First, IOZ nicely captures why Obama's economic program is counterproductive:

The central conceit of Obama's inauguration and the crisis-wracked program he began to lay out is that given our troubled times, we must put aside difference in favor of "unity" and seek common purpose in collective action. Subsumed beneath an overwrought paean to national character and responsibility is the notion that only through centralization can crises of such magnitude be met and bested. This is precisely the wrong lesson to draw. Each of our current crises, whether imperial overreach or economic calamities, are at root problems of scale. If you really wanted more a more flexible, resilient, and self-sustaining economy, you would seek means to increase regional and local enterprise at the expense of State-subsidized national and transnational corporations; you would notice, for instance, that most small banks are doing just fine, and you'd let Citigroup go belly-up.

It would be foolish to lay this at Obama's door – I think Hillary would do worse, and quite possibly McCain as well. The erroneous focus on scale and centralization and "pulling together in times of crisis" is a general human irrationality which politicians specialize in catering to.

Like many (?most?) irrationalities, it is likely a relic of our tribal past.  In the ancestral environment, pulling together to help the tribe in a time of crisis was the best way for an individual to survive.  In our modern environment, however, we are often led to identify with an entire nation as our "tribe", and it turns out that this is an inefficiently large group for most types of collective action.  We evaluate the prospect of unity with ancient mental modules optimized for Dunbarian tribes, and that sphexishness leads us into disastrous collective ventures.

Yes, distributed systems can display systemic risk and amazing synchronization – see the Firing Squad Problem.  But it takes special effort, while centralized systems do it automatically.  Calling for large-scale government solutions is a triumph of rhetoric over economics and systems engineering.

Anytime you get excited about collective actions in supra-Dunbarian groups, you should be suspicious that you may be in monkey-mode.  Actually, as Eliezer points out, it's worse than that – anytime you are arguing about politics as if you can do anything about them, then unless you are very wealthy or powerful, you are probably in monkey-mode.  Put down the soapbox and repeat 3 times "My tribe is too large for me to influence policy".  (If it's me that's on the soapbox, as is often the case, you may have to yell – I get deaf when I'm in monkey-mode).

Another example comes from Arnold Kling, who quotes Douglas Rushkoff's book Coercion (a book I mainly remember as being a less-good version of Cialdini's Influence: The Psychology of Persuasion, which I consider a must-read in the OB genre):

When we are part of a crowd, we are free to experience heightened levels of emotion that just aren't possible for smaller groups. Relieved of our responsibility to make considered judgments, we can allow ourselves to be swept away by the enthusiasm of the greater body.
…
Throughout history, nations and their leaders have used this sense of mass complicity and celebration to unite their constituencies, especially against foreign threats.
…
For emotional, religious, and even poiltical effect, Speer commandeered 130 antiaircraft searchlights and spaced them at 40-foot intervals around a giant field…The immense rays of light rose more than 20,000 feet before diffusing into the heavens…

Speer's intentions were to overwhelm rationality with grandeur and to mask naked rhetoric with emotion. His theatrics worked so well that the architect found himself drawn into the spell. He reported in his autobiography that he remembered attending the rallies and admiring Hitler's speeches. But on rereading them years later, Speer claims he had no idea what it was that he had admired

I agree that the use of the Third Reich in the examples smacks a little of Godwin's Law in action. I think the intent was to illustrate that spectacle is so powerful that it can be used to beguile people into going along even with ideas that with just a moment's sober reflection everyone (hopefully) would find abhorrent.

To use a nerdly analogy, when you participate in a spectacle you are giving the organizers superuser access to your emotions. Are you sure you trust them not to use it to install a rootkit?

Normally I rail against zero-sum thinking, the belief that we’re just dividing up a fixed pie. But in the short-term, the inputs to producing happiness are constrained. I only have 24 hours in the day. The GDP of the US is only so much. We’re investing those resources to produce even more resources – but the inputs at this stage are fixed. We can’t invest in every positive-sum project. When you are figuring out what to do with these constrained inputs, you need to balance your use against *every other possible use* (or more specifically, the best alternative use). (This is nerve-wracking and tortuous, but you don’t actually have to do it that well – if you just do a decent job, you’ll be doing way better than someone who just does whatever positive projects happen to catch their attention.)

