Do you right now favor both a lot of stimulus and a big minimum wage hike? What are your assumptions about elasticities?
Start from a policy preference to subsidize demand and restrict supply. You want to say that subsidizing demand will increase output and that restricting supply will not decrease output. Your elasticity assumptions have to be consistent with those policy preferences, not with one another.
the experiment forces people to reckon with the idea that even experts don’t know what the right thing to do is and that confession of ignorance bothers people.
Recently linked by Tyler Cowen.
W. Edwards Deming distinguished experiments from tampering. With an experiment, you change a process and explicitly compare the results to a baseline. With tampering, you change the process without rigorously examining the results.
For example, in education, most curriculum changes involve tampering. Schools rarely test to see whether a curriculum works.
I once sat next to a high official in the Department of Education, and he was horrified when I suggested experiments in education. “Would you want your child to be part of an experiment?” he asked, incredulously. “The schools do it all the time,” I responded. “They just don’t bother checking to see whether their experiments work.”
Another example is the pandemic. When I complain about the unwillingness of health officials to conduct experiments to see what factors affect the spread of the disease, few people agree with me (readers of this blog are an exception). They quickly invoke Joseph Mengele.
But nobody invokes Joseph Mengele when it comes to lockdowns, which are simply experiments whose results are not rigorously evaluated by those who conduct them.
It is very hard to make a moral case against experiments that is not also an even stronger case against tampering. But we have a much higher tolerance for tampering than for experiments. I am inclined to fall back on Alex’s answer. Saying that you are conducting experiment implies that you are uncertain. Tampering implies that you know what you are doing. Sadly, people have a higher tolerance for tampering.
Eli Dourado has a nice roundup.
Both Moderna and BioNTech have personalized vaccine candidates targeting cancer. Although called a “cancer vaccine,” the treatment is only administered once the subject has cancer—it isn’t preventative. The companies use an algorithm to analyze the genetic sequences of the tumor and the patient’s healthy cells and predict which molecules could be used to generate a strong immune response against the cancer.
He is optimistic about the Hyperloop. Peter Diamindis is, also.
Pointer from Tyler Cowen. The tone is optimistic. Years ago, I noted that the print publication that gives me the most optimism is Technology Review. The one that gives me the most pessimism is Regulation.
We can compare Eli’s post to what I wrote in 2005.
I wrote,
Is the new trend rate of productivity growth 3 percent or higher?
Obviously, it wasn’t. I was thinking about labor productivity, which is not the same as TFP, which Eli wants to look at. All productivity measures are dubious, in my opinion.
I wrote that cognitive neuroscience was the field of the future. I think I was wrong. It gets no mention in Eli’s survey.
I quoted the U.S. Department of Energy to the effect that by 2015 solar power would be competitive with traditional sources of energy. Eli says
The 2010s were the wind and solar decade. We observed stunning declines in the cost of both
I wrote about optimism regarding cancer therapy. We have seen some improvement, but “the emperor of all maladies” is still a formidable killer.
Finally, I wrote that mainstream media were losing attention as well as credibility. Actually, they figured out how to hang on to attention by dialing up the outrage and clickbait. They decided not to bother with credibility.
If I were a billionaire, instead of wasting money on non-profits, I would buy some land and try to build a start-up city. Build roads that work well with autonomous vehicles, and only allow autonomous vehicles–visitors have to leave their ordinary cars in a parking lot outside the city. Design and build an electric grid optimized for today’s technology. Make 5G available everywhere. Implement a set of protocols that allow all sorts of drones to operate without colliding with one another or with humans.
The key to a start-up city might be making it easy for people to interact with people from other cities. This could mean rapid transit in and out, or it could mean the use of augmented reality.
Perhaps in the future cities that have major impediments to livability will be at a disadvantage. It may prove easier to give people in other cities the amenities that they appreciate about NY or SF than it is for NY or SF to escape their downward spirals. Boston, Chicago, and Minneapolis will have a harder time convincing people to live with winter.
That is not a sure-fire prediction–it may prove no more prescient than my 2005 blog post–but I offer it as a possible future scenario.
Supposedly, Tyler Cowen wrote this about Twitter’s decision to ban President Trump:
I am fine with their decision. Furthermore I think they made it at exactly the right moment.
But Tyler has an evil twin, Tyrone, who occasionally takes over his blog posts.
Here are my thoughts on “terms of service” and their enforcement.
1. In my case, I dislike comments that include personal attacks, especially when they are personal against other commenters or personal against me. Criticize a person’s ideas all you want, but avoid name-calling and insults. I do not have the capability to enforce this all of the time, so sometimes inappropriate comments do get through. But apart from personal attacks, I have not found myself wanting to delete comments.
