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Big Business: A Love Letter to an American Anti-Hero — Tyler Cowen

April 15, 2019 By in Books, Nonfiction, Reviews Tags: , , , , 1 Comment

The question underlying Big Business: A Love Letter to an American Anti-Hero is, “How can problems best be identified and solved?” (Although the book is much more interesting than my question may imply.) Sometimes individuals acting alone are the best agents; sometimes groups of individuals who agree to be lassoed together under a corporate aegis are the best agents (that is a long way of saying “business”); sometimes government(s) are the best agents, depending on the type, scale, and fixability of the problem(s). Many political arguments are essentially arguments that want to move problem domains or solutions from one of these classes to another.

Pages 22 – 23 deal with industries that exist despite selling products that, at the very least, likely don’t do what proponents say they will do—industries like dentistry, stockbrokers, sales reps, and food. The food industry is particularly notable, as a lot of food is what Michael Pollan calls “edible foodlike substances.” Another way of looking at those products, though, is that they’re selling hope or reassurance, and people like buying hope much more than they like buying evidence-backed products. Consumer Reports is not all that popular and their evaluations rarely if ever go viral. Perhaps most importantly, a lesson from industries Cowen cites, like dietary supplements, is that most people have bad epistemic hygiene—and, in most circumstances, don’t care about it. I spent much time attempting to teach undergraduates research strategies and how to evaluate claims and sources, and most of the time I wasn’t very successful. It took too long for me to realize that, rather than start with peer review, publication reliability, and that kind of thing, I need to start with a question: “How do you know what you know?” From there, it’s possible to build out towards epistemic hygiene, but the overwhelming majority of students seemed not to give a shit, and, indeed, if you go around asking normal people questions like, “How do you know what you know?” they will at best look at you strangely and at worst leave to talk to someone else about fun topics—at least, I speculate that that may happen.

Human rationality is often not that strong, and we like to give ourselves reasons for our failures while castigating others for theirs. People working in businesses are often engaging in similar activities and ways of arguing.

“How do you know what you know?” is a context question, and Cowen is a great expert in context. He asks us to “step back and consider what standard we are measuring business against. The propensity of business to commit fraud is essentially just an extension of the propensity of people to commit fraud.” The problem is mostly within us, rather than in the specific structures of business.

The chapter “Is Work Fun?” resonates:

I am not trying to whitewash the burdens of the workday and the workplace. Nonetheless, a lot of the other evidence points us toward the more positive side of work. Work provides us with a lot of what we value in life, including affirmation of our social worth, a structure for problem solving combined with rewards, and an important source of social interactions [. . .]

Yet we can rarely say as much in public or among our friends. Why not?

This paragraph is also characteristic of Cowen’s thought, where words like “but” and “nonetheless” play key roles. He’s really trying to get us to rejigger our levels. The “burdens” are real, but so are the benefits, even if those aren’t emphasized. Cowen is great at connecting ideas that are underemphasized and not often foregrounded. Chapter 9 asks us, “If Business Is So Good, Why Is It So Disliked?” Many possible answers are advanced. I will add one that I didn’t see or that I missed: it is easier to blame abstract “business” than ourselves.

I want to quote the book’s last sentence and paragraph but would prefer you to experience it after reading all of Big Business.

One chapter discusses tech companies; many of the criticisms against tech companies are misguided, as you’ve read here. More vitally, I see those criticisms as really being criticisms of individual people. If we, collectively, wanted to, we could all switch to DuckDuckGo for search—a boon for privacy—and many of us could be using Linux as a primary desktop operating system, especially today, when so much software is delivered via the browser. Dell offers high-quality Linux laptops, and using Linux is probably an improvement for privacy; homing beacons and tracking seem much less prevalent in open-source software. Yet most of us—including me when it comes to Linux—don’t choose the privacy-focused option. We don’t choose free software. We choose convenience. Is that the fault of tech companies or individual choices? To me, it looks a lot like we see the faults of tech companies when we look in the mirror in the morning. The number of people who really care about freedom, broadly defined, seems to be small, and far smaller than the number of people who say they care about freedom. Most people want convenience more than freedom or privacy, just as most people want junk food more than they want physical health. To return to my photography examples, most people want greater sharing convenience than the best image quality or artistic effect.

It’s possible to imagine an even more pro-business book than this one; a company like Amazon is amazing, for example, in that what I order, almost always shows up, and it’s convenient too. Contrast that with the many dealings I’ve had lately with New York’s tax office; I could go into detail, but the reader would likely want to stab their eyes out, as I have often wanted to do.

Cowen touches on alternatives to for-corporations:

Another possible way to test the honesty of business would be to compare nonprofit and for-profit organizations. If you think profits induce corruption, you might then conclude that nonprofits should be especially trustworthy. The evidence, however, will show that for-profits and nonprofits, at least if we are comparing enterprises in the same basic economic sector, usually operate in pretty similar ways.

This has been my experience; it’s also apparent to me, having worked for nonprofits for years, that nonprofits are much more like businesses than most people realize. I’ve also spent a lot of time working in and around universities, and they are the ultimate businesses: just try taking classes for grades if you can’t pay tuition. Try returning a low-value, high-cost degree. For a while I’ve been advancing the argument that many parts of the university system are self-interested (and sometimes just bad) actors that have great marketing skills. Most people react to that argument skeptically, but as evidence of student loan burdens grows, the skeptical reaction seems to be declining.

I’m not against nonprofits and the best ones are very important. The science research function at most universities still works fairly well, despite having some well-known incentive problems. The gap between university-in-theory and university-in-practice, though, remains wide, and most universities don’t want to publicize some obvious truths—like the idea that not everyone should go, or that not everyone has the conscientious and IQ necessary to thrive in an academic setting.

