A life well-lived

John Harsanyi was one of the founding fathers of Game Theory, a fascinating part of economic theory that examines how agents make strategic choices when the value of their actions depends on the choices of others. In 1994, he won the Nobel Prize in Economics for his work, along with John Nash and Reinhard Selten. Although most people would rate Nash's contribution as the greatest (in discovering Nash Equilibria, the foundation of all Game Theory) Harsanyi added a lot to the understanding of games of incomplete information, greatly expanding the range of situations that can be analysed using Game Theory tools.

Long before this, he also came perilously close to be killed in the Holocaust. He was a Hungarian Jew in Budapest in 1944, which was a pretty damn hazardous situation to be in. As he describes it:

In that November the Nazi authorities finally decided to deport my labor unit from Budapest to an Austrian concentration camp, where most of my comrades eventually perished. But I was lucky enough to make my escape from the railway station in Budapest, just before our train left for Austria. Then a Jesuit father I had known gave me refuge in the cellar of their monastery.

Before winning a Nobel Prize, John Harsanyi escaped both from the mutha-f***ing Nazis in World War 2. But it gets better. He stayed around in Budapest, and became a professor in Sociology:

But in June 1948, I had to resign from the Institute because the political situation no longer permitted them to employ an outspoken anti-Marxist as I had been.

He hated communism, and wasn't afraid to say so. In 1948. In Budapest. Think about that. Would you have had the balls to say that stuff?

But [Anne, his eventual wife] was continually harassed by her Communist classmates to break up with me because of my political views, but she did not. This made her realize, before I did, that Hungary was becoming a completely Stalinist country, and that the only sensible course of action for us was to leave Hungary. 

Actually we did so only in April 1950. We had to cross the Hungarian border illegally over a marshy terrain, which was less well guarded than other border areas. But even so, we were very lucky not to be stopped or shot at by the Hungarian border guards.

John Harsanyi also escaped from the mutha-f***ing Communists in 1950. Holy Hell! 

He got to Australia, didn't speak the language and his credentials were worthless.So what did he do? Complain to a diversity consultant? Protest that the government wasn't supporting him enough? Lobby for Hungarian language education and civic notices?

As my English was not very good and as my Hungarian university degrees were not recognized in Australia, during most of our first three years there I had to do factory work. But in the evening I took economics courses at the University of Sydney. 

No, instead of bitching, he worked his ass off in a factory and studied economics at night.

And then won a God Damn Nobel Prize in the subject. 

If Milton Friedman and Chuck Norris had a son together, that son would be John Harsanyi.

John Harsanyi, for being a wicked economist, an opponent of tyranny and a thoroughly hardcore dude, you are hereby post-humously inducted into the Shylock Holmes Order of Guys Who Kick Some Serious Ass.

I was reading about this, and two things occurred to me.

The first is how close the world came to never having heard his insights. It's probable that someone else would have figured out similar ideas eventually, but the economics profession and the world benefited greatly from having John Harsanyi pass through this vale of tears. Any small number of mishaps, and he would have been one more unknown death statistic for the Nazis or Communists.

And that is the second point is this - how many John Harsanyis didn't make it? How many more Nobel prize winning insights were lost to the butchers of Auschwitz, the cowardly scum of Nanking, and the rest of World War 2's parade of horrors? The Holocaust in particular killed millions of Ashkenazi Jews, a group notable for their unusually high intelligence. It is a virtual certainty than many future prodigies were killed over those years, whose insights might have advanced human knowledge and welfare in ways we'll never know. What a horrible, criminal waste of humanity. The deaths of the many ordinary people in World War 2 are no less tragic for their lack of extraordinary potential. But it's hard not to wonder at what might have been. 

Quote of the Day

From The Dogg:

[Y]ou can’t become a vegan, all the vegans I’ve ever met are angry. I’m not sure if that’s because they’re weird or just permanently hungry.

Comedy Gold and +1 Insightful! What a combo.

Seems as good a strategy as any...

Ha!

How to Fail in Business Without Really Trying

Over at Paco Enterprises, Paco has an interesting post on Solyndra, the glorious new bankrupt solar energy company that managed to finagle $500 million in loans from the government and proceeded to send the money (and the company) down the rathole.

The more that comes out about this company, the more it becomes apparent that this was a horrible investment of money to start with. From the Government! I know, you must be as shocked as I was. As Zero Hedge noted, when you're producing a low-margin commoditised product like solar panels, and you've got revenues of $58 million versus cost of goods sold of $108 million, that's a recipe for the fast track to insolvency. Coyote's description is almost right:

Even in the worst run late 90′s Internet company I ever encountered, they were not selling dollars for 50 cents.

True enough. My only quibble with this metaphor is that if Solyndra were actually selling dollar bills for 50 cents, it would be a big improvement, because at least the final product would be re-salable for a full dollar. Here, it's more like they took a dollar bill to the 7-11, got change in quarters, melted two of the quarters into a blob of metal and proceeded to flush the blob down the toilet.

There is only one silver lining that I can see in this whole mess. At least the company actually went bankrupt, and now hopefully will be liquidated. In other words, taxpayer losses appear limited to only (only!) $500 million of yours and my money. By contrast, had Solyndra managed to limp along long enough to become a large political constituency, we probably would have been on the hook for much larger ongoing bailouts. It could have been added to the pantheon of dollar-bill blast furnaces of General Motors, Chrysler, Fannie Mae, Freddie Mac and the Post Office that no matter how badly they perform, the government picks up the tab and nobody ever gets fired.

The best thing Solyndra did for us was to fail fast enough and spectacularly enough that even the most coked-out green energy fanboys in the government couldn't justify throwing more money its way. You'll forgive me for not celebrating this fact too highly.

Business Models I Can Respect

Every now and then, I'm struck by a company where my overwhelming response is 'Damn, I can't believe they're selling things that cheap.'

One of those is White Castle (most famous for the 'Harold and Kumar go to White Castle' movie). I had a friend in Chicago who thought this place was awesome (he also had a penchant for Michelin star restaurants, so he spanned the whole culinary universe). I went there with him once, and the burgers there were nasty. They were so bad, in fact, that it taught me something I didn't imagine was possible - that there is in fact fast food of a sufficiently low quality that I wouldn't want to eat it. Everything else - McDonalds, KFC, whatever - retained a feeling of tasty indulgence. It's low quality and bad for you, but boy is it tasty. Not White Castle. I don't plan to ever go back.

But that's not what's most important. What's truly amazing is that their base hamburger costs 63 cents. 63 frigging cents! (At the time it was 50 cents). And they're making a profit selling it for 63 cents. A profit large enough to keep them in business. Truly astonishing.

Reader, I stand in awe of a business model that can profitably produce burgers at scale for 63 cents. Sure, it's tiny and low quality. But suppose you exempted me from every health code and labor regulation. Suppose you let me make the meat out of diseased offal and scrapings from the abattoir floor. Suppose you let me make the bun using moth-eaten, moldy bread. Suppose I didn't even have to keep the quality high enough that anyone would actually purchase it.

Even then, I still can't see me way to making a hamburger for less than 63 cents.

White Castle can, and for that I take my hat off to them. I don't want to eat there, but they retain my strong respect and regard.

Slowly, Scammer Technology Catches Up

If you're anything like me, you've been getting a large proliferation of spam emails containing (presumably infected) word attachments about insurance claims, lotteries, etc.

It seems that viruses using word macros have finally hit the mainstream, by which I mean that average scam artists and spam sites are using them.

Of course, this was all predicted way back in 1995, with the famous W32/Concept virus.

This was the first 'in-the-wild' virus to utilise Word macros. The virus was notable because it infected the user's global document template, and puts a series of macros in there.

