What I’m Re-reading

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Alone, the second volume of William Manchester’s biography of Churchill, The Last Lion. If I were to sum up Manchester’s view of the 1932-1940 period in British history in two paragraphs, they would be:

1. The British ruling class was rotten. The British Prime Ministers of that era were dull-witted and feckless. Traumatized by the first World War and frightened of Bolshevism, they came up with an endless list of excuses not to confront Hitler. The role played by the media during this period was dreadful–covering for Hitler and suppressing the views of Churchill until very late in the game.

2. Churchill was, in many ways, more out of touch with the twentieth century than were other members of the ruling class. However, he had the strength and intelligence that the leading politicians lacked. And unlike most others of his class, he saw Hitler with clarity.

It is very tempting to draw parallels between the highly-educated classes in this country today and the upper-class twits of Britain in the 1930’s. Indeed, at one point I suggested such a parallel during the discussion of the future of democracy, prosperity, and freedom.

So, as usual, I wrote the foregoing and scheduled it ahead. Meanwhile, there was the Islamist’s attack that killed four marines in Tennessee.

A casual reader of the Washington Post could be forgiven for blaming the attack on conservatives and the National Rifle Association. The lead Post story said that this was “the latest eruption of gun violence in the United States.” The print newspaper also provides a second front-page story, headlined “Shooter grew up in conservative family.” [The online version says “middle-class Muslim family.”]

I read every word of the second story, looking for the basis for terming the family “conservative.” Did they have a Romney bumper sticker on their car? A subscription to National Review? Perhaps they flew a Confederate flag? Were active in the Tea Party?

Instead, there are only two references to the attacker’s parents. One says that his father was briefly put on the terrorism watch list but was later removed from that list. The other quotes someone familiar with one of the daughters of the family:

“I got the sense [her parents] were very religious,” Harper added. “I got the sense they wanted to pick who she would marry.”

I would love to know how the Post determined on the basis of the content of the story that the best adjective to describe the family was “conservative.” Getting back to the 1930s comparisons, I do not want to equate Muslim radicals with Nazis, because I think that there are important differences. What I am getting at here are the similarities between the British media in the 1930s and what we find in the U.S. today.

As for the American educated in class in general, consider Harry Painter’s analysis of summer reading lists for college students.

Upon browsing the list, one might conclude that all of humanity’s best books are about minorities fighting and ultimately overcoming the oppressive constrictions of Western, male-dominated society.

My guess is that no college is going to suggest that students read Alone.

Hobbies: Narrower and Deeper

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Karl Taro Greenfeld writes,

By any measure, participation in the game is way off, from a high of 30.6 million golfers in 2003 to 24.7 million in 2014, according to the National Golf Foundation (NGF). The long-term trends are also troubling, with the number of golfers ages 18 to 34 showing a 30 percent decline over the last 20 years. Nearly every metric — TV ratings, rounds played, golf-equipment sales, golf courses constructed — shows a drop-off. “I look forward to a time when we’ve got the wind at our back, but that’s not what we’re expecting,” says Oliver “Chip” Brewer, president and CEO of Callaway. “This is a demographic challenge.”

I forget how I got to the article, but I think I started with Instapundit somewhere.

In any case, I have probably remarked before on what I see as a trend for hobbies to get narrower and deeper. That is, fewer people do X, but there are more people deeply involved in X. X could be following professional baseball, playing bridge, playing golf, or what have you.

I think that hobbies are getting deeper because the Internet gives you more ways to go deeper into a hobby. You can get better at it by watching YouTube videos. You can learn more about it by reading stuff on the Web. What happens is that fewer people try to learn to play guitar, but the people who do play will tend to be pretty good at it.

I think that hobbies are getting narrower because (a) there are more choices, so people who might otherwise have done X will now instead do Y; and (b) because people are getting deeper into hobbies, this tends to discourage the more casual participant. Baseball was hard enough to understand before all the new statistics concocted by the sabermetrics nerds. Twenty years ago, I used to joke about “tournament folk dancing” to describe an especially difficult folk dance session. Now, the phrase could describe most sessions.

In any case, I would not bet on golf or any other hobby experiencing a persistent increase in its casual user base.

Quick, Weak Patents

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Joshua Gans writes,

Suppose that patents were granted automatically without examination — beyond some minimal review — but consequently, with less exclusionary power should the patent be at issue in legal proceedings.

How would this work? An inventor submits a patent application and, if they choose, they can receive a ‘weak’ patent immediately. Should they notice someone else commercialising their invention, they could then initiate court proceedings at which time they would need to have the patent examined which could, of course, require all of the changes and uncertainty that comes with that process. Of course, it may be that this is an obvious outcome and could actually be avoided in return for some settlement with the potential infringer of their patent.

I will grant that, taking the amount of patent filings as given, this sounds like an improvement. But I think it would greatly increase the number of patent filings. From an offensive perspective, you want to file patents on anything you can dream of, because you know you are going to get approval. From a defensive perspective, you want to file a patent much sooner than you would have otherwise, for fear of someone else getting a weak patent.

I hope this idea is thought through more carefully before it is implemented.

