Tag Archives: Politics

Thought Crime Hypocrisy

By Robin Hanson · May 21, 2013 10:20 am · Comments (17)

Philip Tetlock’s new paper on political hypocrisy re thought crimes:

The ability to read minds raises the specter of punishment of thought crimes and preventive incarceration of those who harbor dangerous thoughts. … Our participants were highly educated managers participating in an executive education program who had extensive experience inside large business organizations and held diverse political views. … We asked participants to suppose that scientists had created technologies that can reveal attitudes that people are not aware of possessing but that may influence their actions nonetheless.

In the control condition, the core applications of these technologies (described as a mix of brain-scan technology and the IAT’s reaction-time technology) were left unspecified. In the two treatment conditions, these technologies were to be used … to screen employees for evidence of either unconscious racism (UR) against African Americans or unconscious anti-Americanism (UAA). … Liberals were consistently more open to the technology, and to punishing organizations that rejected its use, when the technology was aimed at detecting UR among company managers; conservatives were consistently more open to the technology, and to punishing organizations that rejected its use, when the technology was aimed at detecting UAA among American Muslims.

Virtually no one was ready to abandon that [harm] principle and endorse punishing individuals for unconscious attitudes per se. … When directly asked, few respondents saw it as defensible to endorse the technology for one type of application but not for the other—even though there were strong signs from our experiment that differential ideological groups would do just that when not directly confronted with this potential hypocrisy. …

Liberal participants were [more] reluctant to raise concerns about researcher bias as a basis for opposition, a reluctance consistent [the] finding that citizens tend to believe that scientists hold liberal rather than conservative political views. …

This experiment confronted the more extreme participants with a choice between defending a double standard (explaining why one application is more acceptable) and acknowledging that they may have erred initially (reconsidering their support for the ideologically agreeable technology). … Those with more extreme views were more disposed to … backtrack from their initial position. (more; ungated)

So if we oppose thought crime in general, but support it when it serves our partisan purposes, that probably means that we will have it in the long run. There will be thought crime.

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R&D Is Local, Global, But Not National

By Robin Hanson · March 7, 2013 10:45 am · Comments (15)

A recent Post article by Brad Plumer illustrates what is wrong with the usual research funding arguments:

One of the few things Republicans and Democrats have been able to agree on in recent years is that the government should be spending more on basic scientific research … Thanks to budget pressures and the looming sequester cuts, federal R&D spending is set to stagnate in the coming decade. …

As a result, scientists and other technology analysts are warning that the United States could soon lose its edge in scientific research — and that the private sector won’t necessarily be able to pick up the slack. “If you look at total R&D growth, including the corporate and government side, the U.S. is now at the low end … We’re seeing other countries, from Germany to Korea to China, make much bigger bets.” …

There’s a long, long list of world-changing innovations that can be traced back to federally funded R&D over the years. .. The key question here is how much of this innovation might have happened without government involvement. … Many economists agree that private companies tend to under-invest in very basic scientific research, since it’s hard for one firm to reap the full benefits from those discoveries. …

When the Congressional Budget Office reviewed the evidence in 2007, it concluded that government-funded basic research generated “substantially positive returns.” And it found that, on the whole, government R&D helped spur additional private-sector R&D rather than displace it. … The United States will soon spend less on all types of R&D as a percentage of its economy in the coming decade than countries like Australia and South Korea …

The sanguine view is that other countries are tossing more money at scientific research that will have positive spillover benefits for the entire world — including us. If China invents a cure for cancer, we all benefit. Others worry, however, that the U.S. economy could suffer from the fact that a greater share of research is happening elsewhere. (more)

Note the conflicting arguments: each small part of the world invests too little in R&D, because other parts gain without paying, but the US should fear falling behind nations that invest more. These two only makes sense together if the nation is the natural scale for innovation – innovations mostly leak away from their source within a nation, but mostly stay within each nation. The academic literature, however, suggests the natural scales are global and local – while there are gains to the world as a whole, gains are focused on related industries in the local area:

