratch and a full power throw on concrete with a 260 pound man landing on top without a bruise. The skills translate, but mistakes or poor skill has a much higher price when the surface is harder.

Impact tool and pain compliance — the earth is an impact weapon. In my opinion, it’s usually stupid to hit people in the head with your fist. I find it stupid and inefficient to do so if there is a substance much harder than your fist right next to the threat’s head. Wall or floor, driving a head into it probably works better than hitting with your hand. For one thing, you can get the body weight of both people into the strike. For another you can sometimes entrain the threat’s flinch reaction into the force. Someone flinching into a door jamb demonstrates amazing short power.

Rough concrete also hurts quite a lot. There is a huge difference between kneeling on an opponent’s jaw on a mat and kneeling on the same jaw when it is backed by gravel over concrete.

You can see that he has a different perspective from most martial artists:

I trained with a man, one of the best in the world at what he does, who insisted that the ground and pound was the “worst possible scenario.” Probably everyone knows, but just in case- you are on the ground, on your back. The opponent is straddling you and raining down blows to your face. This ‘worst possible’ scenario wouldn’t even make my top ten. Five or six guys kicking would make it worse. A knife would make it worse. Being face down would make it worse. Being on top could be worse if I think I’m in some kind of wrestling match and the threat has decided it’s a knife fight… on and on.

What does this last bit have to do with concrete?

When the backstop is concrete anything that misses has a price to pay. Fully committed, full power, threat can cause his own crippling injury. You just have to make the threat miss. Shifting your pinned hips is usually enough.

Bubbles are hard to pop

Wednesday, July 29th, 2009

Alex Tabarrok cites some evidence that bubbles are hard to pop even when you know that they exist:

In the lab we can create artificial assets with known dividend streams and thus known fundamental values. Since Vernon Smith’s classic experiments, we know that even in these cases efficient markets fail and bubbles are common. Bubbles occur even as uncertainty about the fundamental value diminishes. We also know that once a bubble starts it’s difficult to stop. Circuit breakers and brokerage fees (transaction taxes), for example, don’t do much to stop bubbles (see King, Smith, Williams, and Van Boening 1993, not online.) Investor education doesn’t help (for example telling participants about previous bubbles doesn’t help). Even increasing interest rates doesn’t do much to stop a bubble already in progress and may increase volatility on net.

Futures markets and short selling do tend to dampen but not eliminate bubbles, thus, there is a case for expanding futures markets in housing and making short selling easier (not harder!).

Bubbles are also less common with more experienced traders — this is one of the strongest findings. Don’t get too excited about this, however, it’s experience with bubbles that counts not just trading experience. I once asked Vernon, for example, how the lab evidence generalized to the larger economy. In particular, I asked whether 3 bubble experiences in the lab — the number which seems to be necessary to dampen bubbles — might translate to 3 big bubbles in the real world such as the dot com, commodity and housing bubbles (rather than to experience with your run of the mill bubble in an individual stock). He thought that this was a reasonable inference from the evidence. Thus we may not see too many big bubbles during the trading lifetime of current market participants but experience is a very costly teacher. Can we do better?

The last factor that does seem to make a difference is that bubbles liftoff and reach higher peaks when there’s a lot of cash floating around. In theory, this shouldn’t matter, fundamental value is fundamental value. If an asset is worth $10 in expected value then it’s worth $10 whether you have $20 in your pocket or $200. But in practice bubbles are bigger when cash relative to asset value is high.

A Charter City in Cuba?

Wednesday, July 29th, 2009

As a thought experiment, Paul Romer suggests a charter city in Cuba, where the Guantanamo Bay military base now stands:

Imagine that the United States and Cuba agree to disengage by closing the military base and transferring local administrative control to Canada. Canada works with Cuba to draft a charter for this special zone and promises to enforce its terms. Under this charter, a new city blossoms. It does for Cuba what Hong Kong, administered by the British, did for China; it connects Cuba to the global economy.

