Some good ones:
Some people have strong opinions about Alan Kay's CS / programming work and I'd really encourage them to put them aside and deeply understand his points + context. The programming parts aren't ever the point, he's deeply interested in how as humans we improve our ability to collaboratively manage systems.
The problems he addresses still abound and it's really a pity we have culturally suppressed the vocabulary and arguments he put forward to talk about them.
So, my guess: serious.
It doesn't get into politics the way a typical work on political theory might, but that is, I think, very much intentional. Capital centers on the problems and politics of its day, while attempting to critique and respond to them. It does this by establishing a thorough foundation for a better politics focused on achieving a very particular goal--obtaining true freedom from [social/political/economic] coercion and domination. That it seems ahead of its time is a testament to it continuing to be relevant--because the issues it focuses on continue to exist.
That Capital is so widely misunderstood--both by those who turned it into a foundation for totalitarian negation of its foundational principles, as well as those who hold that regrettable history up as an indictment of the principles themselves--is regrettable, and the world is worse off for it.
If you're interested in disabusing yourself of the notion that Capital is an analysis of automated manufacturing, and not a proper work of political theory, I'd wholeheartedly recommend the exceedingly approachable and well-cited book Marx's Inferno by William Clare Roberts. Roberts, in my opinion, gets Capital (and Marx) right--and presents an incredibly compelling argument for a literary connection that really is a first of its kind. Then I'd recommend re-reading Capital, while reminding yourself that Capital is on a mission, and that mission isn't to explain how manufacturing works. :)
It struck me that my favorite intellects usually do foremost concern themselves with “how poorly we understand systems and why it's critical we get better at managing them”. This intellect just seems most important right now.
I'm curious. I wasn't aware of this. What are these strong opinions about?
- He hasn't shipped anything popular (he's a researcher, expanding the tree of knowledge, not an engineer optimizing for shipping)
- Smalltalk isn't as great as Alan makes it out to be (again he's a researcher)
- That the computer revolution has happened but he's stuck in the 70's
- Many, many more things
Just because we do something doesn't make a better idea than ideas we had in the past that are not being used. There are lots of dead great ideas.
And honestly, the language itself isn’t that remarkable by today’s standards; there’s so many dialects floating around most of the features have made their way into mainstream languages. It’s the tooling that I dream of. Sadly, it’s probably also another reason why it never took off: people couldn’t easily incrementally adopt it.
In my little corner of the industry, we've adopted a big heap of things for entirely political reasons, and they're mostly crap in one way or another.
At the end of the day, languages that were less extreme won the popularity contest. Ruby and Python, for example, are just more accessible and full-featured.
Smalltalk or more specifically one of it's dialects, Self (an even more "extreme" Smalltalk), made huge advances in JIT compilation. Advances which later ended up in the Java HotSpot virtual machine. Some benchmarks hit half the performance of optimized C. That was in the late 90s.
I will google these questions also, but am always interested the HN crowd's take. Like the original question I didn't know he'd ruffled any feathers.
Edit: top hit was Alan Kay himself addressing criticism on a Quora question: https://www.quora.com/Has-anyone-criticized-Alan-Kay, but on further read it obliquely addresses criticisms other than his role in developing OOP.
This is in context of dividing two fractions where kids are taught an arbitrary rule too early in their studies and it turns them off to math overall because it's become a class of memorizing arbitrary procedures instead of learning concepts.
(That's all my summary of that segment with a little reading between the lines, not my personal view of it. Or it might be later, but have to consider it more.)
Tend to think about constructive mathematics for this particular insight.
But I mostly think that "fractions as ratios" can be left until the child is older and has more chops for derivations.
The Greeks thought about these as different ways to measure intervals, and they worked out the idea of "common measure" as a good solution to dealing with these problems.
Summation of fractions is much easier to visualise, even if it is harder to calculate.
The amount of crap I got for using the "wrong way" to calculate something in math class, was probably one of the major reason I never really got into it.
I remember math classes in the beginning actually being fun, I loved figuring out more convenient/to me more logical ways to calculate something, only to be constantly shut down by the teachers for using them, as he/she demanded I use the solution given by the book.
I do understand the value of getting to the same solution in different ways, I even did back then, but teachers didn't frame it like that; their insistence on the book solution just felt like an accusation against me of not understanding, telling me my way of calculating is wrong (even tho they usually proof calculated right) when to me it looked like it was them not understanding, by insisting on that one formalized, and often awkward, solution, and only that.
So as a somewhat rebellious character, it didn't take long for me to start actually despising math classes.
If I could go back I'd probably try to do it differently, I'm in my mid-30's now and consider myself "math illiterate". Sure I can do most basic stuff and even the occasional Pythagorean theorem (which fascinates me to this day, take two knowns to figure out the third unknown!), but I still feel like I missed out on something I could probably really have enjoyed.
This image from wikipedia shows it all: the area of square a plus the area of square b equals the area of square c. It's just really convenient that we can use that to calculate triangle sides without resorting to trigonometry.
It could be improved by putting -(ab/2) inside the triangles, but I'm on mobile, so making something is out of the question.
For those who do not get the reference, Alan Kay is the inventor of SmallTalk: http://worrydream.com/EarlyHistoryOfSmalltalk/
"Explaining a joke is like dissecting a frog. You understand it better but the frog dies in the process."
-- Elwyn Brooks White
But every joke has an emotional gravity and the longer you compliment it with other emotions (e.g. intellectual explanations), eventually escape velocity is reached and you're in an entirely different emotional state.
Airplane! has three laughs per minute on average (https://www.forbes.com/sites/andrewbender/2012/09/21/top-10-...). That's not much time pull in other emotional states. And that's on purpose.
Post -> Comment on Post -> Analysis of Comment -> Analysis of Analysis -> Analysis of the act of Analysis -> Question truth itself.
It's like that Wikipedia phenomenon where all articles lead to philosophy.
To the people saying the explanation ruined the joke, I’d ask you to take a minute to consider whether you viewed it as a joke or a shibboleth.
If only those who know ‘got it’ and explaining it ‘killed it’, then isn’t it by definition a shibboleth?
