Friday, May 6, 2011
Thursday, May 5, 2011
Power Players: Amartya Sen
Check out this great interview by Al Jazeera English:
Amartya Sen is a true polymath whose intellectual contributions are quite possibly unmatched by any other living person. A Nobel laureate, he made major headway in incorporating normative concerns (like poverty and gender inequality) back into the economics discipline. He is a giant among political scientists for his contributions to social choice theory (a quantitative subfield concerned with preference aggregation, example: voting). Lately he has focused on philosophy, probably establishing himself as the most important contemporary philosopher since John Rawls with his capabilities approach to measuring justice.
Amartya Sen is a true polymath whose intellectual contributions are quite possibly unmatched by any other living person. A Nobel laureate, he made major headway in incorporating normative concerns (like poverty and gender inequality) back into the economics discipline. He is a giant among political scientists for his contributions to social choice theory (a quantitative subfield concerned with preference aggregation, example: voting). Lately he has focused on philosophy, probably establishing himself as the most important contemporary philosopher since John Rawls with his capabilities approach to measuring justice.
(Caps) Lock-In
Often the only way out of lock-in is to think big: General Motors' Hy-Wire concept car builds all the essential components (engine, fuel storage, system controls, crush zones, etc.) into a six-inch wheeled platform, thus allowing designers to snap on top any number of unconstricted car designs.
Probably the most famous example of lock-in is the qwerty keyboard. Originally designed to accommodate engineering limitations in typewriters, this preposterous technological dinosaur drastically limits the speed and convenience of our typing. A related absurdity is the caps-lock key: how often does the average person use it? (hint: not much) Now compare that with the frequency of accidental activation and the case for its continued existence disappears.
And it's happening: Google's new laptop replaces the caps-lock key with a search button. Many smartphone keyboards have an '@' key, which is a great idea, and I've also heard of a push to create an internet history eraser button. If you start looking, you'll see examples of path dependence everywhere. Let's start innovating from the ground up.
Question: does internet remix culture increase or decrease path-dependence?
Wednesday, April 27, 2011
The Usefulness of Bubbles
Businessweek is out with a great article on the current tech bubble. The article asserts that this bubble, built around social media and online advertising, is wasting a generation of talent and channelling innovative capitol towards a category of technology whose social benefits are ambiguous.
An economic bubble is basically a localized trend of inflated asset prices. Since prices are the conventional measurement of a thing's social utility, inflated prices result in misallocation of productive forces, like money, talent, or even social prestige. Most bubbles quietly deflate before anybody notices, but sometimes they continue to grow and end up popping suddenly. This usually causes financial turmoil and triggers broader economic hardship.
On the surface, this article's premise is straightforward: bubbles are terrible for the economy, and the current tech craze is exhibiting disturbingly bubble-like behavior. Thus the current tech craze is terrible for the economy. I generally agree with this logic, but it does paint diverse economic situations with a very broad brush. Within the framework of "bubbles are bad," what's the best way to compare potential bubbles (e.g. bubble A is worse than bubble B)?
Magnitude is important, but if we're looking at potential bubbles instead of past bubbles, this can be difficult. Given the extreme uncertainty of future economic events, I'd argue that one good test would focus on a candidate bubble's social usefulness. All bubbles, in varying degrees, maul the economy and ruin countless lives. Yet when the dust settles, they always leave behind certain new technologies or structural changes. Even if we can't predict how damaging a bubble will be, we can still ruminate on and compare these after-effects.
Think about it: after the financial crisis of 2007-8, what were we left with? Tons of arcane financial "instruments," ridiculously flawed arbitrage markets, and lots of cracked-out quantitative risk models. Some legacy, huh? Now consider the railroad bubble of the 1880s. When it popped, the U.S. economy was badly damaged. But we were left with a massive intranational network of railroads, establishing the infrastructure base for future development and growth.
