Where does value come from?

Most people have very little idea what makes one business more valuable than another.

This state of affairs tends to persist, because most businesses aren't exactly eager to reveal where their competitive advantages come from either.

My favourite example of this principle is Coca-Cola. In one of the classic bits of corporate mis-direction, Coca-Cola has managed to convince the world that the key to its success is the secret recipe for Coca-Cola, closely guarded by only a few corporate executives. Astonishing numbers of people seem to believe it.

Viewed logically, this is kind of perplexing. Not least, because there's a wikipedia entry for 'Coca-Cola Formula', which lists a number of different purported recipes to try, including one uncovered by Ira Glass on 'This American Life' which claims to be the real deal.

And yet somehow, Coca-Cola doesn't seem to have collapsed since the February 11, 2011 Ira Glass show.

What's truly amazing, though, is that Coca-Cola seems to have managed to convince it's own employees that the value of Coca-Cola is in the recipe. You know this because a number of Coke employees went to Federal prison for trying to sell the Coke secret recipe to Pepsi, back in 2006.

Really?!? In this age of modern chemical analysis? When half the ingredients are listed on the back of the bottle? When the rest could probably be pieced together by a halfway decent organic chemist? That's the thing that's keeping the company afloat?

Of course not. But the myth persists.

The easiest way to see what Coke's real advantage is is to consider the obstacles you'd face if you managed to make a cola that unambiguously tasted better than Coke, to at least 70% of Coke drinkers.

Straight off the bat you've got economies of scale. Coke is enormous and gets enormous discounts. So does Pepsi though, so perhaps we could partner up or at least get financing to grow. But your new drink has to be close to as cheap to produce as Coke in order for you to be competitive.

What else? Well, marketing is the one that probably comes to most people's minds. And truthfully this is a big one. Lots and lots of people around the world know and love Coke. That means that when they go into the supermarket, they already know they'll like it, and so they buy it. Add in fancy marketing terms for affective associations between Coke, good times, and fun parties. Why? Because advertisers have crammed this into their heads over decades.

But perhaps the most neglected is simply logistics. Coke has a crazily effective distribution network. Even if you manage to set up the most-watched viral video that gets everyone fired up about your new cola, you're going to face the problem that it's damn hard for most people to purchase it. Soft drinks tend to be bought with the aim of being consumed then and there. This means that your Amazon strategy of doing internet-only distribution ain't gonna work so flash - people don't plan most of their soft drink purchases weeks in advance. The only way you'll get sales is if you can have your soft drink there at the point that the consumer is thirsty.

And how do you do that? By having your Coke alternative available to buy in every supermarket, every deli, every liquor store, and every hamburger stand. In the whole world. Supplied constantly. So that they never run out.

Think about that. How the hell are you even going to begin doing that?

And that's why you're never going to out-compete Coke.

Setting up an equally good marketing and distribution system isn't impossible, of course. It's just very hard.

It becomes even harder if you're spending all your time trying to work out the magic soft drink formula instead. Coke is happy to let you believe that this is the source of their success, for very good reasons:

In making tactical dispositions,

the highest pitch you can attain is to conceal them;

conceal your dispositions, and you will be safe

from the prying of the subtlest spies,

from the machinations of the wisest brains.

Understatement of the Day

From Mencius Moldbug's 'Letter to Open-Minded Progressives'

Thus we see why progressivism is more fashionable than conservatism. Progressive celebrities, for example, are everywhere. Conservative ones are exceptions. This is cold calculation: Bono's PR people are happy that he's speaking out against AIDS. Mel Gibson's PR people are not happy that he's speaking out against the Jews.

Ha!

54% of UK doctors are either pig-ignorant about statistics and/or meddling nanny-state fools

At some point, the incremental loss of liberty in Britain becomes such a constant depressing dripping that it's hard to maintain the incredulity. 

On the one hand, the police harassed a gallery that displayed a photograph of a sculpture that depicted a mythical scene from Greek antiquity, because they thought it might "promote bestiality". (No, really). Despite the fact that nobody had complained about the photo. That's a separate outrage post all of its own.

On the other hand, the Daily Mail cites a recent UK study where 54% of doctors agreed that the NHS should " be allowed to refuse non-emergency treatments to patients unless they lose weight or stop smoking".

Those god damn smug condescending prats.

If a doctor refused to treat the injuries of a drunk driver at a hospital and let him bleed out on the floor, we'd label him as a monster. And drunk driving has way, way bigger costs to other members of society than smoking does.

In the first place, the size of the true effect of smoking on health is hard to measure. The chances of you dying of lung cancer given you smoke seem to be only around 0.3%. More importantly, very few people seem to have any real sense of magnitudes when considering the question of exactly how harmful things like smoking are.

But let's give the doctors the benefit of the doubt, and assume they know the risks perfectly. 

What exactly is the principle at stake here? Is it:

a) You shouldn't get treatment if the actions were your fault.

b) You shouldn't get treatment if your actions cost the government too much money

c) You shouldn't get treatment if you're an unfavored group.

The first one is a ridiculous way to run a health care system. All of us take risks in things we do all the time. Driving 5 miles an hour over the limit? Increases your risk of death. Take part in an equestrian event? Increases your risk of death. Fail to eat only lentils and beans to minimize your chances of heart disease? Increases your risk of death. Go out drinking at a pub in Covent Garden on a Saturday night? Increases your risk of death, by stabbing or road accident if nothing else.

Where the hell does it end? The reality is that everyone is going to die at some point or other. Actions that you take might make it happen earlier or later, but there's no escaping it. Any test on this point is going to end up transforming into test c) - some risks are deemed politically acceptable, and others aren't.

The second test is actually a fair basis for running a healthcare system (assuming you buy the assumption that it's the government's business to be doing that in the first place, which I don't necessarily). But does it really apply here? It's pretty damn hard to tell, because it depends a lot on how much stuff you account for.

Suppose you die of heart disease that comes from smoking. Since heart disease kills a lot of non-smokers as well, it's not clear that the difference in treatment costs in nominal dollar terms are large, or even positive. It's not like this is a $10 million treatment for some rare disease - smokers die from heart disease and cancer, the same as everyone else, and treating these costs about the same as for everyone else. The cost does arrive sooner for smokers than non-smokers. This does mean that the present value of costs is higher, but it's not clear how large this difference is.

But what else happens? You don't claim the pension for thirty years, either. And based on a fair accounting for these two effects, it's not at all obvious that smokers on net cost the government more money. Absent healthcare costs, dropping dead right before the pension cheques are about to start is good news for the government budget.

So what's really going on here?

The answer is of course option c). Smokers and Fatties are today's out-of-favour social groups. Everyone loves shaming smokers, and nobody sticks up for their right to smoke, notwithstanding its bad effects on health.

Tax them! Make them stand out in the cold! Deny them medical care so they die quicker! When you see them huddled outside in the snow, tell them what a 'disgusting habit' it is, with as much condescension in your voice as you can muster! Feel smug and self-righteous about your own superior decisions!

*#$% THAT.

For some reason people's general sense of politeness in terms of not offering up gratuitous, unsolicited criticisms of people's personal choices that don't affect others seems to go out the window in the case of smoking. No level of hassling is too great. We'll badger them into health! Then when they get fat from giving up the smoking, we'll badger them into going jogging too.

Don't like smoking? Don't smoke. Otherwise, shut the hell up. They're adults. They know the risks. If they decide that they enjoy cigarettes enough that it justifies the reduction in life expectancy, that's their damn choice. 

Don't tell them it's also linked to tax revenues in the City of London which finance their existence

The BBC has a classic case of 'English Majors Trying To Write About Finance', with this clanger of a headline:

Black-Scholes: The maths formula linked to the financial crash

Bravo! Never mind that the 'financial crash' is nearly universally recognised as being about a crisis in:

-Banks and Bank Runs

-Housing

-Sub-Prime Leverage

-Counter-party Risk

-Contagion

-Over-leverage

none of which have anything  to do with options or the Black-Scholes formula. It's like the Black Scholes formula has become the Economic Whipping Boy that SMBC hilariously described.

Here's a fun game - identify other scary sounding 'linkages' that the BBC may be interested in exploring:

-Chemotherapy linked to patients having cancer

-SAT scores linked to students failing to get into college

-Cars linked to increase in bank robberies

etc.

Radical

Radical.

