My last Bloomberg column was co-authored with Garry Kasparov, here is one excerpt:
Another positive sign for UBI is that most Americans seem keen to return to their workplaces. One fear has been that UBI would lead to a couch-potato culture, with people choosing to stay at home even when they’re finally able to leave. But blue-collar service workers are continuing to brave the front lines even when faced with reasonably high risks of infection. They are not trying to get fired so they can collect unemployment. White-collar workers, meanwhile, are feeling restless and unproductive. Working from home may become more common, but most people seem eager to get back to the office — especially if the alternative is a combination workplace/schoolhouse.
…the crisis is serving up a very different and inferior bargain than the one many original UBI supporters advocated. Institutionalizing emergency measures designed to respond to Covid-19 would be irresponsible. It would entrench UBI without the prerequisite productivity boom from artificial intelligence and automation. (For some time it appeared the opposite might happen — namely, an AI boom but no UBI.)
I can report that Garry was a real pleasure to work and co-author with. Here is my earlier Conversation with him.
For $20, fans of German soccer club Borussia can have a cut-out of themselves placed in the stands at BORUSSIA-PARK. According to the club, over 12,000 cut-outs have been ordered and 4,500 have already been put in place.
Here is the tweet and photo.
And some sports bettors are betting on simulated sporting events. (Again, I’ve never understood gambling — why not save up your risk-taking for positive-sum activities? Is negative-sum gambling a kind of personality management game to remind yourself loss is real and to keep down your risk-taking in other areas?)
Via Samir Varma and Cory Waters.
Savers at the Bank of Nook are being driven to speculate on turnips and tarantulas, as the most popular video game of the coronavirus era mimics global central bankers by making steep cuts in interest rates.
The estimated 12m players of Nintendo’s cartoon fantasy Animal Crossing: New Horizons were informed last week about the move, in which the Bank of Nook slashed the interest paid on savings from around 0.5 per cent to just 0.05 per cent.
The total interest available on any amount of savings has now been capped at 9,999 bells — the in-game currency that can be bought online at a rate of about $1 per 1.9m bells.
The abrupt policy shift, imposed by an obligatory software update on April 23, provoked a stream of online fury that a once-solid stream of income had been reduced to a trickle with the stroke of a raccoon banker’s pen.
“I’m never going to financially recover from this,” one player wrote on a Reddit forum. “Island recession incoming,” said another.
Here is more from the FT, via Malinga Fernando.
Let us assume that you, for reasons of choice or necessity, are spending time in close quarters with another person. You are then less inclined to visit corona-dangerous locations. In part you are altruistic toward the other person, and in part for selfish reasons you do not wish to lower the common standard of care. If you go to a dangerous location, the other person might decide to do the same, if only out of retaliation or frustration.
In essence, by accepting such a tethered pair relationship, you end up much closer (physically, most of all) to one person and much more distant from the others. You are boosting your locational extremes.
The physically closer you are to the other person, the more easily you can tell if he or she is breaking the basic agreement of minimal risk. That tends to make the tethered pairs relatively stable. Monitoring is face-to-face!
Tethered pairs also limit your mobility, because each of the two parties must agree that the new proposed location is safe enough.
People who live alone, and do not know each other initially, might benefit from accepting a tethered pair relationship. The other person can help them with chores, problems, advice, etc., and furthermore the other person may induce safer behavior. (Choose a carpenter, not a specialist!) Many people will take risks if they are the only loser, but not if someone else might suffer as well.
A tethered triplet is harder to maintain than a tethered pair. For one thing, the larger the group the harder it is to monitor the behavior of the others. Furthermore, having a third person around helps you less than having a second person around (diminishing marginal utility, plus Sartre). Finally, as the group grows large there are so many veto points on what is a safe location ( a larger tethered pair might work better with a clear leader).
Yet over time the larger groups might prove more stable, even if they are riskier. As more things break down, or the risk of boredom and frustration rises, the larger groups may offer some practical advantages and furthermore the entertainments of the larger group might prevent group members from making dangerous trips to “the outside world.”
There is an external benefit to choosing a tethered pair (or triplet, or more), because you pull that person out of potential circulation, thus easing congestion and in turn contagion risk. Public spaces become safer.
