Category Archives: books and book reviews

Visions for a World Transformed

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The subtitle is 99 ideas for making the world a better place–starting right now. It is edited by Philip Bowermaster and Stephen Gordon. Idea #48 is an anti-outrage campaign.

Some very successful Internet/social businesses have been built and are sustained primarily by feeding the outrage beast. In the long run, this mindset only leads us to isolate and vilify each other, increasingly making those we disagree with the Other. It is time for an anti-outrage campaign. One way to make it happen would be for highly partisan people to start publishing true and fair information about their opponents. . .saying: “I don’t like this person, but here’s what they actually say and what they’re actually doing. And why.”

The book is cheap to download on Kindle. Actually, through April 7 it’s free. Most of the ideas in the book are more exotic than #48. Skimming the book led me to speculate that the editors’ approach for finding writers consisted of hanging out in mental institutions. Or with the rationality community. (Same thing?) They had me contribute idea #76.

Revisiting My Former Life

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Susan Wharton Gates, a former Freddie Mac employee, recently published a book delving into the collapse of that housing finance enterprise. In my review, I write,

The fall of Freddie Mac came as a shock to those of us who were there in the late 1980s and 1990s, who refer to ourselves as “old Freddie.” Was the tree that seemed so sturdy twenty-five years ago knocked down by a storm or did it rot from within? Gates says that it was both. She tells the story of Freddie Mac’s fall as a combination of both external pressure and internal rot.

My review essay is long and personal. You might see at as an exercise in therapeutic reminiscence.

A Seasteading Skeptic

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Reviewing a new book on seasteading by Patri Friedman and Joe Quirk, Shlomo Angel writes,

there is also no particular urgency to settle the oceans, as plenty of land remains for building cities: They occupy only about 1% of the land of countries today. And it is much cheaper to build cities on land than on the oceans.

That is somewhat beside the point. All of that land is now claimed by governments, and those governments will not allow you to build a city with its own set of rules.

I hope to review the book at some point.

Michael Mauboussin on Luck

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A commenter recommended him, and I watched this video.

Some interesting points:

1. As skill in an activity becomes more refined, differences in skill at the high levels tend to narrow. As a result, luck starts to play a relatively larger role. In some sense, it took more luck for George Brett to hit .380 than it did for Ted Williams to hit .400. The standard deviation among major league hitters was higher in Williams’ day, so that when batting averages are scaled by standard deviation, Brett’s best year has a higher Z score than Williams’. The AP statistics text that I use has a problem in which the student calculates this. Mauboussin also refers to this example.

2. He says that luck is difficult to define, but a key element is that it is reasonable to say that the outcome could have been different. He opens the talk by telling a story of how he interviewed for his first job out of college and noticed that highest level executive with whom he interviewed had a trash can with a logo of the Washington Redskins. Because he praised the trash can, the high level executive eventually overrode all the other interviewers and gave Mauboussin the job. I have a similar story about getting into Swarthmore College, which I have told here before. A local alumnus interviewed me, and I guessed that he was the father of a guy I had seen wrestle for the state championship. I talked about that match, and when I came to Swarthmore the Dean of Admissions said that the wrestling coach, Gomer Davies, was looking forward to having me on the team. Having no aptitude for wrestling myself, I never went near Coach Davies.

3. He says that extraordinary success comes neither from pure skill or pure luck. You need a high skill level to compete. But beyond that it takes luck to have extraordinary success. Bill Gates had the skill to do well in technology, but his extraordinary success required luck. If you do not know the story of how Microsoft was awarded the role of providing the operating system for the IBM PC in the early 1980s, then you can get an abbreviated version by listening to the Q&A at the end of the talk.

4. He says that when you are the less skilled player, you need to try to complicate the game. Try a trick play, for example. I would add that you should look for short games. The longer the game goes on, the more likely it is that the other player’s skill advantage will win out. Think of a board game (or a business competition) that consists of many moves. Suppose that on each move, the player with more skill has a 51 percent chance of doing better than the less-skilled player, and conversely the less-skilled player has a 49 percent chance of making a better move. In a short game, the lesser-skilled player might win. But if the game goes on for hundreds of moves, the chances of the lesser-skilled player dwindle. I first wrote about this twenty years ago. I still love that essay.

5. He says that our brain has an “interpreter” that is determined to tell causal stories, even if it has to make them up. There are some famous split-brain experiments that demonstrate this. The interpreter prefers explanations that make something appear inevitable, rather than lucky.

I would illustrate this with the financial crisis of 2008. Although economists did not anticipate the crisis beforehand, they explain it now as if it were inevitable. I just finished Days of Slaughter, Susan Gates’ insider’s account of the fall of Freddie Mac, and it reminds me of the role played by bad luck, in particular the unfortunate choice made by Freddie Mac’s Board to install as CEO in 2003 one Richard Syron, who combined an absence of experience in mortgage lending with an arrogant unconcern for that lack of experience. Another CEO might have charted a different course for Freddie Mac, and for the entire housing market.

Another illustration is the election of Donald Trump. It was very much a random event, but everyone’s interpreter strains to see it otherwise.

6. During the Q&A, he considers the issue of whether popular opinion is right or wrong. When does the wisdom of crowds become the madness of crowds? He says that a necessary condition for wisdom of crowds is diversity of opinion. The crowd is most at risk of going wrong when there is what he calls a “diversity breakdown,” and everyone is thinking alike.

Tyler Cowen’s Complacency Quiz

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It sorts you into four categories:

Trailblazer

Striver

Comfortable

Complacent

I was rated as a striver. I don’t think of myself that way. I might feel better if there were a category called “contrarian.” It would describe me, and I think it also would describe Tyler.