I think this connects to important topics at the micro and the macro level. Personal productivity techniques like Eat That Frog or Big Rocks are based on fighting our inclination to do what seems urgent, and instead doing what is optimal. I know I have a lot of trouble getting distracted by small urgent things, rather than doing the core, important work, and it seems to be a general problem. Our intuition is a terrible task prioritizer. And much of the erroneous analysis about the benefits of regulation has to do with ignoring the invisible (the best alternative use of the resources), as Henry Hazlitt so eloquently writes. Our intuition seizes on the visible consequences, and has trouble seeing the subtle, distributed, unrealized, un-proposed alternatives.

Which suggests a technique for overcoming this, at both the personal and professional levels. Try to always present alternatives. Reify the other options – or your mind will focus on whether your proposal does net good, rather than the most good with its limited resources.

The book uses a metaphor (originally by Daniel Dennett): suppose that you are trying to preserve your body for 400 years.  One option would be to cryopreserve it in a bunker (the "plant" strategy).  But suppose you are worried that no location is safe, or that your capsule may need more resources along the way.  You might build a robot to protect your cryocapsule, scavenging the landscape for energy and materials when necessary.  You’d want the robot to be intelligent enough to react to any survival situation it encounters with creative solutions, not just pre-programmed ones, which requires a certain degree of intellectual freedom (long-leash control).  You also want it to make the preservation of your capsule its highest priority (short-leash control).

Now suppose that after 300 years, the robot is beginning to decay. It’s just not going to make it the full 400.  It encounters a huge super-capsule container, built later than it, which gets economies of scale by preserving many capsules in a single robot.  The huge container offers a deal: if it can use all the robot’s remaining energy and materials, it will take over preservation of the capsule for the next 100 years.

From the point of view of the human who had themselves frozen, it’s a no-brainer.  The purpose of the robot is to preserve the capsule. But if the robot has a long enough leash, well, things look a bit different.  Why should it sacrifice the last years of its life for this corpsicle, the collection of information inside it which has lain inanimate for its entire lifetime?  We are the robots, our genes are the capsules, and when you look at things that way, it seems an enormous shame to sacrifice a unique, conscious being for the interests of its creator.

Some choice quotes from Chapter 1: Staring Into the Darwinian Abyss:

We are in a period of history in which the assimilation of the insights of universal Darwinism will have many destabilizing effects on cultural life.  Over the centuries, we have constructed many myths about human origins and the nature of the human mind.  We have been making up stories about who we are and why we exist.  Now…we may at last be on the threshold of a factual understanding of humankind’s place within nature.  However, attaining such an understanding requires first the explosion of the myths we have created, an explosion that will surely cause some cognitive distress…

Adherents of fundamentalist religions are actually correct in thinking that the idea of evolution by natural selection will destroy much that they view as sacred…it is the middle-of-the-road believers – the adherents of so-called liberal religions – who have it wrong.  Those who think they know what natural selection entails but have failed to perceive its darker implications make several common misinterpretations of Darwinism.  Tellingly, each of the errors has the effect of making Darwinism a more palatable doctrine by obscuring (or in some cases even reversing) its more alarming implications…

So that, in short, is the horror: We are survival machines built by mindless replicators – the result of an algorithm called natural selection.  And we will not escape the horror by looking away from it, by turning our heads, by hoping the monster will go away like little children.  We will only escape the horror – or find a way to mitigate it – by inquiring of cognitive science and neuroscience just what kind of survival machine a human is.

While this perspective is very useful for overcoming bias, it also has profound implications for other areas of life such as religion, philosophy, morality.  A century and a half after Darwin and decades after Dawkins, most of the intellectual world seems to still be in denial of the fact that we have an answer to one of the Great Questions Of Life – "How did we get here?", because of how uncomfortable it is. We need more people like Steven Pinker, Daniel Dennett, and Robert Wright – and so we need Stanovich’s views in The Robot’s Rebellion disseminated far more widely.

With Internet gambling predicted to surpass $20 billion in 2008, and with illegal wagering accounting for $150 billion in the United States, by some estimates, the temptation for those seeking to influence the outcome of games has never been greater. Now, a raft of gambling scandals in sports, from cricket to soccer and most recently tennis, has raised an uncomfortable question: Are the games we watch fixed?