The Iran Deal

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Speaking of things I am not qualified to say much about. . .

1. The key dynamic is the coalition of countries sanctioning Iran. That was a difficult coalition to assemble. It is a difficult coalition to hold together. My guess is that one of the factors that helped hold it together was that Russia, as an oil exporter, probably was happy to see Iran hampered in its ability to sell oil. But in general, you expect these sorts of coalitions to break down, for well-known cartel game-theoretic reasons.

2. To the extent that you believe that the sanctions coalition could not hold together, you would tend to support almost any deal. In other words, if the coalition was fragile, then Iran was in a strong bargaining position. I have not seen any analysis that makes this point. Again, knowing nothing but the game theory of cartels, I am inclined to think that Iran was in a strong bargaining position. Of course, we are not going to hear the Administration say, “This is as good a deal as we could get, because the sanctions coalition was starting to unravel.”*

3. Of all of the technical details of the deal, the one that will interest me the most is Iran’s obligation to get rid of some its enriched uranium. It takes a lot of time and effort to enrich uranium. If much of the enriched uranium will be handed over to other parties that will take it out of Iran and not give it back, then I think that pretty clearly reduces Iran’s ability to produce a bomb in the short run. As to Iran’s ability to produce a bomb in 5 or 10 years, the effect of this deal depends on what you think the alternative was. Again, I am not very optimistic about what the alternative was.

4. Even if the deal sets back Iran’s nuclear program, it could be that the situation in the region will be worse a year from now than it would have been had the sanctions coalition held together longer. It is hard to anticipate the consequences of these things.

5. I am not sure what Congress has to do with anything at this point. They cannot put the sanctions coalition back together.

6. What would Iran have to do to encourage the sanctions coalition to get back together? My guess is that it would take some really major, flagrant violations of the agreement, and perhaps not even those would be sufficient.

*As usual, I wrote this post more than 24 hours ago and scheduled it for this morning. Meanwhile, it turns out that President Obama at his news conference said something quite close to this.

Do Not Code Your Business Rules!

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Sorry to be somewhat off-topic as far as economics goes. This is another one of my biases about systems development–not that I am a qualified professional at it. But on an earlier post, a commenter wrote,

code sent messages to customers by e-mail, phone, text, etc., for flight notifications (on time, late, cancel, gate change, etc.). Just for frequent flyers, the decision making on whether to send a message that a flight was delayed ran past 1000 lines of code. It depended on whether messages had been sent before already, plus results from multiple databases with customer contact details, timezones, whether the flight was a connection or originating, time-of-day, saved preferences, plus legal issues such as whether the customer had triggered telco opt-out for text messages.

My claim is that none of that should be written into computer code. Instead, think of a list of conditions that might trigger a message. Put those into a database and write code that constantly checks against those conditions. Then think of a list of conditions for sending a message by phone, a list of conditions for sending a message by email, etc. Put those into a database, and when “might trigger a message” is true, check these conditions and if they are satisfied, send a message.

My point is that business rules should reside as much as possible in data, not in code. That way, you know where they are, and you do not have the maintenance problems that come with large amounts of code.

One of the advantages I see in rewriting software is that you take the business rules that have crept into the code out of the code and into data.

When Will the Cable Business Model Break?

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Kathleen Madigan writes,

In the inflation gap between goods and services, one of the biggest chasms is between the price of a television set and the accompanying cable bill. In the past five years, the price of a new TV set is down nearly 58%, while the cable bills have risen nearly 14%.

Her article cites the higher prices being charged by content providers, such as ESPN.

My household is providing a subsidy to cable TV. We don’t watch it, but it comes bundled with our Internet service. When will the cable TV model break, so that it can no longer extract so much revenue? Some possibilities.

1. Never. My household is an outlier. Other households are getting ever-increasing value from cable TV, and they will gladly pay more for it.

2. Never. The business model of bundling is sound when there are high fixed costs, as in wiring up a community.

3. When enough spectrum is freed up that consumers like me start to get rid of cable and rely solely on wireless.

4. When enough consumers shift toward Internet-based entertainment.

Social Institutions and Software

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A commenter pointed me to an article by Joel Spolsky from 15 years ago.

The idea that new code is better than old is patently absurd. Old code has been used. It has been tested. Lots of bugs have been found, and they’ve been fixed. There’s nothing wrong with it. It doesn’t acquire bugs just by sitting around on your hard drive.

This might be thought of as a Hayekian view of software. Accept what has evolved, even if you do not understand it. In contrast, I think that if you are maintaining software, and there are parts of it that you do not understand, you are in trouble.

Perhaps I am wrong, and Hayek/Spolsky are right. You should not try to rewrite software that works.

However, I think that it might be possible to distinguish software modules that perform generic functions in a reliable way (do not re-invent these) from application-specific software that lives in a world of changing business rules. My hypothesis is that in the latter case, frequent rewrites are more cost-effective than a process of continual patching.