In-group language is exclusionary by definition. Is this a good thing?
Lets say there is a scale of sentience that goes from 1, which is the lowest level of sentience necessary to develop a technological civilization, up to who knows how high. Where are we on that scale? Well, given that we literally, in evolutionary terms, only just barely got our civilization off the ground we're pretty clearly very close to 1. I discussed this with my brother and he pointed out most of us are below that, because we get taken along for the ride by people who are at 1.0 or higher. They're the geniuses that truly drive innovation forward.
So we are literally at the dumbest, most intellectually feeble level of sentience required to get where we are, otherwise we'd have done it sooner.
On the other hand the article is arguing the opposite. Trying to be empathic towards human nature and look for solutions with that in mind. I think that is refreshing and useful.
A scale of 1-10:
- 1 is the minimum threshold for civilisation
- 10 is the most advanced civilisation the universe has ever known
Unless you know of any other civilisations out there we can measure ourselves against?
The issue here is you have conflated humanity with the universe. Simply, we can't know, and it may be unknowable to any civilization where they are on the scale in an absolute measure, only a relative one.
On a relative scale, we are a 10. On an absolute one, we are no where close.
I totally agree with you, and you have some interesting points. But, this is a subjective definition of “dumb” that is tautological. It ignores the possibility that it could have taken longer. For example, there are other sentient species on this planet for which it hasn’t happened yet.
You could also phrase what you said with the optimist’s glass-half-full phrasing: we are literally the smartest and most intellectually capable beings to get where we are, otherwise it would have taken longer.
Do you know of Sturgeon’s eponymous Law, “90% of everything is crap”? I didn’t realize at first (maybe because I’m dumb) that this isn’t a statement that things are bad. It’s a subjective and un-arguable proposed definition of what bad is. There’s a distribution of stuff, let’s just call the top 10% good and the bottom 90% crap. Sturgeon’s law applies to people as much as anything else.
> most of us are below that, because we get taken along for the ride by people who are at 1.0 or higher.
This thought has occurred to me before, and I think it’s super interesting to ponder. Today I’m not as sure as I once was that this paints an accurate picture of how progress works. History tends to over-inflate the importance of individual contributions and leave out the vast majority of context and help that luminary figures had. The progress we feel around us today takes immense commercial effort that involves uncountable numbers of people. The US launched first into modern computing because the political and economic conditions were right, not because we had more geniuses.
Perhaps it’s not the top sliver of civilization that is driving innovation at all, perhaps the it’s the average intelligence that hit a threshold, or perhaps it’s not much to do with intelligence but with economy and culture, or maybe it’s inevitable once written language happens. It’s hard to speculate about these things since we have no basis for comparison.
I like to view our intellect as a tool for survival of our species. By that measure, we are doing fairly well. We used to get wiped out by minor stuff like not enough food, not enough protection from the elements and other animals, diseases, we have eradicated the majority of these things hindering our survival.
I hypothesise that most of the people here (on average) on HN are highly educated. It's kind of fashionable and almost necessary social behavior to be humble in your own intellect. By all objective measures the people on HN are really fucking smart but you can't say that of course because that's "arrogant". Yes, I too think I'm stupid and suffer from impostor syndrome having two graduates degree in applied math.
Anyway, humans, compared to other animals we compete with for survival, food, and territory, are doing really well. I don't see any cows on the moon yet.
That's exactly what I just did - the level of intelligence necessary to build a technological society. On that scale we only just register above the threshold, as a species.
I'm not saying our intellectual capacity is rubbish or useless, we make the grade to be significant on this scale. Yay us!
I'm just trying to put our intellectual achievements in perspective given that we have no other intelligences on the planet anywhere close to competing with us on this scale. Making a comparative analysis of a single data point is alway difficult, but I think this is a useful way to think about the problem.
Would all this be possible without other mammals? Or is the ecosystem (including mammals) the enabler for us?
But do we all want to be "super thinkers": Is that actually progress?
Especially in the context of "sentience", maybe it's not just a blessing but also a curse?
Imho animals mostly run on instinct in a kind of "intuition mode", this even applies to humans. What makes humans, and maybe some other animals, different is their ability to have self-awareness, which allows them to have an inner monologue and active thought to influence their actual actions and decisions, instead of just leaving it all to intuition.
But we don't all constantly do that, "thinking" that is. When speaking with friends and family about this, how do they perceive their thinking, I was shocked to learn that some don't know/understand this "inner monologue" aka "active thinking" at all.
These people are not stupid, that's not what I'm suggesting, these are very productive people, who often manage to stay positive, wise and happy through some rather nasty hardships that would probably have broken me, due to my tendency to overthink things.
As weird as it might sound, sometimes I wish I could just turn the thinking off.
That's when I pursue hobbies, to take my mind off, but usually results in my thinking being refocused on something more enjoyable, but in the end I'm still thinking about something.
> sometimes I wish I could just turn the thinking off
I have this same feeling, a lot. Sometimes it just goes into overdrive. It's so easy to get wrapped up, when I want to be doing something else. It's fun, but doesn't always have a positive result.
Taking 10, 15, 20 minutes every day to do this exercise of being still and just watching the monologue has been really valuable to understand and recognize that state, which makes it easier to deflect. And I haven't lost anything; that thinking mode is still available if I really need to puzzle something out. But it's in service of something, rather just than a runaway train.
Probably also a way more healthy and sustainable solution than trying to medicate the issue away.
Also ability to drive things forward is limited/driven by things other than just intelligence. Look at Hero's steam engine - without the other metalworking technologies it was a curiosity. Having slave workers do the task was more efficient than having them gather more expensive fuel for an expensive machine to do the task. Also look at the "discovery" that Aristotlian flight paths for thrown objects was wrong. Who already knew for centuries? Literally anyone who actually worked or fought with projectiles but they weren't in contact with them. (Eastern warrior-elites generally would also mock them given the prevalence of aristocratic archery there).
By geographic time scales (read: compared to every other species) we still look like a division by near zero near assimtope.
This is basically the theme of "Atlas Shrugged".
