Month: August 2018

Saturday assorted links

1. Giraffe bible markets in everything.

2. “There’s not much discussion, yet, of classic socialist tenets like worker control or collective ownership of the means of production.” (NYT)

3. “This Article introduces the reciprocal exchange, a type of insurance company that operates without any meaningful use of a legal entity. Instead of obtaining insurance from a common nexus of contract, customers directly insure one another through a dense web of bilateral agreements. While often overlooked or conflated with mutual insurance companies, reciprocal exchanges include some of America’s largest and best-known insurance enterprises.”  Link here.

4. “The Argumentative Indian” is now available for on-line viewing.

5. Informal tourist guide threatened with €600,000 fine by Valencia region.

6. Winning the lottery really does make you happier (NYT).

Olympic gold medals and longevity

Perhaps it is better to win the silver, to which other life outcomes might this apply?:

This paper compares mortality between Gold and Silver medalists in Olympic Track and Field to study how achievement influences health. Contrary to conventional wisdom, winners die over one year earlier than losers. I find strong evidence of differences in earnings and occupational choices as a mechanism. Losers pursued higher-paying occupations than winners according to individual Census records. I find no evidence consistent with selection or risk-taking. How people respond to success or failure in pivotal life events may produce long-lasting consequences for health.

That is from Adam Leive, via the excellent Kevin Lewis.

Religion matters for Senators

Does a senator’s personal religion influence their legislative behavior in the Senate? To date, empirical research has answered this question only using senators’ religious traditions, while more concurrent work implies that religion should be measured as a multifaceted phenomenon. This study tests this proposition by compiling a unique data set of senators’ religion, conceptualized and measured by three different elements—belonging, beliefs, and behavior. The study estimates the association between these three religious facets and senators’ legislative behavior on economic, social, and foreign policy issues, while controlling for their constituencies’ political and religious preferences. It finds that religious beliefs are a strong predictor of senators’ legislative behavior, while religious tradition and behavior are mostly not. Furthermore, it finds that religious beliefs are associated with legislative behavior across a wide array of policy areas and are not confined to sociocultural issues.

That is from Daniel Arnon, via Matt Grossman.

The economic value of the entire universe

This one is about as speculative as you get:

Suppose, just for fun, that we accept Posner’s $600 trillion estimate for the value of the Earth. What then is the value of the Universe?

…We could try to calculate the value of the Universe by estimating the number of planets with intelligent life and multiplying that by $600 trillion. It’s very hard to guess the number of such planets per cubic megaparsec. But since the Universe seems to extend indefinitely, the result is infinite.

That’s my best estimate: infinity!

But that’s not very satisfying. What if we limit ourselves to the observable Universe?

No matter what I say, I’ll get in trouble, but let me estimate that there’s one intelligent civilization per galaxy.

A conservative estimate is that there are 100 billion galaxies in the observable universe. There might be twice as many, but perhaps a lot of them are small or less likely to support life for various other reasons.

So, I get $600 trillion times 100 billion, or

$60,000,000,000,000,000,000,000,000

as my estimate of the value of the observable Universe. That’s $6 × 1025, or $60 septillion.

That is from John Carlos Baez, via Benjamin Lyons.  And to think it all cost nothing to produce…..the ultimate free lunch.

Friday assorted links

1. Charter cities, innovative governance conference, San Francisco, September 20.

2. Parrots can make economic decisions.  Article here, it turns out the African grey parrots had an independent demand to hold the tokens (as stores of value? consumption objects?).

3. Felix Salmon on the German Facebook refugee study.

4. An economic plan to induce Iranian freedom.

5. Sudbin plays Scarlatti.

6. Black holes and computational complexity.

What should I ask Eric Schmidt?

I will be doing a Conversation with Eric, in San Francisco, September 19.  It is not an open event, but you can apply to attend.  It is sponsored by Village Global, which is connected with Ben Casnocha and Erik Torenberg.

In case you have been living under a rock, here is the opening bit of Wikipedia on Eric:

Eric Emerson Schmidt (born April 27, 1955) is an American businessman and software engineer. He is known for being the Executive Chairman of Google from 2001 to 2015[ and Alphabet Inc. from 2015 to 2017.

Not everyone knows that Eric is the son of Wilson Schmidt, a well-known economist at Virginia Tech and Johns Hopkins, who wrote on currency matters and also worked with Jim Buchanan.

So what should I ask Eric?

Would a multi-planet humanity be freer?