As you choose a tethered pair initially, the risk is relatively high. The other member of the pair might already be contagious, and you do not yet have much information about what that person has been up to. As the tethered pair relationship proceeds, however, it seems safer and safer (“well, I’m not sick yet!”), and after two weeks of enforced confinement it might be pretty safe indeed.
Very often married couples will start out as natural tethered pairs. At the margin, should public policy be trying to encourage additional tethered pairs? Or only in the early stages of pandemics, when “formation risk” tends to be relatively low? Do tethered pairs become safer again (but also less beneficial?), as a society approaches herd immunity?
It may be easier for societies with less sexual segregation to create stable tethered pairs, since couple status is more likely to overlap with “best friend” status.
One advantage of good, frequent, and common testing is that it encourage the formation of more tethered pairs.
You can modify this analysis by introducing children (or parents) more explicitly, or by considering the varying ages of group members. You might, for instance, prefer to be a tethered pair with a younger person, but not everyone can achieve that.
Put aside the people with small (and not so small) children at home, and observe whether the pandemic has boosted or destroyed their productivity. That is one measure for how they handle stress, and whether you might wish to trust them with a start-up or some other major project requiring quick adaptation and performance under duress. It may or may not be a measure for their ordinary performance on the job.
Consider the now-cancelled Candidates’ chess tournament in Russia. Ding Liren was one of the two clear favorites (with Caruana), and he lost three games in the first half of the tournament. That is evidence he does not play well under an extreme degree of stress. Yet he still is rated #3 in the world, from a career playing under conditions of “not a pandemic level of stress but still world-class levels of competitive stress.”
Grischuk had been saying the tournament should be called off, even in midstream. Probably he was right, but if play had continued would you have predicted him to come in first? Caruana, the American, was worried he may not be able to get home after the tournament. His play was OK but subpar, at least for a world-ranked number two. The non-favored but sturdy Nepomniachtchi was up three games, before unwisely playing a Winawer defense with the black pieces, but still he was the clear leader. How should we now revise our opinions of him?
A friend of mine writes to me:
I have submitted 4 papers in 2 weeks. Two R and Rs [revise and resubmits] done and sent back and two new papers sent out. Very close on 2 more. Then I guess I’ll start freaking out or something. Working is keeping me less stressed and more sane. You can really see the divide on Twitter between people getting shit done and people spending all their time hyperventilating.
David Brooks (NYT) considers how you have been living your life.
The psychometric stress test is being run, including on our institutions, regions, and nations. We’ll see how it goes.
With all those fools going to bars and concerts, or running marathons, it is evident we still need to solve the problem of entertainment, as I argue in my new Bloomberg column.
It is instructive to look back to the days of World War II. The U.S. government played a critical role in encouraging Hollywood to make cheery movies, and it helped by not trying to force every actor into the armed services. Major league baseball, the national pastime of the era, continued to hold a regular season and a World Series, again to distract people from wartime worries. Many top players, such as Ted Williams, were away fighting, but there were adequate replacements. The government knew that wartime drama could not be the only drama on tap.
With Covid-19, the goal is to keep people at home, at least if they are not essential workers. But if staying at home is too boring, cabin fever will take over and people will run out to social gatherings when they ought to be staying put. So solving the entertainment problem is one very real piece of the puzzle for minimizing the effects of the coronavirus and keeping Americans not just in good spirits but healthy.
The very worst scenario is that the coronavirus itself — how it is playing out, how officials and celebrities and neighbors are reacting — becomes our main entertainment. It could become an ongoing horror show that drives us crazy and makes people even more cynical about politics.
To avoid such a mix of frustration and terror, I have a modest proposal: We should restructure a few of our traditional entertainments to be safe from the coronavirus.
As suggested on Twitter, how about inducing a few of the cable providers to offer free streaming for a few months? The Met has announced a big increase in opera streaming. And:
Or how about proceeding with some version of the NBA Finals? Take a subset of the best qualifying teams, test every player for coronavirus, isolate them in a remote area with a college gymnasium, and have them proceed with a shortened version of the real thing in front of only a TV crew. With so many other public events closed down, television viewership would probably reach an all-time high, and the sense of drama would be incredible. It would be one NBA Finals we would never forget, and the quality of play would respond to the very high psychological stakes.
