A lot of academic “research” may barely count as research by many definitions

February 12, 2013 By in Books 2 Comments

Miriam Burstein has an interesting post on “(Un)intentional scholarship,” which is about the relationship of blogs and other online media to what “counts” in universities. As she says, “Mark Sample defines scholarship thus: ‘a creative or intellectual act becomes scholarship when it is public and circulates in a community of peers that evaluates and builds upon it.'”

By this definition, however, as Mark Bauerlein shows in “The Research Bust,” many peer-reviewed articles in English Lit are barely research: no one “builds upon it,” or the vast majority of “it,” through citations. If that’s true, then we really do need to re-define what counts as “scholarship.”

I’m not likely to be part of that “we,” because there are simply too few jobs in academia to justify trying to get one, but the disjunction between what counts—peer-reviewed articles—and what people actually read—very rarely peer-reviewed articles—speaks to the way academic intellectual life has gotten out-of-whack: the stuff that should be rewarded isn’t, and the stuff that is being rewarded is often irrelevant by academic intellectual life’s own standards.

EDIT: A friend wrote to say that he doesn’t envy the deans who will have to decide the academic merit of blogs. It’s a fair point: the collective “we” don’t have a good way of doing so now. But I’m optimistic because peer review does such a lousy job of deciding academic merit now. People are getting jobs-for-life for writing books that almost no one reads, on subjects no one cares about. I perceive the problems of awarding academic credit for blogs, but those problems can’t be worse than the current problems in academic credit.

In the humanities, most people implicitly treat work as unimportant by delaying its appearance. Peer reviewers are notoriously slow, and articles can pile up for years in publication limbo. Important work needs to reach the world now. That so few academic humanities journals strive to reach this ideal shows what many humanities professors really think about the importance of what they’re doing. I don’t meant to have science envy, but scientists now post important findings to arVix.org and wait for the peer-reviewers to catch up. I don’t think it’s a coincidence that the sciences have developed this dissemination mechanism, while the humanists retain rigid status hierarchies and disdain “officially” publishing work that has already appeared on blogs.

Life: Hangover edition

February 10, 2013 By in Life Tags: , , , 1 Comment

“His mouth had been used as a latrine by some small creature of the night, and then as its mausoleum.”

—Kingsley Amis, Lucky Jim

If you have a “passion for writing” and never do it, you don’t have a passion for writing

February 9, 2013 By in Culture, Writing Tags: , , , , , , , 8 Comments

I signed up for writing-related Meetup.com notifications, and one said this:

Do you have a passion for writing but find it hard to carve out time to engage in the practice of it? It can be hard to find a local writing group convenient for your schedule. If you love to write and would like to be surrounded by others who motivate you, this is the place for you

If “you have a passion for writing,” you don’t need other people around you, any more than if you have a passion for masturbation you need a group wank. You just do it, and masturbation might arguably be the world’s most common leisure activity (among the young at the very least).

IMG_1269For 99% of people, if you “find it hard to carve out time to engage in the practice of [writing],” the solution is simple: redirect time spent on TV and Facebook to writing. If I recall correctly, William Gibson said that he doesn’t write all the time; he’s merely reallocated the time most people spend watching TV to writing. I’m not arguing that would-be writers should never watch TV, but I am arguing that needing extrinsic motivation is, in most circumstances, inferior to having intrinsic motivation.

People also may underestimate how much can be done in small blocks of time. This post, for example, has only taken me a couple of minutes. I haven’t been posting much because I’ve been self-editing a novel and writing proposals. Blogging gets crowded out by those activities. Yet it’s still possible for me to write a short post that says something substantive in about 15 minutes. Cory Doctorow has said in various places that he writes 250 words of fiction every day. A “typical” novel is about 80,000 – 90,000 words. At 250 words per day, you can write a novel in 320 days.

If you have a “passion” for writing, you can express it every day, just like many of you love yourselves every day. You don’t need a group to do it. The need for a group is identical to the need for excuses.

I’m not opposed to writers’ groups in all shapes and forms, and the right group at the right time could in principle provide valuable feedback for the right person (and the right person could give valuable feedback to others). But the raw work should be done alone, and the door opened to others when that work is done.