2. Terms of service should be clear, not vague. You should try to make it as clear as possible how to distinguish what is ok from what is not. Examples are helpful.
3. When you delete someone’s content, you should have a good answer to the question, “You deleted X, but why did you not delete Y?” Ideally, you should be able to show that your terms of service allow Y but not X.
4. Banning an act is serious, but banning the actor is grave. Banning a person should be a very last resort. It seems right to ban someone only after they have been found multiple times to have posted content that is against your policy, you have warned them that their abuse is excessive and could result in a personal ban, and they continue their abuse.
5. When you ban a person, then you must be able to answer the question of “You banned this person, why did you not ban that person?”
6. My sense is that the main social media companies cannot give good answers to the question of “You took down X, why did you not take down Y?” A big part of the answer is that the enforcement of terms of service is costly. That is my excuse for not getting rid of every single personal attack in the comment section. But apart from that, I hope that my enforcement is not selective.
7. But enforcement costs do not excuse selectively shutting out ideas or people you dislike. As with laws, selective enforcement undermines the legitimacy of terms of service.
The status of the center rose, even if it remains far below levels it reached sixty years ago. Just looking at the outcome of the Democratic Presidential nomination contest and the House elections, the body politic did not show an appetite for radical progressivism. I could also cite the failure of the affirmative action referendum in California.
Libertarians had a terrible year. Hong Kong’s freedom got crushed. All over the world, officials exercised unprecedented power over individual behavior, with control over the virus the stated intention but not the result, at least in Europe and here.
Government spending and the Fed advanced deeper into the economy. Both political parties continued to retreat from economic liberty, and both seem eager to find a way for government to exploit the economic and technological power of the big tech firms (that is what politicians mean by “regulating big tech.”) In referenda, a higher minimum wage did well.
Looking for a silver lining somewhere? The marijuana legalization movement had more gains, if that’s what gives you a buzz.
Radical progressives had a disappointing year at the ballot box, but otherwise the religion that persecutes heretics had a fantastic year. Cancel culture came to the New York Times. It made major inroads in corporate America and in major investment firms.
Tyler Cowen made a number of predictions for the effect of the pandemic on relative status, and those mostly proved correct. But he did not predict George Floyd’s death, which led to the conversion millions of Americans to Wokeism. Even foreign demonstrators joined the flock.
The resistance to that religion has become more overt, but the religion itself enjoys powerful momentum. Mr. Trump’s executive order to stop preaching the religion to government workers is certain to be reversed.
If a project having a high moral standing is equivalent to that project having twice as much money, or even more, then culture and narrative are extremely powerful forces that command the equivalent of tens of trillions of dollars of value. And this does not even begin to cover the role of such concepts in shaping our perceptions of legitimacy and coordination. And so anything that influences the culture can have a great impact on the world and on people’s financial interests, and we’re going to see more and more sophisticated efforts from all kinds of actors to do so systematically and deliberately. This is the darker conclusion of the importance of non-monetary social motivations – they create the battlefield for the permanent and final frontier of war, the war that is fortunately not usually deadly but unfortunately impossible to create peace treaties for because of how inextricably subjective it is to determine what even counts as a battle: the culture war.
Pointer from Tyler.
Think of the history of the Catholic Church. The Church translated its cultural power into tremendous wealth (have you seen the Vatican museum?) and political power. Not surprisingly, it attracted some very unsavory people to become popes and cardinals. The Woke religion is in its infancy.
a lot is going on in science and also in applied science and actual invention, not just nifty articles in Atlantic. On net, this means you should spend more time consuming YouTube videos (try this one on protein folding). They tend to be current, and to explain difficult matters in visual and also in fairly memorable terms. There will be such videos for virtually every new advance. You should read fewer normal books, more vertigo-inducing books, and spend less time on social media. You should read more Wikipedia articles, and when you read books you should select more from the history of science and times of turmoil. You should read this blog more often too.
I think that the way you acquire “higher education” may be changing. College may be less all-encompassing and instead more transactional.
Why would you want to go to college these days? I am not just talking about COVID issues–assume the virus restrictions go away.
When I went to college, almost every course was serious. Even “Physics for Poets” was intended to convey important knowledge. Now if you want a rigorous education you have to select courses carefully. And if you want a mentor, you should pick someone like Tyler or someone like me.
When I went to college, there was no substitute for a good professor. Now, there are many more books on academic subjects written for a popular audience. Plus YouTube. [I wrote those two sentences before I saw Tyler’s post.]
When I went to college, high school graduates were ready to experience independence, and the institutions respected that. Today, they have administrators and counselors hovering over you. They’re worse than parents! Telling you what you can and cannot say. Giving you detailed restrictions regarding sexual conduct.