The Bright Side of Information Cascades

From the latest Bon Appetit issue, a thoroughly under-utilised strategy:

"In the summer of 1970, my mom, Helen, went to visit a friend who was living on a Greek island. As she tells it: "I was going to Spetses, but all the interesting-looking people got off the boat at the stop before." So the next day she took the boat back to Hyrda, where she fell in love with the island's beauty. The following year, she brought my Dad, Brice, and soon after they bought an old farmhouse in the hills of Kamini. They've returned in the summer to make art and relax ever since.

Even if it doesn't actually work out, I've always felt wonderfully Quixotic whenever I've done things like that.

This post is also for The Greek, who claims I only ever have mean things to say about his homeland. Au contraire - it's one of the most lovely parts of the world. In fact, it's partly because the country is so beautiful that it's a shame the place is falling into a shambles. That, and the minor point that its collapse may bring down the world financial system.

Bathroom Floor Herd Immunity

I was in the gym with SMH and we'd adjourned to the locker rooms to shower.

SMH is American, and a fairly organised kind of fellow. As a result, he had his shower thongs (or flip flops, in the parlance of these lands).

I, on the other hand, manage to be chronically disorganised. It should thus come as no surprise to find out that despite meaning to do so for about 3 years, I still haven't bought a spare pair of thongs and put them in my gym bag.

Now, I lean towards the laissez faire attitude to hygiene. The human immune system is incredibly well suited towards things like touching bathroom door handles and toilet seats without collapsing in a quivering heap of bacterial infection. Most purported hygiene issues (outside a hospital or food handling setting) are largely just a feeling of ickiness masquerading as health concerns.

Boy howdy do Americans go crazy for bathroom hygiene. There is a shocking number of otherwise sensible people who literally will not touch a bathroom door handle, and will grab a paper towel to open the door because they're so paranoid. This even makes its way on to official instructions sometimes, like here. There doesn't seem to be much of a sense of historical perspective - back in the 60s, I'm pretty sure people weren't using paper towels to open doors (not least because paper towel wasn't that common). I'm also pretty sure they weren't dropping dead from bathroom-door-related infections either. Perhaps, just perhaps, all this craze for hand sanitisers and never touching any public surfaces is just modern man turning into a complete weenie.

Nonetheless, showers in gyms do run the risk of getting fungal infections. The floors tend to be always wet and slightly warm, and lots of feet are walking over them. So it probably is prudent to get a pair of thongs.

But despite 3 years of not wearing them and showering at this gym, I'd pretty much been fine.

And I finally figured out why.

Herd Immunity.

When enough people are vaccinated against a disease, it becomes hard for the disease to spread. As a result, people who don't get vaccinated get to free ride off the added group protection from those who do vaccinate.

And something similar happens with bathroom floors. In the US, the vast majority of people wear thongs to public showers. I'm quite sure this is due to the hygiene/gross-out combo, and not out of any sense of public-spiritedness. But the effect is the same - if there are very few people who aren't wearing thongs, there's very few people likely to be spreading around foot infections. And that means that it's actually pretty safe for free-riders like me to go without.

I'm like the Jenny McCarthy of the gym shower world, free to be recklessly stupid and indulgent thanks to everyone else's good decisions, meanwhile imposing a small negative externality on everyone else by my own actions.

It's just like Tom Petty sang:

And I'm Freeee
I'm Freeee Riiiiiddding.

Good times.

An exact model of Venice in 1744

Venice is a strange place.

I get this sense every time you see paintings of it from hundreds of years ago. This, for instance, is St Mark's square around 1742/1744



(image credit)

So how does it look today?

Well, something like this:



(image credit)

In other words, it's basically identical. The clothes of the people are different, and there's now cafe seating in some areas. There's also pigeons, which don't seem to feature in the early paintings. But that's about the only differences.

This isn't just for this particular view either. In lots of cities, there are some buildings that haven't changed in a long time - Notre Dame, the Houses of Parliament, the White House. But in Venice, virtually every famous painted scene in Venice looks nigh-on identical today, hundreds of years later.

I can't think of any other place remotely similar. In 1744, Manhattan was a few buildings. Sydney was nothing but bush, save for a few Aboriginal dwellings.

So why did Venice get frozen in time, when everywhere else changed?

I have only crude ideas.

One of them, though, comes from the massively different cost of new buildings. If you have a house that's situated on a canal, even today it ain't exactly simple to get a bulldozer in there to knock it down. It's probably easier to maintain it in roughly its current state. In addition, the original buildings were incredibly beautiful. This didn't stop people elsewhere knocking down glorious Victorian architecture, but it at least reduces the incentive somewhat.

I imagine it also helps that Venice has been on a path of economic decline since the 15th century.When there's increasing demand for land, people will bowl over formerly valuable buildings to make way for new ones. But if the place is in decline, there's less desire to build more valuable structures on the same scarce land. By the time Venice did display some economic liveliness in the 20th century, it was largely as a tourist town, by which point the buildings and scenery were the source of revenue.

But in the end, sometimes the what is more interesting than the why. It's only when you see how similar everything was hundreds of years ago that you realise you're walking through a living museum.

History has ultimately given us the answer to the question posed in Robert Browning's wonderful poem,
"A Toccata of Galuppi's". Browning's narrator is reflecting on what became of the past splendour of Venetian society, with its lavish hedonism of masked balls:

"As for Venice and her people, merely born to bloom and drop,
"Here on earth they bore their fruitage, mirth and folly were the crop:
"What of soul was left, I wonder, when the kissing had to stop?

What was left, indeed?

The buildings.

When a society is strong, they are the badge of its vitality, the mark of economic dynamism that can produce exquisite architecture in the middle of the ocean.

When the society has decayed, they stand as a sombre reminder that decline arrives first in production. Eventually, everything from a fallen society crumbles to dust. But before that comes an intermediate stage - the monuments are still there, but the means to produce new ones has disappeared. All you can do is cling on to what remains of the past, forever cognisant of the rebuke it provides to the present.

Charles Krauthammer recently noted something similar about the retiring of the space shuttle.

I wonder if one day people will walk through Manhattan in the same way.

Random observations on the intersection of science and art, from the National Gallery of Art in Washington, D.C.

1. If you want another great example of historical applications of the curse of knowledge (how much you take for granted that everyone knew, when in fact only modern people know), you'd do well to consider the painting 'Joshua commanding the sun to stand still upon Gibeon', by John Martin. It's a wonderful painting:

(Photo credit from the blog 'writing the city', which has an interesting writeup about the painting here)

But I want to focus on a small section of the painting near the storm cloud, which looks like this:

What's that diagonal scratch coming down the mountain? Did someone drop a knife on the painting?

No, my friends. That is the artist's depiction of lightning.

Which, to a modern reader, looks absurdly crude alongside everything else in the painting. Bolt lightning looks more like this:

(image credit)

So how did John Martin get it so badly wrong?

Well, think about it. How do you know what lightning looks like? Answer: because professional photographers using extremely high speed shutters are able to capture precise images of it, which you now take for granted.

If you were alive in 1816, where would your image of lightning come from? Answer: the quarter of a second flash in the sky that you saw maybe a couple of times in your life. Which, from your hazy recollection, probably looked like the line above.

It's amazing how much knowledge you take for granted.

2. Georges Seurat painted in a style called pointillism. In it, lots of tiny coloured points are placed next to each other to create the image of different colours when viewed from a distance. The National Gallery of Art example is called 'The Lighthouse:

(image credit)

What's amazing is that Seurat managed to figure out a primitive version of the RGB pixel displays that you're reading this on. The modern screens we look at are extreme forms of Seurat's pointillism - instead of lots of colours making up the points, we have only three, and instead of the points being large enough to see up close, they're so small that you're not meant to notice them. If you looked at TV screens back from the 80s up really close, you'd get to see the different colours. 

Look at this awesome detergent I bought!!!! I'm so excited, LOL!!11!~!!

I confess to not really understanding the whole social marketing idea.

I mean, I understand how it's meant to work. Apparently we'd rather recommendations from our friends than anonymous strangers on the internet, especially since the latter may be biased.

Even this limited contention didn't quite apply to me. As long as the likely level of bias for self-serving reviews is roughly even across products (Amazon) or driven by a known function, such as a bias towards companies that advertise on the site (Yelp), I can correct for that myself. And once I can do that, I'm a big fan of the Law of Large Numbers. As N gets higher, the mean converges to the true mean (plus the bias term), and the variance shrinks. What's not to love?

