Sycophantry Masquerading As Bargains

The Catholic Church used to sell “indulgences”; you gave them cash and they gave you the assurance that God would let you sin without punishment. If you are at all suspicious about whether this church can actually deliver on their claim, this seems a bad deal. You give them something tangible and clearly valuable, and they give you a vague promise on something you can’t see, and can’t even check if anyone has ever received.

We make similar bad “bargains” with a few kinds of workers, to whom we grant extraordinary privileges of “self-regulation.” That is, we let certain “professionals” run their own organizations which tell us how their job their job is to be done, and who can do it. In some areas, such as with doctors, these judgements are enforced by law: you can only buy medical services approved by doctors, and can only buy such services from those who the official medical organizations labels “doctors.” In other areas, such as with academics, these judgements are more enforced by our strong eagerness to associate with high prestige professionals: most everyone just accepts the word of key academic organizations on who is a good academic.

There is a literature which frames this as a “grand bargain”. The philosopher Donald Schön says:

In return for access to their extraordinary knowledge in matters of great human importance, society has granted them [professionals] a mandate for social control in their fields of specialization, a high degree of autonomy in their practice, and a license to determine who shall assume the mantle of professional authority.

In their book The Future of the Professions: How Technology Will Transform the Work of Human Experts, Richard and Daniel Susskind elaborate:

In acknowledgement of and in return for their expertise, experience, and judgement, which they are expected to apply in delivering affordable, accessible, up-to-date, reassuring, and reliable services, and on the understanding that they will curate and update their knowledge and methods, train their members, set and enforce standards for the quality of their work, and that they will only admit appropriately qualified individuals into their ranks, and that they will always act honestly, in good faith, putting the interests of clients ahead of their own, we (society) place our trust in the professions in granting them exclusivity over a wide range of socially significant services and activities, by paying them a fair wage, by conferring upon them independence, autonomy, rights of self-determination, and by according them respect and status.

Notice how in this supposed bargain, what we give the professionals is concrete and clearly valuable, while what they give us (over what we’d get without the deal) is vague and very hard for us to check. Like an indulgence. The Susskinds claim that while this bargain has been a good deal so far, we will soon cancel it:

We predict that increasingly capable machines, operating on their own or with non-specialist users, will take on many of the tasks that have been the historic preserve of the professions. We anticipate an ‘incremental transformation’ in the way that we produce and distribute expertise in society. This will lead eventually to a dismantling of the traditional professions.

This seems seriously mistaken to me. There is actually no bargain, there is just the rest of us submitting to professionals’ prestige. Cheaper yet outcome-effective substitutes to expensive professionals have long been physically available, and yet we have mostly not chosen those substitutes due to our eagerness to affiliate with prestigious professionals. We don’t choose nurses who can do primary care as well as doctors, and we don’t watch videos of the best professors from which we could learn as much as from attending typical lectures in person. And we aren’t interested in outcome track records for our lawyers. The existence of even more such future substitutes won’t change this situation much.

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Missing Engagement

On the surface, there seems to have been a big debate over the last few years on how fast automation will displace jobs over the next decade or so. Some have claimed very rapid displacement, much faster than we’ve seen in recent decades (or centuries). Others have been skeptical (like me here, here, here, and here).

On October 13, David Mindell, Professor at MIT of both Aeronautics and Astronautics, and also History of Engineering and Manufacturing weighed in on this debate, publishing Our Robots, Ourselves: Robotics and the Myths of Autonomy:

If robotics in extreme environments are any guide, Mindell says, self-driving cars should not be fully self-driving. That idea, he notes, is belied by decades of examples involving spacecraft, underwater exploration, air travel, and more. In each of those spheres, fully automated vehicles have frequently been promised, yet the most state-of-the-art products still have a driver or pilot somewhere in the network. This is one reason Mindell thinks cars are not on the road to complete automation. ..