Ben Golliver serves up a concrete NBA proposal. You’ll have to click through to get to the Browning and Bergman parts, the latter being Easter egg. At least the Candidate’s Tournament still seems to be on in chess, you can all watch that for the next few weeks, starts Tuesday I believe, try www.chessbomb.com.
Lecturing alone won’t work: we really do need to make it more fun for people to stay at home!
Outsiders and critics often think of YouTube and computer gaming as entertaining and quite superficial modes of cultural consumption. I have increasingly moved away from that point of view, and to pursue the argument I will note that lately my favorite YouTube video is Magnus Carlsen doing 100 chess endgames in 30 minutes. That is not recommended for most of you, but I believe that is part of the point. I now think of YouTube as a communications medium with (often, not always) high upfront “investment in context” costs. So if a lot of videos seem stupid to you, well sometimes they are but other times you don’t have enough context to understand them, or for that matter to condemn them for the right reasons. This “high upfront costs” model is consistent with the semi-addictive behavior exhibited by many loyal YouTube users. Once you start going down a rabbit hole, it can be hard to stop, and the “YouTube is superficial” models don’t really predict that kind of user behavior, rather they predict mere channel-surfing.
Did you know that Yonas, my Ethiopian contact in Lalibela, and recipient of royalties from my book Stubborn Attachments, loves YouTube videos on early Armenian church history? He seems to know all about that topic. A lot of those same videos would not make much sense to me. I could follow them, but they wouldn’t communicate much meaning, whereas the Ethiopian and Armenian Christian churches have a fair amount in common, including in their early histories.
Has the popularity of PewDiePie — 103 million subscribers — ever mystified you? I have in fact come to understand the material is brilliant, though not in a way I care about or wish to come to grasp in any kind of detailed way. For me the entry costs are just too high relative to the kind of payoff I would achieve. You really have to watch a lot of videos to get anywhere with grasping the contexts of his various jokes and remarks.
This also helps explain why there is no simple way to find “the best videos on YouTube.”
Perhaps computer games have some of the same properties. They have great meaning to those who know their ins and outs, but leave many others quite cold. Sometimes I hear people that things like “Twenty or thirty years from now, computer games will develop into great works of art.” I doubt that. To whatever extent computer games are/will be aesthetically notable, those properties are probably already in place, just with fairly high upfront context costs and thus inaccessible to someone such as I.
The high upfront costs, of course, mean a high degree of market segmentation and thus perhaps relatively high profits for suppliers, at least in the aggregate if not in every case.
Could it be that these top cultural forms of today have higher upfront costs than say appreciating 18th century Rococo painting?
In any case, trying to understand the cultural codes of 2020 is a truly difficult enterprise.
For this material, I wish to thank a related conversation with S.
Why didn’t ancient Rome have Dungeons and Dragons? I am talking, of course, about the game. Anton Howes presents the general problem:
A theme I keep coming back to is that a lot of inventions could have been invented centuries, if not millennia, before they actually were. My favourite example is John Kay’s flying shuttle, one of the most famous inventions of the British Industrial Revolution. It radically increased the productivity of weaving in the 1730s, but involved simply attaching a little extra wood and string. It involved no new materials, was applied to the weaving of wool — England’s age-old industry — and required no special skill or science. Weaving had been “performed for upwards of five thousand years, by millions of skilled workmen, without any improvement being made to expedite the operation, until the year 1733”, was how Bennet Woodcroft — one of the nineteenth century’s most important historians of technology — put it. (Lest you doubt that description of Woodcroft, he was, in addition to being an inventor himself, the man who compiled and categorised England’s entire patent record up to 1852, and who collected the inventions that would later form the basis of London’s Science Museum, particularly some of the earliest steam engines — among the most important machines in human history — that grace its engine hall today. My hero!) Weavers had been around for millennia, as had shuttles: one is even mentioned in the Old Testament (“My days are swifter than a weaver’s shuttle, And are spent without hope”). As a labour-saving invention, Kay’s flying shuttle was even technically illegal.
I keep coming back to this example, because it goes against so many common notions about the causes of innovation. When it comes to skill, materials, science, institutions, or incentives, none of them quite seem to fit. But I keep seeing more and more such cases. There’s the classic example, of course, of suitcases with wheels – why so late? Was the bicycle another candidate?