A recent body of empirical evidence clearly suggests that R&D and other sources of knowledge not only generate externalities, but such knowledge spillovers tend to be geographically bounded within the region where the new economic knowledge was created (Griliches 1992). That is, new economic knowledge may spill over, but the geographic extent of such knowledge spillovers is limited. … greater geographic concentration of production actually leads to more, and not less, dispersion of innovative activity. (more; see also and also)

While it would be great if the world could coordinate to promote R&D spending worldwide, there is little economic justification for forcing Wyoming and Louisiana, who spend 0.4% and 0.56% of GDP respectively on R&D, to pay for R&D spending in Massachusetts and New Mexico, where those figures are 5.49% and 7.65% (source), any more than the rest of the world pays for such spending. If the US government funds less R&D, it will be mainly states like Massachusetts and New Mexico that suffer, not states like Wyoming and Louisiana, relative to the rest of the world.

If R&D spending mostly helps the particular regions in which it happens, why do we pay for it at the national level? Probably because many see it as a national prestige good – people in Wyoming look good to foreigners by being in a nation where lots of impressive research happens in Massachusetts. Are they right, or is Massachusetts just getting a nice juicy transfer?

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Beware Far Values

By Robin Hanson · February 13, 2013 7:05 pm · Comments (18)

In the last four years I’ve posted often on construal level theory. First discovered in the context of how differently people think about the distant future, construal level theory says that people think either using a near (concrete) mode, or a far (abstract) mode, or some intermediate mix. In far mode we tend to assume things are further away in time, space, social distance, with fewer relevant categories that are each more uniform internally. In near mode we do the opposite. There are lots more correlates.

I’ve talked before a bit about how this biases our thoughts about the future, and on politics. Today I want to focus on a particularly important element: in far mode we emphasize basic values a lot more, relative to practical constraints; in near mode we do the opposite.

Consider some very near choices: if to scratch your nose, how soon to browse Facebook yet again, what to eat for lunch, or if to hit that snooze alarm again. Near mode could bias us toward paying too much attention to practical constraints in such choices, relative to basic values. But it is hard for me to see that we actually neglect basic values that much in such choices.

But if we basically get the practicality vs. values tradeoff right for near choices, and if we pay a lot more attention to basic values for far choices, then either basic values are in fact a lot more important for far choices, or we vastly over-emphasize basic values for far choices. And since I can’t see good reasons why basic values should in fact matter a lot more for far choices, I conclude that in far mode we are greatly biased to attend too much to basic values, and too little to practical constraints.

This certainly fits my more detailed opinions on large scale policy and the future. You have to pay attention to an awful lot of detail in order to figure out which policies are best, or what is likely to actually happen in the distant future. But most people seem to quickly form opinions on such topics using simple value associations. When they can identify a clear value association, people seem pretty willing to form opinions, which seems to me a vastly overconfident attitude.

Now when different people have opposing values on some topic, the average of their opinions isn’t necessarily too far in any one value direction. If some folks focus on the value of citizen freedom, while others focus on the value of reducing crime, we don’t necessarily get too much freedom or crime. It is when people largely share the same values that things seem to go the most wrong.

For example, when everyone agrees on the importance of medicine or education, or military defense, we get way too much of each of them. When futurists generally agree the democracy is good, we get too much confidence that nice futures will be democratic, or that non-democratic futures will be hells.

Really folks, think about all the details that are relevant for your ordinary near choices of when to knock off of work for the day, whether to plant a garden this year, or who to invite to a party. All those far choices of national policy have just as many if not more relevant details. And if you think about all the details relevant for guessing if you will like taking on a new task at work, realize that there are far more details relevant to deciding if you would like any particular distant future scenario. The world is complicated!

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Is US gun control an important issue?