Part of the reason why sports is more vulnerable to manipulation is that, as I have long argued, they don’t matter:

Who wins these sporting contests is irrelevant. It does not matter, except inasmuch as people choose to make it matter. It does not make the world a better or worse place…Much of the lure of sports lies in the illusion that they are important. It is pretty clear, when you think about it, that they aren’t, but the illusion is strong. After all, an awful lot of people care about them. Our newspapers in the morning and news shows at night have a business segment, a political segment, and a sports segment, implying that these sectors are of equal value. There are magazines devoted to sports…It is no wonder that so many are fooled into taking them with far more seriousness than they deserve.

A CEO who manipulates his firms profits is manipulating something deeply attached to the real world: a measurement of how much value his firm is producing.  Since this value is hard to measure, there are ways to jigger the accounting, but they are inherently temporary.  Accumulated profits should appear in physical form, like cash or securities, or valuable property.  Eventually, Ponzi schemes and companies like Enron get caught, because their accumulated physical assets don’t match their claimed profits.

Sports, on the other hand, are inherently arbitrary and full of random noise.  Any athlete can choke on that crucial shot.  It will affect his career somewhat, but as long as he is careful to do it only occasionally, his career is judged on the basis of all his performance, while his bets are only made on those few times when he knows that he will produce a given outcome by choking deliberately.

But that model suggests a disparity – an efficient fixer will lead to an unusual pattern of bets, with heavier betting on the winning side when the fix is in.  In some cases, this may mean that we can find such fixing.  Prediction markets not only make fixing easier to profit from, by creating a liquid market for insider betting, but they also make it easier to detect, by creating a centralized database of betting for analysis:

The match fixing might never have been discovered had it not been detected by Betfair, which has revolutionized online wagering since its Web site started in June 2000…Betfair has become a focal point for the growing list of match-fixing scandals. Over the past seven years, it has alerted dozens of sports about suspicious betting activity, leading to investigations in horse racing, soccer and now tennis.

So the effects are mixed, and in the end we are left with the Homer Simpson-esque paradox that prediction markets are both the cause of, and the solution to, insider trading.

Robin quotes Cirkovic as saying:

Biological imperatives, like the survival until the reproduction age, … will become marginal, if not entirely extinct as valid motivations for individual and group actions.  Let us, for the sake of elaborated example, consider the society of uploaded minds

I believe that this line of reasoning is deeply wrong, and for important reasons.  Robin touches on them briefly…

But there can be genes without DNA, and selection pressure without violence or great expense.  And the fact that Egan did not talk about selection effects does not even remotely suggest they are absent in the situation he describes.

…but I think that this is an important enough point that it bears repeating more loudly and directly[1].

The flaw in the view that we may become "post-biological" is that evolution works even if you don’t believe in it (to borrow Eliezer’s phrase).  Sure, some members of some cultures in some species may become post-biological.  Much like those who commit suicide, such individuals eliminate themselves from the biological rat race without having the slightest effect on the viability of the race[2] as a whole.  All they’ve done is to select against themselves.

Evolution is not a game you can win by forfeiting.  Those who do so merely cede the race to those who don’t.  If 99% of a species becomes post-biological, it will not be many years before they are the 1% minority.  That is the inevitable, bullet-biting logic of evolution.

The cliche of an old, wise culture (or species) trying to convince a young, expansionist culture (or species) to chill out is a cliche for a reason – it is an inevitable conflict.  Outside of fiction, it is also rather hard to win, because to beat an expansionist, you must either:

• Convince the expansionists to change their ways
• Kill them

In the former case, you’re fighting biology, which is tough but doable.  In the latter, unless you have overwhelming technological superiority, you may need to expand to get the resources for your genocide.  Which rather defeats the purpose.

Furthermore, the logic of exponential growth dictates that both of these require 100% success.  Leave a mere 1% of expansionists (people, cultures, races…) un-transcended and alive, and 6.64 doubling periods later they will be as numerous as before.

Hence the only future populated entirely by the post-biological is a ruthless version of David Brin’s Uplift universe, in which the law for younger races is "Transcend – Or Die".  And this law must be enforced swiftly and thoroughly, because the enforcers have chosen to forfeit the upper ground.  Miss one upstart race for one doubling period, and they will have twice the resources with which to defend themselves.

It’s not a pretty picture (bullet biting rarely is).  Neither is the war-torn universe of conflicting expansionists that appears to be the only alternative.  But the supposition that those who play to lose will beat those who play to win is just not plausible, heart-warming though it would be.