Still, not everyone is a Bayesian. (I am 100% sure of this.*). Some people trust their friends' recommendations more, and I can sympathize with that viewpoint. I can definitely imagine taking a friend's advice in a discussion that came up on a product.

But the bit I stumble at is the other dimension - marketers seem to believe, rightly or wrongly, that the world is just full of people who can't wait to discuss their every purchase on some social media platform. Look, I tweeted about my new socks! Here's a facebook post about how much I love this dish sponge! I wrote an ode on GooglePlus about my camera case!

Reader, I cannot for the life of me imagine this mindset. Let's broadcast to everyone I've ever met my thoughts on every purchase! Then they'll buy the thing too, which somehow I care about.

The number of products in my life which I'm willing to evangelise about is shockingly low. I love my coffee machine. (The brand isn't important). But that's about it. Most purchases seem to fall into the category of either:
a) trivial
or
b) ostentatious
And either way I'm unlikely to post about them.

The only plausible exceptions I can imagine - holiday destinations, food, and maybe clothes.

Holiday photos everyone posts without feeling self-conscious. And this probably is a really good way to advertise tourism in Turkey.

Food, there's a whole sub-culture of people who for some strange anthropological reason need to photograph everything they eat. If they happen to eat at Wolfgang Puck's, I can see how Mr Puck might actually get advertising benefits on some reasonable scale.

Clothes, it already seems weird to be directly bragging about what you bought. But perhaps girls notice that you're wearing Jimmy Choos in that photo (guys sure won't. real guys won't even know what Jimmy Choos are, which surely proves the point).

So if these were the only people that were excited about social marketing, I could understand.

This is the facebook page for Colgate toothpaste. It has 1804 'likes'. And how many of those do you want to bet are people who work at Colgate? Or are personal friends of the social media manager at Colgate desperately trying to keep her job? Would you care to wager on the number out of those 1804 who are more than one degree removed from a direct employee of Colgate? 50, tops?

The company probably sunk a bunch of money into developing this, and I can't imagine how exactly that investment is meant to pay for itself, other than by demonstrating that Colgate in fact has a facebook page (which, if you don't, is like the corporate equivalent of being the one teenager who doesn't have a mobile phone).

By comparison, I googled 'One Hit Wonders 80s', and chose a random band I'd never heard of called 'J.J. Fad'. Their official facebook page has 2598 'likes'. Are you starting to see my point?

I can see what's in it for facebook. I can't see what's in it for most of the companies.

Maybe I'm just the wrong demographic, but it seems to me that most of facebook marketing is essentially the Tupperware parties of the modern age - adored by marketing theorists, kitsch and unimportant in practice.

*Bayesian joke. Never mind.

Thought of the Day

"The hour for your departure draws near; if you will but forget all else and pay sole regard to the helmsman of your soul and the divine spark within you - if you will but exchange your fear of having to end your life some day for a fear of failing even to begin it on nature's true principles - you can yet become a man, worthy of the universe that gave you birth, instead of a stranger in your own homeland, bewildered by each day's happenings as though by wonders unlooked for, and ever hanging upon this one or the next."

-Marcus Aurelius, 'Meditations'

Voter, Heal Thyself

On April 4th, a Greek man named Dimitris Christoulas shot himself in a square in Athens, in part as protest for the government's austerity measures. The Exiled has a translation of the suicide note he left:

The collaborationist Tsolakoglou government has annihilated my ability for my survival, which was based on a very dignified pension that I alone (without any state sponsoring) paid for 35 years.

Since my advanced age does not allow me a way of a dynamic reaction (although if a fellow Greek was to grab a Kalashnikov, I would be the second after him), I see no other solution than this dignified end to my life, so I don’t find myself fishing through garbage cans for my sustenance.

I believe that young people with no future, will one day take up arms and hang the traitors of this country at Syntagma square, just like the Italians did to Mussolini in 1945 (Piazza Loreto in Milan).

What a sad story.

Suicide rarely happens only because of one immediate cause - there's a ton of people suffering in Greece, but the vast majority of them aren't killing themselves. Taking suicide notes too literally can cause you to miss the bigger points about mental illness and depression that are likely contributing causes. If you go down that path, you wind up doing ridiculous things like convicting people of bullcrap charges like 'invasion of privacy' and 'bias intimidation' (whatever that is) because they did nasty things to someone who later killed themselves.

So you want to take all suicide notes with a grain of salt. But that said, the note above is interesting as an example of a particular mindset.

The note is full of rage at the Greece's leaders. Not only are they traitors for destroying the country, but likening them to Nazi collaborators in World War 2 suggests that the selling out of Greece to the Germans in the current crisis is something that rankles too. Of course, the reality measures (and the associated cuts in living standards for people like Christoulas who saw their pensions cut in recent budget measures) are the most proximate cause of misery. And fair enough too: pensioners end up thoroughly screwed, because they have the fewest options for replacing their lost income, as they're too old to go back to work. Not that the young and able-bodied have a ton of options for just 'going back to work' in modern Greece, but still.

But now we turn to what is not written.

You might note that there doesn't seem to be much rage at the earlier governments for running up the huge spending tabs that necessitated such dramatic cuts this time around. If you're only angry at the current government for cutting spending, but not angry at the previous governments for creating the whole mess, you've got a serious case of shooting the messenger.

But that's not even the most prominent of the dogs that didn't bark in the note above.

Q: Who is the single biggest group who contributed to the Greek crisis but who doesn't appear in the note above?

A: The Greek electorate.

The virtue of democracy is not that voters necessarily get better government, but merely that voters get the government they deserve. In the end, politicians respond to the incentives voters give them. If you keep voting for more spending, they'll keep spending. If you keep voting for so much spending that the country is now broke, and then vote to demand even more spending, don't be surprised when the politicians appear to act as if they're ignoring the public will. It's like the shareholders of General Motors firing the CEO because he hasn't made a flying car yet. You can keep firing CEO after CEO, but that ain't going to make the flying car magically appear.

The great Milton Friedman understood this well. In a democracy, we don't need to have 'non-traitorous politicians'. We need electorates to reward politicians who make the right choices.



Milt was too nice to point out the corollary to this argument - if the the current politicians keep doing the wrong thing over and over, this suggests that the electorate as a whole, through their opinion polls and their voting behaviour, has given them the incentives to do so. And thus, in the end, they have no one to blame but themselves.

An individual can be justifiably pissed off under a democracy - you vote for the guy who would put in good policies, but the guy with the bad policies gets elected. That's understandable - you did your part to support good policy, but what else can you do?

But the electorate as a whole cannot justifiably be pissed off at the outcomes the policies implemented by their leaders. As a whole, you get the politicians you deserve, whether that's George Washington, Lord Palmerston, Gerry Adams, or Hamas.

As Radiohead put it:

You do it to yourself, you do,
And that's why it really hurts.
You do it to yourself, just you,
You and no one else.
You do it to yourself.

(From a discussion with The Greek).

Margins of Error

I'm always impressed with the engineering associated with ATMs. Think about it - they have some of the smallest margins of error of just about anything outside of the aerospace/submarine/firearms industry. Made a mistake counting? Either you're spewing out money, or short-changing people and pissing off customers. (I'm guessing the former keeps bank managers up at night more than the latter does). Sure, the process is simple, but they get the number of bills right an astonishing amount of the time. I'm no engineer, so it's all just black magic to me.

But I do notice that the reliability is good enough that most of the time I don't even bother counting the money that comes out. Think about that - you're putting your faith in both the honesty and crazy technical competency of the bank. That's a crazy level of trust, but then again first world societies often have levels of trust that seem amazing when you think about them.

Despite and Still

Apropos nothing, the great Robert Graves:

Despite and Still

Have you not read
The words in my head,
And I made part
Of your own heart?
We have been such as draw
The losing straw --
You of your gentleness,
I of my rashness,
Both of despair --
Yet still might share
This happy will:
To love despite and still.
Never let us deny
The thing's necessity,
But, O, refuse
To choose,
Where chance may seem to give
Love in alternative.

The Psychology of Infidelity

I've often wondered about the mindset of people who embark on extra-marital affairs.

In particular, I wonder how they feel when they get back to their spouse and see the person being loving and caring. Do they get overwrought with guilt? Probably not, if only by the anthropic principle: the ones that did either confessed, or at a minimum broke off the affair. The ones that maintain it have clearly found some way to deal with it.