There is always the issue of an overreaching government, and that's where the left/right party split comes in. Each party either creates more regulation and protection or take some away. As voters, we have to recognize this duality of our system and embrace it. It's our only way to control the people we elect.
This isn't strictly true, and I'd love to see you provide extensive data on such a exceptional claim.
There is a lot of evidence showing that harsher punitive measures often have little to no impact on crime and wrongdoing.
I would counter that without those punishments and protections, its possible that fewer people would do things like start businesses, for example. I don't really know. I'd love to see some data on this.
Seems to me that instead of rushing to one extreme or the other (no Government vs big Government), finding a good balance between the two is going to be the most productive for us all.
> I would counter that without those punishments and protections, its possible that fewer people would do things like start businesses
Again, the evidence rather strongly suggests the opposite.
As people's brains are more stressed out by the fear of failing, their decision making gets worse not better. There's tons of evidence that shows that being poor severely screws with your ability to make rational, intelligent decisions about long term planning. (https://www.theatlantic.com/business/archive/2013/11/your-br... ; https://theconversation.com/study-links-poverty-and-poor-dec...)
Likewise, there's data that shows one of the things that's special about entrepreneurs is the fact that they have strong familial safety nets. Part of their risk taking is literally that the risks are less risky for them, because their families will catch them. Which suggests that, if you want to increase the number of new businesses - implement a stronger social safety net (like a basic income). (https://www.theatlantic.com/politics/archive/2015/03/welfare... ; http://www.nber.org/papers/w19276.pdf?new_window=1) . The paper I linked there focused on the "smart" and "illicit" avenues and completely brushed past the "come from wealthier families" part, but I've seen other papers (that google isn't coughing up readily in the 5 minutes I have right now) that focused more on that latter part.
Conversely, you just have to look at the countries that do a good job of taking care of their citizens - Scandinavia, Canada, etc - to see pretty strong evidence for the idea that a well cared for populace is able to make better decisions.
I'd be willing to bet that harsher punitive measures (and more aggressive enforcement) would have a big impact on white collar crime rates.
I spent 6 months in prison as a conscientous objector. One thing I learned was, in the relatively humane nordic penal system, the reality of imprisonment was nowhere near as scary as I'd imagined. If I were to commit a serious crime now, I think the social stigma would be much more serious to me than incarceration, were I to be caught. I think that's probably true for most white-collar types as well. Losing time is one thing, losing standing among your peers is much worse, if you have standing to lose. Shame is a terrible thing. It wasn't an issue for me, fortunately.
Of course, most people in prison don't have the luxury of such problems. The majority of people I met inside were there as a result of psychological and substance abuse issues. One man there reassured me that I was going to be OK because unlike everyone else there, my problems were not with my self. That's got to be about the saddest thing I've ever heard.
>...I spent 6 months in prison as a conscientous objector.
Could you elaborate? Under what conditions does a conscientious objector face a lengthy prison term?
In the US the draft just allowed the US government to continue the Viet Nam war far longer than it otherwise would have gone, I am glad we don't have an active draft here.
Now that American wars are mostly being fought by volunteers from classes without political power they can drag on for decades and most Americans barely even think about them anymore.
I don't think there is much evidence for this. Over 2.7 million Americans served in Viet Nam. If the politicians could have possibly gotten millions of young people to drop what they were doing and go 5 thousand miles to fight in a civil war in a country most had never heard of before, they would certainly have done so. There is simply no possible way they could have gotten that many troops on a volunteer basis, or they would have done so.
>Once kids of upper and middle class parents started getting drafted and killed they started putting pressure on the government to end the war.
The upper class were able to get out of serving in Viet Nam with deferments, serving in the National Guard, etc. Johnson acknowledged this and that is why they never sent the National Guard to fight in Viet Nam.
The middle and lower classes were dieting in Viet Nam long after the average American had given up on the war. Johnson din't even run for re-election because people were so opposed to the war but the war still dragged on for several more years. The politicians didn't end the war sooner because they didn't want to suffer the political consequences of looking like the person who lost and they knew there was plenty of cannon fodder to replace the soldiers who came back in a body bag.
>...Now that American wars are mostly being fought by volunteers from classes without political power they can drag on for decades and most Americans barely even think about them anymore.
There are differences between the wars of today and the Viet Nam war. The Viet Nam war had literally an order of magnitude more deaths than our current wars. A war zone is never safe but there are at least a few occupations that are a more dangerous than fighting in Afghanistan. Having a volunteer force means the soldiers have to treated better and paid more than a draftee. These wars have been a waste of lives and money but things would have been much worse if there were millions of draftees serving in the middle east and Afghanistan. At a minimum, I think it is very likely there would have been a war for regime change in Iran if there were a draftee army that was forced to fight there.
Having a volunteer force in the 1960s would have meant that the Viet Nam war would have been fought with a lot more concern for the loss of life of the solders, and it likely wouldn't have been fought anything like it was fought.
Kind of amazing that this is ground for a legal challenge but the fact that female aren't drafted isn't. That's one of the part of Western societies around which I can't wrap my mind.
In Switzerland we had a small reform of our army and copying the Norwegians was considered for a while, but they ended up dropping the idea for just doing small changes. Quite disappointing.
Every country has abolished private slavery. I'd like to imagine a world where each individual state also relinquished its claim to enslave people.
The exempted religious group are the Jehova's witnesses. It's my understanding they were granted an exemption because men in the group would by and large all refuse to serve, and putting them all in prison wasn't doing much good. However, recently a conscientous objector was released by a court on the grounds that this exemption constitutes inequal treatment, and the state now has to address the issue. I suppose the options they have are to either extend the exemption to others based on some grounds to be determined, or remove the exemption of Jehova's witnesses.
The ministry of defense has proposed to solve the problem by removing the witnesses' exemption. In general, the state appears to be consistently treating this as a practical matter of maintaining the current policy of general conscription, and not as a rights issue at all.
Harsher punitive measures are often meted out to those with the weakest reason.
“Parco, Rapoport and Stein (2002) illustrated that the level of financial incentives can have a profound effect on the outcome in a three-player game: the larger the incentives are for deviation, the greater propensity for learning behavior in a repeated single-play experimental design to move toward the Nash equilibrium.”