Kevin P. emails me:

Suppose humanity becomes a multi-planet species. Does the percentage of people living in autocratic societies decrease or increase relative to what we see on our planet today? How do the time and resources required to travel between inhabited planets affect this?

Do some people on “free” planets work to help the non-free? More or less than such countries today? Is there some scale that is reached so a free Federation comes to guaranty freedom everywhere? Or maybe a tyrant or tyrants, once they have a couple wealthy planets under their belt are unstoppable because of cooperation difficulties of the individual free planets?

When I think of settling other planets, my base case is one of extreme scarcity and fragility, at least at first and possibly for a long time.  Those are not the conditions that breed liberty, whether it is “the private sector” or “the public sector” in charge.

Maybe corporations will settle space for some economic reason.  Then you might expect space living to have the liberties of an oil platform in the sea, or perhaps a cruise ship.  Except there would be more of a “we are in this all together” attitude, which I think would favor a kind of corporate autocracy.

Another scenario involves a military settling space, possibly for military reasons, and that too is not much of a liberal or democratic scenario.

You might also have religiously-motivated settlements, which presumably would be governed by the laws and principles of the religion.  Over time, however, this scenario might give the greatest chance for subsequent liberalization.

America developed to be as free as it did (at least for some people) mostly there was so much free land.  Living standards were relatively high, and moving further westward was always an option.  It is hard for me to think of an interplanetary version of the same condition.  Easy exit and free resources don’t seem to go well together with the concept of space settlement.

Space stations and settlement will give the power to those who control the infrastructure, a bit like Wittvogel’s Oriental Despotism hypothesis, except with both air and water being scarce.

I thus expect that interplanetary settlements, whatever their other virtues, will not do much for liberalism or liberty.  Here is my earlier post on The Moon is a Harsh Mistress.

What should I ask Michele Gelfand?

I am doing a Conversations with Tyler with her, here is her home page.  She is a Professor of Psychology at the University of Maryland and has a new book coming out: Rule Makers, Rule Breakers: How Tight and Loose Cultures Wire Out World.  Here is part of the Amazon summary:

Why are clocks in Germany so accurate while those in Brazil are frequently wrong? Why do New Zealand’s women have the highest number of sexual partners? Why are “Red” and “Blue” States really so divided? Why was the Daimler-Chrysler merger ill-fated from the start? Why is the driver of a Jaguar more likely to run a red light than the driver of a plumber’s van? Why does one spouse prize running a “tight ship” while the other refuses to “sweat the small stuff?”

In search of a common answer, Gelfand has spent two decades conducting research in more than fifty countries. Across all age groups, family variations, social classes, businesses, states and nationalities, she’s identified a primal pattern that can trigger cooperation or conflict. Her fascinating conclusion: behavior is highly influenced by the perception of threat.

She also is well-known for her analyses of how negotiations vary across organizations and cultures. Here is Gelfand on scholar.google.com.  Here is her Wikipedia page.

So what should I ask?

Airbnb Has Implemented Smart Property

In one of Nick Szabo’s classic papers on smart contracts he gives an example of smart property:

Smart property might be created by embedding smart contracts in physical objects. These embedded protocols would automatically give control of the keys for operating the property to the party who rightfully owns that property, based on the terms of the contract. For example, a car might be rendered inoperable unless the proper challenge-response protocol is completed with its rightful owner, preventing theft.

Airbnb is close to achieving smart property. On a recent trip, for example, I booked online. Shortly before I was to take control of the residence I received a code which opened an on-site lockbox with a key. I left the key in the lockbox when I left–never having met the owner or any employee. At a hotel that I stayed in on the same trip, I still had to wait in line to check-in. The Airbnb process is more convenient and cheaper because there is no need to have staff to man a front desk.

The Airbnb process typically uses physical keys but I have also stayed at places that use electronic keys and digital door locks. An electronic key is more secure since it can be a one-time use that opens the door only during the rental period.

All of this may seem somewhat ordinary but that is the point. Smart property is becoming ordinary.

Addendum: The more automated the process becomes the more a decentralized protocol or platform becomes a competitive option. Smart property that can reach out to say a matching protocol and an identity protocol could rent itself.

Airbnb is a very good company that provides valuable services at reasonable prices so a decentralized platform may not have significant advantages but as more base protocols are laid down and stabilized (“primitives”) it will become easier and more natural to create these kinds of decentralized services. See my post Blockchains and the Opportunity of the Commons.