The critic’s temperament and the problem of indifference: Orwell, Teachout, and Scalzi

February 2, 2013 By in Critics, Culture Tags: , , , , , , , 1 Comment

In “Confessions of a Book Reviewer,” George Orwell points to an idea that almost any critic, or any person with a critical / systematic temperament, will eventually encounter:

[. . . ] the prolonged, indiscriminate reviewing of books is a quite exceptionally thankless, irritating and exhausting job. It not only involves praising trash–though it does involve that, as I will show in a moment–but constantly INVENTING reactions towards books about which one has no spontaneous feelings whatever. The reviewer, jaded though he may be, is professionally interested in books, and out of the thousands that appear annually, there are probably fifty or a hundred that he would enjoy writing about.

He’s not the only one; in 2004 Terry Teachout wrote:

[. . . ] I reviewed classical music and jazz for the Kansas City Star. It was great fun, but it was also a burden, not because of the bad concerts but because of the merely adequate ones–of which there were far more than too many.

Teachout uses the term “adequate.” Orwell says reviewers are “INVENTING reactions towards books about which one has no spontaneous feelings whatever.” Together, they remind me of what I feel towards most books: neutrality or indifference, which is close to “no spontaneous feelings.” Most books, even the ones I don’t especially like, I don’t hate, either. Hatred implies enormous emotional investment of the sort that very few books are worth. Conventionally bad books are just dull.

Still, writing about really bad books can be kind of fun, at first, especially when the bad books are educational through demonstrating what not to do. But after a couple of delicious slams, anyone bright and self-aware has to ask: Why bother wasting time on overtly bad books, especially if one isn’t being paid?

That leaves the books one loves and the books that don’t inspire feelings. The books one loves are difficult to praise without overused superlatives. The toughest books, however, are Teachout’s “merely adequate ones,” because there’s really nothing much to say and less reason to say it.

Critics may still write about indifferent books for other reasons; John Scalzi describes some purposes criticism serves, and he includes consumer reporting, exegesis, instruction, and polemics among the critic’s main purpose.* Of those four, I try to shoot four numbers two and three, though I used to think number one exceedingly valuable. Now I’ve realized that number one is almost entirely useless for a variety of reasons, the most notable being that literary merit and popularity have little if any relationship, which means that critics asking systematic questions about what makes good stuff good and bad stuff bad are mostly wasting their time. Polemics can be fun, but I’d rather focus on learning and understanding, rather than invective.

* Scalzi also says:

there are ways to be negative — even confrontational — while at the same time persuading others to consider one’s argument. It’s a nice skill if you have it, and people do. One of my favorite critiques of Old Man’s War came from Russell Letson in the pages of Locus, in which he described tossing the book away from him… and then grabbing it up to read again. His review was not a positive review, and it was a confrontational review (at least from my point of view as the author) — and it was also a good and interesting and well-tooled critical view of the work.

All of which is to note that the act of public criticism is also an act of persuasion. If a critic intends a piece to reach an audience, to be heard by an audience and then to have that audience give that critical opinion weight, then an awareness of the audience helps.

I think that one challenge for most modern writers, and virtually all self-published writers, will be finding people like Russell Letson, who are capable of producing “a good and interesting and well-tooled critical view.” Most Amazon.com reviews default to meaningless hate or praise, both of which can be discounted; getting someone who can “give that critical opinion weight” is the major challenge, since most people are lightweights. Even the heavyweights don’t waste their energy on weak opponents who aren’t even worth engaging.

Links: Sex at Yale, bikes, writing, TV, margins, urban life, editing, and more

February 2, 2013 By in Links Tags: , , , , , , , , , Leave a comment

* Where are the Bicycles in Post-Apocalyptic Fiction?

* Sex in the Meritocracy: Performance anxiety, not hedonism, motivates Yale’s sexual culture.

_MG_8659* In Writing, First Do No Harm.

* A model of TV viewership:

For TV I do not think upfront bingeing can become the norm. The model of “I don’t really care about this, but I have nothing much to talk to you about, so let’s sit together and drop commentary on some semi-randomly chosen TV show” seems to work less well when the natural unit of the show is thirteen episodes and you are expected to show dedication.

