Obviously his talents in crypto and programming are well-known, but he is also a first-rate thinker on both economics and what you broadly might call sociology. You could take away the crypto contributions altogether, and he still would be one of the very smartest people I have met. Here is the audio and transcript. The CWT team summarized it as follows:
Tyler sat down with Vitalik to discuss the many things he’s thinking about and working on, including the nascent field of cryptoeconomics, the best analogy for understanding the blockchain, his desire for more social science fiction, why belief in progress is our most useful delusion, best places to visit in time and space, how he picks up languages, why centralization’s not all bad, the best ways to value crypto assets, whether P = NP, and much more.
Here is one excerpt:
COWEN: If you could go back into the distant past for a year, a time and place of your choosing, you have the linguistic skills and immunity against disease to the extent you need it, maybe some money in your pocket, where would you pick to satisfy your own curiosity?
BUTERIN: Where would I pick? To do what? To spend a year there, or . . . ?
COWEN: Spend a year as a “tourist.” You could pick ancient Athens or preconquest Mexico or medieval Russia. It’s a kind of social science fiction, right?
BUTERIN: Yeah, totally. Let’s see. Possibly first year of World War II — obviously, one of those areas that’s close to it but still reasonably safe from it…
Basically, experience more of what human behavior and what collective human behavior would look like once you pushed humans further into extremes, and people aren’t as comfortable as they are today.
I started the whole dialogue with this:
I went back and I reread all of the papers on your home page. I found it quite striking that there were two very important economics results, one based on menu costs associated with the name of Greg Mankiw. Another is a paper on the indeterminacy of monetary equilibrium associated with Fischer Black.
These are famous papers. On your own, you appear to rediscover these results without knowing about the papers at all. So how would you describe how you teach yourself economics?
Highly recommended, whether or not you understand blockchain. Oh, and there is this:
COWEN: If you had to explain blockchain to a very smart person from 40 years ago, who knew computers but had no idea of crypto, what would be the best short explanation you could give them, basically, for what you do?
BUTERIN: Sure. One of the analogies I keep going back to is this idea of a “world computer.” The idea, basically, is that a blockchain, as a whole, functions like a computer. It has a hard drive, and on that hard drive, it stores what all the accounts are.
It stores what the code of all the smart contracts is, what the memory of all these smart contracts is. It accepts incoming instructions — and these incoming instructions are signed transactions sent by a bunch of different users — and processes them according to a set of rules.
One of the best short essays you will read this year.
Here is a kind of gravity equation for science:
We develop a simple theoretical framework for thinking about how geographic frictions, and in particular travel costs, shape scientists’ collaboration decisions and the types of projects that are developed locally versus over distance. We then take advantage of a quasi-experiment – the introduction of new routes by a low-cost airline – to test the predictions of the theory. Results show that travel costs constitute an important friction to collaboration: after a low-cost airline enters, the number of collaborations increases by 50%, a result that is robust to multiple falsification tests and causal in nature. The reduction in geographic frictions is particularly beneficial for high quality scientists that are otherwise embedded in worse local environments. Consistent with the theory, lower travel costs also endogenously change the types of projects scientists engage in at different levels of distance. After the shock, we observe an increase in higher quality and novel projects, as well as projects that take advantage of complementary knowledge and skills between sub-fields, and that rely on specialized equipment. We test the generalizability of our findings from chemistry to a broader dataset of scientific publications, and to a different field where specialized equipment is less likely to be relevant, mathematics. Last, we discuss implications for the formation of collaborative R&D teams over distance.
That is from a new paper by Christian Catalini, Christian Fons-Rosen, and Patrick Gaulé.
Juan is sometimes considered the world’s greatest hitchhiker, and this was one of my favorite installments in the series. We talked about “the joys of connecting with people, why it’s so hard to avoid stereotypes (including of hitchhikers), how stamp collecting guides his trips, the darkest secrets of people he’s gotten rides from, traveling and writing books with his wife, the cause of violence in the Americas, finding the emotional heart of a journey, where he’s going next…” and which country has the most beautiful women (and men). And why Colombia and Transnistria are two of his favorite places to visit.
Here is the transcript and audio.
Here is one excerpt:
VILLARINO: As a rule of thumb, I always like to say that you stop cars with your smile and not with your thumb. There are actually a lot of things you could do to improve your chances of getting a lift.