By Robert Wiblin · February 5, 2013 9:48 am · Comments (118)

After the shocking massacre in Connecticut it looks like gun control is going to draw a lot of attention from Obama and Congress this year. This got me thinking about how important gun control might be as a political cause. The potential good achieved by focussing on this policy is in large part determined by the damage done by guns in the first place. In that light, does it deserve it?

A natural measure of the importance of the problem is the number of years of healthy life lost due to gun violence. At  the moment there are a bit over 8,000 murders with firearms each year in the US, some two thirds of the total. If we guess that the typical age of death from gun violence is 30, then the average survivor would have enjoyed another 50 years or so of healthy life. Firearm homicides would than lead to the loss of 400,000 years of healthy life each year. We would then have to add health problems among survivors of gun violence. To confirm that these figures are sensible I looked up the World Health Organisation’s Global Burden of Disease, which suggest ‘intentional violence’ as a whole cost the US and Canada about 1,100,000 years of healthy life each year. Two thirds of this would be 650,000 years, a figure which amounts to about 0.8% of the total burden of disease and injury in the US.

Another even larger problem than murder – at least as far as years of healthy life lost - is suicide. Easy access to guns makes suicide attempts more likely to succeed. The US suicide rate is 12 per 100,000; tragically high, though sadly unexceptional by international standards. If the typical suicide victim would have lived another 45 healthy years, this amounts to an annual burden of 1,600,000 each year, roughly the WHO’s figure. [1]  Firearms are used for about half of these suicides, so we’ll say they have a burden of 800,000 years of healthy life, or about 1% of the total burden of disease and injury.

How much could the US hope to reduce these figures? Of course the relationship between the number of guns and violence is contested, and I don’t really want to get drawn into that debate. I will just assume, for the sake of argument, that gun control policies could indeed help reduce violence. For that purpose, let’s imagine it could get firearm violence and suicide down to the average of other OECD countries. [1] Doing so would reduce the gun death rate (and I will assume injuries too) by 80% from ~10 to ~2 per 100,000. This is wildly optimistic given the other drivers of violence and suicide in the US, and the timidity of any likely gun control laws under the Second Amendment. Even if guns did become hard to access, we would expect to see substitution to other weapons. Nonetheless, it offers a useful upper bound.

An 80% drop in firearm deaths and injuries would prevent the loss of 1.15 million years of healthy life each year, or around 1.4 per cent of all the damage done by disease and injury in the US. This falls inconveniently between ‘very little’ and ‘quite a bit’. How can we put this figure in perspective? One option would be to consider how much people claim to value their lives, while another would be to compare it to other available options for saving lives. Here I will use the latter to give some idea of how focussing on gun control compares to other policies or causes that might improve the health of Americans.

How much does it cost to save a life in the US?  The NHS in Britain conveniently uses £30,000 (around $US50,000) for each year of healthy life as the highest price at which a treatment is worth funding. The US has no central body for making these decisions, so no generic ‘marginal cost’ exists. A conclusion of the classic paper, Five-hundred life-saving interventions and their cost-effectiveness, is that the cost of extending lives varies across several orders of magnitude depending on the approach you take. Nonetheless, many interventions in medicine and general safety fell between $5-50,000 for a year of life, at least in the mid-90s. A quick search turns up vaccination of US girls against HPV, which buys a year of healthy life for about $44,000, total knee arthroplasty for $18,300, HIV screening for under $25,000 and flu vaccination at $8,000-52,000. The availability of all of these could be expanded. At a rounded $50,000 figure, the equivalent of 1.15 million years of healthy life could be saved for $57 billion, or 0.38% of US GDP – a significant sum, though under a fifth of long run annual growth. By comparison, the US Federal Government already spends about 24% of US GDP, and all healthcare spending accounts for some 15%. Based on Robin’s work on the inefficacy of much US healthcare spending, redirecting some of that enormous budget to truly life-saving activities would go a long way.