I hadn’t conceptualized TV this way, but the description is accurate and may explain the confusion, verging on horror, that people express when they register the absence of a TV in our apartment. I hesitate to include the previous sentence because I don’t want to become this guy and do use an iMac to watch TV sometimes. Nonetheless it is striking that so many people have so little to talk about.

* Joseph Gordon-Levitt turns the camera on paparazzi; they don’t like it.

* “Margins:”

If you have bigger lungs than your competitor, all things being equal, force them to compete in a contest where oxygen is the crucial limiter. If your opponent can’t swim, you make them compete in water. If they dislike the cold, set the contest in the winter, on a tundra. You can romanticize all of this by quoting Sun Tzu, but it’s just common sense.

* Cool news watch: the bulb discussed here: Switch LED bulb: The long-awaited light bulb is finally here. Is it worth $50? is now available.

* “The emergence of “YIMBY” [Yes In My Backyard] organizations in American cities would be a welcome counterpoint to the prevailing tides of NIMBYism that often dominate local government. But it is worth saying that broader institutional reforms are what’s really needed.”

* “Editing, Silvers advises me, is an instinct. You must choose writers carefully, having read all of their work, rather than being swayed by ‘reputations that are, shall we say, overpromoted’, and then anticipate their needs, sending them books and news articles.” Editing is also an act of sympathy: an editor needs to be sympathetic to the writer’s work. I would be a terrible editor of genre romance novels, and some of my friends have not cared much for my own writing out of taste.

* For writers, along with the above: “The Business Rusch: Hiring Editors,” which is a problem I’ve been thinking about and don’t know how to solve. She confirms, however, that it’s probably impossible for self-published writers to hire effective content editors. Line editors and copyeditors, yes, but not content editors. I can see writers’ groups becoming more important in an era of self-publishing.

A fool’s errand, and I’ll play the fool: Jonathan Last and What to Expect When No One’s Expecting

February 2, 2013 By in Books 2 Comments

Responding to specious articles in the Wall Street Journal is largely a fool’s errand because the hard news sections of the paper have been gutted and too frequently replaced with right-wing pablum or with the same headlines you can find on any news site. It still, however, has enough readers that I get sent a fair number of articles, and occasionally I’m willing to be the fool—in this instance, for “America’s Baby Bust: The nation’s falling fertility rate is the root cause of many of our problems. And it’s only getting worse,” which correctly notes that demography is not going to play nicely with public programs for old people. But this: “The root cause of most of our problems is our declining fertility rate” is wrong today. Most of our problems are due to an innovation shortfall (see Tyler Cowen’s The Great Stagnation, or see The Blueprint) or a finance / banking sector that has become so intertwined with the government that it has achieved quasi-governmental powers and immortality (see Lords of Finance for one account).

The problem is with verb tenses: Last says the root cause of most of our problems is our declining fertility rate,” when that might be or will be the root cause.

Last also gets important stuff wrong, or leaves it out. For example, this: “parenting has probably never been a barrel of laughs. There have been lots of changes in American life over the last 40 years that have nudged our fertility rate downward” is true but doesn’t mention one of the major problems with modern parenting: it appears that, historically, up until the 1970s, most people raised kids around grandparents and other extended family members. Neighborhoods were fairly cohesive and stable, which meant other parents would watch out for one’s offspring. In biology, they call this alloparenting, and it appears to be the historical norm. Since the 1970s, and arguably earlier, we’ve spent more time bowling alone and moving around; you can’t just drop your kids off at your sister’s place in a pinch, or vice-versa, if your sister lives in L.A. and you live in Seattle.

Last gets close to acknowledging these issues:

The problem is that, while making babies is fun, raising them isn’t. A raft of research shows that if you take two people who are identical in every way except for childbearing status, the parent will be on average about six percentage points less likely to be “very happy” than the nonparent.