To help the city flourish, the Canadians encourage immigration. It is a place with Canadian judges and Mounties that happily accepts millions of immigrants. Some of the new residents could be Cuban émigrés who return from North America. Others might be Haitians who come work in garment factories that firms no longer feel safe bringing into Haiti. The new city gives the Haitians their only chance to choose to live under a system of law that offers safety and opportunity.

Initially, the government of Cuba lets some of its citizens participate by migrating to the new city. Over time, it encourages citizens to move instead to a new city that it creates in a special economic zone located right outside the charter city, just as the Mainland Chinese let its citizens move into Shenzhen next to Hong Kong.

With clear rules spelled out in the charter and enforced by the Canadian judicial system, all the infrastructure for the new city is financed by private investment. The Canadians pay for the government services they provide (the legal, judicial, and regulatory systems, education, basic health care) out of the gains in the value of the land in the administrative zone. This, of course, creates the right incentives to invest in education and health. Growth in human capital makes income grow very rapidly, which makes the land in the zone even more valuable.

This scenario shows what is possible. In practice, the personalities and politics of the relationship between the United States and Cuba make it highly unlikely that this potential will be realized. The first charter city is more likely to be set up in a host nation that has lots of land and has not been able to attract on its own the kind of foreign investment needed to create millions of entry level jobs in manufacturing for its citizens. There are many candidates.

Affirmative Action Isn’t About Uplift

Tuesday, July 28th, 2009

Politics isn’t about policy, Robin Hanson says, and affirmative action isn’t about uplift, Shelby Steele explains:

The original goal of affirmative action was to achieve two redemptions simultaneously. As society gave a preference to its former victims in employment and education, it hoped to redeem both those victims and itself. When America — the world’s oldest and most unequivocal democracy — finally acknowledged in the 1960s its heartless betrayal of democracy where blacks were concerned, the loss of moral authority was profound. …

Affirmative action has always been more about the restoration of legitimacy to American institutions than the uplift of blacks and other minorities. For 30 years after its inception, no one even bothered to measure its effectiveness in minority progress. … Research … has completely failed to show that affirmative action ever closes the academic gap between minorities and whites. …

But affirmative action has been quite effective in its actual, if unacknowledged, purpose. It has restored moral authority and legitimacy to American institutions. When the Supreme Court seemed ready to nullify the idea of racial preferences in the 2003 University of Michigan affirmative action cases, more than 100 amicus briefs — more than for any other case in U.S. history — were submitted to the court by American institutions in support of group preferences. Yet there was no march on Washington by tens of thousands of blacks demanding affirmative action, not even a threat of such a move from a people who had “marched” their way to freedom in the ’60s. In 2003, the possible end of racial preferences did not panic minorities; it panicked institutional America.

The Platonic Guardians of the Socialist State

Tuesday, July 28th, 2009

The Platonic guardians of the socialist state, Mencius Moldbug says, persistently prefer bad ideas — but not because they’re bad people:

Why, with its intellectual firepower, can progressivism not self-correct? After all, its public-policy experts are supposed to be scientists. They publish papers — with numbers. Surely this makes them scientists, and science is self-correcting, ie, always right.

Alas. Not everyone who writes papers with numbers is a scientist. The most you can say is that your subject is either a scientist, or a pseudoscientist. Also, while it is correct to note that science can be self-correcting, it is incorrect to assume that it must be, ie, is incorruptible. Nothing whatsoever is incorruptible — certainly not science.

The Platonic guardians of the socialist state — scientists, planners, bureaucrats, or whatever you call them — persistently prefer bad ideas because of the organizational structure of the socialist state. Again, democracy is the fundamental and irrecoverable flaw.

Because socialism is democratic, it distrusts, opposes and tends to destroy organizational structures which are built on (a) hierarchical command, (b) personal responsibility, and/or (c) financial interests. Your socialist state will never produce a structure in which a single planner is responsible for, say, North Carolina; can fire whomever he likes in the administration of North Carolina; and gets fired himself, if North Carolina does not blossom into a subtropical Eden. This is an organizational structure that one might find in, say, the British Raj. It is not democratic in nature, nor socialist.