Consider an environmental technology or energy efficiency bubble. It might pop and crash the economy, but at least we'd have made enormous social progress. By the same token, some people have suggested that we're currently in a higher education bubble, with the cost of college ridiculously high relative to it's value. That may be, but at least colleges and universities are building awesome new facilities and research infrastructure that has tons of lasting value. All bubbles hurt, but it's nice to know that, at the end of the day, our economy's persistent drunken crazes are at least doing something useful.
An economic bubble is basically a localized trend of inflated asset prices. Since prices are the conventional measurement of a thing's social utility, inflated prices result in misallocation of productive forces, like money, talent, or even social prestige. Most bubbles quietly deflate before anybody notices, but sometimes they continue to grow and end up popping suddenly. This usually causes financial turmoil and triggers broader economic hardship.
On the surface, this article's premise is straightforward: bubbles are terrible for the economy, and the current tech craze is exhibiting disturbingly bubble-like behavior. Thus the current tech craze is terrible for the economy. I generally agree with this logic, but it does paint diverse economic situations with a very broad brush. Within the framework of "bubbles are bad," what's the best way to compare potential bubbles (e.g. bubble A is worse than bubble B)?
Magnitude is important, but if we're looking at potential bubbles instead of past bubbles, this can be difficult. Given the extreme uncertainty of future economic events, I'd argue that one good test would focus on a candidate bubble's social usefulness. All bubbles, in varying degrees, maul the economy and ruin countless lives. Yet when the dust settles, they always leave behind certain new technologies or structural changes. Even if we can't predict how damaging a bubble will be, we can still ruminate on and compare these after-effects.
Think about it: after the financial crisis of 2007-8, what were we left with? Tons of arcane financial "instruments," ridiculously flawed arbitrage markets, and lots of cracked-out quantitative risk models. Some legacy, huh? Now consider the railroad bubble of the 1880s. When it popped, the U.S. economy was badly damaged. But we were left with a massive intranational network of railroads, establishing the infrastructure base for future development and growth.
Consider an environmental technology or energy efficiency bubble. It might pop and crash the economy, but at least we'd have made enormous social progress. By the same token, some people have suggested that we're currently in a higher education bubble, with the cost of college ridiculously high relative to it's value. That may be, but at least colleges and universities are building awesome new facilities and research infrastructure that has tons of lasting value. All bubbles hurt, but it's nice to know that, at the end of the day, our economy's persistent drunken crazes are at least doing something useful.
Friday, April 22, 2011
Thursday, April 21, 2011
Quote of the Week
Milton Meuller at The Technology Liberation Front on the AT&T/T Mobile merger:
Let’s begin at the beginning and ask why this merger is happening. It’s not as if AT&T is gaining dominance the way Google gained it in search and advertising, or the way Intel did in chips: i.e., through low prices, superior products and customer loyalty. No, last time I looked AT&T was the carrier with the lowest customer satisfaction ratings, some of the highest prices and one of the weakest network performance metrics. In my opinion there is no reason for this merger to take place other than to make life easier for AT&T by reducing competitive pressures on it. AT&T seems to be driven by the following calculus. It can either grow its services and its network under the harsh constraints of market pricing and competition, or it can attempt to reduce the field to an oligopoly with tacit price controls by using its size and financial bulk to eliminate a pest who keeps downward pressure on pricing and service requirements. I think it is rational for AT&T to try to get away with the latter. I think it’s insane for free market oriented thinkers to support it.
Free e-Book!
Okay, it's a public policy textbook, but it's still worth checking out: Policy and Choice: Public Finance through the Lens of Behavioral Economics by William Congdon, Jeffrey King, and Sendhil Mullainathan.