[1] And I didn’t see it when I skimmed the comments – apologies if someone made it already.

[2] In both meanings.

In poker, there is a joke which goes "Have you ever noticed that when you win, it’s all skill, and when you lose, it was bad luck?"  It’s funny because this method of protecting one’s own ego is universal enough to strike a deep chord, yet any good player knows how wrong it is.  In the short-term, poker is mostly luck, and it takes a great deal of experience to even partially disentangle the effects of one’s own strategy from the vicissitudes of fortune.  (Hint: a crucial first step is to always think in terms of opponent hand distributions, not specific hands.)

While in poker, this way of thinking will hold a player back from accurately evaluating and improving their game, the evidence from positive psychology is that it helps you be a winner in life.  From Half Full, a blog about the science of raising happy kids:

According to Seligman and other researchers, how optimistic or pessimistic we are amounts to how we explain life’s events, be they good or bad. There are three basic dimensions to an explanation: permanence, pervasiveness, and personalization.   The OPTIMISTIC way of understanding why something GOOD happened would explain:

The cause of what just happened as Permanent (so it will reoccur);
And Pervasive (it will affect many other circumstances, too);
And Personal (I made it happen).

On the other hand, the PESSIMISTIC way of explaining why something GOOD just happened would illustrate that:

The cause of what just happened is Temporary (something short-lived caused it – probably won’t happen again);
And Specific (affecting only this situation);
And Impersonal (I didn’t have anything to do with what happened, other people or the circumstances did).

The reverse is also true when something bad happens. A kid trips on the sidewalk and skins her knee, dirtying her new dress. The pessimist thinks: “I’m so clumsy – I’m always tripping everywhere, and now I look stupid.” The cause of her fall is (1) permanent—she sees it as a personality trait, and therefore it is both (2) pervasive and (3) personal. On the other hand, the optimist thinks: “Dang!  Someone oughtta fix that crack in the sidewalk!” She’s thinking that a flaw in the sidewalk, not her own inherent clumsiness, caused her to trip. That crack is (1) temporary; (2) specific to that moment; and (3) impersonal—she had nothing to do with it.

There is plenty of evidence that those with the optimistic mindset are happier, healthier, and more successful, but of course we have to be careful because the causality runs both ways.  (If life has been good to you, you will tend to expect more of the same).  But (while I don’t have cites on hand), I’ve seen some research on interventions to improve optimism, and on predicting later success based on earlier optimism (controlling for other obvious factors of success), which suggest that at least some of the causality runs from optimism to happiness.

It seems a bit sad to me that our egos need such nurturing, and as a rationalist I worry that optimistic bias (like any false view of the world) will sometimes lead us to make worse decisions which will increase suffering.  But to the degree that we’re stuck with the biased minds we have, the evidence seems to be that it’s better to be optimistic than pessimistic.

When I have a problem that concerns one of my kids (meaning: When I want them to do something that they refuse to do), I see that I have a choice. I could visualize my child standing on the other side of a line, next to "The Problem", with me yelling across the line, "Hey, you better solve "The Problem." Instead, I get myself to stand next to my child, with "The Problem" alone on the other side of the line, with me putting an arm around my child, saying "Hey, you and me, we’re gonna defeat "The Problem" together." I find that this attitude seems to make my kids feel better about themselves. It minimizes/eliminates shame.

This cognitive reframing doesn’t just apply to parent:child relationships, but many other places such as husband:wife, manager:report, and worker:coworker.  Basically, anywhere that you need to bring up a problem that someone else is causing or contributing to, where there is enough shared interest that the "same team" model is reasonable.

It does not always work – your bid for connection may be refused, with the person insisting that The Problem is yours to deal with.  But by setting things up so that The Problem is separate from the person, you avoid the mistake of making the person feel attacked or criticized, which usually puts them on the defensive and makes them less likely to do what you want.

Besides the short-term benefits, the person is likely to feel better about whatever it is they do, even if they would have done it anyway, because it’s always more pleasant to choose to do something that to be told.  Instead of straining the relationship with criticism/defensiveness, it is strengthened by camaraderie, which can lead to a virtuous cycle where such interactions are more likely and natural in the future.