Among nonprofits, one possible purpose of the grant system is to keep nonprofits both honest and effective. It is possible to be honest without being particularly effective, and vice-versa. Ideally one wants both. Few of us do both perfectly, despite the way we often demand that others do both perfectly.

One chapter asks whether CEOs are paid too much: Cowen mostly says no, they’re not, and he cites a lot of empirical evidence on the subject. But he also says, “it’s hard to find someone who can both run the day-to-day operations of a company and do these other things [like social media and PR, communication, Congressional and other testimony].” I wonder if it’s really hard to find people who can do those things, or if there’s a kind of weird selection and vetting process going on through which only a small number of people are considered by the relevant people, and thus the number seems smaller than it is because those doing the selecting won’t broaden their search criteria. Think of it as the CEO equivalent of companies that only want to hire from certain schools that reject as many qualified applicants as they admit. I also wonder what level of compensation, if any, is necessary for satiation: many CEOs seem to reach, and to have reached, that level long before. Can we shift from money to some other yardstick? If so, how?

Is the business world changing faster than it used to? If so, is agility more important than it used to be? Many businesses may not be “set it and forget it” anymore (if they ever were). My personal favorite example is camera companies: standalone camera shipments have been dropping for the last six years, and the response of photo company CEOs has mostly been to shrug. No companies have made substantial efforts towards making their camera bodies into smartphones combined with superior image sensors. As a result, Apple and Google have come to dominate the imaging and video worlds, while camera makers seem to lack the agility necessary to compete. In many consumer industries, competition seems to be increasing; to cite another example I’m familiar with, large bike companies like Trek are facing a host of Internet startups like State, Priority, and numerous others that source direct from China and Taiwan. Innovators in electric bikes have not been the biggest companies. Low agility may result in eroding market share and profits. The future is happening and it doesn’t seem to be happening evenly, to everyone.

The modesty of many Big Business claims stand out: “[CEO pay in the aggregate] could be better, but it works much more effectively than many people think.” “Much more effectively than many people think” could still be not all that effective; in this and in many other sections, Cowen is trying to move the needle a bit. He’s describing situations with a large number of potential analogue, intermediary places, and in this he’s moving against the modern Twitter tendency to see things as binary: good or bad, zero or one, shit or brilliant. Most of things in the most of the world are in this intermediary space, including all humans, however virtuous all Twitters may portray themselves to be (in contrast to their vile enemies).

Big Business is much more story-based than one might expect from Cowen, who argues that we should be more suspicious of simple stories. Fortunately, Big Business is not a simple book.

As with all the Cowen books I’ve read, there’s much to think about and much more I could write here; he is very good at finding the space where “rarely argued/articulated” and “possibly correct” intersect. Common arguments and ideas are common, and incorrect or ridiculous ideas are common, but finding the Cowen quadrant is too rare. I sometimes worry that my own ideas are too common to be worth repeating. Finding ones that hit the Cowen quadrant is satisfying, like a deadlift PR.

The world is filled with problems and our goal as humans is to solve them until we die. We very rarely see life formulated in that way, but maybe we should say this explicitly more often. “What problems have you solved recently?” may be a more valuable question than, “What do you believe?”

Where does personality come from?

September 18, 2015 By in Fiction, Writing Tags: , , , , 1 Comment

In “Sentences to ponder, The Strong Situation Hypothesis,” Tyler Cowen quotes from a study:

This hypothesis, based on the work of Mischel (1977), proposes that personality differences are especially like to be outwardly expressed in “weak” situations offering no clear situational clues and a wide range of possibilities as to how to behave. Conversely, individual differences are expected to have less room for expression in “strong” situations where the choice of behavioral outcomes is severely limited and where everyone is bound to behave in a similar way.

That’s especially interesting to me because I’ve long said that many literary novels are concerned with family, love, politics, and the like because those are open-ended domains that tend to be places where personalities can be expressed. In many “flat” thrillers, by contrast, there is one obvious right thing to do (stop the bad guys, don’t let the nuclear device go off, etc.) and the only important question is whether the thing can be accomplished and how it can be accomplished. In that respect personality becomes backgrounded to the task at hand. The interior mental state of the characters become binary: They succeed or they fail. Their sense of interiority isn’t that important.

In a genre like science fiction one can see the thriller model at work in a novel like The Martian, in which survival is the only important question, and the broader model at work in a novel like Stranger in a Strange Land, or in many others. In real life, the kind of music a person who is starving to death likes is not very important, but the kind of music a person who is on a date likes may be very important.

Alternately, one could say that personality is a relatively high point on Maslow’s Hierarchy of Needs (whatever the other deficiencies of the hierarchy model).

(In another world, this point could be part of the “Character” chapter in How Fiction Works.)

I wrote a little more about this here, previously, in 2011.

Tyler Cowen on Paul Krugman on Amazon on the buzz

October 20, 2014 By in Books, business, Publishing Tags: , , , 3 Comments

In “What is the welfare cost of Amazon supply restrictions on books?” Tyler Cowen writes on whether Amazon’s much-publicized maneuvers against publishers are welfare-enhancing or welfare-destroying; most of the former answers tend to come from readers and indie publishers, while most of the latter answers tend to come from publishers and established authors. I however was compelled to comment on a separate and to my mind under-discussed issue: the lack of any sense of history in most of these discussions.

