Yawning At Utopia

The prospect of better physical devices, such as logic gates or solar cells, often generates huge interest and investment. Of course there are many more physical devices where improvements generate much less interest, because we haven’t yet found nearly as much use for those devices. But even so, for devices we often use, small improvements can be very big news.

Similarly, there are many widely used computer algorithms where small improvements also generate big interest and financial investments. Of course most gains aren’t like this. For example, there is less interest in techniques tied to very narrow contexts, such as ways to reorganize particular programs. But when wide use is plausible, algorithm gains can be big news.

We can do engineering and design not only with physical and software systems, but also with social systems. There should of course be less interest in designs tied to very particular contexts, such as reorganizing the management of a particular firm. But we often repeatedly use some simple social mechanisms, like voting. So we should be a lot more interest in improving the designs of these.

I started out in engineering, moved to physics, then to software, and then finally to economics. That last move was very much inspired by big apparent gains from better social institutions. I knew that in physical and software engineering we put in huge efforts to scour the vast space of possible designs to find even small gains on devices of moderate generality. Yet in economics it seemed that big gains could be found from very simple easy to find innovations on general mechanisms of wide applicability.

Over two decades later, I must admit that the world shows far less interest in better designs for institutions and social mechanisms, relative to better designs for physical and software systems. Few talk about them, and even fewer business ventures pursue them. Some say that physics and software designs are far more valuable because we know far less about economics; these proposed social designs just don’t work. But this claim seems just wrong to me.

Yes of course any particular argument for any particular social design will make convenient but questionable assumptions. But this is also true for our main arguments for physical or software designs. They also almost always neglect relevant considerations. Tractable analysis simplifies.

I recently posted on a new voting mechanism. Voting is a very general process whose main purposes are also pretty general. I’ve also posted for years about the very general advantages of prediction markets for the problem of info aggregation, which is a very general problem. (Scott Sumner sees their gains as so obvious he calls anything else “Stone Age Economics”.) I just heard a nice talk on better political institutions to promote urban density. And economic journals are full of articles describing new institution designs, and testing the effects of institutions that are not widely adopted.

Yes, proposed new social mechanisms often fail along the path from simple theory models to complex models to lab experiments to small field experiments to large field trials. But physical and software designs also often fail along this path. I don’t see social designs as failing much more often, except for the key failing of not generating much enthusiasm or interest. That is, most people just don’t seem to care how well social designs do in theory or lab or field tests. Even most social scientists don’t care much about design innovations outside their specialty areas.

Yes in the last decade or so there has been more enthusiasm for social innovations embodied in physical and software innovations, like smart phones or block chains. But this enthusiasm seems to be mainly an accidental side effect of tech enthusiasm. For example, while many are excited by Uber achieving new value in cheaper-if-nominally-illegal cab services, most of those gains could have come decades ago from just deregulating cabs, an option in which there was little interest. As another example, there is far more interest today in prediction markets build on block chains than in ordinary prediction markets, even though far more value could be achieved by the later.

I should admit that this all confirms Bryan Caplan’s claim that few people can generate much emotional enthusiasm for efficiency. Bryan says people are far more engaged by moral arguments. I’d say people are also far more engaged by following fashion and by us vs. them coalition politics. Most apparent interest in innovation in social designs can be attributed to these three sources; we explain little more by positing an additional direct interest in helping us all get more of what we want.

This seems mostly also true at the level of smaller organizations like firms. While people give lip service to increasing the efficiency or effectiveness of the organization as a whole, that in fact generates little passion. The passion we do see in the name of efficiency mostly advances particular factions and individual careers. Homo hypocritus is quite skilled at saying that he serves the great good, while actually serving far more personal ends.

Added 9a: Many of you seem to be stuck on the ideas that social innovations can’t be tested unless the entire world agrees to adopt them. Or an entire nation, or city. Yes, some innovations are like that. (There are also physical and software innovations like that.) But a great many social innovations can be tried out on very small scales, where regulations do not block them. And there is very little interest in pursuing these innovations.

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  • Philon

    Of course, people are interested in a method improving their own efficiency, where they can adopt the method at will and the benefits will flow mostly to them, but not very interested in methods of improving the efficiency of society as a whole, where they are powerless to get the method adopted and the benefits will flow mostly to other people.

    • http://overcomingbias.com RobinHanson

      Most non social techs also require coordination to use. So that isn’t the difference.

  • http://graehl.org/ Jonathan Graehl

    Devise a path for your social tech’s acceptance that doesn’t rely on everyone first agreeing to use it. *That* is why so much effort into better tech – because if it works it will sell. Even getting people to agree on a restructuring research program *whose recommendations will be followed at the end* would be a coup. Try it on a single corporation or municipality, crow about the results, others emulate? More than anything we’re facing countless real and fictional examples of failed utopia design. We see the authors of such ineffective (or worse, ignored) programs as shameful dabblers who’ve exposed their *lack* of influence by even engaging in the unpaid work of leading on spec.

    • http://overcomingbias.com RobinHanson

      Most social tech doesn’t require any more people to agree to it that other tech. The problem is to get that single small group to try it, even when it should increase their efficiency.

      • http://graehl.org/ Jonathan Graehl

        (probably rationalizing) I bet people hesitate to try/learn group skills that even if awesome aren’t likely to be established practice when they move to the next team. So look to sell new practices to people who believe they’re in it for life – cults / married people / tenured profs 🙂

      • IMASBA

        It’s not that simple: for a true experiment the cost of opting out should be high, ideally you’d have a second Earth so opting out becomes impossible. The American revolution had a high price for opting out: almost every commoner family was involved in the war effort and everyone (except for the richest) knew they couldn’t just come crawling back to their countries of origin if the revolution didn’t turn out well.

        Modern versions of such social experiments are quite different, apart from communism, that is, but that one’s not exactly helping your case.

        You can’t just try running a privatized city or a small libertopia or a small commune without significant distortion caused by the outside world, let alone running many such experiments to rule out fluke results. People know they could escape an oppressive regime in a privatized city, sick people in a commune know they won’t be refused by an outside world hospital, people who move to libertopia do so supported by resources they gathered in the outside world and in all of these cases you’ll attract participants who already have positive opinions of the ideas being tested, while it may very well require an atypical personality to have those positive opinions (meaning most children raised in those societies would come to hate it).

        This is where your argument, that technological innovations also make questionable assumptions and gloss over practical details, is truly misleading: the magnitudes are completely different. Technological innovations can be practically tested, get tested many times, get scrutinized by competitors who have something to gain by finding flaws in the innovation and the existence of competing technologies is a feature, not a bug since the technology doesn’t have to be adopted by everyone in order to be successful (unlike say a new voting system which would require everyone to adopt it as mandated by law).