One understandable reaction, particularly for those who have started recently, I think would actually be relief and gratitude. I think the threshold for this would be that you would have to feel a bit bad about it, such that you'd been privately bothered before, but not enough to break it off or confess. Then the person being nice would let you fool yourself into thinking that everything is pleasant and happy. You'd wracked yourself a bit over it, and the curse of knowledge means that you're possibly worrying that your wife or husband might know about it. But then you see them, and of course they didn't know - they're glad to see you, and everything is okay. Their happiness would mix with your relief, and my firm guess is that in the short term you'd be nicer to your spouse, partly out of guilt, partly out of misplaced gratitude for temporarily mollifying your reflections. This is worth reflecting on, because I imagine that most people's mental model of 'how would I spot if my significant other were cheating on me' would probably involve them being distant and cold, but I'm not so sure this would always be the case.

I imagine that those that do it for a long time must end up somehow making peace with the cognitive dissonance between
1. I love my wife
2. I enjoy boning my secretary
3. I am not fundamentally a bad person.

Exactly how they do this likely varies from person to person - the mind is very creative in such instances. But the day to day interactions probably become more mercenary - once you've resolved the inner conflict somehow, you'd probably focus more on the question of how to not get caught. Pragmatic precautions, clearing phone records, emails, the necessary fastidiousness of constantly covering your tracks to stave off the inevitable.

I remember once sitting on a place next to some youngish businessman, probably mid 30s. Tech guy, American, reasonably good looking. There was wi-fi on the place, and he was instant messaging someone. While I wasn't going out of my way to spy (certainly not at first, anyway) his conversation was visible to at least me, and the few seats around him. In it, he was talking to some girl, most likely from work I guess. The girl was mentioning a friend of hers, and how this friend might be up for something with the guy. After an extended period of flirting, the girl said something about how it was weird that she'd been with the guy ('been with' was how it was phrased, but 'slept with and clearly still had some feelings for' was silently screamed), and was now setting him up with her friend. The plane got close to landing, and he put away his laptop. When the plane was taxiing towards the runway, he pulled out his phone. It became quite clear from his 'Hi Honey' discussion that he was talking to his wife. He then asked to be put on to his kid, and spoke a bit to some young child.

I remember thinking what a bizarre way this was to live one's life. People are strange, alright.

Pwned!

Andrew Breitbart may be gone, but Breitbart's legacy lives on. Investigative journalist and serial annoyance to the political left James O'Keefe has a classic new video up examining voter fraud. In it, he goes into a polling booth, gives the name and address of Attorney General Eric Holder, and is offered Holder's ballot. Naturally, they then intersperse this with interviews with Eric Holder where he claims that voter fraud isn't a problem.

Check it out - Comedy gold!

The Department of Justice is spinning like crazy on this one - the current line is the following:

“It’s no coincidence that these so-called examples of rampant voter fraud consistently turn out to be manufactured ones."

You tested this new heart attack medication in a manufactured, controlled environment! That tells us nothing about how the drugs will work in the real world!

Which of course misses the point entirely - the video doesn't show the prevalence of voter fraud at all. It simply shows how trivially easy it is to implement. Whether it happens a lot or a little isn't clear from the video. Truthfully, it's probably not a huge effect. But it's not trivial either, and it might matter in close elections.

In terms of the dog that did not bark though, my initial thought was 'you mean they haven't charged O'Keefe with voter fraud based on the video?'. This would be exactly the kind of politically nasty 'shoot the messenger' approach I'd expect.

But then you watch the video carefully, and see that O'Keefe has learned his lesson from his earlier arrest - at no point does he actually make any misrepresentations about who he is. Listen to how he phrases his question:

O'Keefe: "Do you have an Eric Holder, Address [redacted in video]?

Poll Worker: "H-O-L-T-E-R or -D-E ?"

O'Keefe: "H-O-L-D-E-R . That's the name."

Clever. He deliberately avoids claiming at any point that he is Eric Holder, but they are willing to him the ballot anyway. He doesn't sign his name to anything, he doesn't take a ballot. I imagine a Big Government lawyer probably vetted the whole formulation quite carefully. He's not giving them anything to pin on him.

I remember Tim Blair pointing out back in 2008 that you didn't need ID to vote for Barack Obama, but you did need ID to attend the Barack Obama election night celebration party in Millennium Park. Seems like a funny ordering of priorities to me.

Budget Deficit Gold

Via Ace of Spades, @politicalmath has a classic graph describing the estimated fiscal impact of the Buffett Rule that President Obama proposed, which would increase taxes on those earning a $1 million a year or more. Surely that must bring in tons of revenue, right? It wouldn't just be cheap political demagoguery?



Oh. Oohhhhhh.

A sufficient but not necessary condition for being an economist

You might be almost certainly are an economist if you've ever got irritated at an establishment because their prices were too low.

I remember in Chicago when Mayor Richard M Daley decided to fund the latest of his permanent election bribe fund by privatising the city parking. This of course led to parking immediately becoming about 3 times more expensive.

Most people were pissed off.

But I remember speaking to an economist friend of mine. "How good is this?" I remarked. "I know", he responded, "I can now get a park any time and pay with a credit card!".

This was truly a market that wasn't clearing. Tools kept circling around at peak hour looking for that vacant spot (which didn't exist), all to save a couple of bucks. Sure, you spent 20 minutes and a few dollars in petrol, but the point was you didn't pay for it! Idiots.

Being happy at price increases shows at least two phenotypes of economists.

The first is a recognition of a market that isn't clearing, and the fact that long queues signal a need for price increases (or increased supply). Since the number of parking spots is fixed in the short term, price increases are the answer.

The second phenotype (even more characteristic of economists) is the willingness to place an explicit value on your time. Waiting twenty minutes to save $2 is only a good deal if your implied hourly wage is less than $6. Red hot tip - mine isn't. Hell, minimum wage is more than that in half the country.

With respect to the second phenotype, a lesser appreciation makes you not really mind when prices go up - you accept that there's a tradeoff, but you still liked the cheap version, for all its problems.

A greater appreciation makes you positively glad when prices go up. Getting to buy back 20 minutes of your life for $2 is a bargain, and it's a bargain that you couldn't have before now. Earlier you were paying 25c and 20 minutes. Now you're paying $2. That's a price drop in real terms, my friends.

I remember going to this place that sold really delicious and really cheap ice cream - around a buck fifty. Total bargain, right? Awesome!

Except that every time I went there, there was a half hour wait.

Screw that. I'm not going back there until they raise their damn prices.

Clear that market or don't get my custom, fools!

Like Raaaaaiiiiiinnnnnnnn, on your Wedddddiiiinnnggggg Daaaaayyyyyy

In honour of world backup day being a mere three days ago, the hard drive on my 8 month old Dell laptop decided to die.

The answer to the implied question is, of course, 'No'.

Unless the implied question was 'why on earth would you buy a Dell laptop', to which the answer is' 'if you've ever owned a Lenovo laptop, a Dell laptop seems like an awesome choice by comparison!'. Sure, neither of them work very well, but the Dell is a lot cheaper. The advice to get a Lenovo Thinkpad came from SMH, who had one when they were still the IBM Thinkpad, and his one was excellent. Yeah, the moral of that story isn't hard to figure out. Apparently two other friends of SMH got burned by the same advice though, so I don't feel like a total fool.

Fortunately, I've had enough computers die on me that my friendly IT guy at work left me with a copy of an Ubuntu CD to boot from and rescue as much as possible. Which, thankfully, looks like being most of it.

Good times, good times...

Things I've been doing instead of writing blog posts

Reading up on the writings of Mencius Moldbug.I'm about halfway through the 'How Richard Dawkins Got Pwned' essays, where he claims that modern Universalist philosophy (what Dawkins calls 'Einsteinian Religion) can best be described as 'nontheistic Christianity', and part of the same progression of ideas from the Puritans. Interesting stuff.

The good news is, his writing is excellent!

The bad news is that it's time for dinner and bed, so go read his stuff. I haven't found writing on this theme that's this interesting since Eliezer Yudkowsky finished his daily sequences of posts on rationality, found in the archives of Overcoming Bias.

Don't take it personal, kid

Over at reddit a few days ago, there was this thread where a guy talks about how his daughter has cerebral palsy, and now at age three is doing really well.

But what I found interesting was part of the title:

When she was born doctors said she would never walk, talk and would probably need to be institutionalized.

I always find this a strange response. If you want to see what I mean, compare it to an alternative formulation:

She's doing incredibly well, given her initial condition made it unlikely that she'd be able to walk or talk, and probably would have needed to be institutionalised

I don't want to pick on this guy - I'm really glad his daughter is doing so well. But I find it an interesting example of a particular mindset.