Behavioral economics has been criticized as being a "negative" theory, meaning it focuses more on breaking down the rational-actor assumption of classical economics than explaining social phenomenon. While I think that's somewhat unfair, it does seem that applying psychology to normative questions of policy and economics is a better fit. I loved Nudge, which popularized the idea of government policy using lessons from psychology to help people make better decisions. Conversely, Identity Economics, which tried to incorporate psychology into more traditional explanatory theories of economics and management, totally failed at building useful models. I'm interested to see how Policy and Choice addresses these two realms of theory, and whether it succeeds in both.
Watch Sendhil Mullainathan talk about psychological nudges.
Behavioral economics has been criticized as being a "negative" theory, meaning it focuses more on breaking down the rational-actor assumption of classical economics than explaining social phenomenon. While I think that's somewhat unfair, it does seem that applying psychology to normative questions of policy and economics is a better fit. I loved Nudge, which popularized the idea of government policy using lessons from psychology to help people make better decisions. Conversely, Identity Economics, which tried to incorporate psychology into more traditional explanatory theories of economics and management, totally failed at building useful models. I'm interested to see how Policy and Choice addresses these two realms of theory, and whether it succeeds in both.
Watch Sendhil Mullainathan talk about psychological nudges.
Monday, April 18, 2011
The Grand Perhaps
Most of us are probably familiar with the so-called "New Athiests," the club of popular writers and thinkers that function as anti-religion attack dogs, intent on giving atheism a backbone, using aggressive language whenever possible. Evolutionary biologist Richard Dawkins, philosopher Daniel Dennett, writer Christopher Hitchens, and neuroscientist Sam Harris are typically described as core members of the club.
Each member inevitably has had to carve out their own unique niche in order to sell books and gain popularity. Most focus on demolishing religion and explaining why God probably doesn't exist, in addition to being as cantankerous as possible. Although Richard Dawkins is by far the most accomplished and brilliant, Sam Harris is the most creative and interesting.
With training in both moral philosophy and neuroscience, Harris strings together a complex argument over three books about the role of scientific rigor in moral and ethical reasoning. His recent TED Talk nicely summarizes his conclusion:
Harris focuses on the moral and ethical fitness of religion, science, and public reasoning, rather than simply rehashing old arguments for why God probably doesn't exist. Additionally, he attempts to construct something new by sketching out a possible basis for a secular morality. Employing neuroscience in philosophical discourse is refreshing and potent, and Harris' message that moral and ethical domains should not be off-limits to scientists is spot-on. The current intellectual holding pattern of avoiding moral questions and respecting diversity at all costs must end: next time you're at a fancy dinner, perhaps be a little rude and speak your mind.
Each member inevitably has had to carve out their own unique niche in order to sell books and gain popularity. Most focus on demolishing religion and explaining why God probably doesn't exist, in addition to being as cantankerous as possible. Although Richard Dawkins is by far the most accomplished and brilliant, Sam Harris is the most creative and interesting.
With training in both moral philosophy and neuroscience, Harris strings together a complex argument over three books about the role of scientific rigor in moral and ethical reasoning. His recent TED Talk nicely summarizes his conclusion:
Harris focuses on the moral and ethical fitness of religion, science, and public reasoning, rather than simply rehashing old arguments for why God probably doesn't exist. Additionally, he attempts to construct something new by sketching out a possible basis for a secular morality. Employing neuroscience in philosophical discourse is refreshing and potent, and Harris' message that moral and ethical domains should not be off-limits to scientists is spot-on. The current intellectual holding pattern of avoiding moral questions and respecting diversity at all costs must end: next time you're at a fancy dinner, perhaps be a little rude and speak your mind.
Gear Up for Bike Weather
Creative thinking to enhance bicycle usage is everywhere, but the best new idea I've seen is probably public bike pumps. The Urban Bikeway Design Guide catalogues the more traditional set of strategies. Minneapolis, Bicycling Magazine's 2010 Best Bike City, is preparing for its most bike-friendly spring yet with some cool innovations. Happy riding!