        Finally you seem to be overestimating your knowledge of what really is “good for people”/”what they really want”. Economists are too hung up on averages, people don’t care about averages, except as something to be chauvinistic about when their tribe scores well on some average. People generally care about variance, and utility functions are very complicated, counter intuitive, poorly understood, and not consciously accessible by the person who has them. For example, has it ever occurred to economists that people also derive utility from a small sense of danger and randomness, both directly (they’d get bored in “utopia”) and indirectly (how will you prove yourself and/or define your individuality in a world without challenges?) Then there’s the issue of diversity: utopia needs to be utopia for a wide range of people, otherwise it won’t be utopia at all (popular visions of utopia are usually mostly utopia for non-STEM, physically attractive, high EQ individuals with perfect childhoods).

  • Eliezer Yudkowsky

    We still don’t have fricking land value taxes! Adam Smith understood land value taxes! How can you possibly be surprised by our not having anything else?

    • http://overcomingbias.com RobinHanson

      Land value taxes are an example of a social innovation that takes large scale coordination to achieve. But there are many other social innovations that don’t, needing only small groups to try them.

  • lump1

    I think the divided government of the United States of America was a genuine institutional innovation, put in place by enthusiastic fans of philosophy and classical literature, eager to optimize by society rational principles. But that was a long time ago. Those same bold people are now dubbed “the founding fathers”, and treated as though it’s become our sacred duty to simply obey their decrees instead of following their example.

    Maybe we’ve become so conservative about social innovation because we are simply too comfortable. We may think the status quo is broken, but not so broken that we’re willing to risk replacing it with something new. Also, many proposed innovations are dismissed with the following simple line: “Yeah, it’s a great idea, but good luck getting it passed!”

    I’m a progressive, but I notice this institutional conservatism even in myself. I often suspect that old institutions were likely to have been put in place by people genuinely interested in the public good, whereas new institutions are more likely to be designed by people who are largely indifferent to the public good. (Such people now have better access to executive power, and stronger incentives to use it for their private agenda.)

  • blogospheroid

    Prediction markets on blockchains are interesting precisely because real world prediction markets on centralized servers were driven out or deliberately crippled. Blockchains are designed to be more censorship resistant.

    In general, social innovations are not pursued because they are not profitable to the actors involved. The entire structural libertarianism movement and neo-reaction are precisely trying to attack these areas. Acceptance of for-profit cities by the global elite would be a bigger boost to economic growth than almost anything else imaginable, precisely because it would enable all these innovations you’re mentioning and more.

    • http://overcomingbias.com RobinHanson

      Prediction markets within firms are not driven out or crippled by law.

      • Dave Lindbergh

        Firms are not as “smart” as markets, in a certain sense.

        As you’ve often noted, decision making in firms is driven by a constellation of factors other than firm efficiency or success. Markets are smarter in that sense.

        Polities are even less “smart” in the same sense, because they’re monopolies and subject to barely any selection pressure at all (vs. firms).

      • IMASBA

        Progress in firms is also not strongly hereditary. Even if an improvement gets recognized as contributing to success it’s difficult to copy it accurately and even if that succeeds there’s a high probability it will be forgotten or distorted after a couple of generations.

      • http://www.truthcoin.info/ psztorc

        First, as the *inventor* (afaik) of blockchain prediction markets, that I agree with Dr. Hanson that they are wildly inferior to a US law saying “From now until 2050 (at least), prediction markets are legal and encouraged.” I would prefer the law.

        Second: I know that RH and I agree that an ideal use of PMs would be to clean out the “rot at the top” (bad CEOs of large corporations). I point out in my FAQ that one use of blockchain prediction markets would be a scenario where an undervalued star-employee, instead of being trampled by the corrupt CEO and his friends, anonymously creates an immortal, uncensorable market which gets his boss fired (and, eventually, himself hired) from the CEO job.

      • IMASBA

        A major social innovation would be the realization that there are no star-employees or star-CEOs in the real world (at least no one worth tens of millions of dollars per year). In the real world performance is very messy and random, this also makes it difficult to show that prediction markets contribute to a firm’s success (on theoretical grounds I think they would, on average, but it’s way too easy for snake oil salesman MBAs to convince people otherwise), especially when the executives oppose the idea since it challenges their authority.

        So even though prediction markets in firms don’t require new laws or the whole of society to participate (the usual inhibitors to social changes), adoption is very much an uphill battle.

      • http://www.truthcoin.info/ psztorc

        There certainly are star-employees. My guess is that you’ve never hired or managed anyone.

        IMHO, the rest of your post stems from your bias against rich CEOs/MBAs, specifically http://www.overcomingbias.com/2013/08/inequality-is-about-grabbing.html , because your rambling post agrees with what I said (CEOs don’t want the PM) but doesn’t introduce a single new thought ( other than “messy performance” -> “hard to show that PMs help”, which is irrelevant because people would only avoid something if E(Benefits) E(C) ).

      • IMASBA

        “There certainly are star-employees. My guess is that you’ve never hired or managed anyone.

        IMHO, the rest of your post stems from your bias against rich CEOs/MBAs”

        There is a lot of research supporting my point of view. Even in mainstream economics you have ideas like tournament theory and the empirical conclusion that American CEOs make much more than their European and Asian counterparts. Like I’ve said so many times it’s also just a matter of common sense: the IQs and of these people would have to be unfeasibly high and their kind unfeasibly rare (as in it would take years to find a replacement, probably from the other side of the planet) for them to be worth what they’re getting paid. And just consider how a firm probably won’t go bankrupt when you let the vice president-level people run the firm for a while.

        “which is irrelevant because people would only avoid something if E(Benefits) E(C) )”

        It is very difficult to show that E(B) > E(C) because it is very hard to carry out controlled experiments in a real business environment (there’s always a million factors influencing the bottom line, and there are only small numbers of samples and you cannot control them for uniformity, so even when everyone is being honest and selfless it’s very hard to tie performance to any one factor) therefore only a little nudge by opponents is required to convince a lot of people that E(B) < (EC). You can see this in other things as well, such as management-style fads and consulting.

  • Vitalik Buterin

    I’ve thought about this a lot; social technology is definitely lacking. I think that we can get a lot of the answer by adapting and extending Peter Thiel’s argument: Twitter et al have come so far and biomedical tech has come so slow because software is nearly unregulated and everything else is quite regulated. But I think Peter focuses too much on the regulation side: it’s not so much regulation as it is barriers to entry in general. With software, any kid can build a new software platform and deploy it in five clicks. I think the value of blockchain tech is precisely that it brings the innovate-in-five-clicks friendliness of tech to the world of social innovations. In just a few hours of coding, you can deploy a new institution with new rules, and if you get people to start using it you can see how it works.

