Monthly Archives: February 2014

Fail Faster

It looks bad for a manager to have one of his projects fail. So to “cover his ass”, such a manager often tries to prevent any records showing that people saw failure coming. After a failure, he wants to say “this was just random bad luck; no one could have foreseen seen it.” His bosses up the chain of command tend to allow this, because they also want to avoid being held responsible for failures during their watch. So they also prefer the random back luck story.

Unfortunately, this approach tends to prevent organizations from getting signals that would let them mitigate failures, such as by quitting projects earlier. For example, most startup firms don’t fail until they have spent nearly all of the cash they were given. It is rare for a startup to admit it isn’t going to work out, and give some cash back to investors. Similarly, government agencies created to achieve some purpose rarely recommend to legislatures that they be eliminated when their find that they aren’t achieving their intended purposes.

Of course bosses don’t want to be too obvious about silencing possible signals of failure. They find it hard to silence what have become standard signals, like cost accounting measures.

A great application of prediction markets is to give better and clearer warnings of upcoming failure, to enable better mitigation, such as quitting. Of course project bosses anticipate this, and oppose prediction markets on their projects, for exactly this reason. But we can still hope that prediction market warnings may someday become a standard signal, and thus hard to silence:

I hope prediction markets within firms may someday gain a status like cost accounting today. In a world were no one else did cost accounting, proposing that your firm do it would basically suggest that someone was stealing there. Which would look bad. But in a world where everyone else does cost accounting, suggesting that your firm not do it would suggest that you want to steal from it. Which also looks bad.

Similarly, in a world where few other firms use prediction markets, suggesting that your firm use them on your project suggests that your project has an unusual problem in getting people to tell the truth about it via the usual channels. Which looks bad. But in a world where most firms use prediction markets on most projects, suggesting that your project not use prediction markets would suggest you want to hide something. (more)

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Dvorsky Em Interview

The always thoughtful George Dvorsky just posted an interview with me on ems at io9. Dvorsky calls my scenario “Dystopian”:

These days, people worry about robots stealing our jobs. But maybe we should be more concerned about massive populations of computerized human brains. … Disturbingly, Hanson predicts that human servants could become status symbols among the rich.

“But to survive, most humans would need assets other than their ability to work,” Hanson told io9. “Like stocks, bonds, real estate, or patents. Humans without such assets may or may not get charity from other humans. Em charity to humans may focus on offering humans a chance to become ems.”

Disturbing, no? Hanson made it clear to me that his analysis is designed to forecast likely outcomes, and not those outcomes we currently desire. …

“In virtual reality, ems need never experience physical pain, hunger, disease, or grit,” says Hanson. …

Given these near-Dystopian scenarios, I asked Hanson what would motivate ems and why they would choose to cooperate with traditional power structures. …

As if a lot of this isn’t already grim enough, ems will have to deal with a host of other concerns. For example, a stolen copy of an em mind could be tortured to extract secrets, or enslaved to compete with the original. … Regardless, the future that Hanson describes is a far cry from what many of us are hoping for. Living as a stream of 1’s and 0’s may have its benefits — but a digital utopia has never seemed more elusive.

I wish Dvorsky would made it clearer what parts of this scenario he most dislikes. Then we could talk more productively about how to make it better. Perhaps I should have emphasized that with investments doubling monthly, humans might quickly turn even a small initial investment into a king’s ransom.

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My Little Finger

Adam Smith:

Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connection with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man of speculation, enter into many reasonings concerning the effects which this disaster might produce upon the commerce of Europe, and the trade and business of the world in general. And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquillity, as if no such accident had happened. The most frivolous disaster which could befall himself would occasion a more real disturbance. If he was to lose his little finger to-morrow, he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own.

Last night my father died. And I am sad. This wasn’t a big deal in the scheme of things. But, you see, this was MY little finger. And more.

