Thursday, December 15, 2011

They're All a Bit Crazy, But...

Andrew Sullivan endorses Ron Paul for the GOP presidential nomination. He's for Obama in the the general election, but has some good points.

Tuesday, December 13, 2011

Monday, December 12, 2011

Whither Our Technological Utopia?

At fairly regular intervals it seems I stumble across someone writing about the importance of the humanities--and that math and science and economic growth are muscling their way into everything, to the detriment of human flourishing. This thesis was best articulated by C.P. Snow in his classic essay The Two Cultures, and more recently Mark Slouka's spectacular essay Dehumanized: When Math and Science Rule the School. The trouble, we're told, is the jettisoning of humanistic study for its own sake in favor of economic growth and national competitiveness as the sole ends in public life.

Yet in the past few years I've noticed something strange. More and more math, science, and technology advocates are making essentially the same argument for their own side: that the monolithic goal of economic growth is stripping from the world the intellectual justification of their pursuits. The wonder of science and technology has always been felt most strongly through big, paradigm-shifting advancements, and for whatever reason their frequency has declined lately. Peter Thiel addresses some of these issues in his sprawling essay The End of the Future; Neal Stephenson, in his essay Innovation Starvation, bemoans the loss of inspirational national projects and critiques the current mood in science fiction.

A recent Scientific American article suggests that NASA, with its vague ambitions and neutered horizons, should repurpose itself to identify dangerous asteroids and develop defenses against them. While this is certainly a worthy goal given the costs and benefits, such a change would give me pause. Must NASA have a specific, clearly measurable goal? Is a vague and open-ended mandate not what inspires and defines the agency? Perhaps I'm just a softie--a big asteroid project might be better than no project at all.

Sunday, December 11, 2011

Power Players: Daniel Kahneman

Most of us are probably familiar with behavioral economics, which studies how and why human behavior deviates from the assumptions held by classical economics (e.g. the rational actor). Probably fewer are familiar with Daniel Kahneman, the psychologist who, along with Amos Tversky, helped launch this interdisciplinary field. Despite having tremendous influence, most of his ideas have been interpreted and popularized by others. The demands of marketing and originality have thus built up a rather large corpus of Kahneman-boosting material, each highlighting a specific facet or application of his work. All the more enticing, then, when his first book for the lay public, Thinking, Fast and Slow, was released in late 2011.

Instead of simply identifying some small gap in the popular literature, Thinking, Fast and Slow is essentially a grand synthesis of behavioral psychology and economics: Nassim Taleb's focus on randomness and biases in epistemology (The Black Swan), Roy Baumeister's research into self-control (Willpower), Ian Ayres' thoughts on intuition and expertise (Super Crunchers), Cass Sunstein's theories on risk assessment (Risk and Reason), and Richard Thaler's conclusions about the normative implications for public policy (Nudge) all receive attention. Kahneman weaves these aspects together with storytelling, experimental accounts, and interactive games to articulate one simple theory: that human decisionmaking is governed by two systems, one fast, emotional, and unconscious, the other slow, calculating, and deliberate. Even with a high level of familiarity with these topics, Thinking, Fast and Slow is a great book to read, if only because it's written by the master himself. The few biographical bits scattered throughout the book are really interesting, describing Kahneman's work as a young psychologist working for the Israeli military.

Check out a great interview with Kahneman here, his fantastic TED Talk here, and a superb book review by the great Freeman Dyson here.

Wednesday, December 7, 2011

Quote of the Week

In his “Republic,” Plato put forward the ideal of a state ruled by intellectuals who combined comprehensive theoretical knowledge with the practical capacity for applying it to concrete problems.  In reality, no one has theoretical expertise in more than a few specialized subjects, and there is no strong correlation between having such knowledge and being able to use it to resolve complex social and political problems.  Even more important, our theoretical knowledge is often highly limited, so that even the best available expert advice may be of little practical value.  An experienced and informed non-expert may well have a better sense of these limits than experts strongly invested in their disciplines.  This analysis supports the traditional American distrust of intellectuals: they are not in general highly suited for political office.
But it does not support the anti-intellectualism that tolerates or even applauds candidates who disdain or are incapable of serious engagement with intellectuals.   Good politicians need not be intellectuals, but they should have intellectual lives.
Gary Gutting, from a superb blog post at The Stone.

Tuesday, December 6, 2011

Imagining a Maker Revolution

This week's Economist magazine has a fantastic overview of "makers", describing some of the key technologies and businesses involved in this potentially paradigm-shifting (or destroying) movement. Sharing many similarities with open-source software, the maker movement is essentially open-source manufacturing, and is often grouped together with nanotechnology, synthetic biology, quantum computing, fusion power, and environmental sustainability as a potential tech trend that could lead the developed world out of its current innovation stagnation.