“There’s an idea that progress in robotics leads to full autonomy. That may be a valuable idea to guide research … but when automated and autonomous systems get into the real world, that’s not the direction they head. We need to rethink the notion of progress, not as progress toward full autonomy, but as progress toward trusted, transparent, reliable, safe autonomy that is fully interactive: The car does what I want it to do, and only when I want it to do it.” (more)

In his book, Mindell expertly supports his position with a detailed review of the history of automation in planes, spacecraft and submarines. You might think than Mindell’s prestige, expertise, and detailed book on past automation rates and patterns would earn him a place in this debate on future rates of automation progress. Many of those who blurbed the book clearly think so:

“Mindell’s ingenious and profoundly original book will enlighten those who prophesy that robots will soon make us redundant.”—David Autor

“My thanks to the author for bringing scholarship and sanity to a debate which has run off into a magic la-la land in the popular press.”—Rodney Brooks

But looking over dozens of reviews Mindell’s book in the 75 days since it was published, I find no thoughtful response from the other side! None. No one who expects rapid automation progress has bothered to even outline why they find Mindell’s arguments unpersuasive.

Perhaps this shows that people on the other side know Mindell’s arguments to be solid, making any response unpersuasive, and so they’d rather ignore him. Maybe they just don’t think the past is any guide to the future, at least in automation, making Mindell’s discussion of the past irrelevant to the debate. I’ve known people who think this way.

But perhaps a more plausible interpretation is that on subjects like this in our intellectual world, usually there just is no “debate”; there are just different sides who separately market their points of view. Just as in ordinary marketing, where firms usually pitch their products without mentioning competing products, intellectuals marketing of points of view also usually ignore competing points of view. Instead of pointing out contrary arguments and rebutting them, intellectual usually prefer to ignore contrary arguments.

This seems a sad state of affairs with respect to intellectual progress. But of course such progress is a public good, where individual contributions must trade a personal cost against a collective benefit, encouraging each of us to free-ride on the efforts of others. We might create intellectual institutions that better encourage more engagement with and response to contrary arguments, but unless these are global institutions others may prefer to free-ride and not contribute to local institutions.

You might think that academic norms of discourse are such global institutions encouraging engagement. And academics do give much lip service to that idea. But in fact it is mostly empty talk; academics don’t actually encourage much engagement and response beyond the narrow scope of prestigious folks in the same academic discipline.

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Sexist Prices?

The New York City Department of Consumer Affairs compared nearly 800 products with female and male versions — meaning they were practically identical except for the gender-specific packaging. .. Controlling for quality, items marketed to girls and women cost an average 7 percent more than similar products aimed at boys and men. .. Compounding the injustice .. is the wage gap, .. women in the United States earn about 79 cents for every dollar paid to men. .. The largest price discrepancy emerged in the hair care category: Women, on average, paid 48 percent more for goods like shampoo, conditioner and gel. Razor cartridges came in second place, costing female shoppers 11 percent more. (more)

Stores: 24, Brands: 91, Product Categories: 35. .. Selected products that had similar male and female versions and were closest in branding, ingredients, appearance, textile, construction, and/or marketing. (the study)

There is a huge literature on gendered wage differences, but far less attention to this question of gendered consumer price differences. Maybe people avoid this question out of fears that their answer will sound sexist. So maybe it takes a brave (= insensitive) guy like me to dive into it.

So let’s try to list the possible theories. First, some people seem to think that firms purposely raise prices on women just to be mean to women, or kind to men. But I’m pretty sure that the vast majority of economists will reject this theory. Firms might all be making the same mistake on how to maximize profits, but even then we’d want a story about what they are thinking. And given the lack of firms trying to profit via contrary assumptions, most economists will find it hard not to share the beliefs of most firms on what increases firm profits.

So, what could firms be thinking? Well one obvious hypothesis is that the study cited above fails to control for enough relevant features of quality. That is, maybe even though these products looked similar, they actually were made with different materials, to different standards of reliability, with different degrees of product marketing and other supports. For example, maybe women tend to return and exchange their products more often. But I’ll give these study authors the benefit of the doubt here.

Another obvious possibility is that these 800 products are not representative of the larger space of products and services. The study authors could have selected products to get the answer they wanted. And products where it is plausible to have two closely related versions targeted to different genders must be more intrinsically unisex than other products. Bras and condoms, for example, wouldn’t qualify. However, even if these products aren’t representative, we still want a theory of why prices correlate with gender within this category.