This decline is much smaller than it appears, as Bryan Caplan discusses in Selfish Reasons to Have More Kids, and the “raft of research” is highly dependent on definitional and time-of-day issues. In addition, the alloparenting issue mentioned above also plays a role, because taking two people, sticking them with children in an isolated suburb where they know no one, and telling them to raise children is a pretty crappy way to raise kids, but that’s become the American default, and Last appears to approve of it (see below). If you can take breaks from your kids to recharge, parenting won’t be so difficult.

He also has a section about solutions, where he says:

The Dirt Gap. A big factor in family formation is the cost of land: It determines not just housing expenses but also the costs of transportation, entertainment, baby sitting, school and pretty much everything else. And while intensely urban areas—Los Angeles, New York, Washington, Chicago—have the highest concentrations of jobs, they come with high land costs. Improving the highway system and boosting opportunities for telecommuting would go a long way in helping families to live in lower-cost areas.

But that’s inane. We don’t need to improve “the highway system” or boost “opportunities for telecommuting:” we need to remove urban height limits. Increasing supply is the only way to reliably reduce costs. See The Rent is Too Damn High and The Gated City for more on this subject. Last should take a look at maps of LA, New York, Seattle, etc.—there are no places to build highways. We could build subways, but Republicans hate subways for reasons that appear to be entirely about political power (see Jonathan Rodden’s work for more about urban voting patterns). Republicans love free markets, except when they don’t.

Last also discusses immigration, and, although I don’t like to rely on mood affiliation, I will say that the WSJ’s politicization is transparent: now that the Republicans have realized that they can’t be nativists, we can discuss the demographic advantages of immigration.

Finally, it’s also possible that global climate change will be the real problem in the 21st Century, or that something unanticipated will be.

Links: Teachers, strippers, self-publishing, In the Realm of the Senses, Fundrise, and more

January 23, 2013 By in Links Tags: , , , , , , , 1 Comment

* The Case for a Teacher Bar Exam. I’m skeptical: teaching is one of the skills that is least captured by standardized tests. See also “How do we hire when we can’t tell who’s right for the job?”

_MG_8427* The Uses of Difficulty. Maybe.

* “Uncovering Union Violence,” which “is an under-reported story.”

* “The North Dakota Stripper Boom,” which is a tale about unexpected expected consequences: “North Dakota [. . .] is experiencing an oil boom, which is leading to an overwhelmingly male population boom, which has some strange spillover consequences.”

* “The Early Education Racket: If you are reading this article, your kid probably doesn’t need to go to preschool.” Having written Head Start proposals and read a lot of studies on Head Start and similar programs, I’m not surprised, although this article focuses on the effects of relatively wealthy people (hilarious quote: “research suggests that if you have the time and money to argue over the merits of a Waldorf preschool versus a Montessori one, little Emma isn’t going to suffer either way.”)

* Thorium Reactors, by Peter Reinhardt, which explains one aspect of why thorium-powered power plants might be the future of energy.

* Tips for a successful book launch. This is interesting for its own sake and because Roosh never mentions the word “self-published.” That’s simply assumed.

* Fremen Stillsuit soon to be manufactured? Are the Bene Gesserit up next?

* “Going All the Way: The late Nagisa Oshima’s erotic, transgressive In the Realm of the Senses isn’t about sex. It is sex.”

* Fundrise has a new project in the pipeline.

* Copy Of ‘The Scarlet Letter’ Can’t Believe The Notes High Schooler Writing In Margins.

Life: Robert Trivers and the empathy deficit

January 18, 2013 By in Life Tags: , , , , , 2 Comments

“When a feeling of power is induced in people, they are less likely to take others’ viewpoint and more likely to center their thinking on themselves. The result is a reduced ability to comprehend how others see, think, and feel. Power, among other things, induces blindness toward others”

—Robert Trivers, The Folly of Fools

For Men Only by Shaunti and Jeff Feldhahn is missing evolutionary biology, behavioral economics, and psychology

January 17, 2013 By in Books, Culture, Nonfiction, Reviews Tags: , , , , , , , , , , , , 6 Comments

For Men Only promises “A Straightforward Guide to the Inner Lives of Women,” but it’s missing any acknowledgment of the vast amount of research that shows:

  • We don’t know what we really want.
  • What we say or think we want often doesn’t match how we behave.
  • We behave different ways at different times and places.