    The other factor is the thinking about markets as econo-informational institutions in the way that we do is not something that seems popular in the world; most people, both on the left and right, think that “pro-market” means “just leave us business folks alone”, when in reality the most interesting research that has been done over the last ten years by you and others is specifically in the area of making market institutions that are more activist and decidedly not simply neutral conduits of activity, instead having policy preferences baked in. Examples include: combinatorial prediction markets, front-runner-proof exchanges, combinatorial auctions, self-declared property tax as an eminent-domain substitute, etc.

    I think that the solution will likely involve moving the whole field from the political realm (convince existing big groups to go along with it) to the market realm (try it out, see if/where it works). But then if we go along that path, we need a minimal viable product, and it’s not going to be a city or government in meatspace. Something like an anarchist commune, a virtual world, online virtual property (eg. ad space on some website) or some completely new territory (eg. microtransactions). Institutions in categories of property that are already established (eg. copyright/patents) tend to have high network effects, so innovation is hard, but for that same reason going into completely new worlds is easier. My personal work, for example, is in trying to use market institution theory to devise better and vastly cheaper blockchain consensus algorithms.

    • http://overcomingbias.com RobinHanson

      I agree that some social innovations are blocked by innovation, but there are plenty of others that are not, and are instead blocked by mere disinterest. For example, prediction markets are legal within firms, and that is also where most of the value they can produce lies. Combinatorial auctions are also pretty legal.

      • Vitalik Buterin

        “Disinterest” -> “conservatism”

        (which may have many causes, ranging from psychological biases to executives being comfortable where they are and not wanting to take risks)

        Hence why I think these tools need to be tested out in new domains.

      • http://overcomingbias.com RobinHanson

        I agree there is conservatism in the world, but that should apply equally to physical, software, and social innovations. So it doesn’t explain our different treatment of them.

      • Vitalik Buterin

        My model says otherwise: social innovations are harder to adopt because it’s harder to find MVPs for them that can easily be adopted in new markets that are not yet ossified. Software/tech adoption theory generally has concepts of very early adopters, early adopters, etc, and a concept of startups, and neither of those have very compelling analogues in social systems and politics.

        Also, perhaps we should spend more time looking at social innovations that actually have succeeded. The one that I know of is agile development methodologies. And in that case, agile development became really popular in the context of the software industry, which suddenly appeared out of nowhere in the 1990s and created a completely new domain.

      • http://juridicalcoherence.blogspot.com/ Stephen Diamond

        Software/tech adoption theory generally has concepts of very early adopters, early adopters, etc, and a concept of startups, and neither of those have very compelling analogues in social systems and politics.

        Social movements show a similar progression. There are folks who like to be in the vanguard, those who try to be useful and commit when they might make a difference, and those who feel constrained to do their share. (Jon Elster is responsible for this analysis.)

      • Vitalik Buterin

        Social movements have _early advocates_, not _early adopters_. That’s the fundamental difference that I am getting at.

        Now for the kinds of “social movements” that actually _have_ early adopters (eg. ethical consumerism, health consciousness, self-tracking, personal development), they actually do quite well.

      • IMASBA

        Yes, “social movements” such as the ones you list are far more easily adopted because they do not require all of society to join in at once, that’s quite different from, say a new electoral system.

      • http://overcomingbias.com RobinHanson

        The lack of early social mechanism adopters is the puzzle to be explained. Agile development is a combo of social/tech innovation, and such combos do seem to generate more interest and effort. The question is why.

  • whatever

    From where I’m sitting there seems to be less interest in hardware than in software, less still in medical innovation than in hardware innovation, and even less in better political/social devices than in medical ones.

    The interest decreases with increased required effort to get the first working prototype and regulation to deal with.

  • zarzuelazen

    Social innovations are much harder to implement than tech ones, requiring group coordination , so of course people are not too enthusiastic about it. Organizations quickly get entrenched into fixed ways of doing things and its very difficult to change them unless you are able to exert influence right at the beginning.

    It’s time to get off-world and start new colonies on Mars. There is no shortage of volunteers and there *is* great enthusiasm for experimenting with social innovations on Mars, precisely because the colonists know they can exert a big influence at the point that the colonies are first founded:

    https://www.youtube.com/watch?v=xxS7dCMBvSI

    In future decades, Mars can be a great testing ground for social innovations , because stupid people can be kept out 😉 Irrationality of any kind can be banned. Eventually colonists on Mars (perhaps aided by powerful super-intelligences) can declare unilateral independence and block any attempt from Earth to interfere – only people agreeing to rationalistic social contracts with Martians will be allowed to emigrate to Mars.

    Land value taxes, universal basic income and prediction markets can all be implemented very quickly and efficiently in Martian colonies. People who break the social contract can be kicked out and deported back to Earth. Added bonus: no bureaucrats, lawyers, journalists or religious nuts allowed!

  • John Ohno

    A new software or hardware pattern (or piece of machinery, or industrial process) can be designed and implemented by one person (or under the command of one person) at some arbitrarily smaller scale. Social changes, even at the smallest scale of testing, require the agreement and active engagement of many people.

    • http://overcomingbias.com RobinHanson

      Most actual physical and social innovations have involved the agreement and engagement of a great many people.

      • John Ohno

        However, they do not require the agreement and engagement of many people at a proof of concept stage.

        Anyone who expects empirical evidence before supporting a large-scale social reform will not be on-board with joining said large-scale social reform before that evidence is in, by definition. If the norm is that empirical evidence is expected, then that empirical evidence can never be gathered. (In order to test large-scale social reforms, we need to rely either upon simulations or upon large groups of objectively foolish people willing to thrust themselves into unproven social structures — the kinds of people who put their life savings into utopian experimental communes.)

        Machinery, on the other hand, only requires one guy to waste time and money to create a prototype, which other people can interact with in order to determine whether it’s likely enough to be successful to be worth reproducing, scaling up, or even studying further.

        Medicine is really a better comparison for social change than CS or engineering is. Novel social systems are like novel medical procedures — in order to be proven beneficial, we must test them at a large scale under fairly rigorous conditions; however, when they fail at large scale, people die. So, unless we are ethically alright with subjecting people to untested and potentially fatal procedures against their will, we must rely upon informed consent (i.e., upon volunteers). But, the scale required for interesting social epiphenomena to show up can be much larger than the scale required for adequate medical testing. (It’s also notable that the social stigma is comparable, although different in flavor — people who go off to join communes are considered cultists; people who submit themselves to medical experiments for money are merely considered desperate losers.)

