Month: June 2018
The authors are Primavera De Filipp and Aaron Wright, and the subtitle is The Rule of Code and it is published by Harvard University Press. I am sent many books on crypto and blockchains, but this is the one I feel is useful to an educated readership. It’s not for specialists, but if you have a good general economics and also law background, as one would expect from MR readers, but don’t “get” crypto, this is the book-length treatment for you. It sees merit and potential in crypto, without buying into any particular claim just for the sake of hype.
It is striking that crypto learning and debate really has not occurred through books much at all, nor in the mainstream media. It has been through white and yellow papers, various on-line fora, Medium essays, Twitter, Reddit threads, and a variety of other venues. I believe this is a paradigmatic example of how knowledge spreads these days and it should be studied very seriously as such, because it is the most extreme case of the new methods I know.
A correspondent writes to me:
Isn’t it weird that the best ideas we have just…. pop into your head? I have no idea how to trace them. They just show up.
@Tyler any research into this area?
Dean Keith Simonton springs readily to mind, noting he has a new book coming out this year on genius. Here are some overview pieces on simultaneous discovery, and of course those tend to stress environmental factors. Here are some approaches to the multiplicative model of creative achievement. I am a fan of that one. What else?
2. How the internet has changed sex work (more than just the usual).
I gave a talk yesterday, and did not have time to get to this question, from Eric S., which we discussed during the dinner hour:
Who could launch themselves higher on a trampoline? LeBron James or Simone Biles?
She is a world class female gymnast, and much lighter (and less strong) than LeBron. The question is assuming that both parties are motivated to win the competition, and have sufficient time to train to achieve their maximum potential in the contest.
Ultimately I settled on Simone as the better answer, mumbling something about small ants being very powerful for their size, and that magnification and extension of muscle spans ends up producing problematic results. The power gain from the extra weight might be more than offset by the “drag” loss on the way up. But I genuinely do not know. Your view?
Addendum: This is an interesting article on animals and elastic springs. And Jason Kottke adds comment, amazing photo too.
Firms involved in international commerce routinely contract that disputes are to be resolved by private courts of arbitration such as the International Court of Arbitration, the London Court of International Arbitration or the Singapore International Arbitration Center. These courts of arbitration compete for clients and thus have an incentive to resolve disputes fairly, quickly and inexpensively. Courts compete, for example, to provide arbiters who are experts not simply in the law but in the relevant area of commerce. The New York Convention of 1958 says that private arbitration decisions will be enforced by the national courts of any of the 159 signatories; thus private arbitration leverages national enforcement but is otherwise not tethered to national law (e.g. in US see, Mitsubishi v. Soler Chrysler, National Oil v. Libyan Sun). Over time private courts of international arbitration have developed a system of law that transcends nations, an anational law–this is the new lex mercatoria.
I propose that courts analogous to the courts of arbitration that govern international commerce be created to govern smart contracts in virtual space. Arbitration of smart contracts will develop a new private law that will evolve to meet the needs of virtual commerce, a true lex cryptographia. At first, it might seem contradictory to advocate for courts of smart contracts and the development of lex cryptographia. Isn’t the whole point of smart contracts that no courts or lawyers are needed? Similarly, lex cryptographia is usually understood to refer to the smart contracts themselves–code is law–rather than to law governing such contracts. In fact, it is neither desirable nor possible to divorce smart contracts from law.
Smart contracts execute automatically but only simple contracts such as those involving escrow are really self-enforcing. Most contracts, smart or dumb, involve touchstones with the real world. Canonical examples such as the smart contract that lets you use an automobile so long as the rent has been paid illustrate the potential for disputes. Bugs in the code? Disputes over the quality of the car? What happens when a data feed is disputed or internet service is disrupted? Smart contracts applied to the real world are a kind of digital rights management with all of DRMs problems and annoyances.
Some of these problems can be dealt with online using decentralized mechanisms. But we don’t yet know which decentralized mechanisms are robust or cost-effective. Moreover, when marveling at the wisdom of crowds we should not forget the wisdom of experts. Nick Szabo once remarked that if contract law was suddenly forgotten it would take hundreds of years to recover the embedded wisdom. Contract law, for example, is filled with concepts like mistake, misrepresentation, duress, negligence and intention that are not easily formalized in code. Contract law is a human enterprise. And the humans who write contracts want law with terms like negligence precisely because these terms fill in for gaps which cannot be filled in and formalized in contracts let alone in code.