The same class of writers who five years ago were aghast at the lack of support for literary fiction among publishers now decry Amazon; they’re supporting the same publishers who were until recently the cravenly commercial forces destroying “quality” literary fiction. “The plight of literary fiction” has been an evergreen essay topic for as long as I’ve been cognizant of literary culture. Literary fiction was (or is) in plight because publishers supposedly don’t support and readers are too busy masturbating to romance fiction or science fiction tech fantasies (or whatever) to read lit fic.

Tangentially, I’m also amazed that, in rereading the preceding sentence, it seems to make sense and flow nicely without any commas. Perhaps it is the influence of Steven Pinker’s The Sense of Style, which I bought naturally from Amazon and which has me thinking about nesting and recursion more than any time since CS 102.

The link in the preceding paragraph also goes to Amazon.

Movies as Modern Visual Art: Paglia, Stephenson, Cowen

August 6, 2014 By in Culture, movies Tags: , , , , , , , 3 Comments

In Glittering Images Camilla Paglia writes of George Lucas’s work:

Lucas says, “My films are basically the graphics”: “Everything is visual.” He views dialogue as merely “a sound effect, a rhythm, a vocal chorus in the overall soundtrack.” In structure, Star Wars unfolds as dynamic action sequences alternating with grand panoramic tableaux, including breathtaking cityscapes stacked with traffic skylanes. Lucas declares, “I’m not really interested in plots.” And elsewhere: “To me, the script is just a sketchbook, just a list of notes.”

Tyler Cowen notes that Transformers 4 may be best seen as an art movie. To accuse a movie like Transformers of being plotless or absurd is pointless because plot is not its point. The utter lack of anything resembling a coherent plot may explain why I thought the first one so stupid; it may also be that I failed to go into it with the proper frame of mind. Expecting something novelistic and getting something like a painting or dance is likely to disappoint. Among novels I tend to prefer ones with plots over ones that are about “consciousness” or similar highbrow topics.

Glittering_ImagesI am not necessarily opposed to movies as dance / art—Gravity (discussed by me at the link) has some Lucasian qualities but is also a plea for us to get off this planet—but there may be other implications.

Neal Stephenson, for example, has noticed the trend in movies towards either the visual (to use a positive term) or incoherence (to use my own feelings): in “Turn On, Tune In, Veg Out” he writes of how the changes in the Star Wars movies from 1977 to today also track changes in American culture, away from writing and dialogue and towards the visual. In the decade since he wrote his piece, it is hard not to see the general trends he describes as accelerating. His novel Anathem could be described in many ways, and one is a commentary on what mind happen if current trends regarding the divergence of the technical / literary / intellectual class (which is a class not defined by income) from everyone else. Paglia has not addressed this directly in a contemporary context as far as I can tell. She has a great deal of deserved scorn for what she calls word-obsessed, French theory laden academics, but in the overall scheme of American culture they’re a very small part of the picture.

Still, even in universities that are supposed to conserve knowledge and promote reading the movie temperament has made headway. In universities English professors are eager to show movies in class and have students write about movies instead of books; while that’s okay, I’m reminded of the phrase, “Writing about music is like dancing about architecture.”* There is always an impedance mismatch between writing and the subject of writing that does not exist in writing about other writing; the latter two inform each other in a way that writing about other subjects, including art, does not.

I’m not opposed to watching movies, or movie criticism, or courses about movie criticism or movie making, but the extent to which the people who are supposed to be teaching writing are using movies is another example of the trends Stephenson describes.

When I was a first-year grad student at the University of Arizona I was part of a small teaching group with other first years and one faculty facilitator. A girl and I got into a discussion about why I didn’t show movies in class, and I told her some of the above; watching movies in basic English classes is a waste of time. Reading is an essential part of writing, and people who don’t read can’t be good writers. Period. Most students have plenty of screen time but very little reading time. She said she thought I was wrong about the coevolution of reading and writing, so I sent her some studies demonstrating what is already obvious to every writer. She said didn’t care and was going to keep showing movies anyway. The exchange is symptomatic of deeper issues in academia itself. As Paglia might say, the culture has corrupted it, in ways that it shouldn’t be corrupted, rather than in ways it should be corrupted (which is a subject for another post).

* If so, the criticisms about modern action or blockbuster movies have incoherent plots or dialogue are no more meaningful than saying that dance or architecture have incoherent plots or dialogue. People like me, who like movies that make sense, don’t realize that we’re criticizing the wrong genre.

Photography and Tyler Cowen’s “Average is Over”

March 25, 2014 By in Culture, ideas, Nonfiction, photos Tags: , , , , , , , 3 Comments

Tyler Cowen’s Average Is Over should be read for many reasons, and one of them is a prediction that marketing and similar activities are going to grow in importance over time. At first I thought the claim was bullshit: shouldn’t the Internet make substance win over style? In many ways it does, but I keep seeing evidence that supports Cowen’s point. The latest example: a few years ago I became interested in photography. A few days ago Thom Hogan wrote an essay called “What’s Your Biggest Problem?“, in which he says:

I’d say that the biggest problem I find that most photographers have is a really fundamental one: what is it they’re taking a photo of? And why?

Ironically, pros didn’t use to have this problem. If you were working for a client, generally they were directing you towards what you were taking a photograph of and why. Back in the film days just mastering the technique of getting proper exposure and focus and all the rest was generally enough to set you apart. These days of ubiquitous and cheap stock photography and digital cameras with instant feedback on the basics, for a pro to stand out they need something more than the basics: generally a recognizable and unique style.