If American activists or voters currently preoccupied with gun control were willing to look farther afield in their desire to prevent unnecessary death, directing government spending to provide bed nets to protect children in developing countries against malaria could save 30,000 kids for a meagre $70 million, or 0.00000046% of GDP. Sadly, the effectiveness and size of US foreign aid is barely discussed.

Of course this health story is not the full picture of the damage done by gun violence. We ought also consider the:

  • Costs incurred in trying to stay safe
  • Costs of caring for the injured
  • Loss of human capital from adults dying
  • Resulting distress and fear
  • Reduced urbanisation as a result of crime (which lowers productivity, among other things).

I would appreciate attempts to quantify these costs but don’t have time to pursue them myself right now. I would note in passing that many other interventions that improve health and safety would also reduce these harms to some extent.

My interpretation of the above is that gun violence is a serious issue in the US. It is not being blown out of proportion like shark attacks or terrorism. At the same time, the impact of guns on US health-span is modest, and lower than many common and avoidable diseases or accidents which fail to inspire a national conversation. Guns have become a hot issue because of their grisly and visible results, as well as fierce identity politics, rather than the absolute scale of the damage they do. If the main goal of gun control advocates were to save lives, their cause would not stand out as low-hanging fruit, especially if they cared about foreigners as well as Americans. Given the host of major problems facing the US, the limited attention of Congress and the White House, and the improbability of achieving a significant reduction in the number of dangerous weapons available, it is not a cause I would jump on.

[1] Some would say that a death by suicide isn’t as bad as a murder, because someone who is preventing from committing suicide probably has a low quality of life. There is some truth to this but I will ignore it, consistent with my desire to define an upper bound.

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US laissez-faire serves a greater global good

By Robert Wiblin · January 28, 2013 10:39 am · Comments (61)

Liberals across the developed world are very concerned by inequality within the United States, as demonstrated by global interest in the Occupy Wall Street movement. This is peculiar because poverty within the United States is less common, and less severe, than it is in most countries around the world. The US does have a high level of inequality for a developed country, but it is not extreme by global standards Unfortunately, this disproportionate concern for Americans leads to attempts to narrow income inequality that may increase poverty and inequality worldwide. [1] I’ll explain how.

The US has long been one of the most innovative countries in the world, and exports the technologies it develops everywhere it can. This is, at least in part, due to its relatively cut-throat culture and laissez-faire economic system. Low taxes and ungenerous welfare mean the benefits of working hard, taking risks and making it big, are higher in the US than most other developed countries. More importantly, weaker regulation in the US means incumbents are less protected from competition, and talented people can more easily start new firms and overturn the status quo. Conversely, daring entrepreneurs are less rewarded in countries which redistribute a great deal of wealth to the poor, or build thickets of regulation that unintentionally (or intentionally) slow down disruptive businesses and technologies. While tempering the ravages of the market may on balance improve the welfare of current Americans, doing so is likely to lead to less experimentation in science, equipment, software, art, business models and so on.

Such innovation generates enormous and enduring positive externalities because the successes are copied at low cost across the world and enrich everyone’s lives. Economic theory would predict that coordinating to stimulate more of these costly but invaluable innovations would be a major concern in international diplomacy. But for some reason it is not, and so it is up to individual countries and the people within them to take these risks on behalf of us all.

Miserly social security and weak regulation in America at most harm 0.3 billion people as long as such policies persist; any resulting innovation spillovers help the remaining, poorer 6.7 billion for centuries to come because improvements in technology persist and compound over time. We all continue to benefit from the hard work of those who developed the telephone and prompted the development of an ever-growing number of related products.