In economic terms, two obvious types of causes of price differences are elasticity of demand and product quantity. That is, within this category of products profit-maximizing prices could be higher for women either because women are less price sensitive than men, or because fewer items can be sold of female product versions, forcing each item to cover a larger fraction of the product’s fixed costs. Fixed costs can include costs of design, testing, manufacturing, distribution, or marketing.

First, women could just have a higher preference for quality. Even if these pairs of products are actually the same quality, women may have assumed that the female versions are higher quality because products targeted at women tend in general to be higher quality. Also, a stronger preference for quality could tempt firms into increasing prices because consumers often infer that higher priced products are higher quality. Perhaps women also have a greater tendency than men to infer quality from price.

Second, women might be less aggressive in searching for lower prices for similar products and in switching when such prices are found. Women might instead be more loyal to prior suppliers and brands, and feel worse about betraying previous brands by switching.

Female versions of products might sell fewer units because women just buy fewer of the sorts of products that have similar male versions, because women are buying more of other kinds of products instead. This might be because women have a great taste for product variety, i.e., for products that are more closely tuned to their particular needs and wants. (Here variety is a kind of quality.) It might be because women tend to see more differences between products, relative to men who see fewer differences. Or it might be because women are actually more different from each other than men are from each other, at least regarding the features relevant for these products.

OK, but which of these theories are most true? I’d guess women actually do tend to have a higher taste for quality and variety within this category of products. But I still doubt that women have higher taste for quality and variety overall. Instead it seems to me that the sorts of products that can have similar male and female versions tend to be lower-quality less-varied more-commodity-like sorts of products.

Women could have a higher taste for quality among lower quality products, and still have the same overall taste for quality, if women have less tolerance for variation in quality across product categories. That is, men may be more willing to save via lower quality in some areas, in order to pay for higher quality in other areas. In contrast, women may seek a more consistent level of quality across many product categories. Women may be more afraid someone will judge them badly from one particular unusually low quality category, while men may hope someone will judge them well from one particular unusually high quality category. This theory fits with many other results suggesting that men are and seek higher variance, and have less conformity.

Is my theory sexist? Honestly, I don’t know how to tell. As far as I can tell a claim is most prototypically “sexist” when it posits women as being lower in some nobility ranking than men. So it depends a lot on what features you consider noble. Many see conformity as ignoble, but I’ve blogged often against that view. I don’t see myself as being sexist here, but others may see it differently; maybe posterity can decide.

This post benefited from a lunch conversation with Tyler Cowen and Bryan Caplan.

Added 6:20p: Tyler Cowen riffs, offering a more readable “generalization” of my theory.

Added 6:30p: Anamaria Berea notes that women more often buy for men than vice versa. So the relevant difference could be less actual difference in men versus women than a difference in how women see others vs themselves.

Added 27Dec: Another simple story is that each gender has higher willingness to pay for quality and variety in that gender’s traditional area of specialization. Perhaps this price comparison survey had more items from traditional female than male areas.

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Happy Weather

Yesterday the weather was unseasonably warm and pleasant here in Virginia. I opened the windows at home, and felt pleased by the fresh air. I thought I was happier because of the nice weather.

A new paper just took an unusually detailed look at how 11,000 diverse Australians’ answers to the question “‘All things considered, how satisfied are you with your life?” related to the weather at the 96,000 times and places they were asked. The authors found no effects when the word “life” was replaced with any of these: “job overall, employment opportunities, financial situation, home in which you live, feel part of local community, neighbourhood in which you live, how safe you feel, your health, amount of free time.”

But the authors did find effects related to that overall life satisfaction version. There were no effects of rain/snow, temperature, humidity, or windspeed, but people seemed a bit happier on days that were overall sunnier, and happier with lower air pressure, “typically associated with clouds, rain and strong winds.” Men had three times the preference for sunny weather, and when people moved to very different climates, that climate change had no effect on their happiness, controlling for weather at the time of their answer!

The authors suggest that life satisfaction answers differ from the others because “cognitive demands of assessing overall life satisfaction lead respondents to apply heuristics that are based on contemporaneous transient factors.” I think this means that we use weather to guess our happiness, when in fact we aren’t any happier. The authors support this by noting that these differences reduce as people get more experienced answering surveys, though I didn’t find that result very compelling.