…The economist Alex Tabarrok calls these cases “ideas behind their time”. I tend to just call them low-hanging fruit. Hanging so low, and for so long, that the fruit are fermenting on the ground. I now see them everywhere, not just in history, but today — probably at least one per week. And I now have a new favourite example, suggested yesterday on Twitter by Jordan Chase-Young: tabletop role-playing games.
Was it lack of the right the bureaucratic mindset? Lack of numeracy? Lower population densitie? Were such games invented but then lost to history? Ultimately Howes rejects these explanations, I think correctly.
Physically, there was nothing that actually stopped the invention of such games centuries or even millennia earlier. It required no special level of science, skill, or materials. So why did it take so long? Rather than there being any constraints, soft or otherwise, I think it’s simply because innovation in general is so extremely rare. It’s a matter of absence, rather than of barriers. The reason we have had so many low-hanging fruit throughout history is just because very few people ever bother to think of how to do things differently. We are, most of us, quite set in our ways. So even today, when there are many more inventors alive than at any previous point in human history, the fermenting fruit still abound.
Innovation doesn’t happen very often. How many people have ever invented a new way of doing anything? If stasis is the norm, then we should expect that many great ideas are routinely overlooked. For an economist this is an uncomfortable thought because we tend to think that profit opportunities are quickly exploited (no $500 bills on the ground). But while that is certainly true for choices within constraints it may not be true for choices that change constraints. This is also consistent with Paul Romer’s views on the combinatorial space of possible innovations—when the combinatorial space is vast and the explorers few, the innovations will be few and far between. What times, places and institutions generate more explorers?
Jason Crawford on twitter has more background and thoughts.
Americans are worse at The Price Is Right than they used to be. On the game show, which has been running since 1972, four contestants are asked to guess the price of consumer products, like washing machines, microwaves, or jumbo packs of paper towels. The person who gets closest to the actual price, without going over, gets to keep playing and the chance to win prizes like a new car. In the 1970s, the typical guess was about 8% below the actual price. People underestimate the price by more than 20% in the 2010s.
This finding comes from recently released research by Jonathan Hartley, a data analyst currently studying public policy at Harvard University. A longtime fan of the show, Hartley was inspired to conduct his research after reading a research paper from 1996 that reveals contestants don’t use optimal bidding strategies—they too rarely bid just a dollar over the highest previous bid—and is one of the early economics papers to show how people could be irrational. Hartley wondered what else the data might show. He found that the accuracy of people’s guesses sharply decreased from the 1970s to the 2000s, and then stabilized in the 2010s.
And why? There are three main hypotheses:
First, inflation in the US was much higher and much less stable in the 1970s and 80s. When inflation is high and variable, people become more attentive to prices, noticing they are paying more for goods than before.
Second, the rise of e-commerce may have made people less sensitive to price. Research by the economist Alberto Cavallo finds that online competition has made prices more similar across sellers, both online and off. As a result, people may feel less of a need to do price comparisons.
Third, there are more products than ever. There are 50 times as many products at a grocery store than 80 years ago, according to the economist James Bessen.
Here is the full 2019 piece by Dan Kopf, via Rasool Somji.
Here is the transcript and audio, here is part of the summary:
Tim joined Tyler to discuss the role of popular economics in a politicized world, the puzzling polarization behind Brexit, why good feedback is necessary (and rare), the limits of fact-checking, the “tremendously British” encouragement he received from Prince Charles, playing poker with Steve Levitt, messiness in music, the underrated aspect of formal debate, whether introverts are better at public speaking, the three things he can’t live without, and more.
Here is one bit near the opening:
COWEN: These are all easy questions. Let’s think about public speaking, which you’ve done quite a bit of. On average, do you think extroverts or introverts are better public speakers?
HARFORD: I am an introvert. I’ve never seen any research into this, so it should be something that one could test empirically. But as an introvert, I love public speaking because I like being alone, and you’re never more alone than when you’re on the stage. No one is going to bother you when you’re up there. I find it a great way to interact with people because they don’t talk back.
COWEN: What other non-obvious traits do you think predict being good at public speaking?