      • http://overcomingbias.com RobinHanson

        Most innovations involved many people at proof of concept stages.

      • John Ohno

        Enumerate them.

        And, by many, do you mean in excess of ten thousand? Because, that’s what I’m talking about.

      • Charlene Cobleigh Soreff

        If you want to claim that _deployment_ of physical innovations requires many people, I’ll agree. Proof of concept very frequently involves a handful of people, frequently just a single person (albeit embedded in a technological society). The fast fourier transform did not require even a whole department to change its practices in order to prove the concept.

  • irickt

    Social innovations in the past have grown from natural social relations and thus only run well on that legacy platform. Extensions to that platform have depended on greater and lesser forms of coercion – blunt tools incompatible with fine solutions.

    Software innovations are an emerging subset of social innovations. Both are specializations of language to solve group problems. When software fails it is for the same reasons that social innovations fail – lack of individual benefits, network effects, and/or coercion. Social innovations will succeed when they pass these tests and are implemented with software, because software *is* the refinement of language we use for fine social cohesion.

  • Quixote

    I am suprised by how well you are able to apply cynicism to some causes while forgetting to apply it in other cases.

    Decision makers aren’t about making good decisions. They are about enriching themselves at the publics expense. Better decisions or more efficient processes are not just not exciting, they are actively harmful to those with wealth / power that benefit from the status quo. So of course they won’t get attention.

    • http://overcomingbias.com RobinHanson

      Cynicism isn’t obviously enough to explain a difference in interest between these subjects.

  • Dave Lindbergh

    Robin, I think your answer may lie in the realm of psychology.

    Somehow (and this of course subjective) changes in the architecture of social mechanisms feels transgressive in a way that changes to parameters of existing mechanisms does not.

    For example, eliminating or replacing the minimum wage with something else feels transgressive compared to simply changing its value, and switching from an income tax to taxation based on something else feels psychologically different vs. just changing income tax rates, or how they’re computed.

    I’m not sure why this is, but perhaps it’s related to the taboo on human experimentation – somehow changing social architecture feels like experimenting on people, while tweaking parameters does not.

    Jonathan Haidt, a social psychologist at NYU, has done a lot of work on this stuff (you and he ought to talk – you’d learn a lot from each other). You’ve probably heard of his ideas about “moral foundations” – one that he doesn’t talk about a lot (but was looking into last I heard) is a “Waste/Efficiency” foundation.

    He thinks only a minority of people use this one (I’m obviously one of the minority).

    • http://overcomingbias.com RobinHanson

      A taboo effect is possible, though I’m not sure I see it beyond mere disinterest.

  • http://marnietunay2.wordpress.com/ Marnie Tunay

    “he world shows far less interest in better designs for institutions and social mechanisms” And this surprises you? It’s easy to see a tangible benefit from mechanical designs. But the world is old and tired and has lived through too many promises of the ‘coming social good’ that turned out to be false.

  • http://juridicalcoherence.blogspot.com/ Stephen Diamond

    Feasible (and desirable) social changes are far more limited by norms than is progress in technology. The reason we have so many norms restricting societal changes, but not technical changes, is that social arrangements rest on innumerable compromises, made possible by the existence of semi-natural bright lines (Schelling points).

    To explain the reluctance of firms to adopt prediction markets, I would first look to the norms in orgs. Perhaps, despite the advantages prediction markets afford, they would tend to undermine some important bright-line norm that’s more important than the enhancements in prediction. Without having any expertise concerning orgs, my first thought is that there may be a bright-line rule against privately profiting from information obtained in the course of one’s employment: prediction markets appeal to just that appetite.

  • Forrest

    Perhaps the issue is that it’s easier for the creators of devices and algorithms to capture the value of their creations. This means that it’s easier to raise capital for such endeavors, and more status accrues to their creators.

  • pgbh

    Suppose you’re right that people don’t care much about the efficiency effects of social institutions, and just base their support on a desire to send certain signals.

    In that case, why would there be lots of interest in the efficiency benefits of tech and design systems?

    It seems like if people don’t care much about efficiency, you would see low interest in all areas. Seeing less interest in just one area makes it seem more like people do care, but don’t believe or understand that area could be important.

    • http://overcomingbias.com RobinHanson

      Yes, there is a puzzle of the differing treatment, which needs an explanation based on some difference between these areas.

  • Rafal Smigrodzki

    Many of us here belong to a fraction of the population who are fascinated by mechanisms in general – be it clockwork, cell nuclei or control mechanisms in a society. We are different from others. How many people are appalled when they see an intersection with traffic lights instead of a traffic circle? How many people think signing up for cryonics is a no-brainer?

    I feel we think about social rules using the same general routines and attitudes we would use to think about the traveling salesman or the geometry of cooling fins in a nuclear reactor. Our interest is triggered by the structure of the problem and its applications and no special mental hardware is invoked. Updating on social beliefs is almost as easy as updating on new Google Maps data.

    I would hypothesize that many people have much stronger specialized social interaction modules, constrained by historical evolutionary pressures. Whenever thinking about social innovations, they can hardly help asking “Who? Whom?” – they are distracted from the general, intellectual level towards the particular, gut-instinct level. They can’t detach themselves from their tribe to soar into Platonic realms, where philosopher-kings abide.

    This property of popular psychology may explain why many people enjoy new mechanical gizmos but are indifferent to, or even repulsed by, social thought experiments. This is why the amount of attention devoted to social interactions is staggeringly large but almost all of it is channeled towards the well-worn pathways of seeking dominance, protection, forming alliances – all the stuff people are instinctively wired to do. Hard-wired analytics mean lack of interest in innovation.

  • Shenpen

    One of the biggest easy social changes would be an upper house that is selected randomly by a lot, sortition, not election. I.e. a Senate or Lords with veto power, selected randomly from the population.

    Currently our democratic societies are based on the idea that people who get elected are one way or another better than others, people choose the best people are their representatives. It seems more and more so, that they are worse than others, pathological liars, psychopaths, spineless greedy men and reckless powermongers.

    But the lower house we still need to elect, because J. Random Greengrocer does not have the expertise to write laws. But he can simply reject laws with veto power as a member of the upper house, he does not need much expertise for that because he is representing the customers. The lower house, the elected slimeballs are the politics suppliers, the people are customers of politics, who can also reject laws and suchlike with plebiscites and referendums and ballots, and a randomly selected upper house with veto power is a representative sample of customers, a cheap and fast mini-referendum or mini-plebiscite or mini-ballot.

