What I've been reading lately

1. Licensing Occupations: Ensuring Quality or Restricting Competition? by Morris Kleiner

2. How Not To Be Wrong: The Power of Mathematical Thinking by Jordan Ellenberg

3. Superintelligence: Paths, Dangers, Strategies by Nick Bostrom

4. The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor by William Easterly

5. How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Happiness by Russ Roberts

6. Waking Up: A Guide to Spirituality Without Religion by Sam Harris

7. Designing Resilience: Preparing for Extreme Events edited by Louise Comfort, Arjen Boin, and Chris Demchak

8. Political Ideologies and Political Parties in America by Hans Noel

9. Political Order and Political Decay by Francis Fukuyama

10. Mismatch: How Affirmative Action Hurts Students It's Intended to Help, and Why Universities Won't Admit It by Richard Sander and Stuart Taylor

Cognitive style and public policy outcomes

Critics, including Green, like to satirize Obama's cool by comparing him to Spock. But Spock, though often played for laughs, was a damn fine officer. His clear thinking not only saved the Enterprise on countless occasions but was instrumental in brokering a historic peace accord between the Federation and the Klingon Empire.

That is Matt Yglesias, defending Obama's cognitive style from the critics. Establishing a connection between policy outcomes and cognitive profile among presidents is very difficult. Unlike most lawmakers, presidents don't produce a neat, large dataset of votes that lends itself to causal analysis. What's more, factors like cultural and technological change produce qualitative differences in the political context that every president operates in. Isolating the causal effect of cognitive traits on policy outcomes might very well be impossible. But regardless, the post has some excellent points about media incentives and racial bias as well.

Big companies can do big things

Slate has an interesting article about how Walmart is the by far the biggest player in the commercial rooftop solar market:

Big, mature companies often struggle to innovate and adapt to changing consumer demands, but Walmart's experience with solar and organic foods (and Home Depot's with sustainably-harvested lumber) show that big companies can also have a big impact, simply by virtue of their size. While it's entirely possible that Walmart is coming out ahead financially from these investments, the less-tangible benefits in the form of positive buzz and brand equity are surely a big driver of the push.

Additionally, Walmart is implicitly hedging against future policy action by governments, both national and regional, to combat climate change. Companies that proactively set themselves up to respond quickly to a carbon tax or cap-and-trade system (by investing in clean energy and acquiring talent) will very likely see themselves with an enviable competitive advantage.

Research questions about skateboarding

1. Skateboarders appear to be disproportionately comprised of young, thin men. Is this perception shared by the general population?


2. To what degree does this perception reflect the true demographic and physical characteristics of skateboarders?


3. To what degree is the thinness of skateboarders accounted for by their relative youth (i.e. kids tend to be skinnier than adults)?


4. To what degree is the thinness of skateboarders accounted for by other factors, such as exercise, diet, income, and race?


5. Is there a social selection effect occurring that accounts for the thinness of skateboarders? In other words, do non-thin skateboarders have more trouble acquiring status and social benefits in the micro-culture, and stop skateboarding disproportionately?

Information Nexus

1. Ryan Avent on the digital economy's self-limiting productivity growth problem. Very good.
2. The sub-two hour marathon
3. Some interesting observations on living in relative poverty
4. CEO of Copenhagenize discusses urban cycling
5. Does a boring ballot question hold the key to sustaining Minneapolis' restaurant boom? Yes.

Climate change adaptation

Old Dominion University in Norfolk, Virginia has opened the country's first academic institution focusing on climate change adaptation. The hope is that by locating in a city that's very exposed to climate change risks, the institute will have opportunities to work with government and economic stakeholders free of political strife.

A core mantra of climate change adaptation is competition between places: if certain regions or cities are struggling with costs associated with climate change, labor and capital will naturally flow away to find safer harbor (so to speak). Norfolk is betting that investing now in resilience strategies will pay off in the future by reducing the costs of adaptation. Preemptively measuring the effectiveness of various interventions may be possible by comparing things like insurance premiums along coastal cities, although the massive Navy base (and the implicit government guarantee it represents) could pose a methodological problem.