What went wrong in the West and with liberalism?

That is the topic of my latest Bloomberg column, and the core of my answer is that liberalism and cooperativeness declined in the West, as WWI and the Cold War receded into historical distance (I am indebted to a much earlier conversation with Daniel Klein on these matters).  But I wish to excerpt from another point of the piece:

There is another explanation for the rise in anti-liberal sentiment: immigration. Through a series of historical accidents, it was kept off the table as a major issue for many decades. The U.S. had choked off immigration in 1920, and at first the liberalization of the 1960s did not have much of a visible impact on the American population. In those early decades after the Immigration and Naturalization Act of 1965, many poor nations were so poor and unfree that it wasn’t easy to leave them.

As for Europe, in-migration was too small to make much of a political impact. For a while in the 1960s and 1970s, the bigger story was emigration, due to high taxes, from countries such as the U.K. and Sweden. The presence of the Iron Curtain also blocked some of the routes and sources that enable some migration to Western Europe today.

In a democratic society where there simply isn’t much immigration, it is much harder for nationalists and populists to use it as an issue. But today much of the West has seen high immigration for 20 years or more, giving nationalist and populist forces a major talking point. Even if most of the population is broadly pro-immigration, perhaps a core of 15 to 20 percent will not be. With that base, a movement of counterreaction can have real political impact.

Do read the whole thing.

Is Facebook causing anti-refugee attacks in Germany?

Here is the key result, as summarized by the NYT:

Wherever per-person Facebook use rose to one standard deviation above the national average, attacks on refugees increased by about 50 percent.

Here is the underlying Müller and Schwarz paper.  They consider 3,335 attacks over a two-year period in Germany.  But I say no, their conclusion has not been demonstrated.  Where to start?

Here is one picture showing a key correlation:

It is difficult to see if there is causation in the correlationThat looks pretty strong, doesn’t it?  Nein!  That is not how propaganda works, as an extensive literature in sociology and political psychology will indicate.  That is how it looks when you measure what is essentially the same variable — or its effects — two different ways.  For instance, that very big spike in the middle of the distribution?  As Ben Thompson has pointed out, it represents the New Year’s harassment attacks in Cologne.  Maybe that caused both Facebook activity and other attacks to spike at the same time?  Will you mock me if I resort to the “blog comment cliche” that correlation does not show causation?

To continue with the excellent Ben Thompson (he is worth paying for!), the identification method used in the paper is suspect, and he focuses on this quotation from the authors:

In our setting, the share of a municipality’s population that use the AfD Facebook page is an intuitive proxy for right-wing social media use; however, it is also correlated with differences in a host of observable municipality characteristics — most importantly the prevalence of right-wing ideology. We thus attempt to isolate the local component of social media usage that is uncorrelated with right-wing ideology by drawing on the number of users on the “Nutella Germany” page. With over 32 million likes, Nutella has one of the most popular Facebook pages in Germany and therefore provides a measure of general Facebook media use at the municipality level. While municipalities with high Nutella usage are more exposed to social media, they are not more likely to harbor right-wing attitudes.

The whole result rests on assumptions about Nutella?  What if you used likes for Zwetschgenkuchen?  Has a robustness test been done?  Was a simple correlation not good or not illustrative enough?  I’ll stick with the simple hypothesis that some municipalities have both more Facebook usage, due to high AfD membership, and also more attacks on refugees, and furthermore both of those variables rise in tense times.  AfD is the German party with the strongest presence on Facebook, I am sorry to say.

You will note by the way that within Germany the Nutella page has only verifiable 21,915 individual interactions, including likes (32 million is the global number of Nutella likes…die Deutschen are not that nutty), and that is distributed across 4,466 municipal areas.  (If you are confused, see p.12 in the paper, which I find difficult to follow and I suspect that represents the confusion of the authors.)  That should make you more worried yet about the Nutella identification strategy.  They never tell us what they would have without Nutella, a better tasting sandwich I would say.

I also would note the broader literature on propaganda once again.  Consider the research of Markus Prior: “…evidence for a causal link between more partisan messages and changing attitudes or behaviors is mixed at best.”  These Facebook results are simply far outside of what we normally suppose to be true about human responsiveness — so maybe the company is undercharging for its ads!