    • IMASBA

      You need a pretty big upper house (>1000 people) to get a representative sample of the population most of the time and I’m not sure what you want to do with people who get selected but aren’t interested in the job.

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  • Cambias

    I expect the main problem to any reform in the name of “efficiency” is that the same claims would be made by people making changes purely to alter the rules to their own benefit. And there’s no good way to tell the first group from the second.

    • IMASBA

      It gets even worse: what is an increase in efficiency to one man may be a loss to another (ex: it’s great that you want to increase GDP faster but if it means “I” get pushed down to subsistence level, why would I help you?)

  • ipencil

    I just heard a nice talk on better political institutions to promote urban density

    I largely disagree with your assessment. I think there is enormous interest in setting up social institutions to get what people think are ‘better’. Therein lies the problem; define ‘better’. The quote above largely cuts to the core of why there is so little agreement. WHY is increased urban density a good thing? I don’t want to live in an urban center, nor do most Americans, as recent internal migration trends shows a strong preference to suburbs and exurbs. I, also, don’t want politicians and bureaucrats to have the power to “promote” urban density.

    Your complaints about efficiency are similar. People don’t get worked up about efficiency the way you would expect because other people simply don’t value efficiency the way you do. If you think others should value efficiency more and excited about it, fine, come up with peruasive arguments as to why that may be true. However, using your preference as a pretext for social engineering is to which something I am very unsympathetic.

    • IMASBA

      Good post, what you describe is a major part of the problem.

    • Dave Lindbergh

      Re that (and also pgbh’s comment), when I discuss ideas re improving social institutions, I sometimes hear:

      “Oh, you’re a typical [insert sometimes-justified epithet here], always so concerned about efficiency! Well there are other things in life a lot more important than efficiency!”

      My reply is that whatever those other things might be, surely they are easier to achieve if we don’t needlessly waste resources and effort.

      But that usually doesn’t go over well.

      A large number of people simply don’t think efficiency is important. It seems irrational to me, but I’m obviously in the minority.

      • IMASBA

        “My reply is that whatever those other things might be, surely they are easier to achieve if we don’t needlessly waste resources and effort.”

        All else being equal, then yes. Unfortunately proposals to increase efficiency tend to also, conveniently, result in the gains of the efficiency increase to end up in the hands of certain small group of people, people who tend to need it the least… Increasing urban density is great when you live in a mansion outside the city or in a penthouse far above it, for everyone else the gains might not be worth the losses.

      • ipencil

        I question whether people really don’t think efficiency is important. I think that most people don’t even know what the word means. It’s obvious how important and valuable efficiency is to those who actually know the definition. But the reality is that the economics profession has failed miserably to provide widespread economic understanding of even the basics, including what that term actually means in people’s day to day lives.

        I think mostly the problem is that people think efficiency means higher profits for the haves and more exploitation of the have nots. This is a devastating failure of basic economic education. I no longer fight this battle, as pretty much no one I’ve ever tried to educate on what economic efficiency actually is believes me. I have only so much patience, but I don’t fault the people with whom I speak. I blame educators, i.e., economists. Economists by and large are terrible at explaning things to the lay person. And due to people like Gruber and Krugman, who obviously trade on their reputation for personal benefit, economists are largely viewed suspiciously.

      • http://juridicalcoherence.blogspot.com/ Stephen Diamond

        I think mostly the problem is that people think efficiency means higher profits for the haves and more exploitation of the have nots.

        You’re equivocating on “means.” It is consistent to accept that (as IMBASA puts it) that efficiency is virtuous all things being equal while also believing that increasing efficiency in practical
        contexts promotes greater exploitation.

      • ipencil

        I’m not equivocating on anything, much less on what “means” means. I’m simply telling you what I think most people hear when you talk about efficiency and why it leaves people so cold. If you think that I claimed that that is the actual definition of efficiency, then you are mistaken and you should read more closely.

      • http://juridicalcoherence.blogspot.com/ Stephen Diamond

        I don’t think the masses believe that the definition of efficiency is increased exploitation. My apologies if you didn’t arrive at the opposite conclusion by equivocating on “meaning” when applying the term to your interlocutors, but I can’t imagine what evidence would cause you to impute mass linguistic confusion about a concept that is not itself highly technical. [Perhaps you could supply an example that cogently shows that one of your interlocutors thinks efficiency is linked to exploitation by definition rather than contingently.]

      • ipencil

        An example of the confusion about efficiency is the refrain “people over profits”; a quick google search can show you just how prevalent that refrain is. The implication of the phrase being the increased profits are gotten at the expense of people, i.e., exploitation. One of the best ways to increase profits is to become more efficient. That this phrase has such resonance with people implies the deep misunderstanding that people have about efficiency.

      • IMASBA

        Sure, such misunderstandings are widespread but I think you’re blaming economists the wrong way here. Economists in the past have shown a tendency to think in averages without much regard for the individual or collatoral damage. Economic theory can deal with those subjects just fine but too many economists simply can’t be bothered, it seems.

      • http://juridicalcoherence.blogspot.com/ Stephen Diamond

        Economists in the past have shown a tendency to think in averages without much regard for the individual or collatoral damage.

        Is this criticism equivalent to saying that economic models fail to appreciate loss aversion (or perhaps treat it as a bias rather than a fundament of human motivation)?

      • IMASBA

        I meant it more in a “privatized profits, socialized losses” context, plus the whole averages vs. variances thing. It’s when economists bluntly deny safety nets (or alternatively a basic income) are necessary, because society is doing well on average, that I wonder how they ever passed their basic statistics class.

        But yes, loss aversion ties into it as well and is indeed wrongly treated as some irrational bias (it would be irrational in a commune where everyone shares losses and profits, so a more efficient system means progress for everyone, but that’s not the real world).

      • http://juridicalcoherence.blogspot.com/ Stephen Diamond

        One of the best ways to increase profits is to become more efficient.

        I’m not entirely sure what you mean by “best,” but I think you mean that most increase in profitability comes from increase in efficiency.

        But that generalization says nothing about the value of efficiency in the current context. You didn’t hear “production for use rather than profit” in the U.S. in the 1950s, except from a few socialists. That’s because increases in efficiency in fact did result in improved mass welfare, which it hasn’t in recent times.

        It is far more plausible, isn’t it, that people have observed that during the past several decades there have been massive increases in efficiency that have brought profits but a declining relative welfare and stagnating absolute welfare for the average person (at least in America)?

      • ipencil

        That’s because increases in efficiency in fact did result in improved mass welfare, which it hasn’t in recent times.