Indeed, that is one of the two primary problems pros have these days. Problem 1: standing out amongst all the good imagery that exists, much of it near “free”. Problem 2: marketing yourself so that people know your work. Unfortunately, solving #2 means that you have to be highly visible, which makes more people attempt to copy you, which eventually increases problem #1. Pros have to keep moving, keep reinventing themselves, and above all be great marketers and salespeople.

average_is_overMachines (cameras, in this case) are getting so good that even relatively unskilled photographers like me can take pretty good shots most of the time, and marketing distinguishes a lot of the pros from uncompensated amateurs who share their work online.

A lot of high-skill / low-income photographers disdain Terry Richardson for “boring” shots, blown-out highlights, and other technical flaws, and those photographers say that they could do what Richardson does. (More than a little jealousy also probably animates those attacks, since Richardson appears to lead an active, varied sex life—let’s ignore that for now.) But Richardson has something important almost no one else does: people know his name and to a lesser extent his work. Not many photographers have strangers who know their name—let alone have strong opinions about their work. Whatever his flaws may be, Richardson has what people commenting on the Internet don’t: a brand.

More very good photos are probably being taken today than ever before, and, as I wrote here, I’m a small but real contributor. Writing is still the main focus of my life but I still get some decent shots. Like anything touched by computers and Moore’s Law cameras are getting better all the time, and that makes the shooting envelope more forgiving. I shoot with an Olympus E-M5 that originally retailed for about $1,200 and now goes for half that used.* The E-M5 is better in many respects than most of the professional cameras that cost many thousands of dollars in 2006, and in a year or two it’ll be cheaper still.**

OLYMPUS DIGITAL CAMERASoftware tools like Adobe Lightroom are also making pictures easier to enhance (or “save”) through simple parameter adjustments. Most semi-serious photographers learn to shoot in their camera’s raw file format, which yields greater latitude in post-processing. It’s often possible to get a very professional look by changing a few parameters. Messed-up shots can often be saved in post-processing. That’s always been somewhat true but it’s becoming more true over time.

So what’s going to separate the pros? Marketing. Money in what’s called “stock” photography has already basically disappeared, and journalistic photographers have seen their ranks dwindle along with newspaper subscriptions. Photography is becoming a secondary, not primary, skill for many people. For example, this guy took professional-caliber shots for his friend’s website.

What’s left is finding a way to make people think you’re better than the race-to-the-bottom, even if some people still think some heavily marketed / known photographers are the bottom.

* The people in charge of camera naming and marketing are idiots. Cameras are named with a baffling array of impossible-to-remember letters and numbers, and only obsessive nerds like me take the time to figure out what they mean. The only camera with some mainstream name recognition is the Canon Rebel line; while the name is nonsensical—what exactly is one rebelling from?—it is at least memorable. If I were put in charge of a camera company I’d start by firing everyone in marketing and PR.

** Update from 2015: Olympus just released the OM-D E-M5 II (the successor to my camera), and it’s retailing for $1,100—yet the the updates are, charitably speaking, minor. The new camera will put price pressure on the model I use, which is now under $400 for a still-incredible camera. Camera companies can’t get people to upgrade because existing cameras are so good.

Links: The writer, the adjunct, the technology

February 21, 2014 By in Links Tags: , , , , , , , , , Leave a comment

* Professors, we need you! (Maybe.)

* This is probably fake but definitely hilarious and true to my own teaching experience.

* “Do We Really Need Negative Book Reviews?” I tend to answer “Yes, with qualifications,” and indeed I write many fewer negative reviews than I once did. Then again I write many fewer reviews in general than I once did.

* “Is Paying Adjuncts Crap Killing Technological Innovation?” Hat tip and further commentary: Dean Dad.

* Technological Progress Isn’t GDP Growth and, relatedly, Tyler Cowen: “Robert Gordon’s sequel paper on the great stagnation.”

* Inside DuckDuckGo, Google’s Tiniest, Fiercest Competitor, which I use as my primary search engine:

How could DuckDuckGo, a tiny, Philadelphia-based startup, go up against Google? One way, he wagered, was by respecting user privacy. Six years later, we’re living in the post-Snowden era, and the idea doesn’t seem so crazy.

* “Why Is Academic Writing So Academic?“, which is to say, bad?

Thoughts on Tyler Cowen’s “Average Is Over”

September 13, 2013 By in Books, Nonfiction, Reviews Tags: , , , , , 11 Comments

You should read Average Is Over, which makes many subtle and unexpected (to me) points.

* This: “If you and your skills are a complement to the computer, your wage and labor market prospects are likely to be cheery. If your skills do not complement the computer, you may want to address that mismatch” is a useful way of thinking about things, but if you read books (like Average Is Over) you’re more likely to already know about skill changes and adjust appropriately based on new, incoming information. Yet I am fond of citing the fun fact that people watch an average of four to five hours of TV per day, and by some measures Americans are reading fewer books (or were in 2007) than at any time in the last century or so. Reading skills don’t appear to be high. Basic reading and reading skills may be the low-hanging fruit for many if not most people, especially since reading skills help develop writing skills.

In How to Win at the Sport of Business: If I Can Do It, You Can Do It, Mark Cuban describes how reading conferred on him an information advantage: “Everything I read was public. Anyone could buy the same books and magazines. The same information was available to anyone who wanted it. Turns out most people didn’t want it” (though he doesn’t like fiction, which may also speak to the fields in which he works).

* Cowen writes, “Adult males are seceding from the workforce—or being kicked out—in frightening numbers. Few of these individuals are wealthy playboys. It is no surprise that popular culture today has this image of the male slacker, a young man who lives at home, plays video games, is indifferent to holding down a job, and maybe doesn’t run after young women so hard.” That’s probably true, but a lot of guys have probably realized that marriage markets are stacked against them (see also “How DNA Testing Is Changing Fatherhood“), that relatively few women appear to value guys getting mid-level jobs relative to guys who are cool / fun / have strong game, and there are better alternatives to working for 50 hours a week in a not-that-interesting job. For many guys, learning game and guitar is a more viable route to romantic success than improving a career.