Quote of the week

"One of Smith's insights about technology and gadgets is that we often care more about the elegance of the device than for what it can achieve. He gives the example of a watch that loses two minutes a day, likely a common occurrence in the eighteenth century. Smith says the owner of such a watch might get rid of it and pay a premium for a watch that is dramatically more accurate. But, Smith complains, the owner of the better watch may not be any more punctual than he was with the timepiece that performed more poorly. He bought the better watch simply because it is a superior gadget, not to make his life any better:

But the person so nice with regard to this machine, will not always be found either more scrupulously punctual than other men, or more anxiously concerned upon any other account, to know precisely what time of day it is. What interests him is not so much the attainment of this piece of knowledge, as the perfection of the machine which serves to attain it.

"Then Smith really opens fire on the gadget lovers:

How many people ruin themselves by laying out money on trinkets of frivolous utility? What pleases these lovers of toys is not so much the utility, as the aptness of the machines which are fitted to promote it. All their pockets are stuffed with little conveniencies. They contrive new pockets, unknown in the clothes of other people, in order to carry a greater number.' " 

-------------

That's from Russ Roberts' newest book, How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Happiness. Check out a nice interview about the book here.

 

Book Review: Building a World Class Transportation System by Charles Marohn

Charles Marohn of Strong Towns recently released a short e-book laying out his analysis of the problem with our transportation system, and his plan to fix it. The core insights of Strong Towns derive from a brilliant realization: that by merging our analysis of planning, design and transportation engineering with public finance and economics we can discover surprising truths about what produces growth and prosperity on a fine-grained scale.

 He begins by contrasting the current wave of transportation infrastructure building with previous waves, specifically the construction of the railroad and interstate networks. In contrast to today, previous systems were essentially 'low-hanging fruit': relatively small investments reaped huge gains in productivity. The returns on subsequent building was much lower: connecting two high-performing places creates more wealth and opportunity than connecting two medium- or low-performing places.

 Two subtler points emerge from this story. One is an institutional ratchet effect. During the 'high-return' days, certain institutional norms and arrangements formed and became locked-in, even as the landscape of infrastructure in the US changed dramatically. This idea of 'drift' (or political decay in words of Francis Fukuyama), where policy institutions don't keep pace with changing realities, is rampant here.

 The second point is more philosophical: by maintaining the institutional inertia of infrastructure building even as the ROI of these investments tanked, information-processing and planning-fallacy concerns became more potent. Without the feedback mechanism of prices to coordinate the effective use of scarce resources, infrastructure decisions are largely based on the priorities of the political system. As the low-hanging fruit was picked and finding high-value investments became more difficult, the political system's inherent informational limitations became more apparent (and more costly).

 A large chunk of the book is devoted to articulating the core Strong Towns concepts and laying out a specific reform proposal. I don’t have much to add on this, only to say that his forceful argument against using excess tax revenue from financially-productive places (i.e. those that generate more tax revenue than they consume in public services) to build stuff in non-financially-productive places isn't a blanket argument against all geographic redistribution. His case is limited to the narrow domain of transportation spending, and even then his claim is actually optimistic. Marohn is saying that even a poor place with low growth can be 'financially productive' in an infrastructure sense, so long as it fully appreciates the full tax revenue and maintenance implications of public investments. This is where his framework’s conclusions intersect with localist and resilience-oriented movements.

 The non-partisan, crossover appeal of Strong Towns is a big reason for its success: it uses economics-style analysis (traditionally associated with conservatives) to arrive at conclusions traditionally associated with liberal urbanists. This leads to novel and intellectually satisfying arguments on many topics. A good example is the suburbs: liberals have long disparaged this pattern of development, but often in scattershot, wishy-washy, and vaguely elitist ways. Strong Towns gives us at least one good reason why the suburbs are terrible: the ratio of private investment to public investment is such that these regions are a net drain on the public purse.