The most famous of these was one entitled 'Payload'. The payload macro never actually executed - it merely contained the following phrase:

That's enough to prove my point

The point being, of course, that the word macro language has tons of powerful tools at its disposal that could wreak all sorts of havoc. As you can find out, should you be interested in knowing exactly what the 'YAHOO_AND_MSN_LIVE_LOTTERY.doc' file contains.

The massive proliferation of spyware and computer viruses has a lot to do with incentives. Way back in the glory days of 1995, viruses were relatively rare, and this has every because it was hard work to make them, and the people doing so were akin to computer-based graffiti artists. The art was in their ability to infect lots of computers in clever ways, but that alone doesn't motivate too many people except antisocial nerds.

Back when I had a System 7 Mac in 1995, I remember that the main free anti-virus program was called Disinfectant. It actually gave you a list of all the viruses it was scanning for, and a description of what they did that you could read through. I think there was about 14 of them. The new version of spybot checks my laptop for 808,217 types of spyware.

The internet has had an enormous role in this increase, in two ways. The first is incentives - the ability to direct a host computer's traffic to spam sites that generate ad revenue has proven to be a far, far greater motivation for human behaviour than just the thrill of writing a virus.

In addition, email and infected web sites have done for the spread of computer viruses what international air travel did for the spread of biological viruses - everyone can be infected, and it's far harder to cordon yourself off from everyone else.

Looking back, the chances that my System 7 mac was going to be infected with anything were virtually zero, but that didn't stop Shylock circa 1994 from diligently checking every few weeks. Boy that seems hilarious now. Now, for most people spyware and malware are just facts of life. I try to remove most of it and stop it crapping up my computer completely, but I take it as given that it will get infected eventually. In this particular arms race, the offense always has the upper hand.

The only consolation is that most of the people writing spyware aren't as smart as whoever wrote W32/Concept, so it takes them a little longer - 15 odd years, in this case.

The Number of Traffic Accidents

Sometimes it seems odd how comparatively safe driving is. When you're barrelling along the freeway at 65 miles an hour, you don't actually have much margin for error. It's a fair assumption that if you crash badly, you'll die. Even if the car cushions the blow, the real problem is that your brain is also decelerating against the inside of your skull, and that tends to be problematic.

In addition, there are lots of ways that you can make mistakes. The range of human abilities is vast, ensuring a reasonable number of woeful drivers on the road at any one time. In addition, there are loads of people who are tired, or fiddling with the radio, or text messaging their friend.

Given all this, it's not surprising that people have fatal accidents. What's surprising is that there aren't a whole lot more of them. In a major city, hundreds of thousands of people drive around every day without incident.

If I were from 100 years ago and were explained how the road system works, I think I would estimate far more accidents than there are.

I think it shows the surprising ability of the average person to act in a safe manner, anticipate other people's mistakes, and correct course before there's a problem.

Humans - they'll do all sorts of stupid stuff, but every now and again they'll surprise you with a pretty damn good and resilient system that operates with a fairly low level of central oversight.

The funniest picture I've seen recently.

Ha!

Psychological Constraints are Real Constraints

Over the years, I've increasingly come to the conclusion that the advice to 'try harder' is largely useless.

If you, like me, have battled with procrastination at some point, you possibly find yourself thinking 'Why can't I just sit down and work for 8 hours straight, instead of wasting time on the internet?'

On the other hand, my attempts to boost my productivity rarely last more than a few days, at least absent concrete, short-term, high-stakes deadlines. Once when I had a really big work deadline a month away, I managed to put in a full month of 17-hour work days, every day. But then I was exhausted for the next two months. Most of the time, each new productivity scheme lasts either a few days, or a few hours.

So what gives? Am I just abnormally lazy? Are you?

I think that the way to think about it is to realise that psychological constraints are every bit as important as physical constraints. Just because you can't see them doesn't mean they're not real - your brain is part of your body, just like your muscles, and it's not much easier to just instantly reconfigure your brain than it is to instantly grow your muscles.

For instance, suppose someone was a slow runner. No matter what they did, they can't crack 17 seconds for 100m.

If you were to tell them, "Why don't you just run faster? Why don't you stop being so lazy? You just like taking it easy and running slowly, and don't want it enough!", it would be obvious that this was completely useless advice. Maybe the person lacked natural ability to run very fast. Maybe the person hadn't trained enough, or in the right manner.

Maybe the person actually was being lazy, and not running as fast as they could. But would you bet on that as the main explanation?

My guess is that the ability to concentrate for 5 hours in a row and not click on your internet browser is a skill,  just like running. Some are born with it. Some have to train in specific ways to get it. Some will never have it.

The same holds for the ability to be a door-to-door salesman or telemarketer, and have people scorn you over and over and over and keep on being cheerful.

The same holds for being able to cold-call 20 women in a row in a bar and get rejected each time.

You might be born with this ability, or you might have to train in certain ways. But if we take the average person and just chuck him in that situation, don't be surprised when he fails. And when that happens, laziness is probably not the most fruitful way of understanding the distribution of outcomes.

I can't run 100m in 11 seconds, I don't have a vertical leap of 1m, and I can't make myself do non-stop work for hours on end. And I'm okay with all three of those.

As to how you deal with this problem, your mileage may vary. I respond by repackaging my procrastination as alternative endeavours. Like, you know, writing blog posts. This way, I can surround myself with audiences who appreciate my time-wasting. Yes, that's it. I'm too well-rounded and interesting to do nothing but work.

And who'd want to run it in 11 seconds, anyway?

Problem Solved!

"Boy throws rocks at cars, gets hit by crossbow"

Ha!

"The San Diego Union-Tribune newspaper says his injuries are not life-threatening."

Even better! This sounds like the feel-good story of the year.

There is of course only one appropriate response, namely "Do you see what happens? Do you see what happens, Larry?"

Brass Balls

The world sometimes seems like a very tragic place.

The ones that always get to me are displays of crazy levels of bravery in the pursuit of noble, yet ultimately futile, causes. If there is ever a sense of man fighting righteously against an uncaring and hostile universe, this is it.

Khaled al-Johani turned up at the site of a planned protest against the Saudi Arabian government. Authorities had gotten word of it, and the place was crawling with policemen, but nary a protester around.

It goes without saying, dear reader, that the Saudi Arabian government, full of kleptocratic thugs, takes a dim view of protests. Just ask interior ministry spokesman, General Mansour Sultan al-Turki:

"Saudis…do not have anything to demonstrate for. The Grand Mufti has talked about this and [protesting] is un-Islamic behaviour."

Khaled turned up, alone, to speak to the media about the oppression in his country. Watch below to see some huge brass balls in action.

It's clear from his actions that he knew he was going to be arrested and thrown in prison.

He was. All the way back in March. He's still there, and I wouldn't advise you to hold your breath waiting for him to be released.

It's also pretty clear from his actions that he knew that this was not going to actually achieve any difference in how the country is governed. Saudi Arabia will remain a corrupt hellhole, kept afloat by oil money bribery, thuggish secret police, and double-dealing with radical Islam.

And indeed, it looks like it's going to stay that way.

Saudi Arabia is a long way from 17th Century England, but Mr al-Johani would not be an unfamiliar figure to John Milton:

Give me the liberty to know, to utter, and to argue freely according to conscience, above all liberties.

But this is only half the tragedy.

The other half of the tragedy is that even in the rare cases when tyrants get deposed, it is far from clear that what replaces them will not, in fact, be as bad or worse.

 From the Washington Post:

A few minutes’ drive from the fire station, at least 15 bodies, most of them Gaddafi’s black African supporters, lay rotting in the sun at a traffic junction outside his Bab al-Aziziyah complex. ...

 But not all of them looked like ordinary battlefield deaths. Two dead men lay face down on the grass, their hands bound behind their backs with plastic cuffs....

The worst treatment of Gaddafi loyalists appeared to be reserved for anyone with black skin, whether they hailed from southern Libya or from other African countries. ...

