Capturing The Policy Info Process

Brink Lindsey and Steven Teles’ book The Captured Economy: How the Powerful Enrich Themselves, Slow Down Growth, and Increase Inequality came out November 10. Steven Pearlstein titled his review “What’s to blame for slower growth and rising inequality?” Robert Samuelson says:

As societies become richer, so does the temptation for people to advance their economic interests by grabbing someone else’s wealth, as opposed to creating new wealth. … This sort of economy may be larger than you think. That’s the gist of the provocative new book …

And so on. The book’s marketing, intro, and reviews all suggest that the book is about who to blame for bad trends. And on how exactly (i.e., via what bad policies) bad guys have achieved their nefarious ends. Which to my mind is a dumb topic. Yes, it is what everyone wants to talk about for moral posturing purposes. But it is a far less useful topic than what exactly are the fundamental causes of our problems, and what we could do to address them.

However, sometimes when people play dumb, and observers treat them as dumb, they are not actually dumb. And this book in fact contains a brief but thoughtful analysis of the political obstacles to solving our many policy problems. It also suggests solutions. The problems: Continue reading "Capturing The Policy Info Process" »

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On Thought Leaders

All through the world and history, and across most areas of life, we empower and choose leaders. As usual, we have things we say about the sort of leaders we want, and when choosing we act on preferences. And the two are usually not quite the same.

We tend to actual want leaders who have good family or institutional pedigrees, who give us our desired degrees of flattery and hypocrisy, who will use raw politics in the right ways to gain and keep power, and who are pretty/handsome, energetic, smart, articulate, charismatic, socially savvy, and have other impressive abilities. We also want leaders that others will treat as leaders. But we usually don’t say these things.

For example, we might say we want religious leaders who can help us to be more spiritual, firm leaders who will increase profits, or political leaders who will create peace and prosperity. And while the ancient world didn’t care much about them, in the modern world we often say that we want thought leaders.

Thought leaders lead our conversations and thoughts on particular concepts, ideas, and claims. And we prefer to say that such leaders actually developed original insights on those thoughts. That makes a nice convenient story. “Person P developed thought X; when we heard about X we had to start talking about it, and P has been helping us with that.”

But the pool of people who are inclined to and able to develop each thought X is far larger than pool of people that we consider to be acceptable thought leaders on X. So to get the sort of thought leaders that we want, we tolerate and even encourage qualified leaders to take credit for thoughts developed by others. We let the charismatic people we prefer as leaders pretend to have developed the ideas they talk about.

Yes, each of us personally can’t do the research to find out who actually developed each thought X. Yet there are people who can do such research, and if we cared enough we’d reward them for exposing thought leaders who take origin credits due to others. But we don’t.

Yes, some thought areas have stronger property rights in ideas. With precise and unique enough terminology to enable you to show that you had the same thought before someone else. But even then they can give you only a minor footnote. It is easy enough to find some detail by which their discussion differed from yours, and then claim that detail makes all the difference to why your contribution was small while theirs was big.

So know that unless you are in a thought area with strong property rights, or have the rare features that people actually want in thought leaders, you can influence the world of ideas by coming up with new thoughts, but you are unlikely to be celebrated as a key thought leader. If enough people cared, we could create stronger property rights in thoughts, to increase the rewards to developing thoughts. But don’t hold your breath waiting.

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Dragon Debris?

Apparently the causal path from simple dead matter to an expanding visible civilization is very unlikely. Almost everything that starts along this path is blocked by a great filter, which might be one extremely hard step, or many merely very hard steps. The most likely location of this great filter is that the origin of life is very very hard. Which is good news, because otherwise we’d have to worry at lot about our future, via what fraction of the overall huge filter still lies ahead of us. And if we ever find evidence of life in space that isn’t close to the causal path that led to us, that will be big bad news, and we’ll need to worry a lot more.

One of the more interesting future filter scenarios is a high difficulty of traveling between the stars. As we can easily see across the universe, we know that photons have few problems traveling very long distances. And since stars drift about at great speeds, we know that stars can also travel freely suffering little harm. But we still can’t be sure of the ease of travel for humans, or for the sort of things that our descendants might try to send between the stars. We have collected a few grains of interstellar dust, but still know little about them, and so don’t know how easy was their travel. We do know that most of the universe is made of dark matter and dark energy that we understand quite poorly. So perhaps “Here Be Dragons” lie in wait out there for our scale of interstellar travelers.