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Dust In The Wind

All we are is dust in the wind. (Song lyrics)


Contra Tyler, the lesson of history is that few things are as effective at launching a revolution as is moral argument. Without the firebrand Thomas “We have it in our power to begin the world over again“ Paine, the American Revolution would probably never have happened. (more)

Imagine standing at the shore of a river. You scoop a handful of water, and throw it downstream. By how much do you expect that act to change the flow of the river into the ocean miles downstream? I expect the effect to be far less than a handful of water arriving a few seconds earlier. More like a few atoms arriving a few seconds earlier. The speed of a river is a balance between gravity and friction, and that balance is likely to be quickly restored after disturbances like throwing a handful of water.

This seems a pretty typical example of influencing the physical world. The vast majority of such influences quickly disappear. So if you want your influence to last, you have to choose carefully. For example, since on Earth nature only rarely moves big stones, you might succeed in assembling a stone wall that lasts for thousands of years. At least if other people don’t want to knock it down.

Now consider trying to have a long term social influence. As with physical influence, we should expect that most efforts to influence the social world also diminish quickly away from the point of influence. After all, many aspects of the social world also result from balances between opposing forces. For example, if US independence was largely inevitable in the long run, then Thomas Paine could have at most influenced when exactly when the US became independent.

But what if there are tipping points? Imagine that a burst of floodwater came to the edge of overflowing a dam. An overflow might dig a channel leading in a new direction, changing the course of a river for a long time to come. So adding or subtracting just a little water near that overflow point might have a big long term effect. Can this metaphor give us more hope for long term social influence?

Well first, such tipping points must be rare – the vast majority of points can’t tip very far. Second, when many people can influence a social event, not only are most people only a drop in a tide of influence, most people are also only a drop in a tide of information. For example, imagine that people were pushing for or against US independence based on their best info on if that is good for the world. In this case Paine could only be in a position to tip the outcome if many other people also could tip the outcome, and if they were pushing in many different directions, with their net effects nearly balancing out.

In a case like this, Paine couldn’t be at all sure that a US revolution was a good idea. After all, an awful lot of people would have best info suggesting it was not a good idea. And in fact Bryan Caplan makes a good case that it wasn’t in fact a good idea.

Of course many people might have been pushing based on private interests, instead of a common good. But this still wouldn’t give Paine much reason for confidence in his tipping the world to a better place. Either many others would try to help the world, or Paine couldn’t have good reason to think he is the only exception.

So are there any good ways to have long term influence? One idea is to find a social situation like the stone wall, where you can add things that aren’t likely to get moved, and where your stones aren’t likely to be added anyway a bit later by someone else. Perhaps doing intellectual work on highly neglected topics is something like this.

See also: Long Legacies

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Gopnik on Religion

We’ve seen a long-run decline in prayer, church attendance, identification with particular religions, and belief in God or the importance of religion. I tend to attribute such trends to increasing wealth. Adam Gopnik agrees:

What if, though, the whole battle of ayes and nays had never been subject to anything, really, except a simple rule of economic development? Perhaps the small waves of ideas and even moods are just bubbles on the one great big wave of increasing prosperity. It may be that the materialist explanation of the triumph of materialism is the one that counts. … The daily miseries of the Age of Faith scarcely exist in our Western Age of Fatuity. The horrors of normal life in times past, enumerated, are now almost inconceivable: women died in agony in childbirth, and their babies died, too; operations were performed without anesthesia… . If God became the opiate of the many, it was because so many were in need of a drug. As incomes go up, steeples come down. … Happiness arrives and God gets gone. “Happiness!” the Super-Naturalist cries. “Surely not just the animal happiness of more stuff!” But by happiness we need mean only less of pain. You don’t really have to pursue happiness; it is a subtractive quality. Anyone who has had a bad headache or a kidney stone or a toothache, and then hasn’t had it, knows what happiness is. The world had a toothache and a headache and a kidney stone for millennia. Not having them any longer is a very nice feeling. On much of the planet, we need no longer hold an invisible hand or bite an invisible bullet to get by. (more)