I recall reading somewhere that people also behave more rationally in other games like the Dictator Game (and exhibit fewer cognitive biases) when the stakes are higher, but can’t remember where.
Typically, voting results are highly skewed towards 50/50, say in most elections in democratic regimes with fair elections. This was the case for Brexit or the popular vote in the US 2016 election for instance.
For an election whose expected result is close to 50/50, each voter is highly influential; intuitively, if all but one voter are decided and produce a 50/50 draw, the last undecided voter has complete power. Since a lot of fair elections are approximately 50/50, undecided voters have far better influence than 1/300,000,000 for a population of 300,000,000.
In an approximately 50/50 election with few undecided voters, it is quite cheap to swing the results by bombarding the few undecided voters with ads.
Mathematicians use this concept coined "influence" of a variable, or "influence function" to analyze properties of random boolean functions in percolation for instance.
Even if you had guaranteed ability to affect the outcome of an election, supposing you knew that by spending many hours researching the correct policy to vote for you could save each person in USA $1, it would not be worth it for you to spend the time figuring it out. Although from a social perspective it would be a worthy thing to spend time on.
When was the last time someone got a supermajority with more than a small number of voters?
Your basic point seems to be that a big Government will be so well run that individuals would rely on it to provide them with benefits, even in the case that the Government make poor decisions on policy choices. That is the whole point of a Government: to make life easier for people by taking care of things that are too expensive or complicated for people to do individually.
What actually happens, in the real world, in situations like this, is that people suffer and die. They don't become Ayn Rand's ideal man; there's just lots of needless suffering.
And because people are capable of violence, and because people don't like suffering very much, they commit violence against each other to improve their own position -- which increases the suffering.
And then other people, who don't want to suffer and don't want to commit violence, try to leave. And they come to countries like the United States, which they've heard at some point is a great and welcoming land of opportunity, only to discover that it's all a big marketing sham and the majority of the US wants to put up a sign that says, "Go away, we're closed."
Given the number of failing or failed states around the world recently, you have to have your head quite deep in the sand, or maybe far up in some body part, to still subscribe to this idea that anarcho-capitalism is a solution to anything.
There are many complex problems with many governments around the world right now. "Get rid of government" will not make any of it better.
There are many many counterexamples to this. See [Seeing Like a State - Wikiwand](https://www.wikiwand.com/en/Seeing_Like_a_State) for many good ones.
There's a lot of good evidence that people are in fact capable of taking care of themselves pretty well. But violence, especially organized violence, is tho a very real problem for basically everyone. But that's basically what a government is, fundamentally, so it's not obvious that 'more government' always rebounds to the betterment of everyone or even most people. As with everything, there are tradeoffs to be weighed!
The economic argument for government providing public services is actually that for public goods, the incentives on the individual lead to sub-optimal outcomes (that’s partly just the definition of a public good).
Just because voters vote for government that may be less good at providing that public good (let’s say police protection) is not an argument that this completely eliminates any benefit from that service being provided as a public good.
From the simple example, the Democrats may provide less optimal policing than Republicans (wasting money on nanny state directives) does not mean the service can effectively provided by the private market.
You’re positing that sort inverse incentives apply when voters are choosing the governmental provision of public services. This seems unlikely to be true in the aggregate because voters do not get to choose politicians who are going to pursue policies to benefit themselves, as an individual, when they vote. As you point out, they may vote for totally psychological benefits.
So the tension is not really over the size of government; it is over making the correct determination of how much of a good or service is comprised of being a “public good.”
Classic public good problems, like imposing the correct costs on pollution, can’t be solved by wishing them away.
What you’re complaint more seems to be with is that democracy allows elements of self, or class, interests into individuals voting choices. The solution to this would be some kind of perfect benevolent dictator, who would make the optimum determination as to which goods should be provided by the government, and dedicate the correct resources to them.
The problem with this, of course, is again the incentives on the holders of power distort their decision making to their own benefit, as had be shown over and over in the real world.
People are not fundamentally rational, and people do not know how rational they themselves are in any given context.
Consider, for example, the international politics arena, wherein there is no government over state actors, and where sufficiently important players pursue sufficiently rational actions, since the cost of not pursuing it is so high. Yet even with good evidence that current human activities are leading to future food and environmental insecurity via climate change, the rational actors have been struggling to coordinate on a plan.
When a voter is just one of millions, their share of power is necessarily low. Yet the total power obviously rises linearly. (or even super-linearly, considering the outsize influence the US has in the world). Your comment also suggests that you believe people are fundamentally open to altruistic decisions. It should therefore not matter if the power they have is over themselves, or their compatriots.
I also doubt widespread agreement with the policies you mention. Answers to such survey questions depend on the phrasing more than anything. And to use one recent datapoint: we all know a recent candidate who embodied those policies more than anyone before him. Yet they actually got fewer votes than their free trade / pro-immigration opponent.
Well, soon enough, I am sure, the AI will satisfy both views on the government: it will control everything, and it will fit in your pocket.
We may need a source on that. Are you are familiar with Thaler's work?
This was directly negated in the article.
Do you mean like buying a house they cannot afford for some ideal of home ownership? ;)
There's less war, life expectancies are generally rising (the opioid epidemic being a temporary, and local, blip), the possibility of achieving one's true potential is less dependent on class/gender/race than it has ever been.
It's not perfect, but it's far away from life as it was even 100 years ago: nasty, brutish, and short.
The subtle mechanism behind most problems in public policy today is collapsing of decision tree into just one yes or no answer (red/blue) that IMO is killing the nuanced policy development (or more accurately used by politicians to do whatever half-aed measures they can come up with). having smaller units also help with even more meta-manipulations like gerrymandering so prevalent in US. if we want to hold congress accountable for their constituents this is pretty much the only sustainable path to it. Until this happens IMHO most good policies will continue to be lost in poor/unimaginative implementation.