But many of the detainees in Zawiyah told Amnesty International they were merely migrant workers “taken at gunpoint from their homes, workplaces and the street on account of their skin color,” Eltahawy said.

The vast majority of the Khaled al-Johanis of this world will never get to live in a country as free as the one that you and I take daily for granted.

Bad News, Good News

The bad news is that the world is full of assholes, and sometimes they get together to form fraternities.

The good news is that my priors seem well-calibrated.

The bad news is that lots of people desperate for social validation put up with a lot of misery from such assholes.

The good news is that, at least in this regard, I wasn't one of them.

Questions you probably never thought about...

...but are nonetheless fascinating once you consider them.

What would it be like to walk around the earth if it were shaped like a cube?

Cecil from The Straight Dope gives a thoroughly fascinating answer, and it conforms with the 'Ask a Physicist' answer too.

For starters, all the atmosphere and oceans would be concentrated in blobs in the centre of each face. So when you walked far enough, you would be out in space.

The comment thread on Hacker News had a good rough metaphor for it: imagine that you're on a regular spherical planet, but with 8 big three-face pyramid mountains bolted on for the corners. This gives you an idea, but it's not exactly correct - when you think of walking up the side of a pyramid, you imagine a constant slope. Here, the pull of gravity would make it more like walking up the sides of a round bowl (even though it's geometrically a pyramid). So walking towards the corners is like walking up a mountain that keeps getting steeper and steeper.

You should read the straight dope column for the full low-down.

'morsch' at Hacker News also quotes a description of a water moon from 'The Algebraist' by Iain M. Banks

I was born in a water moon. Some people, especially its inhabitants, called it a planet, but as it was only a little over two hundred kilometres in diameter, 'moon' seems the more accurate term. The moon was made entirely of water, by which I mean it was a globe that not only had no land, but no rock either, a sphere with no solid core at all, just liquid water, all the way down to the very centre of the globe.

If it had been much bigger the moon would have had a core of ice, for water, though supposedly incompressible, is not entirely so, and will change under extremes of pressure to become ice. (If you are used to living on a planet where ice floats on the surface of water, this seems odd and even wrong, but nevertheless it is the case.) The moon was not quite of a size for an ice core to form, and therefore one could, if one was sufficiently hardy, and adequately proof against the water pressure, make one's way down, through the increasing weight of water above, to the very centre of the moon.

Where a strange thing happened.

For here, at the very centre of this watery globe, there seemed to be no gravity. There was colossal pressure, certainly, pressing in from every side, but one was in effect weightless (on the outside of a planet, moon or other body, watery or not, one is always being pulled towards its centre; once at its centre one is being pulled equally in all directions), and indeed the pressure around one was, for the same reason, not quite as great as one might have expected it to be, given the mass of water that the moon was made up from.

For some reason, once I read this I've been thinking about the cube-earth for the past two days. Weird but cool stuff.

Good Advice

From a Reddit post on things that people have learned.

There's a lot of boilerplate (not necessarily bad boilerplate, but boilerplate nonetheless). But my favourite was this, from user 'chasingagoldenhorse':

If you live in an unstable country, always eat your breakfast. You never know if you might get arrested before lunch. At around 11 PM the difference starts to sink in.

Huh!

My New Desktop Background

is this. Gold!

As you can see, it's clearly working.

Hearing Aids and Sexual Appeal

Evolution has equipped humans with powerful urges to select mates based on traits linked to genetic fitness. It's amazing how deep these instincts go.

One I always found interesting is how strongly people react to indicators of disability. This makes total evolutionary sense - sickly or disabled offspring are less likely to reproduce on the savanna, and the open-minded ancestors who didn't care were outbred by the picky ones that did.

But what's strange is that this applies to cases where the cosmetic effect of the disability is quite small. Take the case of hearings aids. Their physical appearance is barely different to ordinary headphones. They're also not something that was selected for specifically. That is, we may have instinctive responses to a cleft lip or an asymmetric face because of ancestors who observed the same things and reacted accordingly. But it's not like our forebears reacted to hearing aids directly, or even anything that looked like them. All you have is the gut instinct.

And yet I think the average person has a strangely strong negative reaction to them, for reasons that they'd struggle to articulate.

If you're interested in testing your own reaction, compare this:

(image credit)

The shape is very similar. The photos aren't quite the same - if you want a more representative hearing aid one, there's a more comparable stock photo here.

For the male version, compare this with this.

The difference is the mental associations of the deafness. And we're not talking about you selecting a life mate here - we're just talking about your subconscious reaction to a picture on a computer. I bet you that if you're honest with yourself, you react very differently to the two images, even when just rating their physical attractiveness.

Obviously, I have no specific data to back me up on this, other than a few anecdotal conversations with people over the years. You can take my lack of any specific data here in at least two ways.

The first is that without data, this post is nothing better than a hunch of mine (which is a fair criticism).

The second is that I'm confident enough of this hunch that I'm willing to bet by writing this post that you share the same response. Because if you don't react the way I think, you're going to read this thinking 'What the hell is that guy talking about? What an asshole!'.

Positive not normative, as they say.

Ben Folds on Blogging

"Some guy on the net thinks I suck, and he should know - he's got his own blog!"

-Working Day

Venues Engineered for Conflict

I was at a rock concert the other day, and it was in one of those theatres with seats the whole way through, and only a small area for the mosh pit at the front.

I really dislike concerts at these types of venues (but liked the band enough to put up with it). When the show started, there were a few people who initially stood up, but most kept sitting down. Things settled down into the equilibrium of 'I guess we're sitting down then'. This gives the whole atmosphere one of a picnic or a movie, neither of which is really what I'm aiming for.

But there were a couple of enthusiastic people that really wanted to stand up and dance. And this produced the following obvious argument (I couldn't hear them, but I'm pretty sure it went down like this):

Person Behind: Sit down, we can't see.

Person in Front: It's a rock concert, you're not meant to sit down. Stand up if you can't see.

Person Behind: I don't want to stand up, I want you to sit down.

etc. With this one girl near me, it ended up getting quite heated.

Now, both parties were sure the other one was a complete dickhead. And honestly, they were probably both right. But what's more interesting is how likely this conflict is in any stadium with seats.

The basic setup of the problem is:

1. People have variation in whether they personally would prefer to stand or sit.

2. Standing up imposes a cost to the person behind you, unless they're also standing.

3. Most people dislike imposing the cost in #2, but this decreases with the number of people doing it with them.

This can result in the equilibrium of everyone standing up. It can also result in the equilibrium of everyone sitting down. And at the start, people are often uncertain, watching others to see what's going to happen.

But there's always a few people with very strong preferences on point 1. In the 'everyone stands' equilibrium, there may be a few people sitting anyway, but we decide that the odd guy sitting anyway must just have tired legs, and that's his decision since we're all standing.

In the 'everyone sits' equilibrium though, things get tense when the (inevitable) small number of people want to stand. Because the person at the front usually isn't a sociopath, imposing costs without caring, although sometimes they are. Usually they're trying to set off a cascade towards the 'everyone stands' equilibrium  - if I stand, the guy behind me will stand, the guy behind him will stand, etc. Then they'll feel better, because they get to stand AND not feel like they're imposing a cost.

But the person behind may resist, and continue sitting down (daring the person in front to keep imposing the cost). They can also raise the stakes by bitching them out.

The problem is, in an audience of thousands of people that are predominantly sitting at the concert, there will always be a small number sociopaths wanting to stand regardless, and a larger number trying to set off a decision cascade.

And this is completely inevitable when you organise a concert in this kind of place. At every one of these concerts that end up in the 'everyone sits' equilibrium (which happens maybe half the time, depending on the type of music), there will be people having exactly the same heated argument, having their enjoyment of the show ruined.

There are, as I see it, a couple of solutions to the problem.