Instead, the socialist state divides power and spreads it as widely as possible — within itself, of course. Its decisions are not personal, but procedural. A procedure is a better procedure if it cuts more stakeholders into the loop — if it is a more open process. Here we see clearly what the State is doing: it is building a support base from its own employee roster, and it is purchasing support by exchanging it for power. The feeling of being in the decision loop produces a remarkable effect of emotional loyalty, no matter how trivial the actual authority may be.

There is just a slight downside to this: when socialism fails, no one is responsible. No system of ideas, even, can be responsible — for a system of ideas would be an ideology, and public policy is not determined by ideology. Thus many will tell you that economics failed in the crisis of 2008, but no one can possibly do anything about it. Certainly, no producer of economic wisdom in the universities, nor consumer in Washington, need feel even slightly threatened. Tenure is tenure, and civil-service protection is civil-service protection. Our masters serve for life.

Moreover, in an environment where failure confers no punishment, we would expect bad policies to outcompete good ones. Much as islands without predators are dominated by flightless birds. Freed from the need to actually succeed, the bad policies can offer everything to everyone — permanently. But alas, no dodo is forever.

Manual Competence

Tuesday, July 28th, 2009

In his original New Atlantis article, Shop Class as Soulcraft, Matthew Crawford laments that manual competence has fallen out of favor:

Anyone in the market for a good used machine tool should talk to Noel Dempsey, a dealer in Richmond, Virginia. Noel’s bustling warehouse is full of metal lathes, milling machines, and table saws, and it turns out that most of it is from schools. EBay is awash in such equipment, also from schools. It appears shop class is becoming a thing of the past, as educators prepare students to become “knowledge workers.”

At the same time, an engineering culture has developed in recent years in which the object is to “hide the works,” rendering the artifacts we use unintelligible to direct inspection. Lift the hood on some cars now (especially German ones), and the engine appears a bit like the shimmering, featureless obelisk that so enthralled the cavemen in the opening scene of the movie 2001: A Space Odyssey. Essentially, there is another hood under the hood.

This creeping concealedness takes various forms. The fasteners holding small appliances together now often require esoteric screwdrivers not commonly available, apparently to prevent the curious or the angry from interrogating the innards. By way of contrast, older readers will recall that until recent decades, Sears catalogues included blown-up parts diagrams and conceptual schematics for all appliances and many other mechanical goods. It was simply taken for granted that such information would be demanded by the consumer.

A decline in tool use would seem to betoken a shift in our mode of inhabiting the world: more passive and more dependent. And indeed, there are fewer occasions for the kind of spiritedness that is called forth when we take things in hand for ourselves, whether to fix them or to make them. What ordinary people once made, they buy; and what they once fixed for themselves, they replace entirely or hire an expert to repair, whose expert fix often involves installing a pre-made replacement part.

So perhaps the time is ripe for reconsideration of an ideal that has fallen out of favor: manual competence, and the stance it entails toward the built, material world. Neither as workers nor as consumers are we much called upon to exercise such competence, most of us anyway, and merely to recommend its cultivation is to risk the scorn of those who take themselves to be the most hard-headed: the hard-headed economist will point out the opportunity costs of making what can be bought, and the hard-headed educator will say that it is irresponsible to educate the young for the trades, which are somehow identified as the jobs of the past. But we might pause to consider just how hard-headed these presumptions are, and whether they don’t, on the contrary, issue from a peculiar sort of idealism, one that insistently steers young people toward the most ghostly kinds of work.

Ask and It Shall be Given

Tuesday, July 28th, 2009

Ask, and it shall be given. That was Steve Blank’s experience:

Our small training department had been without a manager for months and finding a replacement didn’t seem to be high on the VP of Sales list. We four instructors would grumble and complain to one another about our lack of leadership.

Then it hit me — no one else wanted to be manager — what was the worst that could happen? I walked into the VP of Sales’ office and with my knees trembling, I politely asked for the job. I still remember him chuckling as I nervously babbled on what I good job I would do, what I would change for the better in the department, why I was qualified, etc.

He said, “you know I figured it would be you to come in here and ask for the job. I was wondering how long it would take you.” I was now manager of Training and Education at Zilog.