While local government is totally necessary, I don't think we can afford to not have big government. If wind currents made air pollution a non-issue in say, Ontario because wind currents blew it all down to Nebraska, how would we deal with that? Many of our most pressing societal problems live at the interstate or international level and need a corresponding governing body.
The article talks about institutional inertia. The advantage of a market economy is your Blockbusters get replaced by Netflix. Imagine if film renting were a public agency. It would be much harder to disrupt. Governments are, by design, immortal. A crucial design decision is choosing what, in our society, we want to be immortal and what we want to be replaceable.
Further governments are often first adapters. Many legacy government IT systems exist, but as they generally work and cost less to maintain than replace. Really the advantage of free markets is information exchange and diminishing returns not simply building large scale systems.
Consider, some cars come with built in refrigerators yet we ended up with roadside stores selling cold beverages. That's the kind of tradeoff markets are great for identifying.
The elected component of any modern government oversees a vast administrative bureaucracy. This is the part people refer to when comparing "big" and "small" governments.
> the main reason for the institutional inertia is the same scale, complexity and principal/agent problems large corporations also suffer from
Federal bureaucracies only die if (a) the legislature explicitly kills it or (b) the government collapses. Large companies, on the other hand, can go bankrupt. Shareholders are motivated to be ruthlessly efficient in a way lawmakers, somewhat by design, are not.
Ruthless efficiency for maximising long run profit is only useful in cases that particular metric happens to align closely with the goal of society. For film distribution this might be a reasonable assumption. For promoting health or learning outcomes or facilitating retirement, it almost certainly usually isn't.
In Western European and North American history, at least, it dramatically is. Look at a list of the Dow or S&P 500's founding components. Look at those lists now. Now look at a list of U.S. departments in 1850, and compare them to today.
> Q: So policy makers should use bubbles as a way to step in?
> Thaler: Yes, but very gently. It’s not like I think policy makers know what’s going to happen, but if they see what looks disturbing, they can lean against the wind a little bit. That’s as far as I would go. We both agree that markets, good or bad, are the best thing we’ve got going. Nobody has devised a way of allocating resources that’s better.
> Fama: We disagree about whether policy makers are likely to get it right, though. On balance, I think they are likely to cause more harm than good.
We all agree that economists are good at maximizing resource allocation. Sysops are good at maximizing hardware allocation but we should let them dictate national policy :)
Politics is about taking all of the science and all of the human components of administrating a country and merge them into an ideal outcome. Economics is just one part of a bigger picture.
I must say though that I have doubts about the parent's "they largely ignore externalities", I think that is too negative a claim.
Case closed. Pay your taxes, citizen. Thank you; drive through.
And then, occasionally, there are protests in the streets, people start running for office pledging to fix the abuses, we vote for them, and things slowly start to change.
Alternately, sometimes we sue them, or else a state or federal attorney general sues them; the matter ends up in the judicial system, and the behavior is reviewed by an independent judge – albeit only for violations of law, not of sense.
As avenues for redress, both of these are highly imperfect, with well-known limits and failure cases; but they’re not nothing.
If this were possible, there would be no authority
In a small government scenario, who watches those providing services?
Libertarians = Arch Linux (lean, mean, minimal)
Everybody else = Windows or Mac (i.e. huge operating system that tries to protect users from everything under the sun)
I earned my CS degree from a liberal arts college and took my share of liberal arts classes. But the name doesn't directly infer a political slant - there isn't an indoctrination that the right would like to say happens. Certainly some departments will have slants to them (women's studies, african american studies, etc.) but that doesn't mean that the scientific method gets forgotten at the door. Research still gets done and still gets reviewed. Certainly moreso than what happens on Fox News.
Look at net neutrality, it's been completely framed by the republicans as anti-business, and they have appealed to the masses that are uneducated in how the internet works and why it was successful in the first place. But what would those of us who are educated and/or do development know? We just work using the internet all day, every day.
I question this premise. How much of the public actually buys the Republican line on net neutrality?
Life is complicated. It is time consuming to become an knowledgeable, aware person capable of contributing intelligently to society. It is also absolutely necessary if we want to have a self-governed society worth living in. You can't have a worthwhile government - let alone a big government - governed by the will of the masses when the masses are largely ignorant and unable to offer informed consent due to lack of understanding.
Thaler's "libertarian paternalism" is not about controlling choices, but making better choices easier to make while allowing people to still choose something else. Big government in practice is typically about picking an option and not allowing anything else. And if that one chosen option turns out to be wrong, it will take ages to undo it as the now-vested interests who manage to benefit lobby to keep the status quo.
> There was an economist once early in my career who said to me, “You know, if you’re right, what am I supposed to do? What I know how to do is solve optimization problems.”
A career economist not wanting to change their ways because they have spent a career doing things when presented with a possible outcome that maybe those things didn't matter as much. Also:
> If you think of companies that have come and gone, like Kodak, which invented the digital camera, but they had an almost-monopoly in film, and didn’t really think this digital thing would go anywhere. Blockbuster Video, which came along and put tens of thousands of mom-and-pop video stores out of business, only to be put out of business by Netflix.
These are human behaviors to recognize - sunk cost. It can sink a company. Something to be wary of as a startup grows past adolescence and into adulthood.
I suspect Blockbuster behaved similarly. It's hard to kill the golden goose.
Still examples of the sunk cost fallacy, for sure, but it feels like "lack of realization" is perhaps the wrong attribution.
They would have been better ignoring the whole digital camera thing and looking for other opportunities where they could leverage their skills and assets. Or just wound down gracefully.
Kodak is a classic example that no amount of foresight will save you when the entire industry changes underneath you.
Motorola is another, mostly forgotten example. They invented digital radios for cell phones, but they were so entrenched in analog radios at the time that they gave the technology away to a small company called Nokia. A few years later, they collaborated with Apple on an iTunes equipped cell phone, and shared their own internal designs of a full screen phone.
I think this phenomenon is one of the few ways a big company can die.
Blockbuster's organizational, legal and physical infrastructure was wholly devoted to video rental via physical stores. Decommissioning those organizational components and creating the systems necessary to spin up and run an online video portal would have required changes in the company so massive that it would effectively be a different company.