Many stars, like ours, are surrounded by a vast cloud of small icy objects. Every once in a while one of these objects falls into a rare orbit where it travels close to its star, and then it becomes a comet with a tail. Even more rarely, one should fall into an orbit that throws it out away from its star (almost always without doing much else to it). Such an object would then travel at the typical star speed between stars, and after billions of years it might perhaps pass near one other star; the chance of two such encounters is very low. And if the space between stars is as mild as it seems, it should arrive looking pretty much as it left.

Astronomers have been waiting for a while to see such an interstellar visitor, and were puzzled to have not yet seen one. They expected it to look like a comet, except traveling a lot faster than do most comets. Well within roughly a year of a new instrument that could see such things better, we’ve finally seen such a visitor in the last few months. It looked like what we expect in some ways. It is traveling at roughly the speed we’d expect, its size is unremarkable, and its color is roughly what we expect from ancient small space objects. But it is suspiciously weird in several other apparently-unrelated ways.

First, its orbit is weird. Its direction of origin is 6 degrees from sun’s motion vector; only one in 365 random directions are closer. And among the travel paths where we could have seen this object, only one in 100 such paths would have traveled closer to the sun than did this one (source: Turner). But one must apparently invoke very strange and unlikely hypotheses to believe these parameters were anything but random. For now, I won’t go there.

Second, the object itself is weird. It does not have a comet tail, and so has apparently lost most of its volatiles like water. If this is typical, it explains why we haven’t seen objects like this before. The object seems to be very elongated, much more than any other natural object we’ve ever seen in our solar system. And it is rotating very fast, so fast that it would fly apart if it were made out of the typical pile of lightly attached rubble. So at some point it experienced an event so dramatic as to melt away its volatiles, melt it into a solid object, stretch it to an extreme, and set it spinning at an extreme rate. After which it drifted for long enough to acquire the usual color of ancient space objects.

This raises the suspicion that it perhaps encountered a dangerous “dragon” between the starts. Making it “dragon debris.” If the timing of this event were random, we should see roughly one a year in the future, and with new better instruments coming online in a few years we should see them even faster. So within a decade we should learn if this first visitor is very unusual, or if we should worry a lot more about travel dangers between the stars.

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Join The Debate

If you’ve laughed at “X is not about Y”, now is the time to take it seriously, as an equal.

Over the years, many seem to have found my “X is not about Y” arguments to be enjoyably mockable. As if I would be equally likely to say “Toasters are not about toast” or “Napkin holders are not about napkins.” Which seems to suggest that while my claims might be important if true, they are too silly to take seriously.

Now I don’t mind people having fun, but I do worry about the human habit to dismiss as unworthy of attention things that have been wittily mocked. (See the movie Ridicule.) If you worry about that too, and if you’ve at least smirked some at “X is not about Y” jokes, then perhaps I can appeal to your guilt or concern to take the time now to engage the argument.

Because as of today, you can download from Kindle for $22 (or Google for $14), the readable and carefully argued book The Elephant in the Brain: Hidden Motives in Everyday Life. by myself and Kevin Simler.

Now publishers and the media usually coordinate to talk about new books near the day when hardback copies are officially released. Which for our book is January 2. Usually ebooks are also withheld until near that date. As a result, usually the only people who can say much about a book at its official release date are elites who have been given special access to pre-release copies. Those who talk about a book weeks or months later are clearly revealed as less elites, and get less attention.

But now for our book all of you can participate more as equals in that release date book conversation. If you read our book now, and then publicly post a review or engage our argument near the release date, and indicate that you’d like us to publicly engage your response, then we will try to do so. When time is limited we will of course focus more on responses that we think are better argued. But we will try to engage as many of you as possible, without giving undue priority to media and other elites.

So please, go read, and then join our debate. Just how often is it plausible that “X is not about Y”?