        This is very false. Mass welfare in the US is dramatically improved in the past few decades, yet is discounted because of some misleading statistics (like the median income), as well as the standard psychology of the hedonic treadmill.

        A quick way to see just how much better off we are today than just a couple decades ago is to pick up a catalog from you whatever year you’d like to compare and see what’s available. The first thin you’ll note is the markedly lower quality in products from that earlier time; keep in mind quality is a difficult metric to capture, but is an indicator of improved mass welfare. For example, inflation adjust prices for cars is roughly the same as it was a couple decades ago; however, today’s cars are vastly improved. Cars last roughly twice as long, meaning that in a very real sense the cost of cars actually halved.

        Another way to see just how much mass welfare has improved is to compute the number of hours a typical person would have had to have worked to buy a comparable item. You’ll see that item after item has a reduced real cost. Another way to see our improved mass welfare is to look at healthcare outcomes. In the 1970’s, healthcare outcomes in the US were worse than they are today in third world countries.

        Many economists have documented the obvious improvements in mass welfare that people weirdly ignore or simply take for granted. To see Don Bordreaux’s take, you can google for “cafe hayek sears catalog” to see a number of posts detailing what I’ve described above. You can go here or here to see Mark Perry’s take. To see Stephen Landsburg’s take you can google for “the big questions progress”.

      • http://juridicalcoherence.blogspot.com/ Stephen Diamond

        This is well-trodden ground, and highly controversial among economists, for one thing because economists don’t have an integral concept of cardinal utility. The facts are uneven. Yes, every pauper can afford a smartphone (fwiw, I don’t even want one–ever); but even lower-middle class folks may be unable to afford basics like medical care and babysitting. Unlike before,bBoth marital partners must work. Etc.

        In any event, this all seems distant from anyone not having a concept of efficiency.

        [If people truly don’t get efficiency, my understanding is that economics would not be the right discipline to fill the breach, as it more assumes than posits a standard of efficiency. I don’t think there’s any consistent definition of efficiency in economics; that’s because “efficient” is grounded in producing more total utility, a concept most economists have abjured.]

      • ipencil

        but even lower-middle class folks may be unable to afford basics like medical care, babysitting, and nutritious food

        Incorrect. The part about medical care is simply a moving goal post. Calling something “basic” when that something didn’t exist a few decades ago is quite frankly ridiculous. The term “basic” has been defined up, moving the definition to a relative definition as we’ve gotten ever wealthier, since an objective standard of basic has been met for many decades.

        Babysitting is more affordable today than a few decades ago, as well, as is nutritious food; the cost of food as a percent of income is at an all time low. Pretty much all food studies show that nutritiuos food is as affordable as junk food. The people labelled “lower-middle class” prefer less nutritious junk food, putting the myth of the food desert to rest many times over. Experiments have been done in numerous cities in the so-called food deserts by filling the shelves with comparably (to junk food) priced nutritious food. Turns out grocery stores knew their customers and stocked the items their customers demanded, as that nutritious food didn’t sell very well comparatively speaking.

        economics would not be the right discipline to fill the breach

        Maybe.

        as it more assumes than posits a standard of efficiency

        WHY do economists make this assumption standard? They have good reason to make this assumption. They have failed to provide that reason the general public.

        I don’t think there’s any consistent definition of efficiency in economics

        It’s not. There are at least two different definitions that are explicitly given: Pareto efficiency and productive efficiency. When talking with others though, I give the less rigorous definition of improved efficiency as the ability to make more stuff with the same inputs. I leave “stuff” and “inputs” undefined, but many generally get the point.

      • http://juridicalcoherence.blogspot.com/ Stephen Diamond

        The term “basic” has been defined up, moving the definition to a relative definition as we’ve gotten ever wealthier, since an objective standard of basic has been met for many decades.

        If you have the misfortune of contracting a dread disease, sure, you’re better off today, even if you’re poor. But that doesn’t mean mass medical care hasn’t deteriorated in many respects. Doctors’ strings today are pulled by the insurers and increasingly privatized hospitals. If you’re poor and have MediCaid, you may not be able to find a physician who will treat you for nonemergent issues. If you would benefit from an appointment with a doctor and can find one, you will in many places have to wait hours in the waiting room before even getting in to see the Medi-Caid-accepting physician. In many cases, after waiting hours, these patients get to see only a Nurse Practitioner or Physician’s Assistant, given minimal supervision by an M.D. Who will have even the energy to seek adequate medical care under such conditions?

        I’ll confine myself to medicine because I think the issues are analogous regarding food, etc.

      • IMASBA

        I’d say it’s likely that even if you were to limit medical care to what was available in 1980 it would take more purchasing powe (hours you have to work for it) then it did then. The same goes for energy, transportation, rent/housing and most strikingly tertiary education. These things more than offset cheaper electronics and pink slime burgers. Even in fast growing developing countries real wages for most people rise more slowly than overall economic growth. More wealth is certainly being created but a majority ends up with the richest 5% and there are no wealth resets in sight. Right now efficiency increases are not serving the people optimally.

      • ipencil

        If you have the misfortune of contracting a dread disease, sure, you’re better off today, even if you’re poor. But that doesn’t mean mass medical care hasn’t deteriorated in many respects.

        These two sentences contradict each other.

        If you would benefit from an appointment with a doctor and can find one, you will in many places have to wait hours in the waiting room before even getting in to see the Medi-Caid-accepting physician.

        As opposed to not seeing one at all because you can’t afford it. It’s clearly better to wait hours to see a physician, rather than not be able to see one at all.

        In many cases, after waiting hours, these patients get to see only a Nurse Practitioner or Physician’s Assistant, given minimal supervision by an M.D.

        This is also contradicts your seeming belief that “medical care [has] deteriorated”. Doctors are the most highly skilled and highly specialized workers in the medical field. To have them working on routine medical issues is as stupid as requiring a person to have a PhD in mechanical engineering to change brake pads on a car. The real down side to this type of thinking is just think how fewer people could have their brakes changed. While it’s true, a PhD may do a higher quality job, thereby increasing the quality of the average brake job performed, there is a sharp drop off in the average quality of the average brake job demanded because the number of brake jobs that actually get performed divided by the number of brake jobs demanded goes down markedly.

        To have non-doctors perform more and more medical services is good reaction to medical services. Nearly all medical services are routine that can be competently handled by people with only certificates. To require doctors to perform these tasks is a gross misallocation of resources. While the average quality of these procedures may go up, the average quality of these procedures demanded goes way down, since the number of procedures that actually get performed drops dramatically.