So what might happen if a huge chunk of consumer goods suddenly shifted production from factories to individual households? First let's consider the cultural response. There's no doubt free-market cheerleaders praise the Schumpeterian idea of 'creative destruction'--in the abstract. But when it comes to the individual industries at risk of being 'creatively destroyed', they tend to fight tooth and nail for survival: protecting themselves with political concessions and acquiring regulation, and by insulating themselves from competition through collusion and creating barriers to entry for new firms. We see a great example of this currently with the battle over SOPA, a proposed internet censorship bill.

Now, I'm certainly no strong adherent to communist philosophy, but parts of its critique of capitalism explain pretty well the elite response to disruptive innovation. Most new technologies or business practices might eliminate small industry segments, but nothing more. In these cases free market cheerleaders stay relatively passive. But if there are changes on the horizon that threaten big moneymaking in any systemic way, we see opposition. The internet was successful in changing the world in part because of its rapid development, and also because no one saw it coming. Economic revolutions that are obvious and occur slowly (environmental sustainability, say) provide plenty of time for capitalists to defend the status quo.

So let's bring it back to the maker movement. I could see a big backlash occurring by elites: "it will crash our consumption-based economy because people won't have to buy stuff anymore! Not to mention the job losses in retail and manufacturing! And has anyone really considered the threat to national security! Terrorists could be making guns and bombs right down the street from where your kids have little league practice!"

On the other hand, I'm not so sure small-scale distributed manufacturing would really be as disruptive as many predict. Even with a 3-D printer in every home, I doubt a very large proportion of people would tinker and design much. Outside of a small core of devoted amateurs, most of the blueprints for stuff would probably still come from big-name brands. Does anybody really think Lego would disappear if it wasn't manufacturing its own plastic blocks? Among rich-world companies, the shift away from manufacturing to ideas and marketing has been occurring for some time due to globalization. At this point it doesn't really matter where stuff gets made; high schoolers will always be willing to pay a little extra to print out hoodies with the trademarked Abercrombie logo on it (intellectual property rules would become really important under a maker revolution, but that's a topic for another blog post).

But this brings me to my last digression: a maker revolution's impact on developing countries. If the rich world no longer needs anyone to make its stuff, then what happens to the developing world? There are two likely development paths. First, the collapse of labor demand might arrest growth for some time (natural resource extraction would still be a source of growth, although with distributed production various cradle-to-cradle resource streams would likely develop in the rich world). Second, the developing world could chart a novel development path. When a country develops necessarily affects how a country develops, and just as Africa has leapfrogged on telecommunications using cell phones, so too might distributed production allow poor households to jump directly into relative material wealth. I'm not sure what will become of this intriguing movement, but generally the easier it is for creative people to turn ideas into tangible reality, the better.

Saturday, December 3, 2011

Inside the Black Box

I recently saw Margin Call, a new film offering a fictionalized account of the 2007 market collapse. The movie takes place almost entirely within the Manhattan trading offices of a faceless financial institution presumed to be a major player in the unregulated mortgage-backed securities market. The action starts when a junior risk analyst discovers that the company is exposed to catastrophic losses, setting off a crisis mode within the management team. With disaster imminent, the firm faces two awful choices: be the first to sell off as many toxic assets as possible (directly causing a crash but ensuring the company's survival), or doing nothing and waiting until some other firm sees the danger and starts its own fire sale. As you may have guessed, there's not much of a choice.

The film is technically well-executed, with a great cast and an energetic pacing, but its main strength is in the sheer number of interesting questions and concepts packed into each scene. Chiefly among them is the inherent tension between the interests of the company and its employees. Throughout the film, there are two distinct narratives: one concerning the survival of the firm, and the other focusing on the economic "survival" of the individuals working there. The former is a linear narrative unfolding over the course of the whole movie; the latter is more interesting in that each major characters' precarious situation is only revealed gradually and in sequential order, moving up the layers of corporate hierarchy.

We start with the lowly risk analysts and traders. Then on to the department and floor managers. Then the division heads and VPs. And finally, after an artful build-up, the almost mythical CEO is revealed. At every level, the higher-ups are portrayed as living embodiments of the corporate will. Only after the attention shifts up a level do we see their very human predicament and the harsh incentive structure forced upon them which induces such misanthropic behavior. If the institution needs something to be done and an employee won't do it, then they're out. And someone new comes in who will.

Margin Call seeks to muddy the moral waters of the 2007 crisis in a most delightfully challenging way--by confounding the culpability of the rich one percent banksters we love to hate. To cite a classic example: assume one manages to balance a pencil straight up on its eraser. Obviously it will be precarious, and will soon topple. How shall we best assess causation in this example? In one approach we could  identify the particular wind gust that finally tipped the pencil from its perch. In reality, however, this situation is best explained by stating the obvious: that the pencil was tenuously balanced and obviously would soon topple, in one direction or the other. To blame a particular wind gust would be foolish. Its the system that counts.

Other topics explored include equality, the moral deserts of Wall St. traders and executives, and the work/play balance of life. It's a great movie, check it out.