The above, and its absence from contemporary media discussions, may say much about actual power in contemporary society.

* “[M]any of these young earners are threshold earners, meaning earners who are content just to get by and who do not push ambitiously for a higher wage or stronger credentials at every step. Williamsburg, Brooklyn is full of young threshold earners, although rising rents are starting to push them out into other parts of the city, such as the further reaches of Brooklyn or the Bronx.” This goes back to the question above: what are we being productive for?

Stumbling on Happiness says that income above about $50,000 appears to do surprisingly little for the quality of one’s life. In your 20s, perhaps the best investment in happiness-per-dollar is the condom; condoms + an OKCupid account may be the most efficient use of turning resources into fun. Large incomes also expose earners to higher and higher marginal taxes. For someone making, say, $30,000 or $40,000 a year, it might make more sense to stay at a relatively low income OR try to make a very high income of say $200,000 a year. But the middle may be not worth much, especially if the job necessary to stay there is highly time consuming.

In Otherwise Known as the Human Condition, Geoff Dyer says that “I have also been able to live on very little money without any sense of sacrifice (a valuable skill, almost a privilege, for anyone wishing to become a writer). Going without things that most of my contemporaries took for granted never felt like hardship. I spent years living on the dole, more than happy with the trade-off: little money, lots of time.” The Dole provided a generation of artists with enough money for food. We may be heading towards or already at that sort of thing in the U.S. Being a Brooklyn writer is already a cliché. Some people living artists’s lifestyles are writing software instead of prose. Someone like Notch, creator of Minecraft, falls into this category, as do some open-source software writers.

* Early Facebook resembled an art project more than a business, and until recently a lot of people thought Facebook would never make substantial money. The same spirit that animated its creation animates the “threshold earners” in Brooklyn. Many contemporary programmers are closer to painters and writers than is commonly realized.

* I’ve heard friends discuss the benefits of gray economy living (though they don’t use the term “gray economy”), and they usually cite taxes—for good reason. Paying both sides of the Social Security tax eats 15% of a paycheck. Add in Medicare and Medicaid, and even low-wage earners can end up with 20 – 25% of their paychecks eaten by payroll taxes. Someone earning $10 in hard-to-trace cash babysitting in the gray economy is getting a de facto $12 – $12.50, which is a huge improvement, and I see the trends Cowen discusses pushing more people in that direction. When discussing these jobs, I have increasingly heard people ask a simple one-word question: “Cash?” The forecasts Cowen makes on page 236 probably increases the number of threshold earners, since it’s not worth making more if the state is going to take more.

Then there are the sex workers I’ve met; those who earn a lot usually report much but not all of their income, and they pay for pretty much everything they can in cash. They can earn surprisingly high real incomes by minimizing reported income and using a lot of untraceable cash to pay for goods and services.

* Learning discipline and conscientiousness are major themes in Average Is Over, and towards that end I expect pre-binding commitment software like Mac Freedom and Anti-Social to proliferate. While writing this post I reached a point that I didn’t know how to express, so I wandered over to Hacker News and then to a photography forum. I forgot the context, so it took five or ten minutes for me to get re-focused on the sentence—which I still needed to resolve. Micro attention problems may be growing for many people. It is easier and more fun to “waste” time on the Internet, and for most of us there are rapidly diminishing returns to random reading and browsing, although those activities may feel work-like.

* Software is becoming increasingly good at grading student essays and other written work, and Cowen says that “These programs still need to work out some bugs (a clever student can game them with coherent-sounding nonsense).” Some humanities journals can also be gamed with coherent sounding nonsense. Many corporate and government bureaucracies produce huge amounts of coherent-sounding nonsense, so gaming the system in this way may actually be a job skill.

* The restaurant industry soaks up a lot of low- to mid-skill labor, and I’m struck by the extent to which many chefs treat food as art. In New York there is a de facto infinite variety of interesting food, and even someone who restricts themselves to $10 – $20 meals will find innumerable interesting, tasty options. That being said, I see diminishing returns here for all but the most adventurous and exotic of eaters—how much more interesting chefs can get? (I would be happy to be proven wrong here.) Already a lot of menu items look more like differentiating gimmicks than dishes I really want to eat.

The world’s stock of new foods or consumable substances does not appear to be growing rapidly. Genetic engineering may change that, giving chefs a host of new, interesting ingredients to experiment with.

Food has the advantage in that it’s made and then gone; the chefs of today are not competing against the chefs of twenty years ago in the way that, say, writers or musicians are. At bars and clubs I still routinely hear Michael Jackson, Madonna, and Britney Spears.

* I found the first and third sections of Average Is Over much more interesting and useful than the second, which uses games and especially chess to illustrate larger points about human-machine cooperation and the future of the labor market. It could have been shorter, and one (unstated, I think) takeaway is that it’s better to be the person making the machines than the person using them.

* “The ability to mix technical knowledge with solving real-world problems is the key [to new businesses and employability], not sheer number-crunching or programming for its own sake” sounds like something Paul Graham would say, or at least the first sentence does.

* “[W]hen income and wealth disparities are pronounced, everyone who isn’t at the very top will be scrambling for the attention of those who are” is an outcome I hadn’t considered and yet seems true, especially in light of how service industries cater to the very wealthy. Even something like “Pilates studios” may fit this criteria.