All I had to do was ask.

He learned to keep asking:

One day I heard there was an opening in the marketing department for a product marketing manager for the Z-8000 peripheral chips. The department had hired a recruiter and was interviewing candidates from other chip companies. I looked at the job spec and under “candidate requirements” it listed everything I didn’t have: MBA, 5–10 years product marketing experience, blah, blah.

I asked for the job.

The response was at first less than enthusiastic. I certainly didn’t fit their profile. However, I pointed out that while I didn’t have any of the traditional qualifications I knew the product as well as anyone. I had been teaching Z8000 design to customers for the last year and a half. I also knew our customers. I understand how our products were being used and why we won design-in’s over Intel or Motorola. And finally, I had a great working relationship with our engineers who designed the chips. I pointed out it that it would take someone else 6 months to a year to learn what I already knew — and I was already in the building.

A week later Zilog had a new product marketing manager, and I had my first job in marketing.

Now all I needed to do was to learn what a marketeer was supposed to do.

He came up with a heuristic:

In a technology company it’s usually better to train a domain expert to become a marketer than to train an MBA to become a domain expert. While MBA’s have a ton of useful skills, what they don’t have is what most marketing departments lack — customer insight. I found that having a senior marketer responsible for business strategy surrounded by ex-engineers and domain experts makes one heck of a powerful marketing department.

People like who they are

Tuesday, July 28th, 2009

People like who they are, Rory Miller (Meditations on Violence) says — to a point:

They may not think it, they may not say it, but if “just bein’ me” becomes a burden or dangerous, people, except for the most ego driven or stupid, change.

When some idiot’s wife asks or tells him to slow down and he speeds up and snarls, “I drive like I want!” he’s just being an ass. He sees a patrol car in his rear view mirror and suddenly the big man who does whatever he wants drives like a little old lady. People who say they don’t change do change if they perceive the stakes as high enough. But they don’t like it and they resent it.

It’s human nature to prefer everyone to change to accommodate you acting the way you want. Most of us understand that there are limits to this and it is a two-way street. Those that don’t understand this become criminals. I’ll go so far as to say that most acts defined as crimes are simply what happens when you think you are too special. Too special to conform to rules, to special to work to buy things, too special to be told “no.”

He’s writing a book about police and their use of force, and his advice to ordinary citizens — written a few months back — is oddly apropos:

Usually when I write I can subconsciously read like a naive reader and have a pretty good feel for what buttons I am pushing. With this short section, I can feel defensive walls coming up. Up to this point, the book has been largely anthropology — how the strange tribe known as police think and why it makes sense in their world. In this section it is a travel guide — this is how to act when you run across a member of this tribe. Simple stuff, in a way. Never force an officer to make a quick decision. Show your hands. Reason, but don’t argue. and if you can’t tell the difference keep your mouth shut.

But here, when it gets personal (not just advising some random imaginary criminal to keep quiet but specifically you, if something happens to the point that officers show up, especially with guns out, don’t argue with them.) Suddenly, defensive walls go up. Because people like themselves. The most unreasonable people I have ever met felt that they were completely reasonable, even logical. They shouldn’t have to change. The public servant who gets paid from their taxes should have to change…

Cool, except you see the logic when force is used on someone acting just the same as you… but it’s not you… so you’re special?

Akst on Organ Buying and Selling

Tuesday, July 28th, 2009

Alex Tabarrok cites Daniel Akst on organ buying and selling:

It’s illegal in this country to buy or sell organs for transplant. This is an unjust law made and enforced by people who desperately need neither organs nor money.

IBM buys SPSS for $1.2B in cash

Tuesday, July 28th, 2009

IBM buys SPSS for $1.2B in cash. I wonder what the folks just around the corner at SAS think of IBM’s decision.

Socialism is the last stage of democracy

Monday, July 27th, 2009

Socialism is the last stage of democracy, argues Mencius Moldbug:

The process may be fast and bloody, as in the French and Russian Revolutions, or slow and mostly peaceful, as in Britain. But it is not generally reversible by any conventional means.