 In general the book is good, although its target audience suffers from a 'missing middle' problem. For someone who's unfamiliar with Strong Towns, this is a solid introduction that encompases most of the approach’s flavor. At the other end of the spectrum, this book will be valuable to readers with a technical or professional interest in learning about the finer details of a Strong Towns vision of policy. For amateurs already well-versed in the framework, but lacking a reason to deep-dive into the particular magnitudes of financing ratios, this book is somewhat lacking.

 Marohn concludes by gaming out the winners and losers of his public finance reform proposal. It's an interesting attempt at political analysis, but it seems half-baked: some of his claims are overly optimistic, and the actual coalitional breakdown of any major reform in transportation will likely be as familiar and intractable as always. At times the book slips into the, "nation of whiners" and "people are stupid" rhetoric (common among certain subversive urbanists), which is obnoxious, although perhaps understandable given the epidemic amount of wrongness that exists in this field.

Engineering a safer Central Park, ctd.

Stephen Miller from Streetsblog states the case for a car-free Central Park much more elegantly than I:

It’s unreasonable for a cyclist to assume that a green light means the path ahead will be unobstructed by pedestrians, just as it’s unreasonable to expect cyclists to come to a full stop when it’s safe for them to slow down and navigate around people crossing the loop, just as it’s unreasonable to expect a pedestrian to wait for the light when there is clearly a safe opening to cross. 

Getting rid of traffic signals in the parks is a necessary step toward creating loop roads where people on bikes and on foot rely on eye contact and common sense to safely interact, instead of rules that don’t fit the context. And before that can happen, it’s time to finish the job and make the parks permanently car-free, a top request among Central Park users that has support from nearby community boards. Transportation Commissioner Polly Trottenberg says she’s heard the call loud and clear, but she hasn't committed to actually following through, citing the need for more study and consensus-building.

The human experiment must continue

I was struck the other day by the quality and cultural energy of this music video:


I'm no big fan of Taylor Swift, nor pop music in general, but this video is a great reminder of the absurd and glorious experimental project that the human race is engaged in.

The most compelling aspect to this production is the backup-dancers. I don't have much interaction with this industry, but it's clear that there exists a massive army of people in the US (and elsewhere) who labor and perfect a type of artistic expression that is, at its peak, a marginal contribution towards the overall visual experience. These videos are built around superstars, of which there are few. But they are staffed by backup dancers whose individual talent and drive seems undiminished by their servant role.

Despite what philosophers might say, nobody really knows what humans should do or how we should act. I view the entirety of human existence as an experimental discovery process, with economic, cultural and scientific progress occurring spontaneously via the scrum of civilization.

At the risk of making a bizarre claim, it's this beautifully chaotic and random dance that humanity is engaged in that argues strongly towards a massive investment in asteroid detection and defense capabilities. Asteroids are one of the most obvious forms of existential risk, and the simple fact is this: unless the earth develops defense capabilities, eventually we will be annihilated by an asteroid. Prematurely ending the human experiment, and denying future generations the opportunity to progress along the goofy and wonderful path of artistic and scientific expression would be a damn shame.

Anyone who cares deeply about art, science, ethics, and human flourishing should take a good long look at what global obliteration means for these values, and consider prioritizing efforts to develop asteroid detection and defense capabilities. Call your Congressman and Senators. Learn about the issue. Talk to your friends. And most importantly, help the B612 Foundation fund the Sentinel Mission.

An electricity sharing economy

Matthew Crosby of the Rocky Mountain Institute says rooftop solar and other emerging technologies will enable peer-to-peer electricity markets:

For more than a century, the electric grid has relied almost exclusively on centralized infrastructure, such as large power plants and long-distance transmission lines. But distributed energy resources (DERs) -- and the customers buying, installing, and using them -- are changing the economic landscape for the power sector. Energy efficiency, demand response, distributed generation such as rooftop solar, distributed storage such as batteries, smart thermostats, and more are poised to become the front lines of a sharing economy revolution for the grid. Shared economy solutions will help to increase asset utilization rates and improve consumer and overall system economics, just as they have for other sectors.