* Many things now considered to be “productive” used to be considered useless (like quantum mechanics when it was first discovered). It is also worth pondering what we are trying to be productive for. The long-run answers may be “for its own sake,” or for various kinds of sexual marketplace signaling or kids. Nonetheless, most people do not seem to be asking, or coherently trying to answer: “What are we being productive for?” Cowen writes that “When economists investigate human rationality, they are often too dependent on arbitrary stipulations about what is rational and what is not, expressed in the form of models.” Economist may also be too dependent on productivity and income as proxies for the quality of life (though I do not think this true of Cowen). For example, Philip Greenspun’s post “Danish happiness: bicycle infrastructure” notes that bikes don’t contribute nearly as much to measured GDP as cars, but for many people are a real improvement in terms of the quality of their life.

* Many people have not listened to labor market signals: “the slacker twenty-two-year old with a BA in English, even from a good school, no longer has such a clear path to an upper-middle-class lifestyle. At the same time, Facebook, Google, and Zynga are now so desperate for talent that they will buy out other companies, not for their products, but rather to keep their employees. It’s easier and cheaper to buy the companies than to try to replicate their recruiting or lure away their best employees.” Thinking about men, however, many of the slacker twenty-year olds with BAs in English do substantially better with women and get laid a lot more. There may be a correlation-is-not-causation issue here, however.

* Wow: “Kaiser Family Foundation estimates that a health insurance premium today for a family of four averages over $15,000 and within ten years’ time could be $32,000 or more. That’s more than a lot of workers are worth. Keep in mind that the 2010 median wage in the United States for an individual (not a household) was about $26,363.”

* “Just as Adam Smith and Friedrich Hayek and Michael Polyani stressed that a market economy evolves to the point where it is very difficult to understand the overall interrelationships of production, so can the same be said for many branches of science.” This leaves space for Houellebecq novels and other works about modern alienation, since we often lack a sense of impact in an important way.

* This: “It will become increasingly apparent how much of current education is driven by human weakness, namely the inability of most students to simply sit down and try to learn something on their own” has long been apparent to me and probably to other teachers, and it is largely missing in a lot of the elite online technical discourse about education found on sites like Slashdot, Reddit, and Hacker News, where atypical, highly self-motivated people tend to congregate.

* I’m more skeptical of many conventional consulting firms than Cowen (discussed on page 42 – 44), and I see the proliferation of generic consulting firms employing 22 – 30 year olds with little industry experience as symptomatic of the problems in many very large employers—a symptom that may be cured by startups or other competitive means. Do large, well-run companies like Google hire consultants to present PowerPoints?

* “Some of what is going on in today’s global economy is a reorienting of economic activity toward where most of the people are, and obviously, most people live in Asia.” One way to make the U.S. stronger is to bring more people to the U.S., as Cowen says, but that is made difficult by political resentments, misunderstandings, and fears of the other. We are still a highly tribal species.

* “When it comes to technology, progress is usually good, but gradual progress is usually better.” That’s because gradual progress lets people adjust. I’d also ask where, and on what timescales, rapid progress ends and gradual process begins.

Thoughts on possible and perceived income inequality

October 28, 2012 By in Culture, ideas, Life Tags: , , , , , , , , , 1 Comment

Someone in my family sent me “Standard of Living Is in the Shadows as Election Issue,” which is about how we allegedly need to break “out of a decade of income stagnation that has afflicted the middle class and the poor and exacerbated inequality.” But measuring standard of living solely through income has a couple of major problems. One is that a lot of people are getting life improvements through non-income-based measures (surfing the Internet is an obvious example). It also appears that the average basket of goods consumption is changing. Anyone who has to or chooses to consume health care or education is really hurting. Anyone who isn’t is arguably benefiting from the major drop in prices for virtually all manufactured goods.

I’m not convinced that income inequality has changed as much as the media believes it has. Robert J. Gordon wrote “Has the Rise in American Inequality Been Exaggerated?,” which argues that the indices used to measure inequality are flawed, that a lot of income is now needlessly spent on housing (primarily because so many cities restrict housing supply through various means, including arbitrary parking requirements and height limits), and that behavioral choices and changes may have changed perceived inequality. I don’t want to argue the merits of Gordon’s paper. His explanations are at least plausible, and that the more one tries to measure these kinds of changes, the harder it is to really know if what one is measuring is real or evidence of statistical artifacts or measurement biases. Standard of living arguments face the same issues.

I mentioned the kinds of goods we consume in the first paragraph. We have large incentive problems built into healthcare, education, and government, all of which are growing faster than inflation and have been for decades. Tyler Cowen’s The Great Stagnation: How America Ate All The Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better discusses these issues. Cowen also says:

More and more, ‘production’—that word my fellow economists have been using for generations—has become interior to the human mind rather than set on a factory floor. Maybe a tweet doesn’t look like much, but its value lies in the mental dimension. We use Twitter, Facebook, MySpace, and other Web services to construct a complex meld of stories, images, and feelings in our minds. No single bit from the Web seems so weighty on its own, but the resulting blend is rich in joy, emotion, and suspense.

This might be overly utopian: consider the arguments of Sherry Turkle’s Together Alone or Nicholas Carr’s The Shallows, neither of which may be fully persuasive but which still give me pause about the Internet as a “resulting blend. . . rich in joy, emotion, and suspense.”

At least “Standard of Living Is in the Shadows” understands this: “The causes of income stagnation are varied and lack the political simplicity of calls to bring down the deficit or avert another Wall Street meltdown.” The Wall Street meltdown is also a symptom, not a cause, of underlying problems. This is also probably true:

Maybe the biggest reason for optimism is that there is still a strong argument that both globalization and automation help the economy in the long run. This argument remains popular with economists: Trade allows countries to specialize in what they do best, while technology creates opportunities to extend and improve life that never before existed.