I am enthusiastic about smart contracts on blockchains. Smart contracts will significantly reduce transaction costs and thus let people create valuable, new private orderings. But it will be more profitable to integrate law and code than to try to replace law with code. Integration will require new ways of thinking. The natural language version of a contract–what the parties intend to agree to–may not map precisely to the coded version. Arbiters will be called in to adjudicate and thus will have to be experts in code as well as in law. Smart contracts can be made by anonymous parties who may want a dispute resolved not just privately but anonymously. Smart contracts can be designed with escrow and multisignatory authority so arbiters will also become decision enforcers. All of these issues and many more will have to be understood and new procedures and understandings developed. The competitive market process will discover novel uses for smart contracts and the competitive market process among arbiters will discover novel law. Law will adjust to business practice and business practice to law.
In short, the best way to create a vital new lex cryptographia is through competitive, private arbitration built on the model that already governs international commerce.
More than one-half of all people living with HIV are women, and 80 percent of all HIV-positive women in the world live in sub-Saharan Africa. This paper demonstrates that the legal origins of these formerly colonized countries significantly determine current-day female HIV rates. In particular, female HIV rates are significantly higher in common law sub-Saharan African countries compared to civil law ones. This paper explains this relationship by focusing on differences in female property rights under the two codes of law. In sub-Saharan Africa, common law is associated with weaker female marital property laws. As a result, women in these common law countries have lower bargaining power within the household and are less able to negotiate safe sex practices and are thus more vulnerable to HIV, compared to their civil law counterparts. Exploiting the fact that some ethnic groups in sub-Saharan Africa cross country borders with different legal systems, we are able to include ethnicity fixed effects into a regression discontinuity approach. This allows us to control for a large set of cultural, geographical, and environmental factors that could be confounding the estimates. The results of this paper are consistent with gender inequality (the “feminization” of AIDS), explaining much of its prevalence in sub-Saharan Africa.
That is from the latest American Economic Review. Here is an earlier version and related material.
I enjoyed this one, lots of real questions from Eric Wallach, not “tell us about your book” and the usual snoozefest. Here is one bit:
So you like the idea of pardons– how do you work through that one?
I don’t even firmly believe that punishment is justified morally. Maybe it’s necessary, maybe you just can’t do without it. But the mere fact that someone has wronged another, I don’t think causes them to forfeit their rights in the way that was claimed in classic, early modern political philosophy. Once you think wrongdoers still have their human rights, on what grounds do you punish them? Could be that you simply have to– either the public won’t accept another option and they would overthrow your non-punishment regime and bring in fascism, and something with a lot more punishment would come about.
I get that– I’m not saying you can just toss away the keys to all these jails. But insofar as you have options of not punishing people – who in the cases I’ve read about it seems they’re not going to go out there and continue their serial killing sprees – I think we just simply ought not to punish them. Martha Stewart, again, that seems to me a very clear case. Undo the wrong. If I were a president, I’d consider just only pardoning people and then resigning. I know I couldn’t get away with it forever, but it’s one way to think about the job.
There are other points of interest, new and interesting throughout.
You know, I love you FT, please do not go this route in your subheaders:
Can new proposed regulation curb the power of big tech companies that now control roughly 80 per cent of corporate wealth?
Here is the link itself, maybe gated for you, but I can assure you it provides no support for this “factoid” whatsoever. There is a reference to “IP-rich companies” controlling all that wealth globally — come on, that “IP-rich” designation could mean anything, and it does not correspond to how most people understand the phrase “Big Tech”…and where does that stat come from anyway? Which large companies would it not count?
Maybe so, says a new paper by Be:
Using administrative register data with information on family relationships and cognitive ability for three decades of Norwegian male birth cohorts, we show that the increase, turning point, and decline of the Flynn effect can be recovered from within-family variation in intelligence scores. This establishes that the large changes in average cohort intelligence reflect environmental factors and not changing composition of parents, which in turn rules out several prominent hypotheses for retrograde Flynn effects.
In short, IQ relates inversely to sibling order, and the basic effect is not being generated by a changing composition of married pairs over time.