For some reason, people seem to really like the narrative 'and then the doctor [delivered bad news], but he was totally wrong!'.

It's not enough that things turned out better than expected. Apparently there's an extra sweetness to proving wrong an expert who delivered negative news.

My best guess is that this comes from a combination of:

a) A general lingering dislike of people who deliver bad news

b) A particular dislike of people who deliver bad news that turns out to be wrong, even if it was probabilistically correct at the time, and

c) A sense that medical conditions have substantial scope for self-fulfilling prophesies: if you treat someone like they're disabled, they'll end up disabled, but if you treat them like a normal person, they'll end up comparatively more normal, even if not perfectly able-bodied.

The first one I can't relate to at all. The medical profession is the last place you want to start shooting the messenger - if you in fact have cancer, you're going to be a hell of a lot better off knowing that and starting chemo than pretending that you've got something else.

The second one I can't really relate to much more. I can understand getting irritated at advice that was bad ex-ante. But that doesn't quite explain it. As a layman, you'll probably have very little idea whether the advice was wrong ex-ante, or right ex-ante but you just ended up in the odd end of the distribution. e.g. Most people born with cerebral palsy won't be able to walk, but your daughter ended up as one of the lucky ones.

More importantly, would you be equally mad with a doctor who delivered ex-ante advice that was correct but ended up being too optimistic? "The doctors said she'd probably be able to walk just fine, but she can't." Unless you'd be equally bothered by this one, there's still something funny going on.

The third one may have some merit, but I don't know how much. I tend to be slightly skeptical (without any particular evidentiary basis) only because it sounds too much like wishful thinking - if we only act like there isn't a problem, there won't be a problem!

If you want the extreme opposite view, let me present you the great James Bagian, a man who was meant to be on the Challenger Space Shuttle but was substituted out shortly before the mission. He declined to wax lyrical about beating the odds or pretend to be shocked that the outcome was as bad as it was:

Was I sad that it happened? Of course. Was I surprised? Not really. I knew it was going to happen sooner or later—and not that much later. At the time, the loss rate was about 4 percent, or one in 25 missions. Challenger was the 25th mission. That's not how statistics works, of course—it's not like you're guaranteed to have 24 good flights and then one bad one, it just happened that way in this case—but still, you think we're going to fly a bunch of missions with a 4 percent failure rate and not have any failures? You gotta be kidding.

I'm going to go out on a limb and predict that a man who can get in a space shuttle and understand exactly what a 4% probability of the thing exploding means is not somebody inclined to blame a doctor for a negative diagnosis that turned out to be wrong. As indeed evidenced by the entire approach he takes in his current job - figuring out how to reduce medical errors.

As always, sign me up with James Bagian.

Against Compulsory Voting

Justin Wolfers likes the fact that Australia has compulsory voting.

I share Tom Friedman's view that the divisive nature of U.S. democracy is due to non-compulsory voting. But fixing that requires a mandate.

I respectfully disagree.

Less divisive it may be, but it offends me deeply as a statistician.

Why?

Well, who are the marginal people who vote under a mandatory system but not a compulsory system?

It's the people who didn't care enough to turn up of their own accord under a voluntary system.

Now, some of these people might actually have a firm view of the world, but just be feeling lazy or ambivalent. Maybe we really do want their opinions.

But a large number of the people who you're forcing to vote either

a) know virtually nothing about politics

b) genuinely don't give a flying fig

or both. If those people rationally decide to not vote, that's an entirely sensible decision.

How on earth does the decision-making system improve by forcing these people to pick a random answer? You're just intentionally adding noise to the process.

I remember my uncle had a mother who was senile and in a nursing home. He went in on election day to take her in to vote, only to be told that she'd already voted with the rest of the nursing home in the morning. Who did she vote for? Who the hell knows! She didn't know. Possibly someone told her who to vote for. Possibly she voted for the candidate suggested to her. Possibly not, too. But her completely random vote counted, just as much as the guy who read the paper every day. You can rest assured about that.

Lest you think that these people make up an insignificant number of votes, consider the following:

In the 1998 Australian federal election in the seat of Lindsay, there was an independent candidate who stood for office named 'Steve Grim-Reaper'.

Yes, really.

Without delving into the details of his policies, let's assume for the sake of the argument that people voting for a guy called 'Grim-Reaper' are essentially voting for a joke candidate. Let's further assume that the people voting for 'Grim-Reaper' might, if the 'Grim-Reaper' weren't running, vote for anyone at all. They are pure noise in the electoral process.

So how many people voted for the Grim Reaper in 1998?

1,043, or 1.36% of the electorate.

This isn't even counting the additional 4467, or 1.94% of the electorate, who voted informally (i.e. didn't bother to fill out the ballot properly).

Now, let's look at the seats that changed hands at the 1998 election. How many of these were cases where the margin of victory was less than the number of people in Lindsay who appeared to be voting as a joke?

In Bass, Tas, the margin was 0.06%.
In Dickson, Qld, the margin was 0.12%
In Kingston, SA, the margin was 0.46%
In the Northern Territory, the margin was 0.57%
In Stirling, WA, the margin was 1.04%
In Patteron, NSW, the margin was 1.22%

Six seats, where the victory was within the margin of joke voting. What a triumph!

In the most recent federal election, in 2010, the Labor Party ended up forming a coalition government with a majority of only one seat.

Meanwhile, the seat of Corangamite, Vic, was decided by 0.82% of the vote, and the seat of Hasluck, WA, was decided by 1.14% of the vote.

It is entirely possible that not only the outcome of a few seats, but in fact the outcome of the entire 2010 election, was decided by morons voting at random.

Justin Wolfers is a highly-trained economist, and a very competent statistician. It would amaze me if he weren't offended by this kind of forced noise in the voting process.

Even if it increases the civility of debate, it seems like a pretty steep price to pay.

Cross-Price Elasticity of Sexual Demand

Via jwz comes this story of a crazily effective birth control method for men:

The procedure called RISUG in India (reversible inhibition of sperm under guidance) takes about 15 minutes with a doctor, is effective after about three days, and lasts for 10 or more years. A doctor applies some local anesthetic, makes a small pinhole in the base of the scrotum, reaches in with a pair of very thin forceps, and pulls out the small white vas deferens tube. Then, the doctor injects the polymer gel (called Vasalgel here in the US), pushes the vas deferens back inside, repeats the process for the other vas deferens, puts a Band-Aid over the small hole, and the man is on his way.

...

[T]he polymer lines the wall of the vas deferens and allows sperm to flow freely down the middle (this prevents any pressure buildup), and because of the polymer’s pattern of negative/positive polarization, the sperm are torn apart through the polyelectrolytic effect. On a molecular level, it’s what supervillains envision will happen when they stick the good guy between two huge magnets and flip the switch.

With one little injection, this non-toxic jelly will sit there for 10+ years without you having to do anything else to not have babies. Set it and forget it. Oh, and when you do decide you want those babies, it only takes one other injection of water and baking soda to flush out the gel, and within two to three months, you’ve got all your healthy sperm again.

I'd predict that if this became widespread among young single men, the rates of STDs would increase a lot.

My guess is that the risk of pregnancy motivates people to wear condoms a lot more than STDs do. At the point that the average guy is about to get laid, the prospect of 18 years of child support payments concentrates the mind in a way that the unlikely event of getting chlamydia doesn't.

Condoms are nobody's idea of the ideal contraceptive. But the reason that guys want to use them is that they don't generally want to rely on the fact that the girl is on the pill or will take the morning after pill. And for good reason too - maybe they forget to take the pill, or maybe they're just crazy (in which case you've got the worst scenario - having a kid with a nutcase). But either way, there's a tail risk of bad outcomes that's now beyond the guy's control.

But if the guy knows he doesn't face pregnancy risk for any of his sexual partners, my guess is that the rate of condom use will drop off a cliff, with a resulting spike in STDs. (I tried to find estimates of condom use for straight and gay men to get a crude approximation of what the effect of removing pregnancy risk might be for condom use, but a few minutes of googling didn't turn up an obvious answer).

The only thing that makes me guess that this won't happen is that having an injection into your scrotum seems more likely for a man in a long-term relationship (e.g. as a vasectomy substitute) than for single men (e.g. as a condom substitute).

I'm guessing that the doctors treating STDs would probably be privately relieved.