Other interesting results include that people report being happier when someone else is sitting next to them while they answer the survey, that they get progressively less happy over the course of a day, and that they are no happier on weekends. Married people were happier, but people with more dependents were less happy. Middle-aged folks were less happy, and also it seems were mid-education-level folks, controlling for age and income. Here is the paper’s main regression: Continue reading "Happy Weather" »

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The Future of Language

More from Henrich’s The Secret Of Our Success:

Linguists and linguistic anthropologists .. have often assumed that all languages are more or less equal, along all the dimensions that we might care about – equally learnable, efficient, and expressive. .. Recently .. cracks in these intellectual barricades have begun to multiply. .. Like [other kinds of cultural] toolkits, the size and interconnectedness of populations favors culturally evolving and sustaining larger vocabularies, more phonemes, shorter words, and certain kinds of more complex grammatical tools, like subordinating conjunctions. (p. 233, 259)

The most ancient languages we know of are visibly impoverished compared to modern languages today. It just takes longer to say similar complex things in those languages. Assuming that the size and interconnectedness of populations speaking the main languages continues to increase into the future (as they do in my em scenario), we can make some obvious predictions about future languages.

Future languages should make more distinctions such as between colors, and have larger vocabularies, more phonemes, and shorter words. They should also have more grammatical tools such as adjectives, tenses, prepositions, pronouns, and subordinating conjunctions. Technology to assist us in more clearly hearing the words that others speak should also push to increase the number of phonemes, and thus shorten future words.

For obvious reasons, science fiction almost always fails to show these features of future language.

If you search for “future of language” you’ll find many articles noting that the world is losing many unpopular languages, and speculating on which of today’s languages will be the most popular later. And this creative attempt to guess specific changes. But oddly I can’t find any articles that discuss the basic trends I mention above.

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Tax Coastal Cities?

(Nobel-winner) Thomas Schelling just gave a talk here at GMU Econ on “Two Major Infrastructure Worldwide Projects to Prepare for Global Warming.” He said most work on global warming focuses on how to prevent it, and that there’s been a bit of a taboo on looking at how to mitigate harm if it happens.

He defied that taboo, and talked about two harms from global warming: 1) crop drought due to snowpacks melting earlier in the annual cycle, and 2) sea levels rising if the Greenland or Antarctic ice sheets suddenly slip into the sea. For both problems Schelling wants central governments to start planning possible large engineering projects.

On overly-early farm-water, he wants new canals and reservoirs dug to hold water until farmers want it and then deliver that water to them. For rising sea levels he wants dikes etc. to keep coastal cities dry. Such city protection systems could be at the scale of the harbor of a single city, or at the scale of blocking the Strait of Gibraltar to protect the entire Mediterranean Sea.

On protecting coastal cities, John Nye pointed out that if governments are willing to do anything now they should consider taxing coastal cities to collect revenue to pay for future mitigation. This has the further big benefit of discouraging risky coastal development. And if governments aren’t willing to do this obvious easy thing now, what hope is there of them doing much useful later?

Most of the coastal city structures that would be hurt via rising sea levels probably haven’t been built yet. So trying to get governments to start planning to protect coastal cities runs the risk of encouraging too much coastal development, which then becomes insufficiently protected or protected at excess expense.

The fact that central governments are not coordinating much to reduce global warming suggests that they will also fail to coordinate at large scales to mitigate harm from warming. So a simpler safer solution might be to have central governments try to commit to not protect coastal cities in advance. Don’t even start central government initiatives to coordinate and plan for coastal protection, and stop current central government coastal protection programs, such as subsidized hurricane insurance.

If coastal cities want to tax themselves to pay for their own local mitigation, fine, but to the extent we expect that more central governments won’t be able to resist helping later, have them tax low-lying coastal development in advance to pay for that. Let everyone know its time to start focusing new development away from low coasts.

The problem of building reservoirs for farmers seems more easily dealt with via private property in water. If private parties can pay to dig reservoirs to sell water to private farmers at market prices, it isn’t clear why much central government coordination is required.

Added: Seems Glenn Reynolds proposed to tax coastal development a month ago. HT Robert Koslover in the first comment below.

