Web/Tech

Peter Thiel tells us:

Look at the Forbes list of the 92 people who are worth ten billion dollars or more in 2012. Where do they make money? 11 of them made it in technology, and all 11 were in computers. You’ve heard of all of them: It’s Bill Gates, it’s Larry Ellison, Jeff Bezos, Mark Zuckerberg, on and on. There are 25 people who made it in mining natural resources. You probably haven’t heard their names. And these are basically cases of technological failure, because commodities are inelastic goods, and farmers make a fortune when there’s a famine. People will pay way more for food if there’s not enough. 25 people in the last 40 years made their fortunes because of the lack of innovation; 11 people made them because of innovation.

I also liked this bit:

One of the smartest investors in the world is considered to be Warren Buffett. His single biggest investment is in the railroad industry, which I think is a bet against technological progress, both in transportation and energy. Most of what gets transported on railroads is coal, and Buffett is essentially betting that after the 21st century, we’ll look more like the 19th rather than the 20th century. We’ll go back to rail, and back to coal; we’re going to run out of oil, and clean-tech is going to fail.

This very useful post collates and presents all of Peter’s evidence for his view that modern technology has been stagnating.  It is both “interesting throughout” and “self-recommending.”  It is from this blog by Dan Wang.

I very much liked Peter’s new book, Zero to One: Notes on Start-Ups, or How to Build the Future.

DJs are now making mistakes on purpose

by on September 9, 2014 at 2:36 pm in Music, Web/Tech | Permalink

Graham writes:

DJs all over the world are now deliberately making mistakes during their mixes to prove to fans and critics that they are in fact real DJs.

The latest craze, known as miss-mixing, is proving very popular amongst digital DJs as a way of highlighting that they are actually manually mixing tracks rather than using the sync button.

Michael Briscoe, also know as DJ Whopper, spoke about miss-mixing with Wunderground, “Flawless mixing is now a thing of the past, especially for any up and coming digital DJs. You just can’t afford to mix without mistakes these days or you’ll be labelled as a ‘sync button DJ.’”

“I learned how to mix on vinyl years ago so naturally I’m pretty tight when it comes to matching beats,” continued the resident DJ. “I swapped to digital format a couple of years ago because it’s convenient, now I spend more time practicing making mistakes than I do practicing actual mixing.”

Of course the software can toss in some mistakes too…good luck.

For the pointer I thank Will Ivy.

Zeynep Tufekci on Medium.com says no.  It seems Twitter is considering (instituting?) a method that would ignore strict reverse chronology, and if a user hasn’t accessed his or her timeline in a while, the more popular tweeters would be given some kind of priority in the queue.

She considers how the tweets about the death of Osama bin Laden spread so effectively, and from the account of a user (Keith Urbahn) who did not have many followers:

I honestly doubt that there is an algorithm in the world that can reliably surface such unexpected content, so well. An algorithm can perhaps surface guaranteed content, but it cannot surface unexpected, diverse and sometimes weird content exactly because of how algorithms work: they know what they already know. Yet, there is a vast amount of judgement and knowledge that is in the heads of Twitter users that the algorithm will inevitably flatten as it works from the data it has: past user behavior and metrics. I have witnessed Twitter network’s ability to surface unexpected content again and again, from matters small to large.

I suspect the really big news will get out very quickly under just about any reasonable algorithm.  The broader question is what kind of model we should use to consider Twitter curation.  Believe it or not, I am led to the thought of Ronald Coase.

As a reader, I seek an algorithm which weeds out some repetition.   For instance I sometimes see a Vox.com article in my feed from three different sources — it would suffice to see it once, along with a color shading indicating that some other people in my feed were tweeting the same thing.  I also would like blocks on tweets about the Super Bowl, Academy Awards, and so on.

That said, from a Coasean perspective, the tweeters may wish to impose these messages on me nonetheless.  Allowing users to create their perfect filters would in equilibrium mean that those sources send fewer other tweets through the system.  Some might leave Twitter altogether.  They are producing a service for free, and the ability to impose the bundle on me and other readers is part of what they value.  And indeed I also send self-promoting tweets (a justifiable practice provided it is not abused), and that is for me one reason to be on Twitter.  In other words, a major goal is to keep tweeters interested in supplying content, not to give every reader a perfect experience, and those two variables often conflict.