Even if Blockbuster had bought Netflix early on, Blockbuster would have been left running an organization they did not understand in a market that only vaguely resembled something it was familiar with. Even worse, and totally contrary to modern management theory, management skills alone are necessary but not sufficient to operate a growing and dynamic company on the forefront of technology. The entire management organization of Blockbuster would have been totally unequal to the task of operating Netflix competently.
Steve Eisman puts this well in  when talking about why he's investing in bank stocks even though he thinks prospective rollbacks in Dodd-Frank reforms are a bad idea: "There's two issues. There's what I think about the financial system and what I think about financial stocks, and the two don't necessarily correlate."
KBE: 44.49 Jan 30, 2017, 47.82 July 11, 2018 = 7.48% price growth (I couldn't find numbers for total return and too lazy to compute from distribution history)
VFAIX: 20123 Jan 30, 2017, 23569 July 11, 2018 = 17.1% total return
VFIAX: 22291 Jan 30, 2017, 27729 July 11, 2018 = 24.4% total return
KBE: SPDR Bank ETF
VFAIX: Vanguard Financial Index
VFIAX: Vanguard S&P 500
I mean, sure, the business model and support systems between original Netflix and video rental store are fairly different, but Blockbuster still had a huge leg up over starting from scratch. They already had vast inventories, sorting systems, a distribution network (albeit one that would have to be heavily modified), name recognition in a market that consumers considered interchangeable (common consumers just think "video rental", not "brick-and-mortar retail vs. online direct delivery") and I assume a lot of production industry connections and relationships.
It seems like they were already over halfway there, and given that the biggest hurdle is getting off the ground, their existing brand recognition and membership records are a massive advantage.
For a while I was pretty sure I knew what a healthy buyout should look like. Now I’ve no idea. How do people pull this off?
Any pointers to where to find the information/studies that won him the prize. What people should/shouldn't be doing when making financial decisions. For instance, there was a reference to the fact that people "should ignore sunk costs" but don't. What are some other things to watch out for, and the reasons to do so?
If you're looking for information on nudges, check this: http://economicspsychologypolicy.blogspot.com/2013/08/nudge-...
It looks like they've stopped updating it but it has all sorts of economic research on nudges in it. Beware that some of this research is debated though.
Misbehaving is more of a personal history of how he got to behavioral decision theory. I particularly enjoyed that because I had a couple classes with him when he was working on these ideas early on.
Someone calling in that doesn't know the difference between the PC tower and the monitor and doesn't care to learn isn't "stupid" any more than you are stupid for not knowing an alternator from an AC compressor, and chances are you won't remember even if shown once or twice because you pay someone else to know and maintain/fix that stuff.
Stuff like "where's my seat warmer?", "How do I turn off the windshield wipers" and "why does my window go up all the way when I just touch the button" are all questions I was asked when I worked as a mechanic.
And if they are coming to my shop to get those answers, then it's my job to help them. Hopefully come tax time when I need to talk to that accountant he wont laugh me out of the room because I didn't know I needed to keep my own tax when working as a contractor.
hmmm, in many cars the window dongle has two states. Half pull moves the window only as long as it's pulled, full pull makes "the window go up all the way" even after releasing the dongle... and it might depend on whether the keys are inserted and whether the doors are open. Took me some time to figure it out in my car.
Really smart dude, but just needed some help with his new car.
If so, you are not part of the demographic the parent is talking about.
ps. I would correct though and say some people are dumb. I've met others on the other end of the spectrum too. Also, something something, the difference between ignorance and stupidity, etc.
Every (somewhat major) decision I'm making now, I'm constantly reminding myself of various biases and silliness that I participate in unwillingly (or even sometimes willingly).
I would say this study has been immensely helpful, and Thaler is a huge contributor to this for me. (Freakonomics, also, has been a great learning resource.)
For anyone interested in this subject, I recommend Thinking Fast and Slow by Kahneman. (You'd think I should get a referral bonus as often as I talk about this book.) It quite literally changed my life. Of course, Nudge is the other juggernaut in the field.
In fact, if anyone is particularly interested, I'd love to chat. Profile has contact details.
A simple example is the "default choice" effect. The standard explanation is that people are too lazy to check a box. A more sophisticated explanation would be that people infer information from the default they are presented with and allow it to influence their decision based on their assumption that the form creator is well informed and looking out for their interests. There is in general an under appreciation in behavioral economics that people are likely being more rational than the over simplified models they are benchmarking them against. There are lots of examples of this in the most widely known results.
A trial shows that people often exhibit behavior A. Why they exhibit behavior A may be complicated.
In your example, there's a sense of authority and conforming to a norm that can be used to describe those behaviors. But there's also the cognitive barrier (which we call lazy) that requires someone to exert mental effort to change away from a default.
It's not that one is wrong and the other is right. All of these may be right. But B.E.'s best contribution to society isn't to explain so much of _why_ we act in these ways - but instead to accept that despite our desires or perspectives of rationality, we do act in these ways.
Understanding the "why" may help us to make better decisions, certainly; however, being too prescriptive about "why" may lead us down the wrong path.
There is an admirable strain in classical economics of epistemic humility: assuming that when human agents act in the world in ways that don't appear to match economic theory, it is at least as likely that the agents are acting in their own best interests and the economic theory, model or data are wrong than the reverse.
Behavioral economics tends to follow a less admirable strain of economic thought that assumes when agents don't follow the predictions of our over simplified model, it is the agents who are wrong and not the model. This is merely misguided in it's benign form but becomes pernicious when it is inevitably extended to "fixing" the agent's behavior through some form of coercion.
My criticism of BE is when it makes too strong a claim to agents acting irrationally rather than questioning where its own assumptions or models may be incomplete.
I find it somewhat useful if overly simplistic as an aid to analyzing and improving my own decisions. I dislike its use as another tool to justify telling people what to do. I also find its lack of introspection into its own flaws and limitations as a field disappointing.
One thing that always bothers me is how we have this myth of personal responsibility that supposes an individual is equipped to defend their own interests against a multinational corporation on their own.
“Well I just don’t get why the baby didn’t defend itself from the bear.”