Miscellaneous Nuggets of Interest

-In favor of my revised definition of why LA seems spread out, comes this: the 50 densest cities in America: . Clocking in at number 1:

The nation's most densely populated urbanized area is Los Angeles-Long Beach-Anaheim, Calif., with nearly 7,000 people per square mile.

 (Thanks to VarianB for the pointer)

-Taki's Magazine has a number of interesting articles at the moment covering a range of heterodox conservative opinion, including the disturbingly high suicide rate among transsexuals, the way people don't know how to interact with wounded soldiers, and the media circus surrounding the tragic death of Trayvon Martin.

-On the last point, former NAACP leader C.L. Bryant reiterates the depressing truth of the 'dog bites man' stories that don't get reported:

Bryant, who explores the topic of black-on-black crime in his new film “Runaway Slave,” said people like Jackson and Sharpton are being misleading to suggest there is an epidemic of “white men killing black young men.”

“The epidemic is truly black on black crime,” Bryant said. “The greatest danger to the lives of young black men are young black men.”

Sad but true.

-Britain continues to circle the drain: a drunk student who made a racist comment on twitter about a footballer will spend 56 days in prison for the offense. That's the British police - unwilling or unable to stop riots, but willing and able to punish drunks who call people nasty names.

I was going to call this post the traditional 'Miscellaneous Joy', but frankly there's not much joy in there. Interest, perhaps, but not joy.

Sporting Overconfidence, Part 2

The second effect of overconfidence on the sports field is that people over-invest in the sport.

In other words, when you think you have high skill, the rewards to training are higher, because you could go on to be a superstar. And in truth, the extra training will be useful, as training always is. You will improve because you train heaps.

But the margin on which you'll make a mistake is that you'll overinvest in the sport relative to what else you could be doing with those hours - hanging out with your friends, learning Russian, snorting meth, whatever your chosen avocation is.

Unfortunately, this creates even worse effects when everyone else is overconfident too. When you know that all the other teams are likely to overinvest because they're overconfident, it means that you'll need to train that much harder in order to beat them. In other words, even if you aren't overconfident yourself, the only way to beat the other teams is to act as if you were overconfident.

Once again, behavioural economics comes to the rescue, with the sage of advice of 'Can't win, don't try, spend your time enjoying life instead'. Not exactly the stuff of inspirational speeches.

But sod it! There's more to life than winning on your six-a-side soccer tournament. How about just enjoying yourself?

The second obstacle to this is the team structure. The team captain is usually among the most psyched up about the team's chance. So you often get conversations like the following:

Captain: I was thinking we'd train three times a week. You guys agree, right?

Everyone else: *shuffle feet, don't want to be seen as the lazy one*.

It takes an unusually bold person to demand that everyone train less because they personally are lazy. But then the consensus answer is always more training, even if that's not what most people want.

If I were running things, I'd start out the first meeting with the following:

'Okay, I want everyone to write down on a piece of paper the number of hours per week they'd like this team to train, ranging from zero to five. We'll put all the pieces in a hat, then draw them out, and whatever is the median answer will be how much we'll train.'

And my team will probably get our butts kicked! But it won't matter, because we'll be doing other fun stuff and not viewing training as being a chore.

Did I mention I'd make a rotten team captain?

"We're better than those guys

Statisticians rarely make good members of sports teams.

I found this out the hard way when I used to be on a frisbee team. Most people run on overconfidence. I've had numerous arguments with people over whether this makes sense or not. The general view is that if I psych myself up that we're going to win, I'm going to try harder to make it happen. If I believe I'll fail, I'll be demoralised and not try hard.

The idea is thus that belief in success and failure has a self-fulfilling component. Only a component, mind you - if I really truly believe I can beat Kobe Bryant to the net in a game of one-on-one, I will fail. But I'll still have a better chance than if I don't believe in myself.

Frankly, I was always a bit skeptical of this argument, as it reeks of a second-best solution. In other words, if you're being rational, better answers are unlikely to come from deliberately feeding in faulty inputs. Including your chances of victory. This only works if it's the workaround to some other faulty process - one bias (inability to try hard in the face of failure) is offset by another bias (convincing yourself that you won't fail).

But I remain committed to the belief that the first-best solution is always to eliminate the biases - in this case, figure out how to try hard even if you do think you'll lose.

Since this is what I aim at, I want to know the true probability, and work from there. It's a fair bet that most other team members (if they're non-economists or non-statisticians) won't feel that way. They'll view you as a negative nancy.

I remember this came to its zenith when we were down at half time. The captain of the team was trying to get us fired up. He said 'hands up who thinks we're going to win this game'. About half the team put up their hands. He responded, 'Right, you guys are on the field'. Personally, I thought this was absurd, but that's probably part of the reason I never got made captain.

The net effect of all this is that you end up with the absurd result that on any given sports field, at least 70% of the players think they're going to win. They think that they're better than the other team. Talk about the Lake Wobegon Soccer team effect.

It also leads to a hilarious misconception of what it means to be 'better' than the other team. For most people, if they lose on a knife-edge, they'll be bitterly disappointed.

But the statistician sees it differently.

If we play against a really rubbish team, we'll win about 95% of the time. Then we'll advance higher, and play a better team, that we'll beat 70% of the time. We'll advance higher still, until we're playing a team that we have an edge over, but it's tough - we might win 60% of the time. 

And eventually, we'll get to a point where we're playing against a team that's very evenly matched. We'll have a 50% chance of winning. And we might just end up in a 16-16 game to 17. And someone drops the disc, and the other team scores. And we lose.

The non-statistician weeps.

The statistician is sanguine. In expectation, we got exactly where we should have. We bet on a fair coin, and it  came up tails. This time we lost. Next time we'll win.

But there's no disappointment just because the coin landed on tails.

Funnily enough, that might make for a reasonable consolation speech afterwards. It would certainly have a better likely effect relative to the 'we're probably not going to win, but I plan to try jolly hard anyway' speech.

On the other hand, I'd would be much more inspired by the speech that talked about the true probabilities.

After all, not everybody who's willing to face up to true probabilities is necessarily a coward. The best response to likely defeat is to stare the truth in the face, and give it the finger.

Great News

Apparently the War on Drugs has ended! I know this because I read as much from Gil Kerlikowske, director of the Obama administration's White House Office of National Drug Control Policy. (i.e. the drug czar). Let's hear it from the man himself:

My first act upon being appointed President Obama's drug policy advisor in 2009 was to discard the "war on drugs" approach to formulating drug policy.

That's fantastic! It should could as great news to the families of Wendell Allen, Ramarley Graham, Jonathan Ayers, Eurie Stamps, etc. etc. etc.

Miscellaneous Joy, Ribald Conservatism Edition

-Steve Sailer catches the New York Times with their preconceptions being hilariously disproved. A shooter had being going around in France, targeting victims including Jews and Muslim soldiers. Naturally, without a shred of evidence, the New York Times wrote up the story as an example of Europe's "far-right" in action. But then it turned out that the shooter was actually an example of what Mark Steyn described as 'some guy named Mohammed', who claims to belong to al Qaeda. It's all well and good for New York Times writers to claim to not pre-judge matters based on stereotypes, but they might try to be a little more consistent in their application of the principle. I expect the retraction and apology to be coming any day now.

-One of the best one-sentence pitches for considering Mitt Romney as both a fiscal and a social conservative, (referencing a particular NEA grant) coming from Ann Coulter:

"Do you think a man who slashed government spending in North Korea [Massachusetts], put the corrupt and financially bleeding Olympics on solid financial footing and rescued dozens of companies from bankruptcy would consider a photo of a bullwhip stuck in a man's buttocks a wise investment of the taxpayers' money?"

It doesn't fit on a bumper sticker, but it's a pretty great slogan.

-Via Hacker News, an interesting piece by a female programmer talking about the subtle sexism she faces at work. I found it actually quite thought provoking, because it points out how a lot of male behaviours might not be considered that bad individually, but can have a cumulative effect that's quite corrosive.

Of course, then you scroll down to the comments, and it in part features her expressing some reservation (with a smiley face, admittedly) about a commenter referring to 'girls'. Later she suggests 'gals' as an alternative "if you want to sound less stuffy". Yeeeah. There's nothing wrong with this, and she does imply she's partly kidding. But let's just say that if you've given serious consideration to whether the term 'girls' is overly sexist and what alternatives there might be, I'm probably placing you somewhere higher up on the 'likely to take offense at mildly inappropriate comments' spectrum. That doesn't change what she wrote, but it might add some context about the things she's talking about.