Even so, almost everyone is religious to some degree:

Most [who say they don’t believe in God] believe in something like what the Super-Naturalists would call faith—they search for transcendence and epiphany, practice some ritual, live some rite. True rationalists are as rare in life as actual deconstructionists are in university English departments, or true bisexuals in gay bars. In a lifetime spent in hotbeds of secularism, I have known perhaps two thoroughgoing rationalists—people who actually tried to eliminate intuition and navigate life by reasoning about it—and countless humanists, in Comte’s sense, people who don’t go in for God but are enthusiasts for transcendent meaning, for sacred pantheons and private chapels. They have some syncretic mixture of rituals: they polish menorahs or decorate Christmas trees, meditate upon the great beyond, say a silent prayer, light candles to the darkness. They talk without difficulty of souls and weapons of the spirit, and go to midnight Mass on Christmas Eve to hear the Gloria, and though they leave early, they leave fulfilled. You will know them by their faces; they are the weepy ones in the rear.

So religion will remain a big influence on the world even if we keep getting richer. And if wealth per person falls a lot, as I forecast, religion may well resurge to near its former levels of importance.

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Me Talking Thrice

  1. This Thursday March 6 at 4pm I speak at Duke University in the Philosophy, Politics, & Economics (PPE) Seminar, in room 330 Gross (room TBD), on Shall We Vote On Values But Bet On Beliefs? (slides)
  2. This last Sunday I talked to the DC Philosophy Cafe on Em Econ (audio).
  3. Last week I did another interview with Adam Ford, on Futurism (video).
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Engineering v. Design

Silicon Valley has always been obsessed with efficiency. But lately, it is also obsessed with beauty. In a place where engineers have reigned supreme, the new tech talent war is for designers. (more)

In those parts of the economy that are well modeled by the introductory economics textbook treatment of widgets – firms producing a thing with workers with increasing marginal costs in a somewhat competitive industry, such as durables, clothes, and cars – we’ve seen continuing, very substantial growth in real wages as measured by the purchasing power of things that our economy produces. The reason that real wages in aggregate have stagnated is that much of what people buy are things where there are issues of fundamental scarcity: energy, the land under the houses we buy, and goods and services that are produced in complicated, heavily public-sector-inflected ways. Medical care and educational services are examples of the latter category. (more; HT Tyler)

Many long-term trends over the last few centuries can be plausibly attributed to people getting richer, and thus wanting different things than poor people want. One interesting example: the decline of engineering relative to design.

All products and services have to negotiate between the two extremes of the raw physical world and complex human preferences. That is, products must deal with the physical world in order to give humans what they want. Engineers tend to focus on the physical world, trying to minimize the effects of key resource constraints, while designers tend to focus on how a product looks and feels to customers.

Because we have simple powerful general theories of how the world works, engineering can make use of a lot of math and computer modeling, and can often transfer inventions to very different products. In contrast, since humans are very complex and poorly understood, designers must instead develop intuitions by seeing many specific examples of good and bad design.

As we have become richer, we have become less concerned about raw physical constraints. When we have enough calories in our food, enough insulation in our clothes and walls, and enough mass moved fast enough in our transportation, we focus more on how exactly our food, clothes, etc. make us feel. This includes how we feel about how the product is abstractly described to us – marketing also gets more important as design gets more important.

Rich people also care more about product variety. When we can barely make any affordable car that functions, car design focuses on making one working car at sufficient scale to be cheap enough. Such as the Model T. But when we get better at cars, customers are willing to pay extra to get cars in more variety, to better match the self-image they want to project. So design and marketing come to matter more than simple engineering.