        Who will have even the energy to seek adequate medical care under such conditions?

        If, as you imply, millions go through this every year, you answer your own question: at least millions will have the energy to seek adequate medical care under these circumstances. Circumstances, which may be dire compared your imagined utopia, are in fact dramatic improvements to what they used to be.

      • Dave Lindbergh

        The idea that people don’t understand what “efficiency” means is interesting.

        People don’t seem to have that trouble when talking about, say, energy efficiency or gas mileage.

        Yet some of the comments in this very thread (for example IMBASA’s “it’s great that you want to increase GDP faster but if it means “I” get pushed down to subsistence level, why would I help you?”) do seem to indicate that people think “efficiency” means something different from what you and I mean by that word.

        Do you think “reducing waste” is a more understandable formulation than “efficiency”?

        Do you have any hypothesis re why people interpret “efficiency” in this way?

      • ipencil

        I have hypotheses, but they are untested and little more than WAGs. On the “reducing waste” question, I think people view it as coldly as “efficiency”, as it’s likely associated with lay-offs. The question “What’s in it for me?” is a valid and serious question, though, that should be taken seriously and patiently answered, as there IS an answer to that question.

      • Dave Lindbergh

        I think I get it now. People interpret “efficiency” as “I will pay YOU less, so there will be more for ME.” (_You_ are the waste that will be eliminated.)

        Which of course is not what is meant at all, but, that interpretation explains responses like IMBASA’s.

      • IMASBA

        A lot of people do interpret it like that but that was not what I meant. Increased efficiency doesn’t automatically reach everyone, you need affordable (re)education schemes for that, as well as an unemployment safety netfor it to reach the general population. Also remember how we once thought that cell phones would give us extra leisure time? You have to take into account collatoral damage, the existing inequalities and diversity as well game theory and the motives of the elites who propose new plans.

      • Dave Lindbergh

        Increased efficiency in agricultural production resulted > 95% of the population switching out of agriculture.

        Yet I think it’s hard to argue that the descendants of those subsistence farmers aren’t far better off today as a result.

        So I’d argue that increased efficiency does reach everyone, at least after some adjustment time.

        Without “affordable (re)education schemes for that, as well as an unemployment safety net”. (Not saying I’m against those things, just that they don’t make a difference in the long run.)

      • Charlene Cobleigh Soreff

        Hmm – if we take either a longer timescale, and compare hunter-gatherers with people today, or a shorter timescale, and note that the median real wage in the US peaked somewhere around the late 1990s, it is far less clear that increased efficiency really winds up benefiting everyone.

        In any event, setting that aside, it is still an interesting question as to why _investors_ concentrate more on physical or software innovations than on social ones. Take it as read that an innovation is going to shaft the median US worker: There is still a distinction between an innovation that makes bandwidth to low wage nations cheaper, and has the effect of offshoring jobs, and an innovation that clones an existing firm, but replaces committee decisions with internal prediction markets. The former has gotten funded, and has happened, the latter hasn’t – and why this is is an interesting question.

      • IMASBA

        The 19th century was a horrible period for a lot of people and it did take laws and social programs (even things as basic as elementary schools were not standard fare before) to make it all a bit less horrible. There have also been several wealth “resets” (most notably two world wars).

        In the future we will see even more rapid technological progress and a large portion of the population will face an extended period of unemployment at least once in their life, often far removed from relatives (and many will have few or no relatives because of small family sizes) just how long that period will last depends on what kinds of affordable options for education are available. “Rugged individuals” who don’t want to do everything themselves will be working quasi-sweatjob jobs or sleeping on park benches.

      • IMASBA

        *Rugged individuals who want to do everything themselves.

      • Dave Lindbergh

        Horrible compared to todays’ standards, yes.

        Horrible compared to what came before? No.

      • Charlene Cobleigh Soreff

        >Horrible compared to what came before? No

        If that comment was intended to apply to the 19th century, then it is wrong. If you look at e.g. height as a surrogate measure of general health, it hit a minimum in the 17th and 18th centuries, a loss not recovered till the 20th. http://researchnews.osu.edu/archive/medimen.htm

      • IMASBA

        Exactly! Also the standard should not be set by what came before but by what would have been possible at the time itself. There didn’t have to be poorhouses, there didn’t have to be slaves, there didn’t have to be 7 year old kids working the mines and the factories, there didn’t have to be a ban on condoms, there didn’t have to be a ban on married women working (which would have taken some pressure off of the laborers) and there didn’t have to be an idle aristocracy/gilded elite, but all those things existed and they only went away because of laws and transfers of resources through taxes. The efficiency in agriculture itself was not a bad thing, the way the elite responded to it was bad, and on that front things haven’t changed that much.

        So here’s a partial answer to Robin’s question: don’t treat questions of collateral damage as an afterthought, meet them head on and include solutions to them in your reform proposals, and then just maybe you can start to reverse public perception about social innovation pushed by elites. But don’t expect centuries of bad experiences to just be forgotten overnight. The Chinese government seems to have learned this lesson and it’s working for them (every time public anger about where the spoils of progress go rises too high, they let go of some repression and expand social security and medical and education services).

      • Dave Lindbergh

        If we accept those numbers, then the “horrible” 19th century was an improvement on the previous 200 years.

      • IMASBA

        It mostly kept declining for the first half of the 19th century (in industrialized Europe), especially in the cities, and far more people were living in the cities than before. There is a marked improvement in height in the second half of the 19th century and life expectancy at birth shot up in the early 19th century (people who would be middle-aged or older in the second half of the 19th century).

        Guess when most of the progressive reforms took place…

      • http://juridicalcoherence.blogspot.com/ Stephen Diamond

        Yet I think it’s hard to argue that the descendants of those subsistence farmers aren’t far better off today as a result.

        So I’d argue that increased efficiency does reach everyone, at least after some adjustment time.

        The comparison is misleading, deriving from a standard based only on dream time. Through most history, folks lived at the border of subsistence, increased efficiency notwithstanding. For Malthusian reasons (argues Professor Hanson), we are destined to return to conditions where we’re at the edge of subsistence. Increased efficiency, therefore, is not predicted to result from increased efficiency. If there’s a case to be made for efficiency furthering welfare, it would have to be made in a specific context (dream time).

  • Sieben

    I always thought that the best way to organize voting would be to randomly draft like, 50 people, assume that on average they’re representative, and pay them to study the election issues for a month or two.

    There isn’t even anything undemocratic about this since everyone has an equal chance to be drafted. But old people do like to vote….

    • Omegaile

      Is there a name for this idea? I ask because I had the same thought. Although I believe 50 is too little, 1000 gives a more reasonable standard deviation.