In terms of the categories as given, I would self-identify as comfortable now and a trailblazer when I was younger. I was very entrepreneurial in my 30s and 40s. Now, I just blog. My wife and I have visited many countries, but lately we would rather travel to visit relatives than to see new places. I would much rather go folk dancing than go to a party or have a new experience.

It could be that my score was affected by questions that were impossible to answer, forcing me to almost randomize. For example, dancing is the source of suggestions for music to which I like to listen. That was not one of the choices in the quiz.

Other comments:

1. The introduction to the quiz says that

Complacency is defined as self-satisfaction accompanied by unawareness of possible deficiencies or dangers

This differs from the definition that is offered in The Complacent Class, but I think it gets much closer to what Tyler means.

2. Making up a quiz is fun, but I wonder if it was made up with complacency (as defined above). In theory you ought to test your quiz to see how well it works. You would ask a bunch of beta testers to both self-identify in terms of categories and to take the quiz. If the quiz puts them in their self-identified categories, then it works. Otherwise, it needs to be tweaked.

In the first edition of The Three Languages of Politics, I used a made-up quiz. I only tested it out on a few friends beforehand. They said that it worked ok. I imagine that it was easier for people to self-identify as libertarians progressives, or conservatives than to self-identify into Tyler’s idiosyncratic categories. But in the new edition that is about to come out, I dropped the pretense of a quiz, and instead I just used the examples as illustrations of the three-axes model.

Yuval Levin on Paulos and Cowen

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He writes,

Stagnation moved by insecurity seems a little more like the predicament we are in than stagnation moved by complacency (which Cowen defines as “a growing sense of satisfaction with the status quo”). The former, more negative, kind of stagnation is what both books are really about, it seems to me. Poulos focuses on the underlying sense of insecurity, which runs much deeper than our economistic ways of thinking about politics usually suggest. Cowen focuses on the resulting paralysis, which is a huge problem for a society that is barely capable of understanding itself in any terms other than the terms of change. And both argue that the way forward is to recognize that insecurity is our natural condition and that this is by no means all bad. In this sense, the two books help to clarify each other.

I will look into the Poulos book, but I do not assign a high probability to my finishing it.

Asymmetric Intolerance

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In the United States, the average number of automobile accidents per year is 5.25 million (source). The average number of fatalities per year is 30,000 to 35,000. (source).

How many accidents are we willing to tolerate involving self-driving cars before we stop trying to restrict their usage? Pretty much zero, right?

Let’s call this “asymmetric intolerance.” We accept a phenomenon that is highly flawed (human-driven cars) while we refuse to tolerate a phenomenon if it has any flaws at all (self-driven cars).

If asymmetric intolerance had been a policy principle 125 years ago, might we not still be transporting ourselves in horse and buggy?

Some further thoughts:

1. Maybe this is in line with the issue of resistance to change that is a theme of Tyler Cowen’s latest book.

2. Is an obsession with terrorism an example of asymmetric intolerance?

3. I have a relative in California who buys “organic toaster pastries” (non-GMO, of course). In other words, Pop-Tarts that have been blessed as all natural. Isn’t that an example of asymmetric intolerance?

4. Where else do we observe dramatic examples of asymmetric intolerance? Or is this the only example that comes to mind?

My Review of Tyler Cowen’s Complacent Class

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I conclude,

there is an important category of people who are dissatisfied with the status quo and at the same time are averse to risk and to change. It is an interesting pathology, but I think it is misleading to term it complacency.

A few more thoughts.

1. There is a lot to the book. You should read it. Even though it is getting a lot of coverage, don’t just assume that you can pick up its contents by osmosis. But prepare to disagree with him at times.

2. I wrote the review in a hurry. I can imagine re-reading the book and writing a different review.

3. I am still not happy with Tyler’s use of the term “complacency.” I can think of three senses of the word that are floating around in the book.

a. Complacency is “a general sense of satisfaction with the status quo.”

b. Complacency is a desire to avoid risk and resist change.

c. Complacency is a belief that the current social order is stable, that we will not suffer from a sharp increase in violence or a major breakdown of norms and institutions that maintain order.

Tyler explicitly writes (a), but I don’t think he really means it. The first three-quarters of the book are about (b), amassing evidence that modern Americans suffer from (b) much more than our forefathers. The last quarter of the book is about (c) and why Tyler believes it is wrong. He wants to claim that a big reason that (c) is wrong is that (b) has become so prevalent. Think of a Minsky model of social change: stability leads to instability.

Tyler Cowen Reminds me of Charles Murray and Neal Stephenson

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I just opened my (Kindle) copy of The Complacent Class. He describes three complacent sub-groups. First is “the privileged class.”

the wealthiest and best educated 3 to 5 percent of the American population

This is Charles Murray’s Belmont (or Neal Stephenson’s Vickies). It is easy to see why they might feel complacent.

The third group is “those who get stuck.”

Their pasts, presents, and futures are pretty bad. . .A lot of these people never really had a fair chance.

This is Charles Murray’s Fishtown (or Neal Stephenson’s Thetes). I think it is a stretch to put them in the “complacent” class. Tyler himself says that “they are not happy about their situations.” They are just not capable or motivated to do what is required to change.

Anyway, I need to read more than a page or two before reviewing the book.

Shorter Version of Tyler Cowen’s New Book

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From one of my comenters.

the chief anti-libertarian human tendency is the wish to minimize risk by distributing it which leads to all the “too big to fail” and social security and regulatory boondoggles. The bigger and richer the society the easier it is to fulfill this wish at least in the short-medium run

This sounds like the problem of the “complacent class,” as reviewed by Walter Russell Mead or Edward Luce.