These trends have many implications. Since innovations that accumulate and transfer well are more easily found in engineering, our focus on design slows our rate of economic growth. Also, since local tastes vary, our focus on product variety that better adapts to local tastes gives us fewer gains from globalization. Finally, a focus on design weakens the connection between economic and military power. An economy that is better at making more varied products to make more customers feel good about themselves is less obviously better able to make weapons that kill. After all, engineering matters much more than design and marketing when it comes to weapons of war.

In the em future scenario that I’ve been exploring, income per em falls to subsistence levels. This should increase economic growth rates, the importance of engineering relative to design and marketing, and emphasize scale economies relative to product variety. Our descendants would return to focus more on conquering nature, and on acquiring economic power that translates better into military power.

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What Cost Variety?

In 1930 Keynes famously predicted that by 2030 we’d be four to eight times more productive, and we’d use those gains to work far fewer hours. Though we could get by on less, we might work fifteen hours a week just to feel useful.

It is clear now that this won’t happen. But it is interesting to wonder what sort of lifestyle we could manage if we worked three to ten times fewer hours on average. And it occurs to me that we could probably work far less, and still have just as much stuff, of just as high a quality, if only we’d sacrifice product variety.

Imagine that we made just as many cars, houses, clothes, meals, furniture, etc., each one just as big with just as high quality materials and craftsmanship. But instead of the making these in the stupefying variety that we do today, imagine that we made only a few standard variations, and didn’t update those variations as often. A few standard cars, standard clothes, standard meals, etc. Enough variety to handle different climates, body sizes, and food allergies, but not remotely enough to let each person look unique. (An exception might be made for variety in music, books, movies, etc., since these are such a tiny fraction of total costs.)

I’d guess that this alternative could plausibly cost three to ten times or more less than what we pay now. Let me explain.

First, most products have fixed costs of production. That is, not only does it cost more to make more items, it costs to be ready to make that kind of item. For example, in addition to costing more to give you another gallon of gas, it costs to make a gas station and have it ready to sell you gas. With product variety, there is usually an added fixed cost for each new product variation.

Second, industry has worked hard to enable “mass customization,” i.e., product variety, by lowering fixed costs at the expense of increased per-item costs. Without product variety, industry would instead work hard to reduce per-item costs, at the expense of higher fixed costs.

Third, there is a lot of learning during most production processes, learning that makes it cheaper to make more items, even when the scale of the production process doesn’t change. A typical estimate is that costs fall in half when ten times as many items are made. So with a thousand times less product variety, costs would be eight times lower.

Fourth, there are lots of ways to save on costs when you produce at larger scales. For example, for most chemical processing, like making gas from oil, the cost of a production plant goes roughly as the surface area of its devices, while the amount processed goes roughly as the volume of the devices. Since volumes grow faster than surface areas, the per-volume cost goes down. There are also lots of ways to save on costs when you distribute and store more standardized items.

Even with a lot of bad management, the early communist revolution in Russia was still able to make impressive gains in output by using these scale economies. They didn’t have much variety, but they did make a lot of cars, etc.

What fraction of us would prefer to live in a world where they work only 10% as many hours, have just as much high quality stuff, but lose most of our product variety. If many of us would rather switch to this alternate world, then we may suffer from a coordination failure, of failing to switch together to more standard products.

I suspect that status competition is the problem here. We see those who don’t use distinctive products as lower status, either because they can’t afford them, or don’t have enough taste to pick ones well matched to them. Consider the distain expressed in the famous Pete Seeger Malvina Reynolds song Little Boxes for houses that look the same, and people who act similar. Consider the horror two women might feel to arrive at a party wearing the same dress. Or how folks at a restaurant are reluctant to order an item chosen by someone else at their table.

It isn’t like we are each born with detailed preferences for varied products, so I must own a tall white leather couch while you must own a short red cotton one. Instead we each try to construct a product-use-identity that is the right distance from other identities around us, and that well matches our few distinctive features. The more different others around us are from each other, the more different we must also be to not seem low status.