This is not to say that the Occupy movement does not have some important points; it is crucial to oppose the US’s many ‘crony capitalist’ policies which enrich the wealthy while also stifling competition and creative destruction. [2] Nor would the ideal necessarily be a minimal government; there is a prima facie case that government investment in education, R&D, natural-monopoly infrastructure, and so on, can spur technological change. Unfortunately, a higher and higher share of US government spending is going to the opposite: the military, Medicare, Medicaid, unemployment benefits and pensions. These programs are not investments in the future, and generate few if any positive spillovers for future Americans and the rest of the world. And because these programs are funded by taxes on the hard-working and successful, they blunt the incentives to invent things that help the whole of humanity.

Anyone who cares about lowering poverty and inequality, and doesn’t believe that American citizens are dramatically more important than everyone else, should think carefully before encouraging the US to follow the European economic model. If the US were go even further and slip into the sclerotic ‘extractive‘ economic model found in most of the developing world and some of southern Europe, it would be a global catastrophe. Resisting any movement in this direction is one way that heartless US conservatives are inadvertently more compassionate than they look.

Update: Turn out I’m I’m not the first person to notice this problem!

Update 2: Many people below doubt whether the US is more laissez-faire, and whether a laissez-faire model does as a general rule foster innovation. If you doubt these things, at least take away the point that whichever policies you think do stifle innovation, whichever countries they are found in, are much more harmful than they first seem. I will research and write up more on the topic of which broad economic settings lead to the most innovation in the future.

[1] The effect on wealth inequality is unclear, but the effect on ‘welfare inequality’ is likely to be negative.

[2] Though perversely, lousy healthcare policies have led to very high prices for medicine in the US, which has driven investments in new procedures and drugs, which have been borrowed by other countries. My guess is that effort probably would have been better directed at other industries.

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Hail Scott Siskind

By Robin Hanson · January 14, 2013 9:30 pm · Comments (47)

Scott Siskind gets it:

A democracy provides a Schelling point, … an option which might or might not be the best, but which is not too bad and which everyone agrees on in order to stop fighting. … In the six hundred fifty years between the Norman Conquest and the neutering of the English monarchy, Wikipedia lists about twenty revolts and civil wars. … In the three hundred years since the neutering of the English monarchy and the switch to a more Parliamentary system, there have been exactly zero. … Democracy doesn’t always perform optimally, but it always performs fairly, … and that is enough to prevent people from starting civil wars.

Academia is different. Its state resembles that of pre-democratic governments, when anyone could choose a side, claim it was legitimate, and then get into endless protracted fights with the partisans of other sides. If you believe ObamaCare will destroy the economy, you will have no trouble finding a prestigious academic who agrees with you. Then all you need to do is accuse the other academics of bias, or cherry-picking, or using the wrong statistical test, or any of the other ways to discredit scientists you don’t like. …

A democratic vote among the scientific establishment is insufficient to settle these topics. The most important problem is that it gives massive power to the people who determine who gets to be part of “the scientific establishment”. … So not having any Schelling point – being hopelessly confused about the legitimacy of academic ideas – sucks. But a straight democratic vote of academics would also suck and be potentially unfair.

Prediction markets avoid these problems. There is no question of who the experts are: anyone can invest in a prediction market. There’s no question of special interests taking it over; this just distributes free money to more honest investors. Not only do they escape real bias, but more importantly they escape perceived bias. It is breathtakingly beautiful how impossible it is to rail that a prediction market is the tool of the liberal media or whatever. …

Nate Silver might do better than a prediction market, I don’t know. But Nate Silver is not a Schelling point. Nobody chose him as Official Statistics Guy via a fair process. And if someone objected to his beliefs, they could accuse him of bias and he would have no recourse until it was too late. If a prediction market is almost as good as Nate, and it is also unbiased and impossible to accuse of bias, we have our Schelling point. …

Just as democracy made it harder to fight over leadership, prediction markets make it harder to fight over beliefs. We can still fight over values, of course – if you hate teenagers having sex, and I don’t care about it, we can debate that all day long. But if we want to know whether a certain law will raise the pregnancy rate, there will be only one correct answer, and it will only be a mouse-click away.