By pouring their talents into the democratic movement, the new aristocracy of progressivism ensured the following results:

First, that bad ideas would blossom and good ones wither and disappear. Progressivism has become a veritable religion of quack goverment. Its policies are always counterintuitive: it preaches leniency as the cure for crime, timidity as military genius, profligacy as the acme of economics, “special education” as the heart of pedagogy, indulgence as oversight, appeasement as diplomacy. As it goes from one disaster to the next, progressivism never considers the possibility that the obvious, rather than its opposite, could be the case. Occam’s Butterknife is the only tool in its kitchen.

So everywhere that socialism or communism triumphs, we see the same phenomena: hypertrophy of the bureaucracy, destruction and/or assimilation of organizations outside the State, expansion and widespread delinquency of the underclass, decimation of the working class, decay and disappearance of manufacturing industries, persecution of upper classes and successful minorities, destruction of old cities and production of hideous totalitarian architecture, ubiquitous depression both economic and psychiatric. These effects are not pleasant to anyone, progressive or otherwise. But their production does not slacken.

The History of the University

Monday, July 27th, 2009

Philip Greenspun looks at the history of the university:

University of Bologna, founded in 1088, mostly to teach the Justinian Code, recently rediscovered. It made a lot of sense for professors to lecture in the 11th Century. What other means of broadcasting information from 1 person to 100 existed? Printing was very expensive and cumbersome. Having monks make 100 copies of a textbook by hand was not economically feasible.
The university incorporated an important quality control mechanism: student associations paid professors according to how well they taught, how many students were attracted to their lectures, and whether they showed up on time.

It made sense for students to show up to lecture and to do their homework. A student’s lodging might not have been heated. It might make sense to come to lecture simply to get warm. Students in 1088 had no television, no radio, no Internet, no email, no instant messaging, no mobile phone. A student might come to lecture for entertainment.

What about homework? Students in a pre-technological university would do homework either in the library or at home. Both places lacked television, video games, email, etc.

Times have changed — sort of:

In the face of massive technological advances, the most significant change that universities have made is removing their only quality control mechanism. Through tenure, the university now guarantees professors pay regardless of effectiveness.

Why don’t universities change?

Why should a university change? In order to graduate, a Harvard student need not take a standardized test that is also taken by a University of Massachusetts students; groups of MIT students need not attempt projects in competition with students from Olin College of Engineering. There is literally no way that a university can be embarrassed by its graduates’ poor overall performance. The comparative scores of GRE exams taken by graduates of different schools are not published. Even if they were, the GRE is basically the same test as the SAT, so a prestigious school with a lot of students who scored well on the SAT would tend to do well in a GRE competition.

His recommendations:

  • Simple Change
    Stop grading your own students.
  • Simple Change 2
    Stop lecturing.
  • Modest Change
    Build open offices for students.
  • Modest Change
    Provide detailed review of all work; grade students on their ability to assist other students.
  • Big Change for Engineering
    Teach Engineering.

I love that last suggestion. His point:

Consider the typical Computer Science graduate. He (for it is almost always men who are dumb enough to major in this dreary subject) has done a lot of problem sets, tackling small problems that were precisely defined by professors. He has never met a client. He has never been asked to do something that isn’t doable in the allotted time. He has probably never written more than one engineering document. He may never have worked on an open-ended problem. The CS graduate comes out prepared to work for an engineer, not to be an engineer.

The Uninsured

Monday, July 27th, 2009

Paul Krugman asserts that Insurance companies avoid covering people who are likely to need care, but Alex Tabarrok has some inconvenient facts to share:

If insurance companies do avoid covering people who are “likely to need care,” this suggests that the uninsured are unhealthy. But 60% of the uninsured are in excellent health (Table 10) (In fact, overall the uninsured are only slightly less healthy than the insured).

The Wisdom of’ Mike Rowe

Monday, July 27th, 2009

I’ve never caught more than a few minutes of his show, Dirty Jobs, but every time I’ve seen Mike Rowe speak, he has impressed me as a very sharp guy — and an unusually wise one:

It’s quite reminiscent of Matthew Crawford’s Shop Class as Soulcraft.