Previous periods of rapid economic change also created problems that seemed to be permanent but were not. Neither the cotton gin nor the steam engine nor the automobile created mass unemployment.

I don’t pretend to have answers to these questions, but both major political want to sell easy and probably wrong answers. A critical mass of voters haven’t revolted, or won’t revolt. I don’t see the end game. But we may also get self-driving cars, 3-D printing, and human genetic modification in the next decade. All three are big, transformative technologies that may alter the fabric of human life in major and unforeseeable ways. Remember that a huge number of technologies diffused through society incredibly quickly during the depression (radio being the best known). In my own case, for example, Amazon, Barnes & Noble, and Apple’s digital reading devices have made self-publishing pragmatic in a way that it wasn’t prior to about 2010 or so, and that’s a pretty big win for me, given my experience with literary agents.

There does, however, seem to be a pervasive societal sense over the last four years that something has gone wrong.

In an e-mail, one friend said this: “These days, I feel like much of society is living in some sort of shared delusion, where people want what they want but are blithely unaware of the effects of their desires” in the context of a link to Branford Marsalis’ take on students today. Marsalis says that he’s learned that “students today are completely full of shit. [. . .] Much like the generation before them, the only thing they’re really interested in is you telling them how right they are and how good they are.” I said to my friend:

I suspect people have always been “living in some sort of shared delusion, where people want what they want but are blithely unaware of the effects of their desires,” but wealth has enabled us to indulge these desires and shared delusions in new ways. And “shared delusion” as a small and relatively unimportant percentage of GDP / government spending is a cheap, affordable thrill. But shared delusion in an environment where economic growth is weak—I tend to buy the Tyler Cowen argument espoused in The Great Stagnation, along with Peter Thiel’s addendums, though I’m more than willing to consider alternate points of view—is much harder. A lot of people are clawing for a bigger slice of a limited pie, which is a more substantial problem than a lot of people clawing for a sliver of a growing pie. Most people don’t even understand the problems, or try to genuinely understand; it’s easier to fit small pieces of complex problems and phenomena into an existing social / political worldview than it is to try getting a handle on the problem domain and the forces in play (most of the political posts I’ve seen on Facebook look like mood affiliation and simple, Haidt-style posturing and mood affiliation than anything else). The delusion isn’t new, but the large climate /environment has changed. The scale of the delusion has changed too, and scale has qualities of its own.

But I still wonder about something real: when someone makes it really rich (Astors, Vanderbilts, or, today, Gates, Ellison), there’s a tendency for the wealth and the kinds of behaviors that led to the major wealth in the first place to be diluted over time and across generations (think of Paris Hilton as a salient media example). I wonder if that also happens to some extent at the level of countries, but over centuries instead of decades. Most of the time I tend to guess not—the wealthiest countries in 1800 are still mostly the wealthiest countries today, with a couple of notable exceptions (Argentina has gone down, South Korea up)—but it’s still something I ponder. Changing wealth distributions play into this too, although I’m not really sure how.

The preceding paragraphs might be overly pessimistic. Let’s take the long view: things are actually pretty good. The Soviets aren’t threatening us with total annihilation (and vice-versa: the news that Kennedy seriously considered a first strike in the 60s is really scary), we’re not in the Great Depression, there’s still lots of cool stuff happening, books are cheaper than ever, and virtually everyone has a magic box that lets them communicate with almost anyone, anywhere, any time. The minutia and stupidity of politics is being enabled in new ways, but I think the basic content isn’t so different from the past. By virtually every metric people are better off today than they were 30 or 40 years ago (psychologically speaking, I’m not so sure, but we’ll leave that to the side). Anyone who has had medical treatment that wouldn’t have been possible 40 years ago is aware of this.

As I said above, we may also get self-driving cars, 3-D printing, and human genetic modification in the next decade. These technologies might be overhyped or not pan out. But I still think:

Pretty neat!

People who are well-equipped to take advantage of modern nutrition and communication are in an especially good position. People who fall into the defaults—lots of simple sugars and fast foods, four or five hours of TV of dubious value every day—might not be. Simply being a consumer might be getting harder. So is following default paths. Certainly I derive a huge amount of benefit from being part of modern communication networks, but the kind of person who doesn’t care that much about writing or artistic production or whatever might not care or benefit.

In Name of the Rose Adso thinks: “As I lay on my pallet, I concluded that my father should not have sent me out into the world, which was more complicated than I had thought. I was learning too many things” (179). But we can’t avoid getting sent out into the world. All we can do is hope we have or can develop the strength and fortitude necessary to make a go of it. Maybe the very wealthy, who have inherited wealth, can avoid much of the world, but that will only last for a generation or two, and then it’s back against the hard rock face of reality, whether we’re ready for it or not.

School, incidentally, does a poor job of presenting the rock face, which is another issue for another, but I think it’s possible to present that rock face without being a jerk about it. I try to do so.

I also try to remember that life is hard. Even when it’s beautiful.

Tyler Cowen, Bad Religion, and contemporary religious practice

April 20, 2012 By in Links Tags: , , , , , , , 2 Comments

Tyler Cowen writes about Ross Douthat’s Bad Religion and as usual shows a lot of acumen in a small space; consider:

My main question is what could have become of most organized religion in an era of newly found television penetration — a competing source of ideas about right and wrong — and the birth control pill and sexual liberation of women? Not to mention gay rights. The recent evolution of American religion may not be optimal, but it is endogenous to some fairly fundamental forces. Non-religious thinking seems to offer especially high returns to successful people these days, and while American religion certainly has survived that impact (unlike in the UK?), what is left will seem quite alienating to much of the intelligentsia, Ross included.