-Pick your appropriate headline, between 'About Bloody Time' and 'I'll Believe It When It Actually Happens'.

Great Moments in Government Compassion

In New York, Mayor Bloomberg has stood behind a policy to refuse private food donations to the homeless, on the basis that they might not meet the right nutritional requirements. That's right, you're living hard on the streets of New York, sleeping in doorways, begging for spare change, chugging mouthwash because it's the cheapest source of alcohol and hoping that you don't become the target for somebody's random violence. But according to Michael Bloomberg, the real threat to your life expectancy is the salt in that bagel you're being served. Problem solved!

Ace claims that this policy suggests that New York may not have a genuine problem with real poverty after all.

He may well be right, but I don't think you can conclude this from the story.

It seems entirely plausible to me that some pinhead from the food police would refuse donations even if people really were going hungry. This is in fact entirely consistent with the incentives of bureaucrats everywhere - the only thing that matters is following the rules, no matter how nonsensical.

In an ordinary business, employees tend to be given some discretion in their choices to solve customer problems. This is because a private company has to leave customers satisfied or it goes out of business. As a result, it makes sense for management to encourage employees to have some initiative, in order to deal with unexpected problems that arise so that the customer goes away happy.

But the government never has this problem. No matter how pissed off you are when you leave the DMV, this doesn't affect the DMV's viability, or the paycheques of its employees. Because there's no profit, it's hard to measure if the organisation is doing better, or the contribution of individual employees. It is however easy to measure if you happened to break a particular rule. If in doubt, follow the rule. The end result is this kind of lunacy. If you allow the food to be given to the homeless and you gain nothing, but run the risk of some other bureaucrat punishing you. If you refuse the food, the homeless suffer, but nobody will blame you personally for following the rules. In the extreme case where an article gets written, it doesn't mention the individual who made the decision - the problem is just with the rule.

Individual government workers have no incentive to look at the larger perspective. Hopefully that's what their superiors are meant to do. Unfortunately, Mayor Bloomberg has a long history of monomaniacal pursuit of browbeating people into eating healthier. As Mark Steyn noted:

That’s the very model of a can-do technocrat in the age of Big Government: He can regulate the salt out of your cheeseburger but he can’t regulate it on to Seventh Avenue.

But even if he weren't the certified nitwit that he is, Mayor Bloomberg would have a hard time undoing every stupid, hidebound, butt-covering, slave-to-the-rulebook decision being made by New York City officials. It's a game of whack-a-mole that he'll inevitably lose no matter how hard he tries, let alone when he's instead wearing his mole cheerleader outfit.

The bureacrat initially follows the rules mindlessly because that is what his incentives dictate. Cognitive dissonance being what it is, the bureaucrat doesn't want to admit that he's following stupid policies that hurt people only because that's what the rules say - that would make him a coward and a pinhead.

As a result, it's easier for him to convince himself that the rules are in fact just, that the application of the rules is the actual end in itself, and that the world works better if he leaves the judgment calls to somebody else and follows the rules, no matter how bad the immediate impact.

And thus the stupidity gets internalised. Even if that means turning away food for the homeless.

The scorpion bites the frog because that is its nature.

Update: As if to prove the point, here's a story about a council sending a main to prison for not properly putting up siding on his home.

The Positive Commitment Value of Enormous Weddings

I've previously written about how I wouldn't have any desire to organise a massive wedding celebration that lasts many days. These types of events might be fun for the guests (if you're good friends with the bridal party - less so if you're a list C invite), but I can't really see why it's much fun for the people hosting them. Unless they happen to be enormous extroverts or just gluttons for punishment, neither of which would be terms I would self-identify with.

But the more I think about it, the more I think that elaborate weddings have a value. Namely, the prospect of a massive wedding may be a barrier to getting married, but it will also be a barrier to divorce as well. For me, the prospect of having to sink a second year of your life into organising wedding #2 (or 3 or 4) is a very strong reason to work harder on marriage #1. I imagine that if I had to spend months on end organising a four day party for hundreds of people, my feeling at the end would be of such great relief at the prospect that this duty was now discharged and didn't have to be contemplated again. As long as people chase after sunk costs, this should make them reluctant to take actions that would make the investment in time and energy worthless.

Given that a large apparent point of marriage is to raise the costs of ending the relationship (thus making the union more permanent), I guess this is something to put in the 'benefit' column. It's not so much of a benefit that I wouldn't chew my own arm off to avoid it, but then again I write a blog, which probably tells you a pretty strong signal about where I fit on at least one of the Myer Briggs personality components, and my likely desire to organise a big party.

Relative Scarcity in Exotic Travel

If you ever want an example of just how fickle people's preferences really are, look no further than their choice of holiday destinations.

The context I came across this in is the relative perception of Bali and Mexico.

To Americans, Bali is a land of exotic beaches, beautiful resorts and interesting locals. It's a good choice of honeymoon destination, and a holiday choice designed to make people thoroughly envious.

Mexico, on the other hand, is the crass and unoriginal place where low-rent rednecks go to drink cheap beer and stay in some generic resort.

To Australians, hilariously, the perceptions are exactly reversed. Bali is the place where football teams go for their boozy holidays, and you meet lots of other derelict Australians. But Mexico is enticing, with delicious food, amazing beaches, and Corona everywhere you look.

The reality is that both places are pretty similar - they provide fairly easy beach holidays with a range of accommodation options, and attract a lot of locals from their richer nearby neighbours - Americans go to Mexico more, and Australians go to Bali more.

But the relative scarcity of each place determines in part how it's perceived in each country.

As far as I can tell, there's two likely explanations.

The first is that this is about bragging rights - you need to go somewhere special so that you can boast to your friends, and even though Bali might be similar to Mexico, you choose the one that sounds better and makes you feel well travelled when you get home.

The second is that there's a self-fulfilling prophesy going on with accommodation spending. When you spend two grand on an airfare, you're more likely to stay in the expensive resort upon arrival. This makes the place seem super lush, and you go back and tell your friends how great it is. When you spend five hundred on the airfare, you stay in some cheap motel with the other budget travellers, and this reinforces the impression of a bargain kind of place.

While #2 might sound kind of rational, it's hard to reconcile with a proper search of the options - if you're American and want a nice holiday but don't care about what anyone else thinks, why don't you just stay in a nicer hotel in Mexico?

I'm led to believe that #1 must have something to do with it. But strangely, I don't think this is explicit - the Americans I know who went to Bali truly believed that it really was completely different from Mexico in lots of essential dimensions. As a result, they didn't seem especially thrilled when I pointed out that to Australians, Bali was basically like Mexico.

In other words, bragging doesn't work unless you've also convinced yourself that this was a better option. Cognitive dissonance, anyone?

Did I mention I also help little old ladies across the street on my way to Mensa meetings?

I was going to write about this piece at the New York Times where this guy called Greg Smith writes about how he's leaving Goldman Sachs because it no longer has the vibrant service culture of putting clients first that it had when he started (no really, stop laughing). He also wrote to say that all you darn kids have no respect any more, and you keep listening to that damn rap music, and back in his day politicians cared about the public interest.

I was going to write about that, but then David at Popehat nailed it so perfectly that you should really just read his post instead. Comedy gold!

Thought of the Day

"In death, Alexander of Macedon's end differed no whit from his stable-boy's. Either both were received into the same generative principle of the universe, or both alike were dispersed into atoms.
...
Do you make a grievance of weighing so man pounds only, instead of three hundred? Then why fret about living so many years only, instead of more? Since you are content with the measure of substance allowed you, be so also content with the measure of time."

-Marcus Aurelius, Meditations

Against Tasers

Via Drudge comes a story of our time, of Scott O’Neil, a cop in Mount Sterling, Ohio dealing with an arrest of a 9 year old boy for skipping school. That premise alone may sound ridiculous, but bear with me.

[O'Neil] went to the boy’s S. Market Street home about 8:30 a.m. to serve a complaint filed against Jared for truancy.

Jared — listed on the report as between 5-foot-5 and 5-foot-8 inches tall and between 200 and 250 pounds — refused to cooperate. He begged his mother to let him go to school rather than with the officer, but Perry told her son it was too late.

O’Neil wrote that after repeated warnings, he pulled Jared from the couch, but he “dropped to the floor and became dead weight ... flailing around,” and the boy lay on his hands to prevent being handcuffed.