But it isn’t clear we are any happier, or that our lives have more meaning. This seems to just be part of the human status treadmill. A treadmill we don’t seem able or even much inclined to coordinate to avoid. Welcome to the human condition.

Added 20Feb: See a nice quote from Murray’s Coming Apart on increasing variety.

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Rah Local Politics

Long ago our primate ancestors learned to be “political.” That is, instead of just acting independently, we learned to join into coalitions for mutual advantage, and to switch coalitions for private advantage. Our human ancestors added social norms, i.e., rules enforced by feelings of outrage in broad coalitions. Foragers used norms and coalitions to manage bands of roughly thirty members, and farmers applied similar behaviors to village communities of roughly a thousand.

In ancient politics, people learned to attract allies, to judge who else was reliable as an ally, to gossip about who was allied with who, and to help allies and hurt rivals. In particular we learned to say good things about allies and bad things about rivals, such as accusing rivals of violating key social norms, and praising allies for upholding them.

Today many people consider themselves to be very “political”, and they treat this aspect of themselves as central to their identity. They spend lots of time talking about related views, associating with those who share them, and criticizing those who disagree. They often feel especially proud of how boldly and freely they do these things, relative to their ancestors and those in “backward” cultures.

Trouble is, such folks are mostly “political” about national or international politics. Their interest fades as the norms and coalitions at stake focus on smaller scales, such as regions, cities, or neighborhoods. The politics of firms, clubs, and families hardly engage them at all. Of course such people are members of local coalitions, and do sometimes voice support for enforcing related norms. So they are political there to some extent. But they are much less bold, self-righteous, and uncompromising about local politics, and don’t consider related views to be central to their identity. Such folks are eager to associate with those who sacrifice to improve world politics, but are only mildly interested in associating with those who sacrifice to improve local politics.

This focus on politics at the largest scale is both relatively safe, and relatively useless. On the one hand, your efforts to take sides and support norm enforcement at very local levels are far more likely to benefit you personally via better local outcomes. On the other hand, such efforts are far more likely to bother opposing coalitions, leaving you vulnerable to retaliation. Given these risks, and the greater praise given to for those who push politics at the largest scales, it is understandable if people tend to focus on safe-scale politics, unlikely to cause them personal troubles.

Near-far theory predicts that we’d tend to focus our ideals and moral outrage and praise more on the largest social scales. But a net result of this tendency is that we seem far less effective today than were our ancestors at enforcing very-local-level social norms, and at discouraging related harms from local coalitions. We chafe at the idea of letting our nation be dominated by a king, but we easily and quietly submit to local kings in firms, clubs, and families.

Our political instincts and efforts are largely wasted, because we just are much less able to coordinate to identify and right wrongs on the largest scales. Now to some extent this is healthy. There was a lot of destructive waste when most political efforts were directed at very local politics. But many wrongs were also detected and righted. The human political instinct does serve some positive functions. After all, human bands were much larger than other primate bands, suggesting that human politics was less destructive than other primate politics.

I’ve suggested that organizations use decision markets to help advise key decisions. And to illustrate the idea, I’ve discussed the example of how it could apply to national politics. I’ve done this because people seem far more interested in reforming national politics, relative to reforming local small organizations. But honestly, I see a much bigger gains overall from smaller scale applications. And small scale application is where the idea needs to start, to work out the kinks. And such trials are feasible now. If only I could get some small orgs to try. Sigh.

I posted back in ’07 on a hero of local politics:

A colleague of my wife was a nurse at a local hospital, and was assigned to see if doctors were washing their hands enough. She identified and reported the worst offender, whose patients were suffering as a result. That doctor had her fired; he still works there not washing his hands. (more)

I’d admire you much more if you acted like this, relative to your marching on Washington, soliciting door-to-door for a presidential candidate, or posting ever so many political rants on Facebook. Shouldn’t you admire such folks far more as well?

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Open Thread

This is our monthly place to discuss related topics that have not appeared in recent posts.

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