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NYC Age of Em talks

I’ll be speaking twice this January in New York City on my upcoming book The Age of Em:

  • January 6, 7pm, at Brooklyn Futurist Meetup, Geraldo’s Cafe in Brooklyn Law’s Feil Hall (1st Floor), 205 State Street, Brooklyn, $5.50 fee. (Video here)
  • January 7, 7pm, at NYC Junto, General Society Library, 20 West 44 Street, New York, free. (Slides here)
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Engagement As Respect

It saddens me to see funerals where attendees only say generic nice things about the deceased. Such as that he or she was a good neighbor, parent, or professional. I’d rather hear more specific descriptions and evaluations, some of them mildly negative, or at least not obviously positive. The usual platitudes suggest that people didn’t actually notice the deceased very much as a distinct person. “You say Fred from accounting’s funeral is Saturday; which one was Fred again?”

At my funeral, I prefer attendees to signal that they actually noticed me as a distinct person, and that they engaged that distinctiveness to some degree. I want them to have enough confidence in my reputation and the wider perception of my value to point out features of me that are not obviously positive. I want to have been a specific vivid person to them, who they often liked but sometimes didn’t. I’d like them to share specific anecdotes that remind them of my specific distinct features, both good and bad.

I feel similarly about book reviews. It saddens me to think of someone putting in all the effort it takes to write a book, but then even when their book seems to get a lot of attention, reviews mostly just rephrase the book jacket summary, or give generic praise like “must read” and “interesting”. It makes one suspect that most book reviewers haven’t actually read the book. Or if they read it, the book skimmed past their attention without making much of an impact, like an easy-watching TV show.

My first book comes out in May, and instead of having people generically “like” it, I’d much rather that my book had an impact on their thoughts, so that they became different in some way after reading it. I want them to have engaged my ideas enough that they actually grappled with some of the difficult issues I raise. They weren’t just carried along by my entertaining show, but they actually thought about what I said at some point. And readers who engage difficult issues discussed by an author almost never end up agreeing with that author all the way down the line. So the fact a reviewer disagrees with me on some points is a credible sign that they actually read and engaged my book. Which shows they thought my book worth engaging.

Yes, in a sense what I’m asking for here is counter-signaling. Acquaintances distinguish themselves from strangers by acting generically nice to you, such as by dressing nice, being polite, etc., but friends distinguish themselves from acquaintances by feeling free to speak their minds to you and dressing comfortably around you. At my funeral, I want people to see I had friends, and for my book I desire more impact on readers than just “I read some books on X and Y lately; they were okay, though I forget what they said.”

And yes, when signals are ranked by quality, then asking explicitly for a high quality signal is risky, because that can force people to say explicitly “Yes, some people deserve that high of a signal, but not everyone, and not you, you aren’t good enough.” But that is the risk I now take by saying: love me or hate me, but notice and remember me. Respect me by engaging me.

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How Plastic Are Values?

I thought I understood cultural evolution. But in his new book, The Secret Of Our Success: How Culture Is Driving Human Evolution, Domesticating Our Species, and Making Us Smarter, Joseph Henrich schooled me. I felt like I learned more from his book than from the last dozen books I’ve read. For example, on the cultural plasticity of pleasure and pain:

Chili peppers were the primary spice of New World cuisines prior to the arrival of Europeans and are now routinely consumed by about a quarter of all adults globally. Chili peppers have evolved chemical defenses, based on capsaicin, that make them aversive to mammals and rodents but desirable to birds. In mammals, capsicum directly activates a pain channel (TrpV1), which creates a burning sensation in response to various specific stimuli, including aside, high temperatures, and allyl isothiocyanate (which is found in mustard and wasabi). These chemical weapons aid chili pepper plants .. because birds provide a better dispersal system for the plants’ seeds. .. People come to enjoy the experience of eating chili peppers mostly by reinterpreting the pain signals caused by capsicum as pleasure or excitement. .. Children acquire this preference gradually, without being pressured or compelled. They want to learn to like chili peppers, to be like those they admire. .. Culture can overpower our innate mammalian aversions when necessary and without us knowing it. ..

Runners like me enjoy running, but normal people think running is painful and something to be avoided. Similarly weight lifters love that muscle soreness they get after a good workout. .. Experimental work shows that believing a pain-inducing treatment “helps” one’s muscles activates our opioid and/or our cannabinoid systems, which suppress the pain and increase out pain tolerance. ..