It’s not like go there, stick out your thumb, and get a ride. Definitely, smiling as a car is passing — it’s a really important thing. Then there are very subtle things that people wouldn’t guess that have an impact, and they do…
For example, a driver has on average three seconds to decide whether he’s going to stop or not. He sees you, he’s driving maybe 80 miles an hour, and you suddenly pop out. There are a lot of things going on unconsciously through his mind to decide whether he’s going to stop or not. You have only these seconds to convey any message of trust, and so you have to do things.
For example, one is smiling. The other one is, when you manage to get eye contact, then I reinforce. Let’s say, I’m showing my thumb, but I also switch my hand signal and point it to the direction in which I’m going as I’m smiling. This makes a more personalized link over the general link you are already doing, which is thumbing.
Then the way you are dressed, the way your backpack is positioned . . .
VILLARINO: Oh, yeah. Scandinavia.
COWEN: Those countries have plenty of cars. Why are they so slow?
VILLARINO: That’s amazing. To be hitchhiking in Scandinavia, you see all this row of Volvo cars passing you by [laughs] and they will never ever stop.
I had talked to a Swedish friend of mine, and she just said, “Yeah, I wouldn’t stop either,” she said, “because it’s so cheap and affordable to have a car. Then if someone is hitchhiking and doesn’t have a car, you would think he has second intentions or something wrong is going on here.”
COWEN: Would you describe yourself as a workaholic hitchhiker?
VILLARINO: Yes. [laughs] I am. People would be so surprised to see how much time there is involved on the backstage behind the screen because you hitchhike, you have books, and you have a blog. The blog is so time consuming.
Juan had the very best answer I thought as to why the New World is more violent than the Old World, overall. It starts with this:
VILLARINO: Probably because in our evolution as territories, we have had violence as a part of it much more recently in the timeline. We were conquered by means of powder. I think that’s probably in the genetic of our culture. I hope not.
Strongly recommended, and I hope to read and see more of Juan in the future.
D. asks me that question, citing Morocco, BA, and Paris. Here are a few factors militating in favor of such cafes:
1. The weather should be reasonable. This militates in favor of Mediterranean climates, with Paris eking through nonetheless. It hurts much of Asia.
2. The broad highways and thoroughfares should be removed from where the cafes might go. This factor harms Los Angeles, which otherwise has excellent weather, and helps La Jolla. Note that BA and some of the larger Moroccan cities were designed and built up around the same time, based on broadly European models, and to fit early 20th century technologies.
3. Street crime must be acceptably low. Bye bye Brazil.
4. Pollution should be fairly low, otherwise sitting outside is unpleasant. This harm many Indian and Chinese cities.
5. Streets must not be too steep. Sorry La Paz, and yes here at MR we adjust steepness coefficients by altitude.
6. Skyscrapers must not be too plentiful. This harms Manhattan, because the sunlight is mostly blocked.
7. Explicit or implicit marginal tax rates on labor should be relatively high. Another boost for the Mediterranean. And is cafe culture therefore correlated with smoking culture?
7b. Explicit or implicit land rents should be “low enough.” After all, they have to be willing to let you sit there all day. Just try that in midtown Manhattan.
8. The cities should have mixed-use neighborhoods, well-connected to each other by foot, conducive to many diverse groups of people walking through. This hurts many parts of the United States and also some parts of Latin America. It is a big gain for Paris.
9. The city dwellers need some tradition of “being alone,” so that these individuals use the cafe to connect to the outside. You will note that in many parts of Italy, the people-watching street cafe is outcompeted by the “stationary street conference, five guys who know each other really well yelling at each other about who knows what?” They never get around to that cafe chair. So the city needs some degree of anonymity, but not too much. This harms some of the more traditional societies found around the Mediterranean. On the other side of the distribution, too strong a tradition of television-watching hurts cafe life too.
10. Another competitor to the people-watching street cafe is the zócalo town square tradition of Mexico. I myself prefer the centralization of the zócalo (though admittedly it does not scale well fractally). So the city also has to fail in providing just the right kind of parks and park benches and focality in its very center. Surprise, surprise, but dysfunctional local public goods are by no means unheard of around the Mediterranean, Paris too, BA, and cities such as Casablanca.
The study, titled “Evidence for a conserved quantity in human mobility’ is published in Nature Human Behaviour is based on analyses of 40,000 people’s mobile traces collected in four different datasets.