For most mainstream religions, for most urban and suburban intellectuals circa 2012, it is hard to live a religiously observant life during the ages of say 17-25. American religion is left with late convert intellectuals and proponents of various enthusiasms, all filtered through the lens of America’s rural-tinged mass culture. Where is the indigenous and recent highbrow Christian culture of the United States?

I left this as a comment: I wonder why a large divergence in American religious signaling (as opposed to actual practice) has opened up, while in Europe pure signaling seems smaller (see, for example, Slate’s “Walking Santa, Talking Christ: Why do Americans claim to be more religious than they are?“, which observes that Americans say they engage in religious practice much more than they actually do, as measured by attendance in religious institutions like churches). The trappings of religion seems to offer benefits to some people, especially the non-intelligentsia, even when religious doctrine is unimportant. The only popular media representation of this sort of thing I can remember is in Friday Night Lights, where many of the characters go to church but aren’t theologically inclined.

In other religious news, I’ve been reading John Updike’s novels, and the way many of his characters are aware of each others’s church affiliation is striking (such and such is a Methodist, such and such is an Episcopalian) because a) I don’t think that way, b) I don’t even know the major differences among Christian sects, save for Catholics, and c) to Updike’s characters this is important, but mostly as a form of group membership. The status markers are religious in nature. This gives many of his novels an old-fashioned tinge; in my own mind or culture, people get divided into “hard-core religious” and “not,” with more people in the “not” category, even when they claim they are. Religious signaling might increasingly be a matter of convenience, in which one adopts religious trappings when they’re useful and discards them when they’re not (especially sexually).

For liberals / people in the intelligentsia (those two groups are not synonymous), I get the sense that college or academic affiliation is the modern secular equivalent. You build group affiliation based on college instead of your brand of Christianity / Judaism / Islam. Incidentally, Updike also gets the power of movies to take over religious beliefs: they are sprinkled throughout In the Beauty of the Lilies, which is often boring and over-written; it should be half as long, though as always there are beautiful individual sentences. It is hard to accept the more retrograde parts of older religions when they are paired against modern narrative experts, especially modern visual narrative experts who make TV shows and movies.

In general I find religious discussions very boring but sometimes like meta-religious discussions about why people are religious. I’ve been citing him a lot lately, but Jonathan Haidt is very good on this subject in The Righteous Mind.

The Tiger Mother post (with thoughts from The Great Stagnation)

February 26, 2011 By in Links Tags: , , , , , , , Leave a comment

Everyone online has an opinion about Amy Chua’s Tiger Mother article, otherwise known as the tongue-in-cheek “Why Chinese Mothers Are Superior.” The essay says all work and no play makes Jack (and Jill!) a good student. A grad-student friend said she applauds the Tiger Mother and thinks her students are lazy and would be much improved if they’d been raised by Tiger Mothers.

I wonder, though, especially since reading “Mary Gates and Karen Zuckerberg Weren’t Tiger Moms: Is the Amy Chua approach bad for the American economy?” in Slate. The article describes one of the potential “anti-Tiger” positions: Americans might be better at leaving more space for spectacular failure and spectacular success, then reaping the successes. I would add one other point: I went to a Seattle-area high school that was about 25% – 33% Asian and saw a lot of the Tiger Mother causalities, including the ones who are probably now in therapy, the ones who learned to hate learning, and so on. If my parents had been tigers, I don’t think I would’ve turned out so well because I have too wide a rebellious streak and was utterly indifferent to school work of any sort until I was about 16. Now in many ways I’ve superseded the tiger cubs who burned out, at least as measured by conventional measures of status and respect.

I suspect there is no “right” way, and how people turn out is more random than not. Some of the research I’ve seen indicates that parents don’t have as much control over their children’s future as many parents think, although I can’t find any direct links at the moment. See some discussion here and here from Marginal Revolution.

Finally, I think some of the Tiger narrative’s resonance with the larger cultural is linked to the decades-old idea that the U.S. is somehow losing its educational prowess or falling from some educational golden age. But it looks like American Kids Aren’t Getting Dumber; They Were Just Never That Smart. For much of the United States’ history, the smartest thing smart people around the world could do is move to the United States. So lots of smart people came to the U.S. by default. We got lots of dividends from immigration throughout history because the United States’ political institutions worked pretty well when most places were languishing under autocracies; we managed to avoid destroying ourselves, as Europe did during World Wars I and II and Japan did during World War II; we got a lot of smart minorities who fled Germany before World War II; big oceans and good relations with Canada and Mexico protected and continue to protect the U.S. from immediate threats, which means we can spend ludicrous amounts of money on military technology. There are probably others I’m not considering. But, as Cowen points out in The Great Stagnation, the rest of the world has a relatively easy playbook to catching up to the major Western democracies. Now they’re doing so, which means our “smart and ambitious immigrants” advantage might be drying up and making the rest of the world more attractive—and the world is likely to get more competitive, by some definitions of competitive.

So we get fertile soil for Amy Chuas (notice the plural), whose writing can feed the sometimes justified anxiety a lot of people who simply read the news or live in the economy are already feeling. Others are probably just saying, “Do we really need this much materialism?” (see, for example, Stumbling on Happiness), but the answer on the political level appears to be yes. Chua bridges the individual and political whether she realizes it or not, and the potent combination of two make her so attractive both to people of the anti- or pro-Tiger Mother crowd, as well as to the meta commentators like me.

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