The first is if you happen to end up in the 'everyone stands' equilibrium - the people with tired legs may grumble, but it probably won't be directed at the person in front of them specifically.

The second is if the singer is savvy, and directly asks the crowd to please all stand up. This is almost always enough to shift the equilibrium, and I'm always grateful when they do.

The third is to hold rock concerts in places without seats. This is my preferred option, but not always available alas.

My guess is that the two people yelling at each other probably didn't stop to blame the concert promoter for scheduling the concert at such a venue, which made this type of thing quite likely.

But they should have. Co-ordination games rarely work well when thousands of people are involved, and architects ought to plan accordingly.

Marginal Costs to the End-User* of various items in Sweden

-Triple Heart Bypass:  0 Kroner.

-13 years of primary and secondary schooling: 0 Kroner

-Undergraduate university degree: 0 Kroner

-Taking a piss in a mall in Stockholm: 10 Kroner.

From this, I can only conclude that as a society they're far more worried about the moral hazard problems with urination than with, say, wasting years on a degree in gender studies. If we make urination free, people will just be going back to toilets every 5 minutes, flushing them over and over for fun!

Talk about a strange preference ordering.

(from a conversation with The Greek, which also ranged over the question of whether 'Stockholm Syndrome' was so-named because when you get to Stockholm you initially think it sucks, but gradually get used to it).

*!= "Free"  -  Weak Form No Free Lunches applies, as always.

The Best Thing You'll Read This Week

...is this commencement speech by David Foster Wallace.

If you haven't read much of his stuff, it's pieces like this that reinforce in my mind his position as the most interesting author of the last 30 years at least.

Go, read.

Asian Marriage Rates: Who? Whom?

The worst assumptions are those that you don't even realise you're making.

The Economist recently had an article discussing how marriage rates in Asia are dropping. The sub-heading tells you pretty much all you need to know:

Women are rejecting marriage in Asia. The social implications are serious

That would be serious.

But the first sentence actually hides two claims, not one. These are:

1. Marriage rates are dropping, and

2. This is primarily the result of women actively deciding to avoid marriage.

So what is the evidence the article marshals in favour of each of its claims?

The first one seems on fairly solid ground:

Marriage rates are falling partly because people are postponing getting hitched.The mean age of marriage in the richest places—Japan, Taiwan, South Korea and Hong Kong—has risen sharply in the past few decades, to reach 29-30 for women and 31-33 for men.

Almost a third of Japanese women in their early 30s are unmarried; probably half of those will always be. Over one-fifth of Taiwanese women in their late 30s are single; most will never marry.

Okay, this probably doesn't surprise too many people - it's happening everywhere. But how about the second claim? How do we know this is a choice by women?

That’s partly because, for a woman, being both employed and married is tough in Asia. Japanese women, who typically work 40 hours a week in the office, then do, on average, another 30 hours of housework. Their husbands, on average, do three hours.

I'd want to see where these numbers came from - are the women who are working also doing the housework, or are they disjoint sets ( i.e. the average woman does both work and housework, but this is made up of some who only work and some who only do housework). But I'll give them the benefit of the doubt - let's assume married Asian women who also work still do a lot of housework. Anything else?

Not surprisingly, Asian women have an unusually pessimistic view of marriage. According to a survey carried out this year, many fewer Japanese women felt positive about their marriage than did Japanese men, or American women or men.

Okay, so women who are married report being unsatisfied. From this the author concludes that women who aren't married are avoiding marriage based on anticipating the same feelings. Let me translate this into a metaphor in a different context to see if any alternative hypotheses might more readily present themselves:

My friend Timmy got a new bicycle for his fifth birthday, but now he doesn't play on it much. I don't have a bicycle, but seeing that Timmy doesn't use his much any more, I stopped wanting one.

See the problem? How about buyer's remorse as an alternative? In other words, it's entirely plausible that a lot of women desire marriage beforehand, but only once they get there do they realise it's not all it's cracked up to be. Does this sound like human nature to you?

Now, I'm not claiming massive evidence in favour of this proposition either. But let's be clear - the article doesn't even countenance the possibility that marriage rates in Asia are dropping because of choices by men, not women. 

Let's go out on a TOTALLY CRAZY LIMB HERE, and propose the following meth-and-LSD-induced alternative hypotheses, purely to play devil's advocate:

-Women are more attractive in their 20s than in their 30s. The decision to pursue education and careers in their 20s makes them seek out marriage later only when they are less physically attractive, at which point men are no longer interested. Such women who miss out on marriage are filled with regret.

-Men in Asia are avoiding marriage because divorce law favours women too much, and thus they see marriage as a raw deal for them.

Are these right? Who the hell knows?! But ask yourself the following - do we really have strong reasons to prefer the author's 'every trend is the result of informed and rational choices by women'  hypothesis over either of the above? The unstated assumption, which the author probably doesn't even realise they're making, is that women are always the who, and men the whom, in Lenin's famous formulation.

If you wanted to tell the hypotheses apart, wouldn't you start by surveying men and women who aren't married, and asking them if they're actually looking for marriage? Or asking them if they're actively avoiding marriage, and if so, why?

Given how flimsy the evidence, let's evaluate the article's conclusion:

Relaxing divorce laws might, paradoxically, boost marriage. Women who now steer clear of wedlock might be more willing to tie the knot if they know it can be untied—not just because they can get out of the marriage if it doesn’t work, but also because their freedom to leave might keep their husbands on their toes. Family law should give divorced women a more generous share of the couple’s assets. Governments should also legislate to get employers to offer both maternal and paternal leave, and provide or subsidise child care.

If this trend is all the result of women's time-consistent choices to avoid marriage, then yes, you would need to make marriage more attractive to women to reverse this trend, and these policies might accomplish this.

If this trend is the result of women's time-inconsistent choices to inadvertently avoid marriage, then most of these policies would do very little. The only one that might work (and highly ironically) is forcing unsubsidised maternity leave and child care on employers  - the most immediate effect would be businesses avoiding hiring women of child-bearing age. The resulting female unemployment may end up pushing women away from education and jobs and into marriage. I don't think this is what the author had in mind though.

If this trend is the result of men's time-consistent (or time-inconsistent) choices to avoid marriage because they think it's a raw deal, then these policies (especially giving more assets to women in divorce) would be disastrous.

Repeat this type of article dozens of times, and you start to realise why the endorsement of a particular policy position by The Economist does not fill me with reverence and awe.

Low Speed Racer

Tim Blair notes that Sydney's cyclists are taking an ambivalent attitude towards the new bike lines around the city:

Up to a quarter of cyclists on Sydney’s busiest CBD streets are ignoring Lord Mayor Clover Moore’s controversial bike lanes and choosing to ride on the road.

Apparently the problem is that the speeds of the average rider in the bike lanes are too slow.

Wait ... to these riders eschewing their expensive bike lanes, you mean you don't like trying to navigate around people travelling substantially slower than you, and having your speed limited by people content to move a lot slower than they could be?

That's exactly how everyone feels when you ride on the road!

What's amazing is how these cyclists are able to ride through the piercing winds of the category five irony storm that they create.

The Weak Form and the Strong Form of "No Such Thing as a Free Lunch"

The expression 'there's no such thing as a free lunch' is one of the best summaries of free market economics. It was popularised by Robert Heinlein in his book 'The Moon is a Harsh Mistress', and was also the title of a book by Milton Friedman.

With such an illustrious pedigree, it may seem churlish to suggest a slight expansion of this principle. Nonetheless, I propose breaking the idea into two parts - the weak form, and the strong form. I think this is because people use the term to describe two separate cases.The Weak Form of No Free Lunches states that there is no lunch that you can eat that is without cost to someone. The Strong Form of No Free Lunches states that there is no lunch that you can eat that is without cost to you.