Ben adds:

I am bothered by the paper’s robustness section in two ways: first, every single robustness test confirmed the results. To me that does not suggest that the initial result must be correct; it suggests that the researchers didn’t push their data hard enough. There is always a test that fails, and that is a good thing: it shows the boundaries of what you have learned. Second, there were no robustness tests applied to one of the more compelling pieces of evidence, that Internet and Facebook outages were correlated with a reduction in violence against refugees. This is particularly unfortunate because in some ways this evidence works against the filter bubble narrative: after all, the idea is the filter bubbles change your reality over time, not that they suddenly inspire you to action out of the blue.

The authors do present natural experiments from Facebook and internet outages.  They find that “…for a given level of anti-refugee sentiment, there are fewer attacks in municipalities with high Facebook usage during an internet outage than in municipalities with low Facebook usage without an outage.” (p.28).  Again I find that confusing, but I note also that “internet outages themselves…do not have a consistent negative effect on the number of anti-refugee sentiments.”  That is the simple story, and it appears to exonerate Facebook.  pp.28-30 then present a number of interaction effects and variable multiplications, but I am not sure what to conclude from the whole mess.  I’m still expecting internet outages to lower the number of attacks, but they don’t.

Even if internet or Facebook outages do have a predictive effect on attacks in some manner, it likely shows that Facebook is a communications medium used to organize gatherings and attacks (as the telephone once might have been), not, as the authors repeatedly suggest, that Facebook is somehow generating and whipping up and controlling racist sentiment over time.  Again, compare such a possibility to the broader literature.  There is good evidence that anti-semitic violence across German regions is fairly persistent, with pogroms during the Black Death predicting synagogue attacks during the Nazi time.  And we are supposed to believe that racist feelings dwindle into passivity simply because the thugs cannot access Facebook for a few days or maybe a week?  By the way, in their approach if there is an internet outrage, mobile devices do not in Germany pick up the slack.

I’d also like to revisit the NYT sentence, cited above, and repeated many times on Twitter:

Wherever per-person Facebook use rose to one standard deviation above the national average, attacks on refugees increased by about 50 percent.

That sounds horrible, but it is actually a claim about variation across municipalities, not a claim about the absolute importance of the internet.  The authors also reported a very different and perhaps more relevant claim to the Times:

…this effect drove one-tenth of all anti-refugee violence.

I would have started the paper with that sentence, and then tried to estimate its robustness, without relying on Nutella.

As it stands right now, you shouldn’t be latching on to the reported results from this paper.

Do Congresswomen Outperform Congressmen?

That is a 2011 AFPS paper by Sarah F Anzia and Christopher R Berry, here is the abstract:

If voters are biased against female candidates, only the most talented, hardest working female candidates will succeed in the electoral process. Furthermore, if women perceive there to be sex discrimination in the electoral process, or if they underestimate their qualifications for office, then only the most qualified, politically ambitious females will emerge as candidates. We argue that when either or both forms of sex‐based selection are present, the women who are elected to office will perform better, on average, than their male counterparts. We test this central implication of our theory by studying the relative success of men and women in delivering federal spending to their districts and in sponsoring legislation. Analyzing changes within districts over time, we find that congresswomen secure roughly 9% more spending from federal discretionary programs than congressmen. Women also sponsor and cosponsor significantly more bills than their male colleagues.

I also would consider the alternative hypothesis that the women legislators are simply more conscientious and less wrapped up in themselves.  Nonetheless this result is one possible equilibrium relevant to the recent MR discussions on statistical discrimination.

Here is a paper showing female mayors have higher political skills,  This paper shows that women do better in a minority party than in a polarized majority party setting.

For the pointer I thank Michelangelo L.

Wednesday assorted links

1. MIE: “Travel to the summit of Africa’s highest peak, Mount Kilimanjaro, where Three Twins Ice Cream’s founder will hand-churn a batch of ice cream with glacial ice from the mountain’s summit. The mountain’s glaciers are predicted to disappear within the next 10-15 years due to climate change – and your purchase helps raise awareness of this fact with a five-figure contribution to an African environmental non-profit. The sundae’s price also includes first class airfare to Tanzania, five-star accommodations, a guided climb, as much ice cream as you can eat and a souvenir t-shirt made from organic cotton.”

2. New South Wales town mobbed by thirsty emus.

3. Cowen’s Second Law there is a literature on everything including autistic zebrafish (110 papers).

4. It matters how seriously students take PISA testing.

5. Superb Samuel Hammond piece on codetermination.

6. Annie Lowrey on is pot too strong?

7. My Farnham Street podcast, mostly about how to reason, came out very well I thought.  And you can buy a transcript at the link.