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Preferences > Awareness

I recently asked:

The vast majority of economic papers and books that offer explanations for human behaviors don’t bother to distinguish if their explanations are mediated by conscious intentions or not. (In fact, most papers on any topic don’t take a stance on most possible distinctions related to their topic.) …

Yet I’ve had even economics colleagues tell me that I should take more care, when I point out possible signaling explanations, to say if I am claiming that such signaling effects are consciously intended. But why would it be more important to distinguish conscious intentions in this context, compared to the rest of economics and social science?

Bryan Caplan answers:

Standard signaling models assume that people dislike sending the signal. It is this assumption that implies that signaling equilibria are highly inefficient – or even full-blown Prisoners’ Dilemmas. If people enjoyed signaling, in contrast, signaling equilbria could easily be ideal. What superficially appears to be a vast zero-sum game turns out to be fine because the players like playing the game.

So why don’t economists clearly acknowledge the centrality of conscious desire when they apply signaling models to the real world? Because we usually focus on cases where most people plainly don’t enjoy sending the signal. When I wrote The Case Against Education, I definitely double-checked this fact; but I probably wouldn’t have even launched the project if I’d spent a lifetime inside classrooms packed with jubilant learners.

I agree that, when explaining human behavior, it can often be important to be clear about the preferences that one is postulating. The same behavior explained by different preferences can have different implications for if we should encourage or discourage that behavior.

But when explaining behavior, postulated preferences and conscious intent are just separate and independent topics on which one can be clear. There is no obvious or necessary relation between them.

For example, the real reason that people go to school could because they like school, or it could be because they want to show off smarts, conformity, etc. And for either real motive, people could be fully conscious of that motive, or they could be self-deceived and in denial about it. For example, people could think that they enjoy school, but really go to show off, or they could think that they are trying to show off, but really go because they enjoy school.

While I’m pretty sure that Caplan claims that we go to school more to show off, I’m not actually sure if he has taken much of a stand on how conscious we are in choosing to go to school for this purpose. And that’s my point: I can love his new book (buy it) even without knowing this stance. Like most good economists, he doesn’t bother to distinguish how much his explanation of schooling is mediated by conscious intent.

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Why Be Contrarian?

While I’m a contrarian in many ways, it think it fair to call my ex-co-blogger Eliezer Yudkowsky even more contrarian than I. And he has just published a book, Inadequate Equilibria, defending his contrarian stance, against what he calls “modesty”, illustrated in these three quotes:

  1. I should expect a priori to be below average at half of things, and be 50% likely to be of below average talent overall; … to be mistaken about issues on which there is expert disagreement about half of the time. …
  2. On most issues, the average opinion of humanity will be a better and less biased guide to the truth than my own judgment. …
  3. We all ought to [avoid disagreeing with] each other as a matter of course. … You can’t trust the reasoning you use to think you’re more meta-rational than average.

In contrast, Yudkowsky claims that his book readers can realistically hope to become successfully contrarian in these 3 ways:

  1. 0-2 lifetime instances of answering “Yes” to “Can I substantially improve on my civilization’s current knowledge if I put years into the attempt?” …
  2. Once per year or thereabouts, an answer of “Yes” to “Can I generate a synthesis of existing correct contrarianism which will beat my current civilization’s next-best alternative, for just myself. …
  3. Many cases of trying to pick a previously existing side in a running dispute between experts, if you think that you can follow the object-level arguments reasonably well and there are strong meta-level cues that you can identify. … [This] is where you get the fuel for many small day-to-day decisions, and much of your ability to do larger things.

Few would disagree with his claim #1 as stated, and it is claim #3 that applies most often to reader lives. Yet most of the book focuses on claim #2, that “for just myself” one might annually improve on the recommendation of our best official experts. Continue reading "Why Be Contrarian?" »

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The One Ruler Obsession

I often teach undergraduate law & economics. Sometimes the first paper I assign is to suggest property rules to deal with conflicts regarding asteroids, orbits, and sunlight in the solar system, in the future when there’s substantial activity out there. This feels to students like a complex different situation, and in fact few understand even the basic issues.

Given just two pages to make their case, a large fraction of students (~1/3?) express fear that one person or organization will take over the entire solar system, unless property rules are designed to explicitly prevent that. And a similar fraction suggest the “property rule” of having a single government agency answer all questions. Whatever question or dispute you have, fill out a form, and the agency will decide.