In other words, we have started building a more stupidity-inducing environment. Or at least the Norwegians have. But of course the retrograde Flynn Effect is starting to pop up in the data more generally, and not just in Norway. From The Times of London:
The IQ scores of young people have begun to fall after rising steadily since the Second World War, according to the first authoritative study of the phenomenon.
The decline, which is equivalent to at least seven points per generation, is thought to have started with the cohort born in 1975, who reached adulthood in the early Nineties.
Have a nice day!
For the pointer I thank Michelle Dawson.
The Verge: Microsoft has placed a data center in the Scottish sea to determine whether it can save energy by cooling it in the sea. Data centers typically generate a lot of heat, and big providers try to move them to cooler countries to save on energy bills. Microsoft has been experimenting with subsea data centers for around five years, and previously sunk a data center on the Californian coast for five months back in 2015.
Today’s underwater data center will be deployed for five years, and includes 12 racks with 864 servers and 27.6 petabytes of storage. That’s enough storage for around 5 million movies, and the data center is as powerful as thousands of high-end desktop PCs. The data center will be powered by an undersea cable and renewable energy from the Orkney Islands. The cable will also connect the servers back to the internet.
Hat tip: Robin Hanson.
3. “It is easier to own a tiger than a dog that has been labelled dangerous in the state of Texas, which could have between 2,000 and 5,000 tigers.” You also can buy a tiger on-line.
Many of you have asked what I think, so here goes:
1. There is a secret (and unenforceable) deal beneath what is reported. You may think this is good or bad, but for heaven’s sake don’t just be judging the press release.
2. If they didn’t actually agree to anything, that is fine.
3. I am reading so much yelping about how Trump “legitimized” Kim. The status quo ex ante simply was terrible, and there is no reason to think this change is for the worse. Trump’s great “virtue” in this regard was simply to be some mix of ignorant/disrespectful of the prior “expert consensus” and approach the problem afresh with a rather direct transactional and person-centered, personality-centered mentality.
4. As I tweeted: “Isn’t the whole point of the “deal” just to make them go visit Singapore? The real spectacle is not always where you are looking. And I hope someone brought them to the right chili crab place.”
The goal is to show the North Korean leadership there is a better way than playing the Nuclear Hermit Kingdom game. We won’t know for some time whether this has succeeded. Here is good FT coverage on this point. There are in fact numerous signs that the North Koreans are considering serious reforms. Of course those could be a feint, but the probabilities are rising in a favorable direction. Economic cooperation with South Korea is increasing at an astonishing pace.
5. The chance that North Korea someday becomes an unruly version of an American client state has gone up. The chance of a kind of faux, “on paper” Korean reunification has gone up too.
6. No, North Korea isn’t giving up its nuclear weapons. The more important question is to what extent they will use those weapons in the future to check China.
7. How is it that Dennis Rodman played in only two All-Star games?
8. In expected value terms, this is the biggest triumph of the Trump presidency. Most of all, however, you should be agnostic. The negative commentary I am seeing is mostly sour grapes, misplaced frustration, and it is weak in the quality of its argumentation. Here is one of Trump’s better tweets.
In honor of President Trump’s meeting with Supreme Leader Kim Jong Un it’s time to reup The Importance of Institutions:
Metro significantly relaxed its policies on extended hours for the Washington Capitals’ run to the Stanley Cup Final, including extending service for Thursday night’s series win without ever planning for any cash to change hands, WTOP has learned.
Since last summer, Metro has required a $100,000 deposit for each additional hour of service, and Metro suggested Wednesday that the Capitals’ parent company, Monumental Sports and Entertainment, would cover those costs for Thursday night’s game.
In fact, Thursday night’s extended service was part of a trade between the Caps and Metro that Metro valued at $100,000, Metro spokesman Dan Stessel said in an email…
Revised requirements issued last year normally call for the $100,000 deposit two weeks ahead of an event for each extra hour of service. Instead, Metro is billing each of the other groups that agreed to pay for the extended service for Capitals playoff games after the fact, Stessel said…
Here is the bizarre story, via Bruce Arthur. For those of you who don’t get the joke, the D.C. Metro system shuts down too early relative to when many sporting events are likely to end.