It is also the first of its kind to investigate people’s mobility over time and study how their behavior changes.
Behind the project are Dr. Laura Alessandretti and Dr. Andrea Baronchelli, researchers in the Department of Mathematics at City, University of London, together with Professor Sune Lehmann from DTU Technical University of Denmark and the research team from Sony Mobile Communications.
“We first analysed the traces of about 1000 university students. The dataset showed that the students returned to a limited number of places, even though the places changed over time. I expected to see a difference in the behavior of students and a wide section of the population. But that was not the case. The result was the same when we scaled up the project to 40,000 people of different habits and gender from all over the world. It was not expected in advance. It came as a surprise,” says Dr. Alessandretti.
Old places disappear
The study showed that people are constantly exploring new places. They move to a new home, find a new favorite restaurant, find a new bar, or start going to another gym, etc. However, the number of regularly visited places is constantly 25 in a given period. If a new place is added to the list, one of the places disappears.
The pattern is the same when the researchers divide the locations into categories based on how often and how long time they spend at the location.
“People are constantly balancing their curiosity and laziness…
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.
David was in top form, and I feel this exchange reflected his core style very well, here is the audio and transcript.
We covered why people stay so lonely, whether the Amish are happy, life in Italy, the Whig tradition, the secularization thesis, the importance of covenants, whether Judaism or Christianity has a deeper reading of The Book of Exodus, whether Americans undervalue privacy, Bruce Springsteen vs. Bob Dylan, whether our next president will be a boring manager, and last but not least the David Brooks production function.
Here is one excerpt:
COWEN: Walt Whitman, not only as a poet, but as a foundational thinker for America. Overrated or underrated?
BROOKS: I’d have to say slightly overrated.
COWEN: Tell us why.
BROOKS: I think his spirit and his energy sort of define America. His essay “Democratic Vistas” is one of my favorite essays. It captures both the vulgarity of America, but the energy and especially the business energy of America. But if we think the rise of narcissism is a problem in our society, Walt Whitman is sort of the holy spring there.
COWEN: Socrates, overrated or underrated?
BROOKS: [laughs] This is so absurd.
BROOKS: With everybody else it’s like Breaking Bad, overrated or underrated? I got Socrates.
BROOKS: I will say Socrates is overrated for this reason. We call them dialogues. But really, if you read them, they’re like Socrates making a long speech and some other schmo saying, “Oh yes. It must surely be so, Socrates.”
BROOKS: So it’s not really a dialogue, it’s just him speaking with somebody else affirming.
COWEN: And it’s Plato reporting Socrates. So it’s Plato’s monologue about a supposed dialogue, which may itself be a monologue.
BROOKS: Yeah. It was all probably the writers.
And on Milton Friedman:
BROOKS: I was a student at the University of Chicago, and they did an audition, and I was socialist back then. It was a TV show PBS put on, called Tyranny of the Status Quo, which was “Milton talks to the young.” So I studied up on my left-wing economics, and I went out there to Stanford. I would make my argument, and then he would destroy it in six seconds or so. And then the camera would linger on my face for 19 or 20 seconds, as I tried to think of what to say.
And it was like, he was the best arguer in human history, and I was a 22-year-old. It was my TV debut — you can go on YouTube. I have a lot of hair and big glasses. But I will say, I had never met a libertarian before. And every night — we taped for five days — every night he took me and my colleagues out to dinner in San Francisco and really taught us about economics.
Later, he stayed close to me. I called him a mentor. I didn’t become a libertarian, never quite like him, but a truly great teacher and a truly important influence on my life and so many others. He was a model of what an academic economist should be like.
Recommended. (And I actually thought David did just fine in that early exchange with Friedman.)
Alesund, Norway is one of the most beautiful small cities in Europe. The setting is picture-perfect, and much of the architecture was redone in 1904-1905 in Art Nouveau style, due to a fire that burned down the previous wooden structures. The Art Nouveau murals in the town church deserve to be better known.
This time around, Norway seems vaguely affordable. The food is “good enough,” especially if you like cod. Dark chocolate ice cream is hard to come by. Driving to the puffins takes 3-4 hours, though they are not always to be seen.
That is my latest Bloomberg column, here is the opener:
I sometimes wish the market supplied “travel guides as if microeconomics really mattered.” Most guides outline the major sights and the best hotels, but what about the little things that make up so much of the value of a trip? Here’s my handy introduction to the micro side of travel, based on my recent 10-day stay in Ethiopia. You should consider investigating these same factors before choosing a destination:
How are the sidewalks?