For_men_onlyThe book would benefit from close study of work by Dan Ariely and Daniel Kahneman. For most guys, it’s worth reading, but reading skeptically. I say it’s worth reading because much of the book, especially regarding emotional engagement, matches my mistakes.

The writers, for example, say that “Women tend to process things by talking them through. [. . . while ] Men, however, tend to process things by thinking them through, and not saying anything until they full understand what they are thinking.” That is, on average, true in my experience, and it took a lot of trial and error—and more error—to realize that talking without knowing why one is talking isn’t necessarily a sign of intellectual fatuousness or weakness. It’s a sign that a lot of women are simply “processing,” to use the Feldhahns’s language.

Elsewhere, the Feldhahns say that “When our wife or girlfriend is upset, we do what we would do with other guys: We give her space to work things out. But with very few exceptions, when women are upset they don’t want space. They want a hug.” Space increases feelings of loneliness, not feelings of competence and control. They also say that women often don’t necessarily want solutions to emotional problems—they want empathy, and a listener:

She just wants you to listen = she does want and need you to understand how she’s feeling about the problem. ‘It‘ = an emotional problem. This listening rule does not apply to technical conundrums.

To me, this makes no sense: why share a problem unless you want it resolved? But I’ve learned the the hard way that their reading is correct in many situations, and I’ve tended to discount emotions in favor of trying to solve problems. When this strategy failed, or elicited tears from girls, I would wonder what the fuck is the matter. I mean, when I have problems, I want them fixed, right? But, as the Feldhahns point out, I’m missing that the problem isn’t the problem—it’s a placeholder, in many situations, for something else. I failed to read the situation metaphorically.

The Feldhahns also point out that men overestimate the need to be seen as a “provider” and earn money, while underestimating the need for emotional and sexual closeness (for a literary example of this, pay close attention to the portrayal of Matt French in Megan Abbott’s novel Dare Me; he spends his life working, or worrying about work, in order to buy a big, crappy house, and neglects his wife to the point that she starts sleeping with another guy who probably makes less money but is sexy and available). Notice the words “overestimate” and “underestimate:” money and ambition matter, but not as much as many men think. The Feldhahns say, “For her, ’emotional security’ matters most: feeling emotionally connected and close to you, and knowing that you are there for her no matter what. Sure, providing financially is appreciated, but for most women it’s nowhere near the top of the list.” Clearly Jeff Feldhahn hasn’t dated some of the cold fish I have, but we’ll leave those stories aside.

From what I can discern, those insights are correct, even if the process that led to those insights is bogus, or at least not optimal. The authors say, “Besides conducting hundreds of in-person interviews, we gathered huge amounts of anecdotal information at dozens of women’s events where Feldhahn was presenting materials from For Women Only.” What people say they want and what they actually do often differ severely, as anyone who has ever listened to girls complain about the “assholes” they sleep with, compared with the “nice guys” they don’t, can attest. But my favorite study on the topic of the discrepancy between what people state in various situations is Alexander and Fisher’s “Truth and consequences: Using the bogus pipeline to examine sex differences in self‐reported sexuality:”

Men report more permissive sexual attitudes and behavior than do women. This experiment tested whether these differences might result from false accommodation to gender norms (distorted reporting consistent with gender stereotypes). Participants completed questionnaires under three conditions. Sex differences in self-reported sexual behavior were negligible in a bogus pipeline condition in which participants believed lying could be detected [meaning that “participants are attached to a non-functioning polygraph and are led to believe that dishonest answers given during an interview or on a survey can be detected by the machine” (28)], moderate in an anonymous condition [where participants don’t believe their answers will be revealed at all], and greatest in an exposure threat condition in which the experimenter could potentially view participants’ responses. This pattern was clearest for behaviors considered less acceptable for women than men (e.g., masturbation, exposure to hardcore & softcore erotica). Results suggest that some sex differences in self-reported sexual behavior reflect responses influenced by normative expectations for men and women

In other words, what people say about their sexual habits and beliefs depend in part on who is listening and how the speaker believes what they say will be interpreted. Given that fact, “in-person interviews” and “anecdotal information at women’s events” are arguably the worst way one could gather data on what women “really” want. Every time the Feldhahns say things like, “70 percent of the women said they’d rather their husband take a lower-paying job that would require financial sacrifices if it allowed more family time” (emphasis added) I wanted to say, “they only say that.”