Yet in my lectures I talk a lot about concepts and issues of property rights, but never mention government agency issues or scenarios, nor the scenario of one power taking over everything. And econ undergrads at my school are famous for being relatively libertarian.

I conclude that most people have a strong innate fear of power concentrations, and yet also see the creation of a single central power as an attractive general solution to complicated problems. I’ve seen the same sort of thing with a great many futuristic tech and policy issues. Whatever the question, if it seems complicated, most people are concerned about inequality, especially that it might be taken to the max, and yet they also like the idea of creating a central government-like power to deal with it.

I’ve certainly seen this in concerns about future rampaging robots (= “AI risk”). Many, perhaps most, people express concerns that one AI could take over everything, and many also like the “solution” of one good AI taking over everything.

I recently came across similar reasoning by Frederick Engels back in 1844, in his Outlines of a Critique of Political Economy. Having seen the early industrial revolution, not understanding it well, but fearing where it might lead, Engels claims that the natural outcome is extreme concentration of power. And his solution is to create a different central power (e.g., communism). Of course while there was some increase in inequality and concentration, it wasn’t remotely as bad as Engels feared, except where his words helped to inspire the creation of such concentration. Here is Engels:

Thus, competition sets capital against capital, labour against labour, landed property against landed property; and likewise each of these elements against the other two. In the struggle the stronger wins; and in order to predict the outcome of the struggle, we shall have to investigate the strength of the contestants. First of all, labour is weaker than either landed property or capital, for the worker must work to live, whilst the landowner can live on his rent, and the capitalist on his interest, or, if the need arises, on his capital or on capitalised property in land. The result is that only the very barest necessities, the mere means of subsistence, fall to the lot of labour; whilst the largest part of the products is shared between capital and landed property. Moreover, the stronger worker drives the weaker out of the market, just as larger capital drives out smaller capital, and larger landed property drives out smaller landed property. Practice confirms this conclusion. The advantages which the larger manufacturer and merchant enjoy over the smaller, and the big landowner over the owner of a single acre, are well known. The result is that already under ordinary conditions, in accordance with the law of the stronger, large capital and large landed property swallow small capital and small landed property – i.e., centralisation of property. In crises of trade and agriculture, this centralisation proceeds much more rapidly.

In general large property increases much more rapidly than small property, since a much smaller portion is deducted from its proceeds as property-expenses. This law of the centralisation of private property is as immanent in private property as all the others. The middle classes must increasingly disappear until the world is divided into millionaires and paupers, into large landowners and poor farm labourers. All the laws, all the dividing of landed property, all the possible splitting-up of capital, are of no avail: this result must and will come, unless it is anticipated by a total transformation of social conditions, a fusion of opposed interests, an abolition of private property.

Free competition, the keyword of our present-day economists, is an impossibility. Monopoly at least intended to protect the consumer against fraud, even if it could not in fact do so. The abolition of monopoly, however, opens the door wide to fraud. You say that competition carries with it the remedy for fraud, since no one will buy bad articles. But that means that everyone has to be an expert in every article, which is impossible. Hence the necessity for monopoly, which many articles in fact reveal. Pharmacies, etc., must have a monopoly. And the most important article – money – requires a monopoly most of all. Whenever the circulating medium has ceased to be a state monopoly it has invariably produced a trade crisis; and the English economists, Dr. Wade among them, do concede in this case the necessity for monopoly. But monopoly is no protection against counterfeit money. One can take one’s stand on either side of the question: the one is as difficult as the other. Monopoly produces free competition, and the latter, in turn, produces monopoly. Therefore both must fall, and these difficulties must be resolved through the transcendence of the principle which gives rise to them. (more)

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Authentic Signals

Many people (including me) claim that we eat food and drink water because without nutrition and fluids we would starve and dehydrate. Imagine this response:

No, people eat food because they are hungry, and drink water because they are thirsty. We don’t need abstract concepts like nutrition and dehydration to explain something so elemental as following our authentic feelings and desires.