I think this would have more positive effects than anyone anticipates. If people took it seriously, not only would the gun control debate be over in an hour, but it would end on the objectively right side, whichever side that was. If single-payer would be better than Obamacare, we could implement single-payer and anyone who tried to make up horror stories about how it would destroy health care would be laughed out of the room. And once these issues have gone away, maybe we can reach the point where half the country stops hating the other half because of disagreements which are largely over factual issues. (more; HT Stephen Bachelor)

By the way, my futarchy paper will appear this year in Journal of Political Philosophy. This is very close to the final version.

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Democracy Is Competition

By Robin Hanson · January 11, 2013 1:20 pm · Comments (30)

How much should business be regulated? This is often framed as a choice between the good feelings of freedom, and the costs of unmanaged cut-throat competition. But consider: the democracy that most people want to use to manage business is itself a form of cut-throat competition. That is, candidates usually have wide freedoms as they compete to get elected.

Oh sure there are places like Iran or China where democratic competition is highly regulated, such as via restrictions on who can run for office and what can be said to whom. But such places are usually seen as shams – real democracy must have highly competitive elections.

Fans of democratic regulation of business thus need to explain why mostly unregulated business competition is bad, while mostly unregulated candidate competition is good. In both cases ignorant customers are often exploited, and there can be lots of waste and duplication of effort.

Libertarians, who want pretty free business competition but more limits on what regulations democratically-elected governments can choose, also need to explain why business competition is good but democratic competition is bad. It is autocrats and Adictators who are the most consistent here – they usually want strong regulation of both.

Added 12Jan: Campaign finance rules seem more to regulate business than candidates. The intuition is that unfair business competition makes some people unfairly rich, and we shouldn’t let that unfairness influence elections.

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A King is fine, so long as he’s one of us

By Robert Wiblin · November 27, 2012 9:00 am · Comments (54)

Living today in longstanding democracies, it can be hard to comprehend why so many people living in the past, or other countries, would permit or even enthusiastically support the unchecked power of their monarchs and dictators. Wasn’t it obvious to them how dangerous and corrupting the accumulation of power by individuals could be?

When someone we don’t like is in power, all of the intellectual arguments for separation of powers jump to mind to justify our fears. But sadly our tribal minds go looking for totally different rationalisations as soon as ‘one of us’ is in charge. This is nicely demonstrated by the acquiescence of US progressives to the further expansion of Presidential powers that supposedly horrified them during the Bush administration:

For the last four years, Barack Obama has not only asserted, but aggressively exercised, the power to target for execution anyone he wants, including US citizens, anywhere in the world. He has vigorously resisted not only legal limits on this assassination power, but even efforts to bring some minimal transparency to the execution orders he issues.

This claimed power has resulted in four straight years of air bombings in multiple Muslim countries in which no war has been declared – using drones, cruise missiles and cluster bombs – ending the lives of more than 2,500 people, almost always far away from any actual battlefield. They are typically targeted while riding in cars, at work, at home, and while even rescuing or attending funerals for others whom Obama has targeted. A substantial portion of those whom he has killed – at the very least – have been civilians, including dozens of children.

Worse still, his administration has worked to ensure that this power is subject to the fewest constraints possible

…

President Obama was recently convinced that some limits and a real legal framework might be needed to govern the exercise of this assassination power. What was it that prompted Obama finally to reach this conclusion? It was the fear that he might lose the election, which meant that a Big, Bad Republican would wield these powers, rather than a benevolent, trustworthy, noble Democrat – i.e., himself.

This is a nice example of human hypocrisy, as if we needed another. So long as a member of the other political tribe was in control, progressives would convince themselves that such a power grab was Wrong On Principle. But now that their man is in control, we can all relax and just trust him to be a Nice Guy:

… the primary reason for this fundamental change in posture [among progressives] is that they genuinely share the self-glorifying worldview driving Obama here. The core premise is that the political world is shaped by a clean battle of Good v. Evil. The side of Good is the Democratic Party; the side of Evil is the GOP. All political truths are ascertainable through this Manichean prism.