Beyond the issue of what people say in different contexts, there’s an issue about what people do in different states of mind. In Dan Ariely and George Loewenstein’s paper “The heat of the moment: the effect of sexual arousal on sexual decision making,” the authors show that college-aged guys in a “cold” state systematically underestimate their likely sexual preferences and acts when they are in a “hot” state (which the experimenters elicit through showing each individual man porn, encouraging him to masturbate, and then asking the same set of questions). In Predictably Irrational, Ariely describes the difficult of conducting that experiment in the first place because of his university’s human-subjects board, and he speculates that getting permission to operate the same experiment with female subjects would be more difficult still.

The women the Feldhahns speak to are, presumably, in a cold state. What they say they want at that moment, speaking to somewhat high-status writers, may or may not bear any relation to what they want in hot states, or what they want in the private sphere that still exists between their ears. We are all hypocrites, but some of us are better at acknowledging it, and incorporating that knowledge into our thinking, than others.

Perhaps the second-best romantic advice I’ve ever heard is simple: “Don’t pay any attention to what she says—just look at what she does.” (The first-best is “The worst thing she can say is ‘no.'” Alter the gender pronouns to fit your preferences, as needed.) The Feldhahns are paying a lot of attention to what she says.

Jeff also plays himself off as stupid, like many men: “I doubted that a woman could ever be understood. Compared to other complex matters—like the tides, say, or how to figure a baseball player’s ERA—women seemed unknowable. Random even.” That’s because he’s either a) an idiot or b) has bought into large-scale cultural nonsense. Women can be understood. Evolutionary biology is a good place to start: take a look at Geoffrey Miller’s The Mating Mind: How Sexual Choice Shaped the Evolution of Human Nature, then the new introduction to Sarah Blaffer Hrdy’s The Woman That Never Evolved, then Thornhill and Gangestad’s The Evolutionary Biology of Human Female Sexuality. All of them explain a lot about the pressures women feel, and, by extension, the pressures men feel in response (the pressures men and women feel are, of course, a feedback loop, with one side “responding” to the other).

Individual preferences can’t be understood based on group identification, because individual preferences can vary substantially, but understanding the basic evolutionary and cultural pressures operating on each sex will show why many people behave the way they do. Those “cultural pressures” I mentioned in the previous sentence are also important, and books like Neil Strauss’s The Game discuss them.

Let me return to Hrdy for a moment. In describing her path to the book, she says:

Competition between females is documented for every well-studied species of primate save one: our own. Once we leave the scientific realm, of course, and consider history, literature, and, for many of us, personal experience, examples of highly competitive, manipulative, and even murderous females flock to mind.

Competition between human females also exists—as “history, literature, and [. . .] personal experience” show us (we should get out of the lab and into culture if we’re going to study humans)—but it tends to exist along different dimensions than male competition. That’s why men tend not to notice it. In addition, male scientists suffer a failure of imagination, as Hrdy elegantly puts it: “The history of our knowledge about primate infanticide is in many ways a parable for the biases and fallibility that plague observational sciences: we discount the unimaginable and fail to see what we do not expect.”

Jeff doesn’t understand women because he doesn’t understand that women are also under competitive pressure, though he probably doesn’t realize what he doesn’t understand. Instead of thinking that women are “Random even,” he should be asking: What incentives operate on women that don’t on men? What’s it like to be female in our society? How can I learn more? He’s showing an empathy deficit and a research deficit.