Yes hunger and thirst are direct proximate causes of eating and drinking. But we are often interested in finding more distal explanations of such proximate causes. So almost no one objects to the nutrition and dehydration explanations of eating and drinking.

However, one of the most common criticisms I get about signaling explanations of human behavior is that we are instead just following authentic feelings and desires. As in this exchange:

Yes, people don’t need to consciously force themselves to express opinions on many topics. That habit comes quite naturally. Even so, we might want to explain that habit in terms of more basic distal forces.

I’m an economics professor, and the vast majority of economic papers and books that offer explanations for human behaviors don’t bother to distinguish if their explanations are mediated by conscious intentions or not. (In fact, most papers on any topic don’t take a stance on most possible distinctions related to their topic.) Economics are in fact famously wary (too wary I’d say) of survey data, as they fear conscious thoughts can mislead about economic behaviors.

Yet I’ve had even economics colleagues tell me that I should take more care, when I point out possible signaling explanations, to say if I am claiming that such signaling effects are consciously intended. But why would it be more important to distinguish conscious intentions in this context, compared to the rest of economics and social science?

My best guess is that what is going on here is that our social norms disapprove mildly of consciously intended signaling. Just as we aren’t supposed to brag, we also aren’t supposed to do things on purpose to make ourselves look good. It is okay to look good, but only as a side effect of doing things for other reasons. And as we usually claim other reasons for these behaviors, if we are actually doing them for signaling reasons we could also be accused of lying, which is also a norm violation.

Thus many see my signaling explanation proposals as accusing them personally of norm violations. At which point, they become vastly more interested in defending themselves against this accusation than in evaluating my general claims about human behavior. Perhaps if I were a higher status professor publishing in a prestigious journal, they might be reluctant to publicly challenge my claimed focus on distal explanations of general behavior patterns. But for mere tweets or blog posts by someone like me, they feel quite entitled to read me as accusing them of being bad people, unless I explicitly say otherwise. (And perhaps even then.) Sigh.

For the record, the degree of conscious intent of any behavior is a mildly interesting facet, but I’m less interested in it than are most people. This is in part because I’m inclined to give people less of a moral or legal pass on the harms resulting from behaviors if people do not consciously intend such consequences. It is just too easy for people to not notice such consequences, when they find it in their interest to not notice.

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Villain Markets

Imagine that you have a large pool of cases, where in each case you weakly suspect some sort of villainous stink. But you have a limited investigative resource, which you can only apply to one case, to sniff for stick there.

For example, you might have one reporter, who you could assign for one month to investigate the finances of any one member of Congress. Or you might have one undercover actor, whom you could assign to offer a bribe to one member of the police force of a particular city. Or you might assign a pretty actress to meet with a Hollywood producer, to check for harassment.

Imagine further that you are willing to invite the world to weigh in, to advise you on where to apply your investigative resource. You are willing to say, “Hey world, which of these cases looks stinky to you?” If this is you, then I offer you villain markets.

In a villain market, some investigative resource will be applied at random to one case out of a set of cases. It will report back a verdict, which in the simplest case will be “stinky” or “not stinky”. And before that case is selected for investigation, we will invite everyone to bet anonymously on the chances of stickiness in each case. That is, anyone can bet on the probability that the verdict of case C will be found stinky, given that case C is selected for investigation. So if you have reason to suspect a particular member of Congress, a particular police officer, or a particular Hollywood producer, you might expect to gain by anonymously betting against them.

Imagine that we were sure to investigate case C87, and that the market chance of C87 being found stinky was 2%, but that you believed C87’s stinkiness chances were more like 5%. In this situation, you might expect to profit from paying $3 for the asset “Pays $100 if C87 found stinky”. After your bet, the new market chance might be 4%, reflecting the information you had provided the market via your bet.

Now since we are not sure to investigate case C87, what you’d really do is give up “Pays $3 if C87 investigated” for “Pays $100 if C87 investigated and found stinky.” And you could obtain the asset “Pays $3 if C87 investigated” by paying $3 cash and getting a version of this “Pays $3 if C investigated” investigation asset for every possible case C.