At different scales this means unionization and professional organizations, government regulation, and international regulation, to prevent whole countries from defecting - this is in large part what the EU is about, and a significant source of UK ill will towards it; and also generally what makes nationalists upset at globalists.
Collective action problems require collective action solutions. Large actors, however, tend to dislike collective action because it reduces their scale advantage.
Collective action has its own problem: power structures encourage corruption and misuse of the pooled power. Overall, I suspect government and international systems are more likely to be less corrupt because they can afford to build more checks and balances into their institutions, but the distance from the people decreases their perceived legitimacy.
Not an easy circle to square.
I read a bit I liked a while back about early feminism, in which members rejected wholesale the idea of power structures & authority, and established no authority. The author relates, however, that the power vacuum was naturally still filled- but because everyone wanted to pretend there was no power structure, the one that developed was unusually cruel & unaccountable.
I liked the bit because to me it seems like the strongest argument for official government- if the power vacuum must always be filled, let us be deliberate in how we fill it.
Another very big factor in having a properly accountable government is reducing information asymmetry as much as possible. Democracy doesn't work well if education is crippled, and there's been a serious decline in the quality and breadth of education in the U.S. (I can't speak to other countries, but I hear of decline elsewhere as well) It sounds a little conspiratorial, but I don't believe the massive student debt loads and the disparagement of fields of study such as philosophy, which prompts critical authority-challenging questions, are accidents. It is my opinion that the upheaval of the 60's scared major U.S. powers and they took steps to nullify student activism.
People in general are very disengaged, apathetic, and distracted. Much of the corruption in government, media, and business could be countered effectively by a population that knows how to inform itself. Instead we seem to be sinking, like Rome did, into corruption, ignorance, and widespread superstition.
I've seen it work, where people found ways to fluidly hold each other accountable and natural leaders gently stepped into the power vacuums with out any kind of formalized authority. And I've seen it fail catastrophically in a myriad of ways. It really comes down to the people who are involved, and how intentionally they approach the organizational problem.
I've also seen larger scale organizations that intentionally attacked this problem and created formalized structures that were built to minimize concentrated power and instead keep it distributed. It was essentially a formalization of the first case where the no-authority / structure model worked.
So it's doable. You can have collective action with out concentrated power and hierarchy. It just takes intention and strong (but compassionate) social accountability.
Let's see who naturally arises as a leader style also leads to special kind of hell.
It's important to make governments that are "about laws - not about men". Because if governments are built around single people, those people will concentrate power. When a system leads to the person in power hands off power to the next person, it's a way to distribute power.
The second principle that is a huge problem today is concentration of power into the hands of the wealthy. Thomas Piketty put his finger on the problem - in the 1970s, most obviously in the US, billionaires began to figure out how to use their wealth for persuasion. In that way they use their wealth to take more of the profits in the economy for themselves.
I think this is the problem of our time:
How do we stop oligarchs and billionaires from funding a propaganda machine designed to break democracies so they can accumulate more wealth?
Link (and second recommendation) for the curious:
Not just "sometimes", it takes the threat of violent people in uniforms ALL of the time when dealing with people bent on illegally benefiting themselves at the expense of others.
The issue is that the violent people in uniforms, (and even the people controlling them for that matter), can ALSO be bent on benefiting themselves at the expense of others.
It's not only grassroots organizations that can be corrupt, the government itself is actually even more likely to be corrupt. So you almost have to solve corruption before you try to solve the other structural issues. And corruption is just a very hard problem to solve.
It talks about how socializing risk and privatizing profits is actually the definition of corruption.
No. Once upon a time we nominated experts to make most of those decisions. Groups like the EPA or the IRS were given a mandate to examine what was going on and ban behaviors that did harm. But today "regulation" is a bad word. Everything is political. The EPA and IRS cannot ban anything without massive public debate. In fact, most regulatory bodies are so under pressure to reduce any and all regulation that they rarely ever ban anything. Quick and efficient regulation of harmful behavior is dead.
Example: the recent bill to ban upskirting photography in the UK. Nothing much to debate. But the bill gets killed by the new breed of politicians who demand every new regulation be subject to the full public process in order to make the act of passing new regulations as difficult as possible.
One thing I've observed over and over is that there are unintended consequences to everything. It often takes years to figure them out.
Exactly. I tend to be wary of concentrating power. The larger the group the more likely that there are conflicts of interest within the group.
Perhaps more importantly, large groups just don't make sense in a lot of cases. If I make a union of milk drinkers, we can buy in huge bulk and get a discount. But then we have 1000000 bottles of milk in one place that will go bad in a couple weeks. We need to invent a distribution network, and a way to figure out who actually needs milk and when, and a way to track who is drinking the most milk so they can pay higher dues. In other words, the union hasn't accomplished anything and basically everything will be the same.
The broad correlation (and correlation isn't necessarily causation) is that as union power decreased, so did real wage growth.
Dealing with information asymmetry not distribution can result in better outcomes without expending nearly as many resources.
PS: Consumer reports is a solid example. Collecting a lot of information on each toaster/fridge/bed is not practical for an individual, but split that among 1,000,000 people and each can save more money than the cost of a subscription.
"The currency of evolution is neither hunger nor pain, but rather copies of DNA helixes. Just as the economic success of a company is measured only by the number of dollars in its bank account, not by the happiness of its employees, so the evolutionary success of a species is measured by the number of copies of its DNA. If no more DNA copies remain, the species is extinct, just as a company without money is bankrupt. If a species boasts many DNA copies, it is a success, and the species flourishes. From such a perspective, 1,000 copies are always better than a hundred copies. This is the essence of the Agricultural Revolution: the ability to keep more people alive under worse conditions."
The gene is the unit of selection is perfectly right. It's missing a finer point in that groups of genes are unities of selection too, but it's correct.
Your last illustration there reminds me a little of this:
His name is Johan.
He drank a bottle of milk and played with a purple ball as he waited for the immigration judge, The Associated Press reported.