And while we’re on that subject, when I went to college it was a unique opportunity for finding potential mates. Many people my age found their spouses at college. Today, there’s an app for that. These days, by far the number one way spouses meet is through online dating services.
What to do instead of going to college right away? The old-fashioned options include getting a job or backpacking abroad, and I would not argue with either of those.
But I recommend asking for funding from your parents to take a road trip with a friend. Find a friend who is neither more nor less adventurous than you are. (If one of you wants to smoke pot and the other one doesn’t, it’s not a good match.) Get a reasonably reliable car.
Tour the United States. Read ahead of time about national parks, interesting small towns, and what to see in major cities. Save notes either on paper or in electronic format.
Pack a tent, some clothes, some electronics, some food coolers. . .Sleep mostly in the tent, usually at a campground. Every ten days or so try to get a bed and laundry facilities for a night. One approach would be to query your social network to find somebody’s friend or relative who lives in the state where you happen to be driving.
Don’t go with an unlimited data plan on your smart phone. Don’t rely on it for entertainment. Minimize your use of GPS. You can ask people for directions.
Introduce yourselves to people everywhere you go. Spend several days in one place if you find it particularly friendly.
Going to college right away will reinforce your fears and insecurities. Taking a road trip instead will help you approach grown-up life with more assurance.
very powerful economic forces drive centralization of a successful decentralized system. . .
the fundamental problem is that decentralized systems inherently provide users a worse experience than centralized systems along the axes that the vast majority of users care about.
Pointer from Tyler Cowen.
The argument over whether software should be centralized or decentralized is analogous to the argument about command vs. a market. In Specialization and Trade, I describe two forms of coordination, or resource allocation. A command system is used within a firm. A price system is used in the market.
I discovered during my business career that software does not evolve independently of the context in which it is created. I used to say that every organization gets the information system it deserves. Tightly-run organizations end up with very reliable systems. More free-flowing organizations end up with very fragmented systems.
People’s needs differ from and conflict with one another. In a command system, a central planner determines which needs will be met. In a market system, the price and profit system directs entrepreneurs to which needs will be met.
A command system is fine if the pattern of needs is given, or if you have enough power over people to treat their needs as given. A central planner can seek to optimize to meet a given set of needs. But a market system works better at discovering needs.
The original communication network–the telephone system–was centralized. That is because switches were expensive relative to bandwidth. But as computers took over switching, the cost of switching plummeted, obeying Moore’s Law. This opened the way for the Internet to take over communications around the turn of the 21st century.
When the Web first arrived, people did not know how it was going to be used. The challenge was one of discovering needs, and decentralization was most appropriate.
Eventually, some needs coalesced, and we started to see well-worn paths through the Internet jungle. So there emerged big, centralized systems, such as caching servers and search engines.
Amazon, Google, Facebook, and Apple are able to take people’s needs as given. They try to optimize to meet those needs.
One of them could falter if and only if it gets caught flat-footed by a new service that has discovered needs that its customers have that are not being met.
If you don’t know exactly what your software will need to do, then a decentralized architecture might make sense. But once you find a clear pattern of usage, you will want to optimize the software for that pattern, and one can predict that the architecture will evolve in a centralized direction.
Paul Graham describes what Y-Combinator looks for in business founders, and he explains why you become a billionaire by building a great product, not by being a bad person. Pointer from Tyler Cowen.
I would bet that the chances that you are a bad, exploitative person are much less if you work at a profit-seeking firm than at a non-profit. Within a profit-seeking firm, I would also bet that the chances that you are a bad, exploitative person are much less if you have a stake in the enterprise as a whole than if you are highly compensated based on individual performance. To be clear, what I am saying is that the non-profit sector is more likely to unintentionally select for bad people than is the for-profit sector. And within the for-profit sector, high compensation without skin in the overall game is more likely to unintentionally select for bad people than is an ownership stake in the overall enterprise.
On the topic of what YC looks for, how would I have done in 1994, when I first started Homefair? Continue reading
UPDATE: a commenter points out that the survey was not very trustworthy.]
Relatively conservative professors valued academic rigor and knowledge advancement more than did relatively liberal professors.
Relatively liberal professors valued social justice and student emotional well-being more so than did relatively conservative professors.
Professors identifying as female also tended to place relative emphasis on social justice and emotional well-being (relative to professors who identified as male).
Business professors placed relative emphasis on knowledge advancement and academic rigor while Education professors placed relative emphasis on social justice and student emotional well-being.
Regardless of these other factors, relatively agreeable professors tend to place higher emphasis on social justice and emotional well-being of students.
Pointer from Tyler Cowen (see the Rolf link). See also Sumantra Maitra.
This relates to what I call the Road to Sociology in economics. The economics profession is rapidly increasing its number of females and also rapidly moving to the left. This is not a coincidence.