The weak form is particularly true in the case of governments, who notionally try to balance lots of people's interests. There is no such thing, for instance, as 'free healthcare'. At the margin, it may be free to you as the end user, but it is paid for in taxes. Even if you don't pay any taxes yourself, there's still opportunity cost - less can now be spent on schools, or roads, or national defense. Everything is paid for by someone, even if it's not you. The weak form is especially good for attacking pie-in-the-sky idealists and people fond of misleading labelling of social programs. The weak form, if true, injects sober realism into a lot of debates. Stimulus programs will not pay for themselves. Then again, neither will tax cuts. The biggest violations of the weak form would seem to be comparative advantage and gains from trade - if we both specialise and trade with each other, we really are both better off.

The strong form says that even when something seems free to you, it's actually imposing a cost, most likely in the form of something that the lunch provider is getting out of you - a favour, a chance at selling you something, a chance at guilting you into paying more than the cost of the lunch, a  chance to waste more of your time with a discussion that you wouldn't have otherwise undertaken. This is stronger than the weak form, because it says that you should be wary of accepting anything that seems free until you understand what the other person is getting out of you. Welfare, for instance, is an apparent violation of the strong form but not the weak form. It's paid for by someone, but not by you. Or is it? Being on welfare for long periods tends to be psychologically very damaging in ways that people don't anticipate. Which is why communities where everyone is on welfare tend to be drug-addled, violent hellholes that nobody in their right mind would want to live in. It's also why rich parents worry a great deal about giving too much money to their children in case it turns them into entitled brats. Gifts too - if you're Australian cricketer Shane Warne and an Indian bookmaker wants to give you thousands of dollars for providing freely available information about weather and pitch conditions, you'd better believe that ain't a free lunch.

The strong form is useful for combating fools about to part with their money. 'Money Back Guarantee' != No Risk. Church Soup Kitchen Lunch -> forced attendance at sermon. Backroom deal with politician to get tax break for your company -> being strongarmed for donations and political support later on.

Like most weak and strong form laws, there are more apparent violations of the strong form than the weak. The weak form is true in the vast majority of cases. The strong form is true more often than you might like to think.

Musician's Hell

Having to perform in a packed auditorium with the audience constantly clapping slightly faster than the beat, as they inevitably do, forever.

Check out a great example at about 40 seconds into this video of James performing 'Sit Down'. They get off the beat, and then just keep getting faster. Argh!

Just once, I want to be in an audience comprised entirely of musicians, clapping along to a live performance and actually keeping time.

Instant Book Review Credibility!

I recently came across, quite by chance, a book called 'The Art of the Start' by Guy Kawasaki. Apparently it's about startups or something, although I never opened it.

But what caught my eye was the front cover words of praise from Pierre Omidyar, the founder of eBay:

"Guy has done it again - evangelized something useful and meaningful. This time, it's a bottom-up business approach profound in its simplicity: Focus on what's real and forget the fluff. And, please, read the last chapter first."

This is such a great line! It instantly conveys that the person has actually read the book from start to finish, and also that they've understood it on such a deep level that they want to reorganise its contents in a way the author didn't intend because the meaning will be even clearer that way.

I plan to add this to my recommendations for virtually everything, including things I've never read.

Shylock: War and Peace is a great book. But you have to read the last chapter first.

Some Guy: Uh, how will I know who the characters are? And won't it spoil the ending?

Seems intractable, no? But there's an easy way to double down:

Shylock: It will seem that way at first, but it's only once you've gone back and read all the way through from the start that you'll realise the significance.

In this way, they'll spend hours of their life before they figure out that your advice was ridiculous. You'll be laughing so hard you'll barely notice how few friends you have left.

A proxy for the wealth of a society

The number of stray dogs walking around.

The more there are, (and the more emaciated such dogs look), the poorer the society.

By this metric, India is about the poorest place I've been to, which might not be exactly right but is probably close. Delhi had tons of stray dogs, and they were some of the sorriest-looking creatures I'd ever seen: mangy, rib cages sticking out, and devoid of energy, lying as if dead by the side of the road. It made me realise how incredibly healthy virtually all of the 1st world pet dogs were that I'd seen - I hadn't actually seen a truly neglected dog before.

Belize , Mexico and Honduras were all also bad, but with slightly fewer and not as decrepit-looking animals, but they were still fairly ubiquitous.

Funnily enough, this measure would also place this one Indian (as in Native American) Reservation as the poorest place I've seen in America - the dogs there looked thin but not unhealthy, and there were a few of them around. I've never seen stray dogs in noticeable numbers anywhere else in the US that I've travelled. I'm not sure how accurate this would be as a measure of cross-sectionl wealthwithin the US, but it's probably not too far off.

Correlations, man. Though you throw them out with a pitchfork, yet they return.

Let Hallmark Express Your Innermost Thoughts

I never understood why so many people want to buy cards that have messages already written in them.

I know I'm in the small minority on this matter thanks to the miracle of revealed preference. Go to virtually any card section, and you'll find rows and rows of pre-written cards for all sorts of occasions. The section for blank cards tends to be small, and verging on nonexistent if you're in a cheap place. It's safe to assume that the newsagents and supermarkets know their customers pretty well, and that the distribution of cards on shelves roughly matches the distribution in demand.

I understand that, human nature being what it is, sometimes people really don't know exactly how to express their thoughts, and only 'get it' when they read what someone else has written.

By why are the messages in cards so chronically awful? Does anyone read the boilerplate tripe like "wishing you every happiness on your special day" and think "Yes, YES! That's what I've been trying to say all these years!". Look, If they were printing Valentine's day cards with Shakespeare's Sonnet 18 or condolence cards with Catullus 101, I could understand. Hell, I might even buy one. But no, it's always the most jejune, hackneyed prose, trite to the point of being sickening.

I have a few theories. The most charitable is that card writers know that the average person is deathly afraid of a blank page. The messages are rarely long enough to make up the whole card, so it's assumed that you have to write more. Maybe they're just meant to get your thoughts flowing. But if so, it leaves a page looking tacky and broken up.

Less charitably, I wonder whether people aren't really interested in the message in the card, and just want a low-cost symbolic way to 'show they care' (*retch*). The message in this case means they have to write less, although this would suggest you should get longer messages. Or we just live in age age where bogus sentimentality is the norm, and people don't much appreciate the difference between good and bad messages.

There was however one occasion in which I valued message cards. That was when my brother and I had the tradition of sending each other birthday cards with some other message inside (Happy Bat Mizvah! Congratulations on your Baby!), and the card itself being filled with ribald abuse.

If it turns out that this practice is more widespread than I thought, and sufficient to explain the demand for messages cards, I take back all my grousing on the subject.

The McBain Movie

Something I only recently found out.

In the early Simpsons episodes, the scenes featuring the character 'McBain' were written so as to form a movie when played back to back.

You can watch the McBain movie here.

Classic stuff!

Stop Whinging If You Haven't Read The Damn Decision

Murray Gleeson, former Chief Justice of the Australian High Court, was once reported as saying something that I thought was such a good summary of the proper role of courts that I want to repeat it here. (I can't seem to find the quote online, so I'm paraphrasing from memory - if it turns out he didn't say this, it's so good I don't want you to spoil my image)

He said that he was happy for anyone to offer any criticism they wanted of the High Court or any particular decisions. He only made the request that before they did so, they took the time to actually read the court's judgement.

Now, this isn't something that I think holds everywhere. I don't, for instance, think that one has to read Das Kapital to have an informed view that Communism is both wicked and stupid, nor do you have to pay Michael Moore to see Bowling for Columbine before one is allowed to venture the opinion the having a Lockheed Martin factory in Columbine was not the underlying reason for the massacre.

But the reason I think it's particularly valuable in the case of court opinions is that even a layman's reading through will quickly open your eyes to something very basic about the law: namely, that there is a difference between a good legal decision, and a desirable policy outcome.