The Knowledge Problem has further commentary on the idea, and Brad Plumer at Vox has been following the solar beat, most recently with a good article on trends in financing mechanisms for rooftop solar. The environmental and economic resilience aspects of transitioning to a more distributed electricity market are clear. With current interest rates so low, now is the time for governments to encourage investments in enabling infrastructure like smart grids--instead of speculating big on high-speed rail megaprojects with uncertain return on investment potential.

San Francisco's housing market is really screwed up

A few months ago Tech Crunch ran this fascinating, epically-long analysis of San Francisco's housing disaster. A taste:

Rent control is a naturally divisive topic in the tech community. Progressives view it as a sacred right that protects the remnants of a working- and middle-class in the city. “It’s a non-renewable resource,” Erin McElroy, who is part of the Anti-Eviction Mapping Project, explained to me. 

But the tech community is both socially liberal and market-oriented, with more than 90 percent of political donations from Apple and Google employees going to Barack Obama in the last election. So price controls in the name of community stability and equity just makes people’s brains explode.

There are numerous interesting nuggets and concepts packed into the report, but a big takeaway for me is just how strange the politics of land use are in most cities. Most cities are overwhelmingly dominated by Democrats, but there seems to be a huge opportunity for Republicans to naturally extend their governing philosophy and take a strong market urbanist position on these issues. The policy solutions are just waiting collecting dust.

What non-profits I donate to

1. NuSi
2. B612 Foundation
3. SENS
4. Mayday SuperPAC
5. Strong Towns

Information Nexus

1. Dynamic market adjustments in the beverage industry (RIP orange juice)
2. Stephen Pinker on why academic writing is terrible
3. The new Interstellar trailer has been released (what are the positive externalities of this movie being a big hit?)
4. Francis Fukuyama on political decay
5. Excellent Will Wilkinson on spontaneous order

Quote of the week

Human individuals and human organizations typically have preferences over resources that are not well represented by an "unbounded aggregative utility function." A human will typically not wager all her capital for a fifty-fifty chance of doubling it. A state will typically not risk losing all its territory for a ten percent chance of a tenfold expansion. For individuals and governments, there are diminishing returns to most resources. The same need not hold for AIs. ... An AI might therefore be more likely to pursue a risky course of action that has some chance of giving it control of the world. 

"Humans and human-run organizations may also operate with decision processes that do not seek to maximize expected utility. For example, they may allow for fundamental risk aversion, or "satisficing" decision rules that focus on meeting adequacy thresholds, or "deontological" side-constraints that proscribe certain kinds of action regardless of how desirable their consequences. Human decision makers often seem to be acting out an identity or a social role rather than seeking to maximize the achievement of some particular objective. Again, this need not apply to artificial agents.

That's from Superintelligence: Paths, Dangers, Strategies by Oxford philosopher Nick Bostrom. The book is sober, clear-eyed analysis of an issue that's been socially defined by its recurring role as a narrative device in science fiction stories. But the topic is real--and important. Overlooking the issue in public affairs is increasingly risky. For a more accessible introduction to the potential risks of artificial intelligence, I highly recommend checking out this short podcast.

The unseen costs of globalization

The Ebola situation in West Africa has brought to light an interesting fact about our modern, globalized economy: though massive trade has enabled incredible increases in human welfare, it has dramatically increased the potential for contagious diseases to spread to scales unprecedented in history. Other costs associated with globalization--environmental destruction, cultural flux--are more visible and generate more sustained political salience.

And interesting fact about pandemic risk is that the best way to defend against it is more of the very thing that creates it: trade and development. Richer individuals and economies are more resilient to disruptions caused by disease, and higher-quality political institutions can better cope with potential outbreaks through public health and law & order efforts.