1. I remain a vaccine skeptic. Consider these two recent reports.
Out of 170 adult volunteers in the nearly 44,000-subject trial who developed Covid-19 with at least one symptom, 162 received a placebo, while eight got the vaccine, Pfizer and BioNTech said.
Ninety-five people in a 30,000-subject study developed Covid-19 with symptoms; of those, 90 had received a placebo and only five Moderna’s vaccine.
OK. Assume half received the placebo (Does anyone know the actual percent that received the placebo?). So with no vaccine, 162 out of 22,000 got the disease in the Pfizer study. That is less than 0.75 percent. 90 out of 15,000 got the disease in the Moderna study. That is 0.3 percent.
Extrapolate that to the entire population. Of 330 million people, if 0.5 percent get the disease, that would be 1.65 million people. If the fatality rate is 0.5 percent, then that would mean just over 8000 deaths, which is about one week’s worth in reality. If the whole country were like the sample that received the placebo, this disease would never have made it into the public consciousness.
Another way to look at it: The Pfizer study followed participants for more than three months, starting in late July. During that time, more than 6 million new U.S. cases were reported, or about 2 percent of the entire population (the percentage would be even higher if you exclude children from the numerator and the denominator). So more than twice as many people got it in the general population as got it in the placebo sample studied by Pfizer.
Still another way to look at it: the number of cases that emerged in the placebo population was less than what can emerge from a single super-spreader event. Apparently, there were zero super-spreader events in either study. So these studies tells us nothing about the ability of the vaccine to work against a super-spreader. I also suspect that they tell us almost nothing about the ability of the vaccine to work for vulnerable populations.
Maybe the vaccines are 90 percent effective, in which case it is easy to recommend them. Maybe they are 0 percent effective, in which case it is easy to dismiss them. But what if in reality they are 50-70 percent effective? That would create a dilemma. From a central planner perspective, you want everyone to take a vaccine even if it is only 50 percent effective, because that would dramatically slow the spread of the virus. But meanwhile, a lot of individuals who got the vaccine will still get sick and die. That would put the agencies in charge in an awkward position, without any credibility left to deal with the next pandemic.
2. While I am being contrarian, let me go after the “keep R below 1” theory. That is the theory that if we can get the reproduction rate below 1 and keep it there, we can eradicate the disease. Ergo, even a mostly-ineffective intervention, such as an inaccurate test, or an unreliable vaccine, or a mostly-useless lockdown, if it brings R below 1, can achieve eradication.
My problem with “keep R below 1” is that it is a representative-agent model. That is, it treats everyone the same, with identical probability of getting or spreading the disease. But in fact people differ greatly in terms of vulnerability and in terms of propensity to spread the disease. Inferences that “scientists” draw from the representative-agent model are generally bogus. I don’t trust anyone who would make policy based on a representative-agent model, and that includes anyone who uses the “keep R below 1” theory.
3. I am still not impressed with “the science.” They (scientists) are still arguing over the extent of asymptomatic transmission. They are still arguing about the effectiveness of masks. Katya Simon, to whom Tyler Cowen provides a link, writes,
Implement indoor mask mandates for public spaces. Outdoor mask mandates are ridiculous. COVID19 does not appear to transmit outdoors. Enjoy our great outdoors!
Heather Heying and Bret Weinstein say the same thing. But Cambridge Massachusetts, which is where a lot of leading-edge biological research takes place, is a paragon of outdoor mask-wearing.
They are still arguing about the effectiveness of lockdowns.
They are still arguing about how long immunity lasts.
They are still arguing about long-term effects.
I believe that they are still arguing about the mechanism by which the virus causes illness.
All of this reinforces my doubts that a vaccine will prove as effective in practice as it has in trials.
Note that many of the issues about which there are arguments could be clarified, if not completely settled, by careful controlled experiments. As I pointed out more than 6 months ago, experiments would be really useful, but the people you would count on to do them are not willing to do so.
Experimental results are signal. Pronouncements that are not based on experiments are noise. Don’t tell me to “listen to the science” when what I am being asked to listen to is noise.
4. So where are we today? As of the other day, the average daily death totals were higher than at any time since early May. (Tyler Cowen shows a chart.) Unless you are more impressed than I am about the vaccine test results, it is appropriate to be a virus pessimist right now.
I think that there is at least a 25 percent chance that we will be as fearful of the virus a year from now as we are now. And if our fears have declined, this may be due mostly to a change in reporting about the virus. Perhaps someone with congestive heart failure who dies with the virus will no longer be counted as a virus death. Perhaps the press will no longer report cases of long-term damage from the virus. Should such a change in reporting take place, a cynic might call it the “Biden effect.”