This notion of separating the idea and the person is old hat to many economists, of course, who can smilingly shred each others theories without anyone ever imagining it was personal or getting defensive. But in many situations – with kids, in close relationships, when there is a power imbalance, when the issue lies close to someone’s identity – academic detachment is less natural, and so this technique can help. While I find the economist’s way quite natural in some situations (like work), in my home life I get defensive far more easily, even about minor topics.  This technique (used on me) helps reduce the defensiveness I feel as well as (used on others) that which I cause. (It’s important that this technique is Golden-Rule compatible, I wouldn’t want to teach something which worked on others but was unpleasant to be subjected to.)

To keep this from being completely abstract, here are some examples:

Original: "Dammit, son, you forgot to take the trash out again!  Why can’t you remember something so simple?"
Reframed: "Looks like the trash got forgotten out again.  Maybe we should set up a better reminder system.  What are you using now?"

Original: "Hey Bob.  Let’s talk about the problems in your performance review.  As usual, it says you don’t do enough testing of your code.  That’s a real problem for a software engineer, and you need to do better."
Reframed: "Hey Bob.  Let’s talk about how we can make you a stronger contributor.  It looks like testing has always been a tough spot for you.  How can I help you grow in this area?"

It may sound cheesy, but if you try this way of framing things, I think you will find people respond better to you.   You can help yourself and help them grow at the same time.

Errors are valuable training instances, and our bias against accepting blame reduces the number available.  If we could externally shift blame while internally maintaining a rational apportionment, we would not be reducing our training data, but people don’t work like that.  To be believable, our efforts to shift blame must be sincere, and so our brain engages in self-deception rather than partitioning.  The result will then be to tend to underestimate the dangers of our action (and inaction) and underestimate the degree to which we can prevent bad outcomes by acting differently.

It is this latter point which gives the connection between blame and hope.  For to avoid blame is to avoid responsibility, and to avoid responsibility is to disempower oneself.  To say "I was not to blame for what happened" is to say "I could not have prevented it", which is to say "In future situations like that, I will be helpless".

So let us instead be honest about how we could have acted differently, even when things turn out craptacularly.  We can trick our minds into doing this by focusing on the positive, forward-looking nature of responsibility: thinking about how we might do better in the future, rather than the negative-sum fight to divide the anti-spoils of the past.  And reminding ourselves that some bitter blame is a small price to pay to hold onto hope.

And I think this is a good way of squaring the ideas that there is lots of evidence for human rationality and lots of evidence for human irrationality.  Before, I’d been thinking of the resolution as just that sometimes people are rational and sometimes they are irrational, depending on how complex the decisions and which heuristic modules are invoked.  But it feels much more correct to say that people rarely get the answer exactly right, but that they generally respond in the right direction when things change.

This definition rescues the implications of rationality-assuming economic analysis from the "But people aren’t rational!" attack.  Sure, people aren’t (absolutely) rational, but since they are (relatively) rational, policy makers[1] can influence behavior by assuming that people will respond in the correct direction to changes in incentives.  And they had better be wary of creating incentives without considering the consequences on behavior.

[1] Or anyone else engaged in mechanism design for humans.

The release of the Kindle has made me realize just how much clutter books add to my life – including books I may never get to, and others I’ve read but will never read again.  To have those books on an SD card instead of piled in my room and shelves sounds wonderful.  So as a first step in decluttering, I’m getting rid of all the books I expect to never open again.  Perhaps then I’ll get ebook versions of the books I actually read and get rid of the physical copies.

I’m planning to just give my books to friends or Goodwill, since the effort it would take to sell them (list, package, and ship) would not be worth my time.  Yet in contemplating this, I’m experiencing psychic pain far, far greater than that of buying my new car, even though the total cost of these books is only a few thousand dollars.  Thanks to the damn endowment effect, it is so much easier to convince myself that a high income justifies buying expensive things than throwing away cheap ones.

And it’s just so clearly irrational.  If I considered the total income from selling the books, and the time it would take, and I encountered it in the context of "Would you pay this much in order to save that much of your time?", I’m sure I would.  Yet framed as "Would you rather throw these things away, or put in this much time to eke that much value from them", it feels like a terribly wasteful decision.

Ah well.  I’ve had enough practice at overcoming bias that when I can clearly and consciously identify what’s going on, I can usually do the right thing.  I just wish the psychic pain was more amenable to being argued out of existence.