Why are the authors ignorant about the vast literature on deception? They’re not researchers, and they don’t evince any interest in research, which is a major weakness. They’re may be inclined to massage their readers’ prejudice instead of challenging those views. They may also not want to know better, which I say because they say that “This book holds to a biblical world view. [. . . ] because Feldhahn and I view life through our Christian faith, we have seen that these findings are consistent with biblical principles.” In modern America, ensuring that “findings are consistent with biblical principles” is a code-phrase for militant, pointless ignorance. This is where I should point out that intellectual rigor and sophistication can (and should) co-exist with religious belief, but I don’t have the energy for culture-war crap.

The authors also sometimes evade important issues altogether, as their strategic use of passive voice shows here: “In this culture, women are not being protected emotionally. They are being humiliated.” Women are not being “protected emotionally” by who or what? “They are being humiliated” by who or what? As I tell students, cultures don’t just emerge from some amorphous cloud: they’re the result of aggregated individual decisions. Who should be doing the protecting? What does humiliation mean here? It’s hard to emotionally humiliate someone without their consent. This idea is simply asserted, and it’s asserted in a way that removes important information.

Why corporations?

January 16, 2013 By in business, Culture, ideas Tags: , , , , , , , , , , , , 2 Comments

Arnold Kling asks: “Why Large Corporations?” I left a comment citing Peter Thiel’s answer:

Companies exist because they optimally address internal and external coordination costs. In general, as an entity grows, so do its internal coordination costs. But its external coordination costs fall. Totalitarian government is entity writ large; external coordination is easy, since those costs are zero. But internal coordination, as Hayek and the Austrians showed, is hard and costly; central planning doesn’t work.

The flipside is that internal coordination costs for independent contractors are zero, but external coordination costs (uniquely contracting with absolutely everybody one deals with) are very high, possibly paralyzingly so. Optimality—firm size—is a matter of finding the right combination.

This applies to corporations more generally, but large corporations presumably persist because they continue to solve this class of problem. Corporations also solve or ameliorate succession and other problems; one way of re-stating Thiel’s point is that corporations help align the interests of a lot of people in approximately the same direction. This mechanism obviously isn’t perfect, but it’s better than alternatives.

IMG_0298Skepticism of corporations is useful, but only when skeptics understand the problems corporations solve. I took a grad seminar on the Modernism / Postmodernism divide and was assigned the movie The Corporation, which is heavy on innuendo and rhetorical slight-of-hand and light on intellectual acuity. When the seminar discussed the movie, my classmates were happy to assume that corporations are evil—but they couldn’t identify why they exist, let alone offer coherent alternatives that don’t have obvious drawbacks. I’m not in love with the corporate legal form as some kind of ideal, but without a plausible alternative, feeling-based criticism isn’t terribly helpful. It’s like people who criticize coal power plants. . . and nuclear. . . and other viable, large-scale options.

In the seminar’s discussion, other students and the professor conflated publicly-traded corporations with privately traded ones and LLCs with C Corps, etc. (Incidentally, if you want to listen to something hilarious yet depressing, get a bunch of English grad students and professors together and tell them to talk about business). They also thought that all corporations exist solely to make money. That’s not true: Corporations do what their shareholders tell them to do. As far as I know, courts have decided that publicly traded companies need to maximize shareholder value, but single-owner corporations can do whatever the single owner or small group of owners wants them to.

Thiel says this about the advantages of starting a new corporation to accomplish some task:

The easiest answer to “why startups?” is negative: because you can’t develop new technology in existing entities. There’s something wrong with big companies, governments, and non-profits. Perhaps they can’t recognize financial needs; the federal government, hamstrung by its own bureaucracy, obviously overcompensates some while grossly undercompensating others in its employ. Or maybe these entities can’t handle personal needs; you can’t always get recognition, respect, or fame from a huge bureaucracy. Anyone on a mission tends to want to go from 0 to 1. You can only do that if you’re surrounded by others to want to go from 0 to 1. That happens in startups, not huge companies or government.

Usually, developing “new technology” dovetails with making money, but it doesn’t necessarily have to: you could in principle start a nonprofit technology company to conduct research or develop a product (in some businesses, competition between for- and non-profits is common: think of healthcare, or gyms). That no one or almost no one goes this route means that it could be an under-explored avenue for creative and technological success. Or it could be a deadend, and no one goes down it because doing so would be stupid.