So what do we have so far? We're using a police officer to deal with the problem of a kid skipping school. The kid seems pretty hefty, and isn't going along with the officer. It seems like the officer might have to actually grapple with the kid to get his arms free and handcuffed. 

That's what you'd think would happen, right?

O’Neil demonstrated the electrical current from the Taser into the air “as a show of force.” Then, he wrote, Perry told her son to do as O’Neil said or he would be shocked. 

So you threatened to taser a non-violent 9 year old child. Strong words, but perhaps the threat might have been useful. But surely you weren't actually planning on tasering a kid who may or may not be of sufficient age for criminal responsibility ?

The report indicates that after being shocked once, Jared still didn’t cooperate and was shocked a second time. An ambulance was called, but Jared had no sign of injury; Perry signed a waiver for medical treatment. Jared was taken to the sheriff’s office, and a delinquency count of resisting arrest was added to his truancy charge.

Let's all give a round of applause to Officer Scott O'Neil for the 'pathetic cowardice in the line of duty' award! You sure showed that child what for! Without the thin blue line standing with tasers at the ready, why we might have all sorts of children not turning up to school.

This is the problem with tasers. They were brought in, as far as I understand, to give cops a means to apply force that is unlikely (but not impossible) to be fatal.

So without the taser, the cop has the following options:

Pistol: 

Cost to perp: Fatal

Cost to cop: High - psychological trauma of killing someone, mandatory review of their actions, possible career implications. Has the benefit of guaranteeing the cop's safety in a violent confrontation.

Physical Altercation:

Cost to perp: Low. You'll get resisting arrest and might get a violent handcuffing, but you'll live.

Cost to cop: Medium - physically taxing, might get hit, and runs the risk that confrontation could turn nasty if the perp tries to grab your gun, or pull a knife etc.

But now, we introduce into the mix the taser:

Taser:

Cost to perp: Low to medium - guarantees a 'resisting arrest' charge, painful but medical complications are rare

Cost to cop: Zero. Nobody gets hassled for tasing someone. Guarantees the cop's safety about as well as a pistol.

The idea was that the taser was meant to be a substitute for the use of lethal force as a way of ending violent confrontations - instead of reaching for your pistol to kill a subject, you can tase him instead. Since nobody wants more perps to be shot than strictly necessary, this is a benefit. It also stops cops having to go straight to the threat of using a pistol as an escalation of physical confrontation. And this is an improvement too - you don't want to have loaded pistols pointed at yelling and violent suspects any more often than necessary, because they have a tendency to go off in the heat of the moment.

And to this end, the taser is useful. Although frankly, I'm not sure how often this really happens - if the cop truly fears for their life, I imagine they're still going to reach for their pistol, as their main priority is stopping you killing them at all costs.

But what the policy guys didn't seem to take into account is the other substitution - that tasers would be used as a substitute for any kind of physical altercation. 

And this has happened way, way more than the substitution of tasers for pistols, in part because situations that might call for a physical altercation are far more common than situations that might require somebody being shot. 

Cops tend to view tasers as magic button they can press to enforce compliance from people. It's actually a lower cost to the cop than risking a punch in the face, and as long as you come up with some story about the person being threatening, your superiors will go along with it. Good news for the cop.

But it's bad news for everybody else, because the end result is exactly the kind of story above. You threaten the subject with a taser for anything less than full compliance. Subject doesn't comply. You tase them.

Face it - the only thing that makes the story above newsworthy is that the kid was 9 years old. If the kid had been 17, this would be a complete 'dog bites man' story.

But is that what we want? Someone lying on the ground gets tased instead of having their hands grabbed and cuffed?

I want the use of physical force against civilians to be personally costly for the police. That forces the cop to work harder to avoid inflicting harm on the person they're arresting. 

With a taser, there is no incentive at all to wrestle with a suspect - just zap them for anything short of complete compliance.

If you're pissed off at the current story, you should recognise that it's just the logical end point of the current policy. We may end up with fewer fatal shootings, but we end up with a lot more cop-on-civilian violence overall.

We have the law enforcement equivalent of the battlefield nuclear weapon - the good news is that when you nuke the enemy, fewer people will be killed. Hurrah!

But battlefield nukes are actually very dangerous in a different sense, because they increase the risk that nuclear weapons will actually be used. The incredibly negative consequences of nukes are a feature, not a bug - they force countries to think very seriously about whether to fire them.

We've given all our battlefield commanders the availability of small, no-questions-asked nukes, and then we act surprised when the commanders start using nukes to deal with minor border skirmishes.

In foreign policy, nobody would be stupid enough to implement a policy like that. 

But that's exactly what we've done with law enforcement.

On Human Adaptability

Every now and again, I find myself rather impressed at just how adaptable the human body is.

A great example of this is jet lag. This is a phenomenon that is essentially unique to the last hundred years of human existence, out of the god knows how long period that we've been evolving. The body's circadian rhythm is designed to work with fairly evenly spaced days. While the period of day and night changes with the seasons, these changes are very smooth.

Hopping on a plane from New York to Brisbane, however, is an incredibly abrupt change that evolution didn't design us for. There's no particular reason to think that this might not result in you taking months to get back to a proper schedule, if ever.

And yet, it takes a couple of days and things are pretty much back to normal. The systems designed to deal with gradual changes to the seasons are able to deal with a random 36 hour day thrown in without skipping much of a beat.

Evolution may be the blind idiot god, but it makes some pretty damn fine optimisation procedures nonetheless.

Where Were They Then?

Via Jason Kottke, apparently one of Stefani Germanotta's co-workers shot a bunch of photos of her in 2005 in her apartment. Not long afterwards, she went on to become Lady Gaga.

Frankly, I never really rated Lady Gaga. But in these photos, she looks pretty good. I guess when you're wearing a regular cocktail dress with nice hair, instead of a dress made of meat and a ghastly blonde wig, it tends to make you look like less of a weirdo. Who knew?

Resist The Internship Arms Race

One of the things I find unfortunate among American society is the inherent suspicion of unstructured recreation time. There seems to be a large fear among many people of having ‘gaps in your CV’ – that all of your life up to this point must be able to be accounted for when life’s potential employers come knocking.

Personally, I’d never want to work for such a place anyway – if that’s how they expect you to account for every second of your time when you aren’t even employed there, imagine how it will be once you get a job.

In fairness, the suspicion of idleness has its admirable aspects – it is tied up with the strong work ethic that has made America such an economic giant, and is far, far preferable to a widespread desire for handouts and mooching which seems to herald the death spiral of welfare states (see Greece, California).

But perhaps the more pernicious result is that people feel the need to always be working, even if the work itself is not particularly valuable. This seems to find its zenith in the internships that US college students vie for so much.

A lot of these are just worthless CV fillers. Many of them are unpaid – add in the cost of your time and transportation, and you’re literally paying to be there. And what do you get out of it? It’s unlikely to be valuable skills – do you think an employer that won’t even give you minimum wage is going to be assigning you important tasks? Hell, do you think you’re going to be doing much other than photocopying and fetching coffees?

But people want them anyway.

A small number of these internships are genuinely useful – if you’re close to graduating and you want to get a job at Deloitte, you probably want to get a Deloitte internship, because they use this as a screening device for their job offers. That makes total sense. But if you’re just volunteering at some museum? Yeah, I’m pretty sure that’s not a screening device for the next curator position.

The real tragedy is that there are very few opportunities in life to go backpacking around the world for months at a time. College summers are one of them. If you can afford it, and the alternative is just some worthless unpaid job, take at least one of them off and tour around.

Some people seem to realize this partially, and decide to make their overseas holidays part of some career-building thing – studying abroad for a semester, volunteering in some third world place.

Which is fine, if that’s what you want to actually do.

But if what you actually want to do is just tour around a bunch of countries, get boozed and stay in youth hostels, then  go and do that!  It will be more fun than spending half your time studying for useless classes or pretending that what you actually wanted to do was build houses in Guatemala.

This is cheap talk advice, of course. The sad reality is that a lot of US employers will judge you for these things. But my guess is not as much as people think. Personally, I’d do it for at least one summer. If an employer can’t get over that, screw ‘em.

But the average person is stuck in a true arms race – they know the internships are worthless, but they know everyone else will have them, so they fear they’ll look bad if they don’t have them too.

It’s hard to get out of arms races - everyone knows they're a negative sum process, but they can't commit to disarm. 

I’m just glad I’m not involved in one myself.