At the margin, should Twitter institute queuing rules to encourage the tweeters with many readers or the tweeters with relatively few readers?  The answer is not obvious.  The major tweeters produce more social value through their greater number of followers, but they may be reaping such high returns from being on Twitter that they don’t need added encouragement at the margin.  One approach is to prioritize well-regarded tweets, regardless of the number of followers of the tweeter.

For myself, I believe the ideal algorithm is to prioritize tweets from those who are “like” me in the sense of following similar people.  Or perhaps using similar grammatical constructions, or having tweeted similar links in the past.

Within these rules there are further opportunities for Coasean bidding for attention, using the @ function and also direct messages.

A separate issue is whether Twitter may wish to remedy the “overfishing” of the common pool of our attention which occurs when too many people tweet at peak time, and not enough people tweet at off peak times.  I suspect the demand for immediate gratification is too high for there to be gains from reshuffling the supply of tweets across time.

Overall I don’t see why company-regulated customization has to be a negative.  Tufekci put her anti-curation piece on Medium, which itself seems to have algorithms of curation, which in this case (fortunately) led me to her argument, wrong though it may be.

Our new class on international finance is up here.  The class description reads as follows:

International finance covers some of the most complex but also important topics in economics. How are exchange rates determined? When if ever are ongoing trade deficits harmful? Are fixed or floating exchange rates better? What are the roots of the euro crisis and what resolution can we expect? Does China manipulate its exchange rate and if so how does that matter? We cover all of these topics and more, with an eye toward what a person really might want to know. There is no use of mathematics in this course beyond the very basic.

The interesting thing about international finance is that even a lot of professional economists don’t understand it very well, unless they have specialized in the area. If you complete this course, you’ll probably know a lot which they don’t!

You will find particular videos on capital controls, the classical gold standard, “dark matter,” “the Dutch disease,” the Asian financial crisis of 1997, and are devaluations contractionary?, among many other topics.

Again, here is Guinevere Liberty Nell’s recent class on the Soviet Union (still relevant alas!) and our Principios de Microeconomía, by Andres Marroquin, is growing as well.  There is more on the way!

A very nice talk by Robert Litan on the contributions of economists and economic ideas to the internet economy:

One major advance in knowledge over the last twenty-five years of research in industrial organization is just how important — and how possible — market segmentation agreements and institutions may be.  Is this another example?:

…this summer the service provider T-Mobile began offering its customers an alternative. Under a free feature on some plans, T-Mobile users can now stream music services like Pandora, iTunes Radio, Rhapsody, and Spotify all day long without having to worry about sapping their data caches.

T-Mobile calls it “Music Freedom,” and it’s part of a quiet but powerful global trend.

Apps and Web sites that don’t count against the users’ data plan are popping up both in the United States and abroad, often under names like Wikipedia Zero or Facebook Zero. “[W]e hope that even more people will discover the mobile Internet with Facebook,” the company blogged in announcing Facebook Zero in 2010.  (The names are a riff on “zero-rated,” an economics term for products exempt from taxation.) But set against the ongoing dispute over so-called net neutrality, those apps are beginning to spark a debate about the future of an open, equal, and vibrant Internet in the United States and abroad.

And there is a trade off for consumers. In return for low-cost service, users are, in some cases, being corralled into a limited view of the Internet. Rather than wandering freely from site to site, they have gained gatekeepers who have power over what they see.

That is from Nancy Scola.

From Alison Flood at The Guardian:

A new study which found that readers using a Kindle were “significantly” worse than paperback readers at recalling when events occurred in a mystery story is part of major new Europe-wide research looking at the impact of digitisation on the reading experience.

The study, presented in Italy at a conference last month and set to be published as a paper, gave 50 readers the same short story by Elizabeth George to read. Half read the 28-page story on a Kindle, and half in a paperback, with readers then tested on aspects of the story including objects, characters and settings.

Anne Mangen of Norway’s Stavanger University, a lead researcher on the study, thought academics might “find differences in the immersion facilitated by the device, in emotional responses” to the story. Her predictions were based on an earlier study comparing reading an upsetting short story on paper and on iPad. “In this study, we found that paper readers did report higher on measures having to do with empathy and transportation and immersion, and narrative coherence, than iPad readers,” said Mangen.