This is almost never reflected in the popular reporting. It drives me batty that just about every report about court decisions on, say, gay marriage, focus entirely on whether it is desirable from a policy point of view, and whether this case has furthered it or not.

Just once, would it kill them to talk about how this decision fits into existing 14th Amendment jurisprudence? Would it kill them to briefly cite the arguments of the majority and minority?

There is a legal body that exists to decide what is the most desirable outcome to reflect social desires, and that body is the legislature. Now, even if you think that courts should have some role in this (and I don't), surely it's worth appreciating that they also have the role of accurately interpreting the law so that people live in a stable, predictable legal environment and can arrange their affairs accordingly? Surely the aim isn't just to arbitrarily do whatever the judge feels is just on that particular day?

And when you read the actual opinions, this perspective becomes apparent very quickly, even if you don't have a legal background. Because poorly-reasoned opinions make you cringe, even if you like the outcome. They make you realise that there's more to a court's job than just 'Do I want X to happen?'

Take the case of Atkins v. Virginia, in which the US Supreme Court held that allowing the death penalty for mentally retarded defendants was cruel and unusual punishment, and thus unconstitutional. Chief Justice Rehnquist and Justices Thomas and Scalia all dissented.

Now, in the mindset of the average person, what's the conclusion they draw?

OMG, SCALIA WANTS TO EXECUTE DISABLED PEOPLE!!!!11!!!!! WHAT A HORRIBLE HUMAN BEING!!!!

Reader, I challenge you to read through his opinion (it's not very long) and tell me that this is a fair reflection of what this case is about.

Instead of repeating that, as lots of clowns do, how about you read the damn opinion and find out what he says the reasons are for his decision? Here's a hot tip - it's not based on a personal love of his of executing retards.

Instead, you will find lots of very reasonable arguments about
-ambiguity in the definition of what constitutes being retarded
-the fact that legislatures have the option of repealing the law but haven't done so
-that juries represent the proper avenue for deciding these matters
-And lots and lots of stuff about the far more important question of how this fits into the existing precedents on the matter, which are the proper business of courts.

You may disagree with his opinion, and lots of reasonable people do. But I bet you this - out of all the turkeys that are sure that Clarence Thomas is an embarrassment to the Supreme Court, less than 1 in 20 has read a single opinion of his. The embarrassment lies entirely with the people who go around repeating this without ever reading a word the man has written. These people embarrass the ideals of a democratic society. If you read some of his work and still think he's an embarrassment, I will disagree with you, but won't begrudge you that viewpoint.

Do what I do - even if you're not a lawyer, if a newspaper reports a decision that gets you fired up, stop scrolling the New York Times website immediately, type the name of the case into Google, and read the damn opinions.

Murray Gleeson will give you a big thumbs up for doing so, and Murray Gleeson is a cool dude.

Aesthetes vs. Sensualists

Among the myriad ways you can divide up the world to try to understand human behaviour, I think it's interesting to note the different attitudes (straight) men have towards women.

As I see it, the male world is roughly divided into two camps - the Aesthetes, and the Sensualists.

Both the Aesthetes and the Sensualists love sleeping with hot women. (The Couch: Duh! They also enjoy eating food and breathing oxygen). Let's assume they enjoy this equally.

But the difference comes in how they react to hot women that, for one reason or another, they can't sleep with.

Aesthetes are so-called because they love female beauty. They enjoy being surrounded by attractive women, even if nothing is going to happen. They enjoy having attractive female friends, partly for the validation of knowing that hot women enjoy their company, but partly just for the improvement in view. They see a pretty girl walk down the street, and reflect on how good it is to live in area with pretty girls around them. Sure they'd love to bang her, but the fact that they can't doesn't stop them enjoying seeing them.

Sensualists, on the other hand, are driven only by the sensual and carnal aspects of the opposite sex. For the sensualist, being around desirable girls is important mainly for the potential that he might one day be able to hook up with them, however remote that possibility is. If he can't, their attractiveness doesn't bring him any pleasure. Indeed, for the hardcore sensualist, being surrounded by attractive but taken women actually is a source of psychological discomfort - he can't stop being bothered by the fact that he'd like to sleep with them, but can't. Their beauty only serves to remind him of their unattainable nature. He wouldn't ever admit to himself that he might be happier if some of the women around him were less attractive (because he is likely to overestimate the probability that something might still happen), but it is nonetheless so.

The aesthetes I know are generally happier, as it's much easier to find someone attractive to merely look at rather to have sex with. But they are also less driven in their quest to actually sleep with the women they meet, because they derive more satisfaction without that, and hence the marginal change in happiness is smaller. The guys I know who sleep with lots of girls are, to a man, sensualists - beautiful women who they haven't hooked up with are a challenge and a torment, but not a source of pleasure. 

On the other hand, the men I know who had any substantial number of female friends were all aesthetes. This isn't always just driven by the simplified logic of surrounding themselves with hot women - they are also more likely to appreciate the female sex for reasons other than just physical attractiveness, such as the different ways that women tend to view the world. Aesthetes are more broadly interested in eligible women, of which being young and physically attractive is a large part, but not the only part.*Aesthetes tend to objectify women less - not in the OMG SEXISM OBJECTIFICATION!!!11!! sense, but more broadly in terms of viewing the opposite sex mainly as a means to an end. I think this view tends to be more common among sensualists, and it makes friendship unlikely.

For the men, if you want to know which camp you fall into, there is an easy test. Suppose you're 45 and married with two young children. You're also a committed husband, and determined not to stray. In your job, you get assigned a super hot secretary with a huge rack and a penchant for wearing slightly too revealing clothes for an office setting.

How would you feel when you walked in each morning and saw her?

The first thought will probably be, 'Man, she's hot!'. But what's the second thought?

Your answer will tell you not only which side you fall on, but also tends to reveal quite a lot about how you think, which is why I think it's a useful categorisation. 

If you have to judge whether someone else is an aesthete or a sensualist, here's a rule of thumb - men that are greedy in other aspects of their personality are more likely to be sensualists.

*If this post dwells on physical attractiveness as the main salient characteristic of women, it is from a conviction that this is a large component of how most men actually perceive them. A sad fact this may be, but it is a fact nonetheless.

Backwards Induction

Thinking too much like an economist can sometimes get in the way of satisfying cathartic feelings of anger.

For instance, I ordered 4 USB flash drives, and as always they came in the infuriating clam-shell packaging. As I jammed the scissors through each one, it seemed that justice would require that there be a circle of hell for whoever designed this monstrosity, where they have a never ending pile clam-shell cases to open using only their hands, and on Christmas, a blunt pair of scissors.

But then you start thinking that these people are only responding to the demand of shop owners. And they in turn are responding to the actions numerous imbeciles that apparently view flash drives as such a designer item that they can't wait to steal them en masse.

From there, it's only a short step to wondering whether there actually is that much shoplifting to justify this stuff, and whether the Amazon campaign to get rid of them has had any effect, and whether its plausible for consumers to respond by only buying non-clam-shell devices...

And before you know it, you're still irritated, but can't decide at whom.

Bah.

How do you get from there to here?

Do you wonder how end up with a society where you can get massive rioting for 4 days throughout the capital city?

The latest BBC reports provide a clue:

The prime minister has said the "fightback" is under way, after cities in England suffered a fourth night of violence and looting.

This will come as great news to the families of Haroon Jahan, Shahzad Ali, and Abdul Musavir, killed while trying to protect their property

David Cameron said every action would be taken to restore order, with contingency plans for water cannon to be available at 24 hours' notice.

That's excellent! After 4 days of rioting, in only another 24 hours you'll think about dusting off the water cannons. As a backup plan, if you wait another 48 hours, there won't be much left to loot.

 So water cannon is the "contingency plan", huh? What's Plan A then?