The result is that, for so many, it is genuinely inconceivable that a leader as noble, kind and wise as Barack Obama would abuse his assassination and detention powers. It isn’t just rank partisan opportunism or privilege that leads them not to object to Obama’s embrace of these radical powers and the dangerous theories that shield those powers from checks or scrutiny. It’s that they sincerely admire him as a leader and a man so much that they believe in their heart (like Obama himself obviously believes) that due process, checks and transparency are not necessary when he wields these powers. Unlike when a GOP villain is empowered, Obama’s Goodness and his wisdom are the only safeguards we need.

Thus, when Obama orders someone killed, no due process is necessary and we don’t need to see any evidence of their guilt; we can (and do) just assume that the targeted person is a Terrorist and deserves death because Obama has decreed this to be so. When Obama orders a person to remain indefinitely in a cage without any charges or any opportunity to contest the validity of the imprisonment, that’s unobjectionable because the person must be a Terrorist or otherwise dangerous – or else Obama wouldn’t order him imprisoned. We don’t need proof, or disclosed evidence, or due process to determine the validity of these accusations; that it is Obama making these decisions is all the assurance we need because we trust him.

As Glenn Greenwald notes, this blind trust in wise and just rulers is the antithesis of how the American system, designed in reaction to a foreign ruler who wasn’t ‘one of us’, was supposed to work: ”in questions of power…let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.” Unfortunately the constitution isn’t doing much of a job of binding down the President, and the public never managed to bind themselves to the mast to keep caring.

It is especially reckless to allow this precedent to be set for a new technology for surveillance and assassination that will become gradually more accessible to both state and non-state actors. If it had its eyes on the long term, the US would be trying to develop laws and international norms to make sure that this technology is not used in a way that backfires on them in the future. This issue appears not to have been considered much at all.

If you ever find yourself mystified by the tolerance people across history or the world have for giving their rulers great discretion, just because they are charismatic or part of the same cultural group, just look around and you’ll see the same instinct remains all around us today.

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On Friend Jealousy

By Robin Hanson · November 17, 2012 3:30 pm · Comments (13)

We humans have many kinds of relationships with each other. We can be lovers, parents, children, teachers, students, priests, parishioners, customers, suppliers, drivers, passengers, writers, readers, etc.

Jealousy can make sense in most of these relations. Jealousy is a fear that potential associates will choose instead to associate with someone else. I can be jealous that my kids will like their mom better than me, that my students may prefer other teachers to me, or that blog readers may prefer to read other blogs.

Role specialization is a robust way to limit jealousy. If dads have different parental roles than moms, then my kids could like me best as a dad, and their mom best as a mom, and I less have to fear that they will substitute her for me. If I teach a particular course well, then my students can like me for being good at my course, and others for teaching their courses well, and I need less fear that few students will want me to teach them.

We use role specialization a lot, to great benefit, in our business and work lives. And traditional societies greatly specialized their personal and family relations. Genders, ages, and classes all had distinct roles to play. Wives and mistresses were even clearly distinguished. Since we have today weakened such role specialization, we now have more scope for jealousy in our personal and family relations.

One interesting exception is friendship. While friends sometimes specialize into more particular friendship roles, like “golf buddy”, and we are sometimes jealous of others supplanting our friend roles, such as “best friend”, both of these tendencies are noticeably weaker relative to non-friend relations. So much so that when people try to talk you out of being jealous in some other area, they usually point to friendships, as in, “You can have lots of friends without jealousy; why not do that with lovers too?”