But instead, the performance was largely similar, except when it came to the timing of events in the story. “The Kindle readers performed significantly worse on the plot reconstruction measure, ie, when they were asked to place 14 events in the correct order.”

The researchers suggest that “the haptic and tactile feedback of a Kindle does not provide the same support for mental reconstruction of a story as a print pocket book does”.

That is speculative, but consistent with my own intuition, and my own tendency to (sometimes) organize information by remembering physically where it was in the book.

Daimler employees can head to the beach this summer without worrying about checking emails, sparing their partners and children the frustration of work-related matters intruding on the family vacation.

The Stuttgart-based car and truckmaker said about 100,000 German employees can now choose to have all their incoming emails automatically deleted when they are on holiday so they do not return to a bulging in-box.

For that matter they will not feel any pressure to check work email while they are away.  From the FT there is more here.

You will notice this is related to some ideas from optimal queuing theory.  The sender is notified that the email will be obliterated, and if it is important, he or she can send again and rejoin the queue once the recipient is back from vacation.  In other words, when a long queue of email might otherwise form, potential queue creators are told they have to wait and restart later on, but at the back of the line, so to speak.

Some part of me finds this deeply wrong, but perhaps as a blogger/infovore I am not the person to ask.  And there is this, which I don’t believe can be the long-term equilibrium:

It is up to Daimler employees to decide whether they wish to use the system, but Daimler assured staff it would not record who had done so.

There is a legal/regulatory angle too:

Germany’s labour ministry told managers to stop emailing or calling staff out-of-hours except in an emergency.

The Economist ran a long feature story, full of data on the world’s oldest profession.  Here is one bit of interest (WWBCS?):

A degree appears to raise earnings in the sex industry just as it does in the wider labour market. A study by Scott Cunningham of Baylor University and Todd Kendall of Compass Lexecon, a consultancy, shows that among prostitutes who worked during a given week, graduates earned on average 31% more than non-graduates. More lucrative working patterns rather than higher hourly rates explained the difference. Although sex workers with degrees are less likely to work than others in any given week (suggesting that they are more likely to regard prostitution as a sideline), when they do work they see more clients and for longer. Their clients tend to be older men who seek longer sessions and intimacy, rather than a brief encounter.

Are there general lessons here for the rate of return to education?  Here is another bit, when it comes to disintermediation one sex worker complains:

Moving online means prostitutes need no longer rely on the usual intermediaries—brothels and agencies; pimps and madams—to drum up business or provide a venue. Some will decide to go it alone. That means more independence, says Ana, a Spanish-American erotic masseuse who works in America and Britain. It also means more time, effort and expertise put into marketing. “You need a good website, lots of great pictures, you need to learn search-engine optimisation…it’s exhausting at times,” she says.

The full story is here.

Average is Over update

by on August 7, 2014 at 2:20 pm in Economics, Education, Web/Tech | Permalink

Here is the latest, very consistent with what I argued in the book:

Automation and technology are replacing or reducing the menial tasks once associated with typical entry-level roles – those jobs that act as the first rung on a career ladder – so employers are raising the skills bar for their newest hires. Companies want those employees to arrive with sophisticated interpersonal skills, able to collaborate skillfully with colleagues and immediately interact with clients.

Weinberger examined later-life earnings of two groups of white men who completed high school and entered the workforce 20 years apart, one group in 1972 and the other in 1992. As a measurement of social skills, she looked at the men’s participation in high school sports, especially leadership roles on schools teams.

By examining wages seven years after high school graduation – in 1979 and 1999, respectively – and then looking at more recent Census and Department of Labor data to understand current labor-market outcomes, Weinberger found that later grads with impressive social skills as well as cognitive prowess experienced a seven percentage-point wage premium over those from the earlier group.

The paperback edition of Average is Over is out soon on August 26, you can order it here.

The Upshot surveys some optimistic and pessimistic views.  I thought it would be useful to restate my views in a single, simple blog post, here is the enumeration:

1. The law of comparative advantage has not been repealed.  Machines take away some jobs and create others, while producing more output overall.