So you could reuse the same $3 to weigh in on the chances of stinkiness in every possible case from the set of possible cases. And not only could you bet for and against particular cases, but you could bet on whole categories of cases. For example, you might bet on the average stinkiness of men, or people older than 60, or people born in Virginia.

To get people to bet on all possible cases C, there needs to be at least some chance of picking every case C in the set of possible cases. But these choice chances do not need to be equal, and they can even depend on the market prices. The random process that picks a case to investigate could set the choice chance to be a strongly increasing function of the market stinkiness chance of each case. As a result, the overall chance of the investigation finding stink could be far above the average market chance across the cases C, and it might even be close to the maximum stinkiness chance.

So far I’ve describe a simple version of villain markets, but many variations are possible. For example, the investigation verdict might choose from several possible levels of stink or villainy. If the investigation could look at several possible areas A, but would have to choose one area from the start, then we might have markets trading assets like “Pays $100 if stink found, and area A of case C is investigated.” The markets would now estimate a chance of stink for each area and case combination, and the random process for choosing cases and areas could depend on the market stinkiness chance of each such combination.

Imagine that a continuing investigative resource were available. For example, a reporter could be assigned each month to a new case and area. A new set of markets could be started again each month over the same set of cases. If an automated market maker were set up to encourage trading in these markets, it could be started each month at the chances in the previous month’s markets just before the randomization was announced.

Once some villain markets had been demonstrated to give well-calibrated market chances, other official bodies who investigate villainy might rightly feel some pressure to take the market stinkiness chances into account when choosing what cases to investigate. Eventually villain markets might become our standard method for allocating investigation resources for uncovering stinking villainy. Which might just make for a much less stinky world.

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More Prediction Market Criticism

Back in August I commented on a paper by Mike Thicke that criticized prediction markets:

With each of his reasons, Thicke compares prediction markets to some ideal of perfection, instead of to the actual current institutions it is intended to supplement.

Now Saana Jukola and Henrik Roeland Visser weigh in:

We largely agree on the worry about inaccuracy. .. An alternative worry, which Thicke does not elaborate on, is the fact that peer review .. is also valued for its deliberative nature, which allows it to provide reasons to those affected by the decisions made in research funding or the use of scientific knowledge in politics. .. By pointing out defects and weaknesses in manuscripts or proposals, and by suggesting new ways of approaching the phenomena of interest, peer reviewers are expected to help authors improve the quality of their work. .. peer review .. guards against the biases and blind spots that individual researchers may have. .. Criticism of evidence, methods and reasoning is essential to science, and necessary for arriving at trustworthy results. ..

The severity of the potential obstacles that Thicke and we identify depends on whether science prediction markets would replace traditional methods such as peer review, or would rather serve as addition or even complement to traditional methods. .. Prediction markets do not provide reasons in the way that peer review does, and if the only information that is available are probabilistic predictions, something essential to science is lost. ..

As someone who has often experienced the business end of peer review, I can assure you that peer review far from the most useful channel of criticism for scientists today. And I know of no one who proposes forbidding scientists to talk with or criticize each other! Such talk and criticism was common long before peer review became common in science, and if allowed it should remain common. (Peer review only became common in the last century.) Even in the extreme case (which I have not advocated) where prediction markets were our only channel of research funding, and our only source of scientific consensus.

Jukola and Visser cite my blog post on how markets might pick a best qualitative explanation, but complain:

We could also imagine that there are cases in which science prediction markets are used to select the right answer or at least narrow down the range of alternatives, after which a qualitative report is produced which provides a justification of the chosen answer(s). Perhaps it is possible to infer from trading behavior which investors possess the most reliable information, a possibility explored by Hanson. Contrary to Hanson, we are skeptical of the viability of this strategy. Firstly, the problem of the underdetermination of theory by data suggests that different competing justifications might be compatible with the observation trading behavior. Secondly, such justifications would be post-hoc rationalizations, which sound plausible but might lack power to discriminate among alternative predictions.

Again with comparing an alternative to perfection, and ignoring how existing institutions can also fail such a perfection standard. The under-deterimination of theory by data, and a temptation toward post-hoc rationalization, can exist in all other institutions one might use to elicit explanations. Jukola and Visser make no attempt to argue that prediction markets do worse by such criteria.

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