But Association of Chief Police Officers (Acpo) president Sir Hugh Orde ruled out using water cannon or baton rounds for now, saying the tactics were not suited to the current unrest.

"Water cannon are used to deal with fixed crowds to buy distance," he said.
"The evidence... is showing very clearly these are fast-moving crowds, where water cannon would not be appropriate."

Okay, I can buy that for water cannons. But what about baton rounds (i.e. plastic bullets)?

He added that baton rounds would only be deployed when his officers' lives were under serious threat.

 You mean like here?



Or here?



When the whole edifice of civil society is collapsing around you, breaking a window is not an act of petty property crime like graffiti. And to treat it as such is to endanger far more lives, by encouraging events to spiral out of control, eventually requiring far more force to restore the order that you declined to enforce early on.

So according to the police, after 4 days the only answer is 'more of the same', combined with a dose of 'surely eventually we'll arrest them all'.

No, really. Listen to Greater Manchester Police's Assistant Chief Constable Garry Shewan:

He said the force was "absolutely intent" on bringing the rioters to justice and his officers were already studying CCTV.

"Hundreds and hundreds of people, we have your image, we have your face, we have your acts of wanton criminality on film. We are coming for you, from today and no matter how long it takes, we will arrest those people responsible," he said.

Buddy, let me give you the skinny on this: if you're in the middle of a riot, threatening that you'll arrest people 'eventually' is not an adequate response. If you don't have the manpower to do it, bring in the army. You might start by reassigning some of the cops 'studying CCTV' and putting them on the streets.

How about some bluster? How about a threat that looters will be shot on sight? Do you think that announcement, even if not carried out, might have more of an effect?

They can't even bring themselves to threaten the use of actual violence! If plastic bullets aren't appropriate when dealing with an insurrection, even as a threat, when are they appropriate? These aren't nuclear weapons we're talking about.

The police have for several days now manifestly lost control of the streets. They are unable to protect citizens property. They are unable to protect citizens safety. They are barely able to even protect themselves.

And worse than that, they have done all this only after abrogating to themselves a monopoly on the use of force. Apart from the rioters, that is.

The British Police were famous for tending to eschew carrying guns themselves. The whole community policing ideal, and not encouraging criminals to become armed, and all that stuff.

Might I suggest that a riot is a pretty good time to rethink that policy, at least in the short term?

I do not advocate just firing into crowds, or firing on everyone carrying a TV in the streets.

But boy howdy, it sure might help if the police turned up with guns loaded with plastic bullets and ordered the looters to freeze or they would shoot. And maybe fire a few warning shots at people.

The way the police would, say, in any major US city if you started throwing rocks at store windows and then throwing them at the police when they arrived. Except they'd probably have live ammunition. Even if it happened outside of a riot.

There is a principle older than due process at stake here, and that is this: if you gratuitously hurt somebody and break their shit, you deserve to get your ass beaten.

One way or another, it's about time this started getting enforced.

Update: Welcome, Blairites! So good to have you. Have a look at what the London Riots say about gun control, why computer programmers often don’t get economics, and why Standard and Poors is happy to give the middle finger to the US Government.

If you like what you see, add a bookmark or an RSS feed.

Thoughts on the London Rioting and Gun Control

For the third day in a row, thugs and hoodlums have been rioting and destroying London. Because some guy got shot by police. Or something. So in the mindset of this collective human scum, this justifies breaking into the Foot Locker to get some new shoes, or trying to swipe a Plasma TV. Or, you know, just torching some guy's store and not bothering to steal anything.

I am reasonably agnostic about gun control. Of all the viewpoints conservatives tend to endorse, opposition to gun control might be the one on which I'm most lukewarm, for reasons that I'll go into detail on at some other time.

But the 2nd Amendment crowd are 100% right about one thing, and it is this:

When the shit goes down, assume that the police will not be there to save you.

On average, they will not.

They will be there to investigate afterwards. They will be there to arrest and punish the perpetrators. And hopefully through all this, they will be able to deter enough other would-be thugs from breaking the law so that, in equilibrium, you are unlikely to be the victim of random violence.

But if it turns out that the world in your immediate vicinity is not in that equilibrium at that time, and someone is trying to mug you or beat you, you should assume that nobody else will come to rescue you. And you should plan accordingly.

Now there are lots of things you can do in response. Live in a safe area. Live in a high-rise with a doorman and multiple locked sections before you can enter.

Or carry a weapon.

Personally, I pick 1 and 2, but not 3. When the chips are down, I am not willing to shoot someone. And so I don't want to own a gun.

This decision has lots of consequences, some good, some bad. I am unlikely to have my kids accidentally shoot someone. I am unlikely to escalate a situation into a violent confrontation by pulling out a weapon when I could have just given them my wallet.

But I'm not kidding myself about the fact that I'm also going to be worse off if I'm confronted by someone who isn't interested in my wallet, but just wishes to do me harm. Or, hypothetically, a mob of rioters trying to burn down my store.

Make your choice, and live with the consequences.

Dislike Immigration? You Probably Haven't Tried to Move Countries

Rationalists like myself tend to believe that they arrived at their beliefs by reason alone. And this is indeed the hope - if, like the Marxists believe, our world view is shaped only by social circumstances, then logical argument between different people is a hopeless ideal. Which would be a distressing thought. And while I don't tend to subscribe to this notion, still, it's hard to know how much your ideas about the world might change if you were in a different social position.

One example of this that I've found odd is that Australians in England share some resemblance in social position to Mexicans in the USA. Australia exports a lot of the backpacker crowd to the UK, and so most of the ones you meet tend to be poor, working unskilled jobs like bartending or manual labour jobs like construction. A lot of them have overstayed their visas, working on forged documents on a cash basis. There is a middle class, to be sure, but the popular perception among the English seems to be (correctly) of low-brow larrikins, tolerated by their hosts but somewhat outside polite society.

And here's where things get interesting.

Once, when I was in Honduras, I was talking with a bunch of Australians who were living in London, several of them having stayed there illegally. And when the subject came up, what was hilarious was hearing them recite every single argument traditionally given in favour of illegal immigration:

-Why won't they just let us stay? We're not doing anyone any harm
-The country would grind to a halt without the Australians to do the grunt work
-We pay taxes already, through them being withheld from our wages
etc.

What is even more funny is that Australia is not a country known for its embrace of immigration into its own country. Legal immigration is hard enough, and illegal immigration is strongly disapproved of. And I would bet that most of the people making these arguments if asked 10 years earlier would have been fairly unsympathetic to, say, an Iraqi making the same case as to why he should be allowed in Australia. Reader, I struggle to ever recall having heard any Australian advancing these arguments in favour of illegal immigration - even its supporters tend to promote it on a humanitarian basis ("we need to help the refugees", not "we should allow the free movement of cheap labour from India").

Now, I tend to think that allowing open borders is a very bad idea. As Milton Friedman noted long ago, open immigration is incompatible with a welfare state (which, like it or hate it, isn't about to disappear). And even without the welfare concern, I think the culture of the immigrants you're allowing matters a lot - even though it's terribly sad that there are a lot of child soldiers in a particular country, that doesn't mean it's a sound idea to let them move near you (for instance).

But still, if as they say, a conservative is a liberal who's been mugged, and a liberal is a conservative who's been arrested, then a pro-immigration person is an immigration restrictionist who tried to move countries without a job lined up in advance.

How Do You Like Them Apples?

Congress, April 2011;

"Moody's Corp and Standard and Poor's triggered the worst financial crisis in decades when they were forced to downgrade the inflated ratings they slapped on complex mortgage-backed securities, a U.S. congressional report concluded on Wednesday.
...
``The problem, however, was that neither company had a financial incentive to assign tougher credit ratings to the very securities that for a short while increased their revenues, boosted their stock prices, and expanded their executive compensation,'' the report said."