John W. Richardson, the judge at the Phoenix courthouse, said he was "embarrassed to ask" if the defendant understood the proceedings. "I don't know who you would explain it to, unless you think that a 1-year-old could learn immigration law," he told Johan's attorney.
If the judge had integrity he would resign or be disbarred.
It was a reference to the quote above which is saying the reason individual people loose is not because they are dumb but because they are unable to match their opponents resources.
> “Well I just don’t get why the baby didn’t defend itself from the bear."
How can individuals defend themselves when the system and corporations subvert their rights.
That’s an insult to the concept of justice.
Agreed. Unfortunately our justice system has been turned into a legal system. Legalities are more important than justice and it's sickening.
"It is emphatically the province and duty of the judicial department to say what the law is."
I would expect any average individual to lose against AT&T in whatever their issue is unless AT&T willingly concedes to them.
Picking on AT&T for no particular reason.
The inefficiencies are what make the system A)navigable, and B) work.
When you have humans trying to run something that no human can fully mentally represent without significant investment in external memory aids, you have a recipe for disaster, because one bad move by a large actor propagates far better than the same move by a smaller actor.
Real life analogy:
Your kid trips.<-Less severe
YOU TRIP.<-More severe
Which has worse consequences?
Ideally, the ability for individuals to sign contracts with corporations should be forbidden. Maybe a single 1 person corporation that doesn't involve a lawyer either direct or as a contractor.
I get into a restaurant, I order some food. That's a contract where I get into the obligation of paying, and they get into the obligation of serving the food.
It's much more likely that the justice system needs a complete rework.
In which case just save everyone the hassle and pass a law requiring proportionality to the degree of defined max lawyers per lawsuit of size defined in some workable metric so it doesn't take decades just to go through every mortgage in a AAA bank with solo lawyers on each side. It would limit the use of lawyer armies but it may lose a constitutional challenge on grounds of right to petition the government for redress.
We are also fairly dumb when it comes to understanding things like ecosystems, genetic regulatory networks, the climate, the brain, etc. Those are all systems that have similar properties.
It's just when you are caught up in it, you can't afford to think about it. You have to both be a part of it and not allow the responsibility of knowing you influence the system - therefore don't have the capacity to reason about the consequences of every single action - crush you.
It's more like you are the bear and you are trying to take care of a baby. There's the idea that you are just this tiny, little singular organism in comparison to the whole, but you aren't. Everything we do has consequences, everything we do directs systems. If you think some things you do just don't matter, you are missing some perspective.
I prefer not to think like that. I'd say we're doing our best to navigate hard problems, and it's not yet clear how to do things more effectively. Worst case scenario we're acting dumb, and I'd argue that is kind of a useless statement. We're acting, and we can do better, so put some time into working on doing better.
1. Our wiring isn't perfect, but who is better equipped to defend a person's interests than the individual themself? Serious question.
2. I don't think the "power" and coerciveness of multinational corporations is anywhere near that of government, which people bashing corporations usually want to make larger and more powerful. As Diedre McCloskey says, what happens if you are morally opposed to some new fighter jet or corporate subsidy, and unilaterally decide to pay fewer taxes because of it? The answer is you go jail. What happens if you choose Samsung or an Iphone? Nothing.
3. It's not like there is just one monolithic corporation. There are many, and they have various interests, capabilities and incentives. Usually they're competing with each other. Further, in time, many corporations correctly view these irrationalities as market opportunities and actively work on helping consumers combat them. E.g. see Acorns, Wealthfront, or hundreds of apps that help people use their phones less.
Organizations who have similar levels of resources and expertise as those who are infringing upon the individual’s interests, obviously. Otherwise it ends up being a David vs Goliath situation.
Someone who actually knows something about the topic in question? It is highly in the interests of any person to have both a plentiful and safe food supply, and safe, breathable air and safe, drinkable water. Pesticides constantly straddle this line; how much pollution is acceptable for food production, but still leaving the air and water safe? Do you honestly expect any random person to be able to make the correct choice in that situation? No. That's why we have experts in that field which study the effects of these chemicals, and the impact they have on the environment, and come to the conclusion of what's safe or not.
Another similar issue: One's actions do not exist in a vacuum. There's a recent story of some farmers spraying a certain herbicide to protect their crops from pigweed. However, not every farmer in the area is using it, or the herbicide resistant crops. The thing about spraying is that it goes in the air, and tends not to recognize property lines. The herbicide kills the crops on the neighboring farms. So while the original farmer who sprayed acted in their individual interest, they most definitely did not act in the interest of society in general, and clearly not in the interest of their neighbors.
"I don't think the "power" and coerciveness of multinational corporations is anywhere near that of government, which people bashing corporations usually want to make larger and more powerful."
No, we just want government to actually act in people's interests.
"As Diedre McCloskey says, what happens if you are morally opposed to some new fighter jet or corporate subsidy, and unilaterally decide to pay fewer taxes because of it? The answer is you go jail."
Yes, you broke the law, and so you must face the consequences. And unless you're Al Capone, you're not going to jail. Please stop parroting this ridiculous argument.
"What happens if you choose Samsung or an Iphone? "
What happens if you stop paying the balance on your Samsung phone because you switched?
"Further, in time, many corporations correctly view these irrationalities as market opportunities and actively work on helping consumers combat them."
I have huge doubts that many of them do this, and I have huge doubts that they are effective in this.
That said persistently refusing like many conscientious objectors will land you in jail though. It isn't a ridiculous argument but the literal truth. It also isn't a very effective tactic of protest but more a matter of fanaticism of principle.
My grandparents lived most of their life under the menace of a nuclear holocaust, but when they were born the electric power system was still in infancy and they had no electricity whatsoever in their house.
Going back centuries, the Ishtar Gate was built so that people arriving to Babilonia would be scared
I think that we are more scared by what we don't know that by what we can't manage
The world IS hard, but we're also very dumb
We know smoking gives cancer, but we still smoke anyway.
We know cars pollute the environment, but we ride them anyway.
etc. etc. etc.
To paraphrase Eliezer's famous quote about AI - the Corporation does not hate you, nor does it love you; you're just a potential revenue source, and as long as it believes you'll net it something, it'll let you have your way.