    • Peter

      I’ve thought about this. One big problem is that while you can’t buy off a million voters, you can buy off 50 voters. So you’d need to basically move these people into isolation for a few weeks. Expensive, but certainly cheaper Han actual elections.

      Also, its probably unconstitutional, the “one man one vote” rule would be very difficult to overrule.

      • Sieben

        I would think 50 voters would be harder to buy off. If big pharma came and offered Joe Bob $10,000,000 to vote a certain way, everyone would hear about it. Everyone would be pissed. There would be nonstop clamoring for X Y and Z to all be done. One way or another, things wouldn’t work out for big pharma. So big pharma wouldn’t do this in the first place.

      • IMASBA

        Smaller parliaments lower the price of bribery. Yes, in a 50-person parliament an MP COULD ask for outrageously high bribes because he holds so much power but that’s not what happens in reality. MPs simply accept bribes that represent large amounts to them personally (if your MPs aren’t multimillionaires, and they’re not likely to when they’re randomly selected, they may settle for bribes of hundreds of thousands or even just tens of thousands of dollars/euros). Still that shouldn’t be a problem since you’d need a parliament of >1000 people to get a good random sample anyway.

      • Sieben

        If the electorate were 70/30 on an issue, you wouldn’t need 1000 voters to get it “right” reliably.

        If the electorate is 49.999/50.00001 though, you might need hundreds of thousands of voters. But at this point, I kind of throw my hands up and say who the f*ck cares. The marginal EV (practical or philosophical) of getting the vote “right” is basically nil and not enough to outweigh the superiority of a concentrated electorate over a dispersed one.

      • IMASBA

        Opinion polls that try to ascertain if the electorate is x/100-x on an issue use at least 1000 participants. A more common divide would be 55/45 and there a sample of 50 people would certainly not be considered statistically significant. But really, a parliament of 1000 people isn’t really problematic: the US has ~435 people in its lower house, India has ~550. For the US with a 1000 person lower house, per-capita representation would still be lower than that of many mid-sized countries.

  • Memento Mori

    You’re forgetting your history a bit here. Social engineering has been in vogue for quite a long time, so it’s hardly surprising most of us regular folks are getting a bit sick of it now.

    Walt Disney and others planned out cities built to maximize efficiency and inoffensive pleasantness. Today’s Housing Projects are slums but the original intent was very similar: getting ghetto residents out of tenements and into ‘modern’ collective housing to mold them into model citizens. Even now you can’t swing a dead cat without hitting some hipster advocating their own urban planning scheme.

    The modern left’s push of PC is explicitly social engineering to eliminate various ‘social constructs’ which stand in the way of a maximally diverse (read: fungible) populace. And of course it’s ancestor in the form of puritanical censorship to improve public morals was being experimented with since before the Mayflower set sail. Both have been touted as increasing efficiency.

    And all of that is ignoring the elephant in the room that is the Paris Commune and it’s titular economic movement. Communes established as social experiments had been a thing for quite a while, and some like the kibbutzim seem to have turned out quite well, but when it goes wrong it does so spectacularly.

  • Grant

    I certainly cannot disagree with this post, but are you understating the legal barriers to many social innovations? I believe people are interested in block chain prediction markets because they see them as more able to dodge anti-gambling laws than traditional prediction markets. Before Amazon Payments existed I attempted to start a crowdfunding service focusing on non-rivalrous goods. After speak with a few banks and payment processors, I came to the conclusion it was impossible without an army of lawyers.

    I believe there are cultural barriers as well. Before PCs, many people didn’t understand what use people would have for computers in their homes. Similarly, most people today never even consider betting as a way to aggregate information, or pledges as a way to voluntarily fund public goods. Perhaps these attitudes won’t change as our attitudes towards computers have, but with the right “killer app” (as Uber is for cab deregulation) I think they could.

    If you’re right and people are just naturally more enthused about tech than utopia, then lets combine the two.

  • stevesailer

    The Progressive Era in the early 20th Century was chockablock with proposed reforms of the calendar and of spelling. Andrew Carnegie used to publish magazine articles using the simplified spelling he favored. Daylight saving time is an early 20th Century reform that has stuck.

    The growing emphasis in recent decades however has been on diversity, which is usually seen as a zero sum game.

  • Ali

    Nice

  • Fezziwig

    It sounds like a marketing problem. You have to establish that people have a problem, and that your piece of social tech can solve it.

    Consider Agile software development. There was a known problem: “software projects often take longer than expected, and when they’re finished the customers don’t always like them”. Agile proposed a solution: “work in small increments so it’s easy to estimate, and show it to your customer early so they can change their minds up front.” Well, the problem might not have existed, and the solution might not have worked, but people thought it did and thought it might, and that was enough.

    I think this principle applies to all your examples. Solar cells break our dependence on fossil fuels. Uber cabs actually show up when you call them. Prediction markets…help me make decisions, under certain conditions? As an executive, I feel like my decisions are pretty good already. If they weren’t, how would you know? How would _I_ know? Again: these problems don’t have to be real. But people do have to believe in them.

  • duwease

    I think a major factor in the reluctance to adopt a new social innovation versus a new tech innovation is that there are *far* more confounding variables in the wild for the former. If a firm has established a working technical prototype in-house, you can have more confidence that you can implement an exact copy in your own business, as well as have more confidence that the risk involved is mainly limited to the hit to your tech budget.

    For a social innovation, you can’t be nearly as sure that you can implement an exact copy of a laboratory innovation in your neck of the woods. You can’t be nearly as sure that the confounding variables in your environment will be the same as the laboratory environment. And you can’t be nearly as sure that the impact of black swans will be mainly limited to a particular budget — some have the potential for quality-of-life impacts beyond monetary concerns.

  • Arthur B.

    “while many are excited by Uber achieving new value in cheaper-if-nominally-illegal cab services, most of those gains could have come decades ago from just deregulating cabs, an option in which there was little interest”

    It wasn’t an option. In most places deregulating cabs is political suicide, so it doesn’t happen. You can’t isolate the policy from the political apparatus. A policy that doesn’t have a feasible political implementation isn’t a solution at all.

    What’s exciting about Uber is that they managed to solve that problem by allowing politicians to deregulate the cab industry while giving them plausible deniability.

    • IMASBA

      If something like Uber was possible 10 years ago then that whole political dance could have taken place back then. But I have to disagree with you that something like Uber was possible in the past: a high mobile internet penetration seems crucial and that has only existed for a few years.

      • Arthur B.

        Where did I say that Uber was possible in the past?

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