Well, I guess we can consider this particular problem solved! Yessir, Standard and Poors have learned their lesson about the perils of letting risky, systematically important debt stay classified as riskless long after that has stopped being an appropriate description.

Congress must no doubt be thrilled.

Meanwhile, S&P are probably drinking a tasty glass of schadenfreude right about now, and cheerfully giving the US government this one:


Oh, so now you DO want us to be charitable in our ratings, huh?


(inspired by an observation of Coyote's)

Shooting the Messenger

There is no such thing as a riskless bond. Never was, never will be.

But if there were, it would not be issued by the United States Treasury. Today, S&P downgraded US sovereign debt from AAA to AA+.

Zero Hedge is having a field day with this. They linked to this piece noting that the White House challenged S&P's economic analysis, and that this was the thing that delayed the announcement slightly as S&P decided whether to sack up and call it the way they see it, or bend over and be the Government's toady.

The reaction of the administration is quite revealing. Because we all know that S&P is the real problem. S&P's models (and everyone else's) say that US debt is looking increasingly risky. The models must be wrong, because we at the Obama Administration just know that it's going to all be fine. Just ask Timmy 'TurboTax' Geithner, who as recently as April declared there was 'no risk' the US would be downgraded.

If you, like me, are tempted to conclude that he's a dumbass, (and you would not be short of evidence for this proposition), it's worth remembering that he might just be being dishonest as part of his job. In other words, he has to be the cheerleader for the US government, yelling furiously that the ship isn't sinking so that people don't get trampled on the way to the lifeboats.

The nature of the immediate problem, of course, is that things get a little tricky when US debt isn't considered risk-free, as a bunch of institutions are required to hold AAA securities as collateral for various reasons. And now they may have to start dumping treasuries, pushing yields up even further. Fun times!

The nature of the longer term problem, of course, is that S&P is exactly right - the debt ceiling debate is a mess, and nobody is interested in tackling the question of long-term "entitlements" (I dislike that word) in health spending and, to a lesser extent, social security. And S&P decided, again rightly, that since their job is to rate bonds, then by golly they're going to call a risky bond risky, because it's not their job to cover the government's ass for the government's own reckless behaviour.

It's exactly the same as with TARP. The banks yell and shout 'We're in a liquidity crisis, and need a temporary loan!'. Skeptics pointed out that what they actually had was a solvency crisis, which needs not a loan, but a giant equity infusion (i.e. a cheque they get to keep). Most of the banks were insolvent, and that was causing the liquidity crisis. You could throw liquidity at the problem (which is what TARP originally purported to do) , but until you made the politically unpalatable choice to actually bail them out (which is what TARP actually did), liquidity crises will keep returning.

It's the same now with the US government. Except they don't have anyone to bail them out, and so they're going with the only plan they seem to have, namely hoping that the inevitable market reaction happens later, rather than sooner. Ideally after they're out of office.

In other news, it's bullish for equities!

'Nice Shirt'

It is my rough experience that when people say 'Nice Shirt/Tie/Jumper', at least half the time what they actually mean is 'That shirt is ugly, but distinctive'. They first register the need to comment on the odd-looking thing, and since 'your shirt is crap' is not polite, you end up with 'nice shirt'.

For some reason, the expression 'I like that shirt on you' doesn't ring quite as false. It may well be motivated by the desire for false flattery, but that is a much easier problem to deal with. For starters, it's unlikely to lead me to wear an ugly shirt too often because someone once said something nice about it.

Samuel Johnson on Blogging

"No man but a blockhead ever wrote, except for money."

(source)

Ha! 

I'm guessing Google Adsense, even were I to have it, would not be sufficient to alter the opinion of the great Dr Johnson on this current writing enterprise. 

The Most Frustrating Local Monopoly

Economists typically have an ambiguous attitude towards monopolies. When the monopoly arises because one company is providing the single most popular good or service, opinions often differ between educated and well-meaning people as to what to do. Some people worry about the potential for predatory pricing and other schemes to shut down new entrants, and want the government to step in. Others figure that the the market will eventually take care of it - you can sue Microsoft for bundling Internet Explorer with Windows to shut down Netscape, but eventually IE will be replaced by Chrome and Firefox anyway.

But the worst kinds of monopoly are those granted by government fiat. Because then there is little possibility of new entrants displacing the artificial monopoly.

My entry for the category of 'most frustrating and insidious government-granted monopoly' that I've come across is currency exchanges at airports.

At certain airports (Sydney being one that comes to mind), the government allows only one company to be the exclusive currency exchange for the whole airport. I think in Sydney it's Travelex. So you can walk around and find multiple currency exchanges, but they're all Travelex.

And this is an incredibly devious thing to do.  Travelex makes extra money by charging a higher spread (buying at lower prices and selling at higher prices) than they could sustain if they had competition two metres away.

The reason they can get away with this is twofold. Firstly, most people need foreign exchange pretty soon after leaving the airport. But even more tricky is the fact that most people have very little idea what is a competitive exchange rate at any point in time. Even if you check the exchange rate on the internet, this will tell you the midpoint. But what's a reasonable spread if you want to exchange $200? Unless you've been paying attention to what other places in previous airports were offering that day, it's not at all clear.

And this is how Travelex launders its monopoly profits. It's one of the few cases where most people don't have a strong sense of the fact that they're being ripped off.

So why does the government do this?

Simple - they charge Travelex higher rents in order to be the monopoly provider for the airport. In essence, they split the monopoly rents with Travelex. If they're auctioning off the right to be the monopoly provider, my guess is that the government ends up getting most of the rents.

So here's a hearty up yours to the Government of New South Wales for ripping off citizens. Again.

[Update]: Loyal reader BW pointed out to me that Sydney airport is actually owned by MAp Airports, a subsidiary of Macquarie Bank. In addition, some reading around informed me that this privatisation was carried out by the Australian Federal Government, not the NSW Government. So the main post unfairly besmirches the reputation of the New South Wales Government, which is deeply dysfunctional for a number of reasons, but this is not one of them.

BW is quite right, of course. Monopoly pricing is not any more appealing when carried out by a private corporation (especially in an arena, like airports, where there's not exactly a viable threat of competition).

It turns out I'm not the only person to notice this trend at Sydney Airport. According to Wikipedia:

In March 2010 the Australian Competition and Consumer Commission released a report sharply critical of price gouging at Sydney airport, ranking it fifth out of five airports. The report noted Sydney Airport recorded the highest average prices at $13.63 per passenger, compared to the lowest of $7.96 at Melbourne Airport, while the price of short-term parking had almost doubled in the 2008–09 financial year, from $28 to $50 for four hours. The report also accused the airport of abusing its monopoly power.

Let the record stand corrected - up yours, MAp Airports!

Best 'First Dance' song ever

Everyone always picks boring songs for their first dance at a wedding.

If I were getting married, you know what I'd pick? Mike Oldfield's Tubular Bells. Think about it, how awesome would that be? There's so much to recommend.

For starters, the music begins sounding sufficiently creepy that they made it the theme to the movie 'The Exorcist'. Whatever dance you choose to do will seem hilarious inappropriate no matter what you pick.



Secondly, it's so damn long - the two sides between them take up 48 minutes and 18 seconds. You can find parts 2 and 3 here and here. People who didn't know the song would be wondering what the hell was going on. People who did know the song would find themselves thinking 'surely they're not going to dance to the whole thing?'. Only slowly would the horrifying realisation dawn upon them.

Musically, it goes through all sorts of odd bits, including the booming voice announcing the musical instruments, and the strange growling demonic sound at another part. And finally, the piece ends with 1:45 of the sailor's hornpipe, a piece only marginally less suited to the first dance at a wedding than the Exorcist theme beginning.



Face it, everyone would hate you, but it would be the funniest prank ever. Which, I assume, is what you really want in a wedding.