Statistical Regression, MD
The Science-Based Medicine blog has an interesting post about the role of experience in medicine:
Before we had EBM (evidence-based medicine) we had another kind of EBM: experience-based medicine. Mark Crislip has said that the three most dangerous words in medicine are “In my experience.” I agree wholeheartedly. On the other hand, it would be a mistake to discount experience entirely. Dynamite is dangerous too, but when handled with proper safety precautions it can be very useful in mining, road-building, and other endeavors.I don't think describing experiential expertise and intuition as risky-yet-rewarding medical strategies fully appreciates the historical trajectory of evidence-based medicine. While it's true that deep personal experience and intuition in doctors is currently essential to their provision of healthcare, computerized medical records and new diagnostic algorithms will soon change what medical services doctors provide. With the possible exception of new surgical techniques, doctors are no longer in the business of developing treatments or evaluating what works and what doesn't (biostatisticians are the great unsung heroes). Data-crunching, made possible through computerized records, will once again begin to encroach on a realm currently under doctors' jurisdiction: diagnosing ailments. Atul Gawande's checklist idea goes a step further, identifying healthcare implementation (even down to specific details like hand-washing) as another area being systematically blighted by decisionmaking driven by "experience," intuition and routine. The information revolution is changing what doctors do by enforcing precision and rigor, in the process saving millions of lives. This is all very good for humanity, but possibly not not for young med school students salivating about their future social cache. But I'm sure providing a nice bedside manner to patients is one duty that won't be disturbed by computer innovation. Although...
Thursday, April 7, 2011
The Nonfiction Short Story
The National Magazine Awards are out with their 2011 finalists, recognizing the best in long-form journalism. For a complete list of finalists, including article links, check out Longform.org.
Long-form journalism allows for a much richer presentation--arguments can include more information, profiles can contain multiple illuminating anecdotes, etc. While many successful journalists also write non-fiction books, the long-form medium is great exactly because of its relative concision. Sometimes a topic is too specific or obscure to deserve (or more importantly, adequately market) a full-length book or biography, and so long-form articles in magazines and newspapers allow detailed inquiry on a much broader range of topics.
Economist Tyler Cowen's The Great Stagnation, an ebook about the size of two long New Yorker articles, is a fantastically successful attempt at experimentation with an unusual length. I hope we see more of these nonfiction novellas in the future.
Long-form journalism allows for a much richer presentation--arguments can include more information, profiles can contain multiple illuminating anecdotes, etc. While many successful journalists also write non-fiction books, the long-form medium is great exactly because of its relative concision. Sometimes a topic is too specific or obscure to deserve (or more importantly, adequately market) a full-length book or biography, and so long-form articles in magazines and newspapers allow detailed inquiry on a much broader range of topics.
Economist Tyler Cowen's The Great Stagnation, an ebook about the size of two long New Yorker articles, is a fantastically successful attempt at experimentation with an unusual length. I hope we see more of these nonfiction novellas in the future.
Thursday, March 31, 2011
The Political Logic of Libyan Military Intervention
A few nights ago, President Obama issued a vague and underwhelming explanation of the U.S. military affair in Libya. Since then our situation in Libya hasn't gotten any clearer. In justifying military action, Obama was heavy on horror-inducing imagery and facts, but failed to clearly articulate a sound argument differentiating the Libyan situation from the dozens of brutal dictatorships scattered around the world. Clearly this particular military action isn't best explained through a logically consistent theory of international conflict. Looking at the conflict through the lens of domestic politics, however, we see that Obama made a shrewd political calculation given the highly uncertain nature of the recent Middle Eastern turmoil.
To establish a bit of context, Obama's response to the previous revolution in Egypt--basically a muddled confusion--turned out very well. But it's easy to imagine scenarios where things didn't turn out as rosy, and Obama looking flat-footed and foolish. With nobody quite sure when (and how) this snowballing revolutionary trend will end, it's entirely likely that some flashpoint will occur in the future where a "do-nothing" policy on the part of the administration will result in serious political fallout. With the 2012 election gearing up, the situation in Libya provided the perfect opportunity for Obama to neutralize his exposure to this political risk.