HARFORD: Hmmm. You need to be willing to rehearse and also willing to improvise and make stuff up as you go along. And I think it’s hard for somebody to be willing to do both. I think the people who like to rehearse end up rehearsing too much and being too stiff and not being willing to adapt to circumstances, whereas the people who are happy to improvise don’t rehearse enough, and so their comments are ill formed and ill considered. You need that capacity to do both.
And another segment:
HARFORD: …Brian Eno actually asked me a slightly different question, which I found interesting, which was, “If you were transported back in time to the year 700, what piece of technology would you take — or knowledge or whatever — what would you take with you from the present day that would lead people to think that you were useful, but would also not cause you to be burned as a witch?”
COWEN: A hat, perhaps.
HARFORD: A hat?
COWEN: If it’s the British Isles.
HARFORD: Well, a hat is useful. I suggested the Langstroth beehive. The Langstroth beehive was invented in about 1850. It’s an enormously important technology in the domestication of bees. It’s a vast improvement on pre-Langstroth beehives, vast improvement on medieval beehives. Yet, it’s fairly straightforward to make and to explain to people how it works and why it works. I think people would appreciate it, and everybody likes honey, and people have valued bees for a long time. So that would have been my answer.
COWEN: I’ve read all of your books. I’ve read close to all of your columns, maybe all of them in fact, and I’m going to ask you a question I also asked Reid Hoffman. You know the truths of economics, plenty of empirical papers. Why aren’t you weirder? I’ve read things by you that I disagreed with, but I’ve never once read anything by you that I thought was outrageous. Why aren’t you weirder?
The conversation has many fine segments, definitely recommended, Tim was in top form. I very much enjoyed our “Brexit debate” as well, too long to reproduce here, but I made what I thought was the best case for Brexit possible and Tim responded.
This one is better than the other available conversations with Reid, here is the transcript and audio. Here is part of the CWTeam summary:
Reid joined Tyler to talk about all these leverage points and more, including the Silicon Valley cultural meme he most disagrees with, how Wittgenstein influenced the design of LinkedIn, mystical atheism, what it was like being on Firing Line, why he’s never said anything outrageous, how he and Peter Thiel interpret The Tempest differently, the most misunderstood thing about friendship, how to improve talent certification, what’s needed from science fiction, and his three new ideas for board games.
COWEN: If we think of Peter Thiel and Elon Musk, they could arguably, by the standards of many people, be called weird. I’ve reviewed all the books you’ve written and a lot of your public talks. I can’t recall you saying a single thing that’s outrageous in any way whatsoever. Why aren’t you weirder?
HOFFMAN: [laughs] Maybe I mask it better. That’s my Straussian element, that I hide my weirdness. I would say that a little bit of it comes down to a theory about what is the right way of evolving discourse.
I think I probably do have a variety of views that people would think is weird. I, for example, think of myself as a mystical atheist, which is neither the full atheist category nor any religious category, but some blend in the middle. Or the fact that I actually think that the notion of capitalism is one of the world’s leading interesting technologies, but it’s not a particularly good philosophy, and you’d think that’s odd for an entrepreneur or an investor, and so forth.
So I have areas where I would say groups of people would think I’m weird. I may not highlight it because I tend to always speak in a way to, how do I think I help us make the most progress? And I would only say the weird things if I thought that was the thing that would result from that.
COWEN: So there are weird things that are in your mind?
HOFFMAN: Yes, yeah.
COWEN: How did your interest in the late Wittgenstein influence the construction and design of LinkedIn? I’m sure they ask you this all the time in interviews.
HOFFMAN: [laughs] All the time. The question I’ve always been expecting. I would say that the notion of thinking about — a central part of later Wittgenstein is to think that we play language games, that the way that we form identity and community, both of ourselves and as individuals, is the way that we discourse and the way that we see each other and the way that we elaborate language.
That pattern of which ways we communicate with each other, what’s the channel we do, and what’s the environment that we’re in comes from insights from — including later Wittgenstein, who I think was one of the best modern philosophers in thinking about how language is core to the people that we are and that we become.
COWEN: What else from philosophy influenced the construction and design of LinkedIn?
Recommended. For help in arranging this Conversation I am very much indebted to Ben Casnocha.