Why treat friendships so differently? My guess is that friends, more than other relations, function in large part to cement our position in larger social coalitions. As a social species, we play a lot of coalition politics, and in coalition politics one needs many allies who themselves have many other allies. For this function jealousy makes a lot less sense. If my friends have more other friends, that makes them better not worse friends for me, if their function is to cement my position in a larger social alliance.

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Was Intrade being manipulated over the last month?

By Robert Wiblin · November 7, 2012 12:06 pm · Comments (72)

Intrade’s betting odds on the 2012 presidential election have differed significantly from those available elsewhere. For the 48 hours preceding the election, the difference in the implied probability of Obama winning on Intrade relative to other betting agencies like Betfair, was 8 to 15 percentage points. This persisted until a large share of Ohio votes had been counted and Colorado and New Mexico were starting to count, at which point the difference quickly evaporated. Over the previous 3 weeks or so, the difference had moved in the range of 5 to 10 percentage points.  The same distortion was observed in favour of McCain during the election in 2008, though to a lesser extent.

This provided an opportunity to make substantial money by betting on Obama on Intrade and Romney elsewhere – a so called dutch book, or ‘arbitrage‘. I joined some colleagues at 80,000 Hours doing this yesterday to earn money for our favourite cost effective charities. We each walked away with about $500 after all of the associated fees. Eyeballing it, a dutch book is profitable, ignoring the cost to your time, if the probability gap is larger than 3 percentage points; below that, the fees involved will eat up your winnings.

Why was this possible? I don’t have a good answer, but I can suggest one possibility. Some noteworthy aspects of the situation are:

  • Americans can’t deposit money into Intrade using credit and debit cards – they have to use bank transfers.
  • Bank transfers take at least two days to arrive and cost over $20.
  • Everyone else can choose between cards and bank transfers.
  • Cards are instantaneous and free (if denominated in US dollars anyway) but have a $2,000 deposit limit in the first month, and $5,000 thereafter.
  • It takes at least a day, probably two, to open a new Intrade account and have it approved.
  • There are other significant barriers to entry – knowing about the issue, learning about the fees, opening an account with another betting agency and finally having the time and confidence to correctly place the hedge.
  • Intrade seems very widely covered by the US media.

A single person with a huge amount in their account from a wire transfer could manipulate the market by selling Obama’s shares down, or buying Romney’s up. This appeared to be happening in the 67-72% likelihood range in which Obama was stuck for a long period of time, while other larger agencies were placing him around 82%. Several people on Intrade’s forum spotted what they thought were abnormally large bids for Romney’s stock.

Once someone started doing this, it would take at least two days, probably three, for a wealthy or ambitious person to respond by wiring in enough money to bet against them. They would have to hope that the manipulation persisted long enough for them to profit from it. Until then, people outside the USA would be limited to putting at most $2000 or $5000 into their accounts, which is barely worth the effort for someone with the required skill. Someone could plan to do this over the last few days of the election without generating much resistance.

The volume yesterday on Obama’s Intrade shares was about 600,000. If all of those trades involved one person, who was losing 10 percentage points on each share, they would have blown $600,000 to keep Obama’s odds down. The volume over the previous three weeks is hard to read from Intrade’s graphs, but looks to be about the same again. So a single cunning person willing to lose $1 million could have singlehandedly driven the price difference, if they wanted to influence perceptions of the race and encourage voter turnout. Out of the $6 billion spent on the election so far, that’s not a big investment. Intrade will face the risk of this until they make it easier for wolves to fund their accounts and go out hunting sheep.

Weaknesses of this theory are:

  • Why didn’t manipulation over the previous three weeks prompt someone to move a large sum onto Intrade in anticipation?
  • Why haven’t wealthy Obama supporters attempted the same trick?

Nonetheless, I think this is more likely than a broad pool of Intrade participants being enthusiastic about Romney against all the evidence, and unaware that they could get better odds elsewhere.

If I were a Democrat supporter with a lot of money, I would plan to profit from similar situations in the future while simultaneously improving Intrade’s performance.

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