Think about the following scenarios. If Obama chose not to act, the many revolutions around the world might have resolved themselves without too much trouble (or bloodshed). It would have then been a non-issue for Obama: no political cost, no political benefit (the stable of Republican governors preparing to run against Obama in 2012 don't want to compare foreign policy credentials). If, however, the situations in many of these countries (such as Libya) continued to deteriorate, the lack of U.S. action early on would have been seen as a lack of confidence and foresight. In fact, by 2012 conditions in some countries might be so bad that military action might have been necessary anyway. By waiting so long to act, military intervention would be much less effective and Obama would be viewed as reactionary.
Now consider the flip side where Obama acts now with a limited military intervention (it doesn't really matter where). As before, the many revolutions bubbling in the Muslim world might still have resolved themselves, but now Obama gets to claim credit if that happens--a big political advantage. If things continue to deteriorate (civilian massacres, warfare, etc.), Obama can claim that he did the best he could in trying to use U.S. power to impose regional stability, but that any further action would be imprudent. He can spin a compelling narrative to voters that anything beyond the limited military action already taken would be counter-productive to U.S. interests in light of the quagmires in Iraq and Afghanistan. By acting now to preempt the scenario of increased regional instability, Obama minimizes the potential political fallout and exposes the possibility of a big political win.
In light of the political logic of minor preemptive military action, Libya provides a good target. It's proximity and history with Europe, combined with the kooky vileness of Gaddafi make military intervention an easier sell. While we must wait to see how things ultimately turn out, of this I am sure: under any scenario, Obama now has a strong narrative to sell during the election.
To establish a bit of context, Obama's response to the previous revolution in Egypt--basically a muddled confusion--turned out very well. But it's easy to imagine scenarios where things didn't turn out as rosy, and Obama looking flat-footed and foolish. With nobody quite sure when (and how) this snowballing revolutionary trend will end, it's entirely likely that some flashpoint will occur in the future where a "do-nothing" policy on the part of the administration will result in serious political fallout. With the 2012 election gearing up, the situation in Libya provided the perfect opportunity for Obama to neutralize his exposure to this political risk.
Think about the following scenarios. If Obama chose not to act, the many revolutions around the world might have resolved themselves without too much trouble (or bloodshed). It would have then been a non-issue for Obama: no political cost, no political benefit (the stable of Republican governors preparing to run against Obama in 2012 don't want to compare foreign policy credentials). If, however, the situations in many of these countries (such as Libya) continued to deteriorate, the lack of U.S. action early on would have been seen as a lack of confidence and foresight. In fact, by 2012 conditions in some countries might be so bad that military action might have been necessary anyway. By waiting so long to act, military intervention would be much less effective and Obama would be viewed as reactionary.
Now consider the flip side where Obama acts now with a limited military intervention (it doesn't really matter where). As before, the many revolutions bubbling in the Muslim world might still have resolved themselves, but now Obama gets to claim credit if that happens--a big political advantage. If things continue to deteriorate (civilian massacres, warfare, etc.), Obama can claim that he did the best he could in trying to use U.S. power to impose regional stability, but that any further action would be imprudent. He can spin a compelling narrative to voters that anything beyond the limited military action already taken would be counter-productive to U.S. interests in light of the quagmires in Iraq and Afghanistan. By acting now to preempt the scenario of increased regional instability, Obama minimizes the potential political fallout and exposes the possibility of a big political win.
In light of the political logic of minor preemptive military action, Libya provides a good target. It's proximity and history with Europe, combined with the kooky vileness of Gaddafi make military intervention an easier sell. While we must wait to see how things ultimately turn out, of this I am sure: under any scenario, Obama now has a strong narrative to sell during the election.
Monday, March 21, 2011
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