The Duke of Cambridge has spoken of his “sadness” at the broken bond with his brother and voiced sorrow that the royal family is no longer a “team”.
As the Queen called emergency peace talks tomorrow at Sandringham to end the Windsors’ civil war, The Sunday Times can reveal that Prince William has said he feels sorrow that he and Prince Harry are now “separate entities” and expressed hope that they might pull together again in future.
“I’ve put my arm around my brother all our lives and I can’t do that any more; we’re separate entities,” he told a friend.
…Tom Bradby, who did the recent ITV interview in which Harry and Meghan confessed their sense of isolation, warned failure to keep the pair on side could lead the Duke and Duchess of Sussex to do a “no-holds-barred” interview that could damage the monarchy further.
…Harry and Meghan may have their security downgraded, with protection squad officers armed only with Tasers rather than guns.
That is the topic of my latest Bloomberg column:
Just hours after Iran’s missile strike this week on U.S.-Iraqi bases in Iraq, the Iranian government made an incredible claim: The attack, it said, had killed 80 Americans and wounded about 200, all of whom were immediately removed from the site by helicopter. U.S. officials, meanwhile, said that there were no U.S. casualties…
U.S. officials may be quite happy that Iran is claiming this “victory” without any Americans having to die. In essence, manufactured casualties may now be able to substitute for actual casualties, at least for some limited purposes.
The most likely purveyors of these fake-news casualties are the weaker sides in military conflicts. They can use fake news reports of revenge to pacify their populations. And the prouder a nation’s citizens are, the more useful such fake-news casualties will be. Fake-news casualties are also easier to fabricate in countries with censorship of the press, such as Iran.
To use the game-theoretic language of deterrence: Threats to retaliate in a painful way are now less credible because lying about retaliation is now an alternative.
Note that the U.S. does not have a comparable ability to invoke fake-news casualties….
But not all is rosy:
The possibility of fake news means that when more powerful countries wish to take action, they need to do something quite vivid and dramatic. There is no doubt — in either the U.S. or Iran — that America did in fact kill Soleimani.
All in the tradition of Thomas Schelling of course. Solve for the equilibrium!
That is the topic of my latest Bloomberg column, here is one excerpt:
Maybe Trump’s threat to attack cultural sites was not meant literally, but rather as a brash reminder that his retaliatory actions will not be constrained by world opinion, international law or the views of American elites. If so, such a signal, to be effective, has to harm the Iranian regime. Trump’s message shows that he doesn’t understand the calculus of retaliation very well.
Assassinating a military leader by drone, by contrast, is something the U.S. can do but the Iranian government cannot, at least not easily or without provoking even greater retaliation. That makes such a policy an effective deterrent in the short run, as it hurts the actual decision maker, and indeed that is what Trump chose to do.
By mentioning cultural sites, he in essence has decided to follow a very strong signal of action with a much weaker signal of words. If you are a hawk, you should understand that Trump’s talk of cultural sites is weakening his core message that retaliation will be effective. It is usually better game theory to follow up a highly impactful action with relative silence, but silence never has been Trump’s strong suit.
There is much more to the argument at the link.
Hosted by Alibaba’s founder Jack Ma, the four-hour entrepreneurial talent show had all the production values of The Apprentice.
But the glitzy televised extravaganza, in which 10 contestants battled for $1m in prize money in front of a boisterous audience, took place neither in the US nor China. The action unfolded instead on a stage in Ghana, the first of what is set to be an Africa-wide annual contest as one of China’s best known businessmen scours the continent for younger versions of himself…
Mr Ma came up with the idea of the $1m prize — and the Africa Netpreneur television show to go with it — after meeting young Kenyan entrepreneurs on his first trip to the continent as a special adviser to the UN agency Unctad in 2017…
The Netpreneur show is due to be broadcast in mid-December on two channels with a pan-African presence, South Africa’s DStv and StarTimes, a Chinese media company. During the filming, Mr Ma sat on a raised dais next to three fellow judges: Strive Masiyiwa, the billionaire Zimbabwean founder of telecoms and media company Econet Wireless, Ibukun Awosika, chairman of First Bank of Nigeria, and Joe Tsai, executive vice-chairman of Alibaba.
Where are the Smothers Brothers? Here is the full David Pilling FT story.