2. That said, some particular kinds of machines increase the relative return to skilled labor.  If the new jobs require working with computers, and working with computers effectively is hard, reemploying lower-skilled workers at good wages may be difficult.

3. Smart software, factor price equalization, and better measurement of value have all boosted income inequality.  Returns to working for low-skilled workers have fallen or stagnated in many regions (not North Dakota).  Returns for many higher skilled workers have risen, but most of them were working and working hard already.

4. Lower returns to unskilled labor mean (on average) that low-skilled laborers will work less.  This effect may interact with government benefits but sometimes people decide to work less or search less hard for a job for reasons unrelated to benefits.  These decisions may produce feedback which weakens pro-work norms in the broader culture.

5. The employment to population ratio will be lower than it otherwise would have been, because of “robots” but not only robots.  The natural rate of unemployment will be higher too.

6. Many of the new service sectors jobs will be better suited to women rather than the most unruly men.  Physical strength will matter less, conscientiousness and teamwork will matter more, and much of the burden of these adjustments will fall on lesser educated men.

7. Facebook makes it easier to get sex and keep friends without having a job.

8. There is good evidence for each of these propositions, although it may be questioned how great is their combined import.  In the meantime, yes robots may lower employment, although the catchphrase “robots are destroying jobs” is misleading rather than illuminating.

ITinvestment

The pointer is from Matt Yglesias.

Addendum: Claudia Sahm refers us to this chart of declining IT prices.  It also can be argued that IT spending moved into other, more general business categories.

The working paper (pdf) describes it in this way:

Filecoin is a distributed electronic currency similar to Bitcoin. Unlike Bitcoin’s computation-only proof-of-work, Filecoin’s proof-of-work function includes a proof-of-retrievability component, which requires nodes to prove they store a particular file. The Filecoin network forms an entirely distributed file storage system, whose nodes are incentivized to store as much of the entire network’s data as they can. The currency is awarded for storing files, and is transferred in transactions, as in Bitcoin. Files are added to the network by spending currency. This produces strong monetary incentives for individuals to join and work for the network. In the course of ordinary operation of the Filecoin network, nodes contribute useful work in the form of storage and distribution of valuable data.

The mother site is here.  File under…arbitrage.

For the pointer I thank J.

The Finnish capital has announced plans to transform its existing public transport network into a comprehensive, point-to-point “mobility on demand” system by 2025 – one that, in theory, would be so good nobody would have any reason to own a car.

Helsinki aims to transcend conventional public transport by allowing people to purchase mobility in real time, straight from their smartphones. The hope is to furnish riders with an array of options so cheap, flexible and well-coordinated that it becomes competitive with private car ownership not merely on cost, but on convenience and ease of use.

Subscribers would specify an origin and a destination, and perhaps a few preferences. The app would then function as both journey planner and universal payment platform, knitting everything from driverless cars and nimble little buses to shared bikes and ferries into a single, supple mesh of mobility. Imagine the popular transit planner Citymapper fused to a cycle hire service and a taxi app such as Uber, with only one payment required, and the whole thing run as a public utility, and you begin to understand the scale of ambition here.

The story is here, via s.  Here is a further and very different installment in The Culture that is Finland, nice visual on the igloos.  Or try this Finland Bitcoin link, blockchain-by-air.

This is from a New York Craigslist post, from a restaurant owner who apparently viewed tapes of customers from 2004 and 2014, here is part of his account of the more recent behavior:

2014

Customers walk in.

Customers get seated and is given menus, out of 45 customers 18 requested to be seated elsewhere.

Before even opening the menu they take their phones out, some are taking photos while others are simply doing something else on their phone (sorry we have no clue what they are doing and do not monitor customer WIFI activity).

7 out of the 45 customers had waiters come over right away, they showed them something on their phone and spent an average of 5 minutes of the waiter’s time. Given this is recent footage, we asked the waiters about this and they explained those customers had a problem connecting to the WIFI and demanded the waiters try to help them.

Finally the waiters are walking over to the table to see what the customers would like to order. The majority have not even opened the menu and ask the waiter to wait a bit.

Customer opens the menu, places their hands holding their phones on top of it and continue doing whatever on their phone.

There is more here, interesting throughout, and for the pointer I thank Jacqueline Mason.