Those who saw the tough model [who reported lower pain ratings] showed (1) .. bodies stopped reacting to the threat, (2) lower and more stable heart rates, and (3) lower stress ratings. Cultural learning from the tough model changed their physiological reactions to electric shocks.

Henrich’s basic story is that from a very early age we look to see who around us who other people are looking at, and we they try to copy everything about those high prestige folks, including their values and preferences. In his words:

Humans are adaptive cultural learners who acquire ideas, beliefs, values, social norms, motivations, and worldview from others in their communities. To focus our cultural learning, we use cues of prestige, success, sex, dialect, and ethnicity, among others, and especially attend to particular domains, such as those involving food, sex, danger, and norm violations. .. Humans are status seekers and aware strongly influence by prestige. But what’s highly flexible is which behaviors or actions lead to high prestige. …The social norms we acquire often come with internalized motivations and ways of viewing the world (guiding our attention and memory), as well as with standards for judging and punishing others. People’s preferences and motivations are not fixed.

The examples above show cultural influence can greatly change the intensity of pain and pleasure, and even flip pain into pleasure, and vice versa. Though the book doesn’t mention it, we see similar effects regarding sex – some people come to see pain as pleasure, and others see pleasure as pain.

All of this suggests that human preferences are surprisingly plastic. Not completely plastic mind you, but still, we have a big capacity to change what we see as pleasure or pain, as desirable or undesirable. Yes we usually can’t just individually will ourselves to love what we hated a few hours ago. But the net effect of all our experience over a lifetime is huge.

It seems that this should make us worry less that future folks will be happy. Even if it seems that future folks will have to do or experience things that we today would find unpleasant, future culture could change people so that they find these new things pleasant instead. Yes, if change happens very fast it might take culture time to adapt, and there could be a lot of unhappy people during the transition. And yes there are probably limits beyond which culture can’t make us like things. But within a wide range of actions and experiences, future folks can learn to like whatever it is that their world requires.

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Variety Is Shallow

I haven’t read that much in the field of marketing, but what I have read so far has tended to confirm what I’ve read and taught in economics industrial organization: firms try hard to make products have distinctive feature packages in order to gain market power over customers whose ideal product is closer to that package. Even if some of those features are symbolic and created via how ads make people see products.

Reading the book How Brands Grow: What Marketers Don’t Know, by Byron Sharp, leads me to doubt this usual story. Sharp presents a lot of data (some shown in these figures for the Audible version) in support of these points (from this summary):

1. Penetration is key .. all brands have similar levels of loyalty.
2. Light users are as or even more important as heavy ones
3. Leading brands are distinctive, not different
4. Create memory structure to build “mental availability”
5. The power of “physical availability”
6. People don’t want a love affair with most brands

Most price promotions, and ads that don’t reinforce easy-to-recall product cues, are wasted money. We can model the distribution of purchase choices pretty well via these assumptions:

A. People vary a lot in how often they buy from any given product category; most buys are from very infrequent buyers, who mostly buy from other brands.
B. People have a some “loyalty” in having a better than random (but far from certain) chance to buy the same brand choice as last time.
C. If they don’t pick the same brand as last time, buyers pick a brand at random in proportion to product popularity.

Product categories are surprisingly large. For example, to a first approximation all fast food competes nearly equally with all other fast food. It isn’t that pizza places compete mainly pizza places while burger places compete mainly with other burger places. There are some exceptions, such a rich people tending more to buy expensive brands, or people with kids tending to buy books for kids, but these are rare and weak. Mostly there is no “space” of product features; there is just a set of distinct but equally different options, some more popular than others.

Over the last century consumers have moved to choosing a LOT more product variety, which ends up being expensive because of all the fixed costs to support all those different products. We like to tell ourselves that we do this because the new products we pick are closer to the ideal points of our complex authentic identity. Marketers like to tell the same thing to us, and to the firms who buy marketing services. But in fact we just want the appearance of having specific feature packages we like that fit who we are; we mostly don’t actually have coherent identities, but instead just wander around in the space of available products.

This greatly strengthens the welfare case for reducing product variety, in order to reduce unit costs. It seems we are mostly trying to gain a zero-sum status via showing off our wealth and not-actually-there distinct identity.

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