The Future of Democracy, Freedom, and Prosperity

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A simple topic for four of us to spend an hour discussing. The conclusion of my opening remarks:

one sort of maybe fictional type scenario would be that you would get a sudden sovereign debt crisis in the United States that would take place in an environment where the political feelings are frayed–there’s a lot of controversy; people no longer see the legislators and the executive as having legitimacy for solving their problems. They take to the streets. There’s fighting; there’s violence. And at that point the people are ready to turn to some kind of dictator to resolve the violence. So that’s kind of a fictional scenario. There’s certainly you can see either economic or political ways to avoid it. But that would be sort of my one pessimistic scenario relative to maintaining our open access order. Which, if we do maintain our open access order, I think eventually we do recover prosperity and we sort of maintain freedom.

John Cochrane worries about

the vast attempt of our government to control economics from the big Dodd-Frank and Obamacare down to the small regulations against Uber and occupational licensing for hairdressers, and so forth. This enterprise has vast power. It’s increasingly politicized. And right now it’s used already to silence opposition to the regulatory fiefdoms. What bank dares to speak out against the Dodd-Frank Act? What health insurer dares to speak out against Obamacare?

It seems to me that strong regulation often has the support, or at least the acquiescence, of incumbent business interests. The question is whether potential new competition is thwarted. Lee Ohanian, another speaker in this session, is pessimistic on that score.

Another recent study found that the decline in community banking accelerated considerably in the last few years, reflecting economies of scale in managing new regulation associated with Dodd-Frank. Small Business Administration says that lending to small businesses has declined by about 20% since 2008, which was of course the year of the Great Recession. And in 2013 only 1 new bank entered the banking industry. So you look at the outcome of Dodd-Frank–declining competition, fewer banks, lack of entry, higher costs, regulators with broad mandates who make vague and far-reaching rules–this represents a sharp departure from the clear and specific limits on government.

Kirzner vs. Samuelson

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David Glasner writes,

In Kirzner’s view, the divergence between Mises and Hayek on the one hand and the neoclassical mainstream on the other was that Mises and Hayek went further in developing the subjectivist paradigm underlying the marginal-utility theory of value introduced by Jevons, Menger, and Walras in opposition to the physicalist, real-cost, theory of value inherited from Smith, Ricardo, Mill, and other economists of the classical school.

…as the neoclassical research program evolved, the subjective character of the underlying theory was increasingly de-emphasized, a de-emphasis that was probably driven by two factors: 1) the profoundly paradoxical nature of the idea that value determines cost, not the reverse, and b) the mathematicization of economics …The false impression was created that economics was an objective science like physics, and that economics should aim to create objective and deterministic scientific representations (models) of complex economic systems that could then yield quantitatively precise predictions, in the same way that physics produced models of planetary motion yielding quantitatively precise predictions.

neoclassical economists who developed this deterministic version of economic theory, a version wonderfully expounded in Samuelson Foundations of Economic Analysis…

Pointer from Mark Thoma (!).Read the whole post, which refers to this lecture by Israel Kirzner. (Kirzner starts about 17 minutes in)

The Samuelson tradition keeps wanting to treat production technology as known and costs as objective. It is long on math and short on philosophy. For an exploration of subjective cost, see James Buchanan’s Cost and Choice. For an analysis of the ideological implications of subjective cost, see my essay.

Software Conversions are Hell

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From a Washington Post article on the software glitch that briefly grounded United Airlines:

“When the two airlines decided to merge, they had a choice to make: Would they take the Continental system, or would they take the United system?” Seaney said. “They decided to go with the Continental system and basically dumped Travelport.”

Flipping one reservation system into a notably different system is complicated and problematic, and it has led to headaches for United.

“There wasn’t a lot of commonality, and there were a lot of glitches along the way,” Seaney said. “They had issues with reservations, with elite status, all their awards programs had issues.”

I feel United’s pain. About 17 years ago, my homefair.com web site (which I now have had nothing to do with for 15 years) bought a related web site. We had very similar business models, so our software did similar tasks, but theirs was written in Perl and ours was written in Java. Rewriting their software to work with ours cost more than building both of our individual systems. Still, I think it was worth it.

I am a huge believer in rewriting software. In particular:

–As soon as you finish the first working version of an application, you should rewrite it from scratch. The rewrite will go quickly and will involve a much better design.

–Letting any software application go more than two years without a total rewrite will create maintenance headaches. You will have accumulated patches that turn the code into a mess. Your developers will not remember enough to be able to discern what sorts of changes could blow up the system.

The Perl code that we inherited was not only hard to follow (all Perl code is hard to follow–that’s why I hate it) but had undergone continual patching without rewrites. Most corporate software evolves that way, and sooner or later that ends up costing a lot.

Related: Zeynep Tufekci writes,

In the nineties, I paid for parts of my college education by making such old software work on newer machines. Sometimes, I was handed a database, and some executable (compiled) code that nobody had the source code for. The mystery code did some things to the database. Now more things needed to be done. The sane solution would have been to port the whole system to newer machines, fully, with new source code. But the company neither had the money nor the time to fix it like that, once and for all. So I wrote more code that intervened between the old programs and the old database, and added some options that the management wanted. It was a lousy fix. It wouldn’t work for the next thing that needed to be done, either, but they would probably hire one more person to write another layer of connecting code. But it was cheap (for them). And it worked (for the moment).