I enjoy walking around cities, but it’s not just the quality of the architecture or the vitality of the street life that matter. The quality of the sidewalks is a central consideration, especially in emerging economies. What good are the sights if you are looking down all the time to avoid a slip or a broken ankle because of gaping holes? Sometimes major thoroughfares have no sidewalks at all.
I am happy to report that in Addis Ababa, the capital city of Ethiopia, the quality of the sidewalks and street paths is high enough to sustain productive walking with your head held high. Most of the time. B, and B+ outside the capital.
There is much more at the link, definitely recommended.
I totally agree about Ethiopia being easy to visit. I went there last December and was baffled by how safe it was. I went outside and easily hailed a Taxi at 11 pm (the blue and white ones that everybody take in Addis not the special ones made for tourists). I’d never find a real Taxi in Port-au-Prince after 8 pm. Except the special (and very expensive) ones you can call on the phone.
What stroke me the most was how cheap Ethiopia was compared to Haiti and low income countries in Africa (especially Tchad, where my wife works). I think this is a major problem for countries like Tchad or Haiti (or Nigeria): they grew too expensive before getting even remotely rich. And this gives me hope that Ethiopia could achieve some significant success in tourism and exports in the coming years. By the way, I think that why a country like Ethiopia is cheaper than Haiti or Chad remains a question to be seriously investigated.
However, the Internet in Haiti is way better and cheaper. Cars in Haiti are also substantially cheaper (3 times cheaper at least, thanks in part to the US being so close). I also think the Internet is largely better and cheaper in Nigeria compared to Ethiopia. This made me think about something you wrote about the future of economic development, with people in countries like Haiti or Nigeria getting more satisfaction from the Internet and relatively cheap electronics instead of jobs and income. My impression is that it’s one of the very few low income country not taking this route currently…
Here is Carl-Henri on Twitter.
Chinese travelers are the world’s top tourism spenders, shelling out almost $260 billion in 2017 alone. A growing part of that spend is now happening in Africa, encouraged by relaxed visa rules, increased interested in the continent’s cultural and historical sites, and a initiatives that seek to appeal to Chinese tourists.
Last week, the Industrial and Commercial Bank of China launched a joint loyalty program with Kenya’s Stanbic Bank, aiming to create incentives for travel, shopping, and leisure to tourists visiting the two nations. The “I Go Kenya—I Go China” scheme follows the bank’s similar program in South Africa last year, which rewarded its cardholders by offering a range of discounts and special offers from merchants across the travel, hospitality and lifestyle sectors. The state-owned financial behemoth is doing this as part of its plan to internationalize, and push its banking card product abroad.
Meanwhile, Africa is becoming increasingly attractive destination for Chinese tourists. A recent survey by the global travel platform Travelzoo found that the continent was the top destination of choice for Chinese tourists seeking more adventurous holidays in 2018, beating Japan and Australia. Visitors were especially drawn to Morocco, Tunisia, South Africa, Namibia, Madagascar, and Tanzania.
Here is more from Abdi Latif Dahir.
Bearing backpacks loaded with thermoses, sipping their steaming-hot refreshments with satisfaction, Chinese tourists’ unquenchable thirst for hot water, though odd for many Westerners, is having a huge impact on destinations worldwide, causing a “hot water revolution” in the global tourism industry.
In snow-crested Scandinavia, where chugging ice water is a long-standing habit, several hot water dispensers are being installed in Helsinki Airport to cater to Chinese travelers’ thirst for the throat-scalding beverage.
“We have long traditions in providing services for Chinese, but we want to develop them even further in order to welcome new passengers and make the current ones even happier,” Katja Siberg, SVP Marketing and Communications at Finavia, told People’s Daily Online, who added that the idea of serving hot water was proposed by her Finnish colleagues after they visited airports in China.
Helsinki Airport is not the only transportation hub that attempts to capture the hearts of Chinese tourists by providing them with hot water, and some of its counterparts have pushed the “hot water revolution” even further. In March, an intelligent hot water installation was set up in Schiphol Airport in Amsterdam, where USB heating vacuum cups designed by KLM were distributed to Chinese tourists as Spring Festival gifts.
Here is the full story.
Via Malcolm Clark.
Gonder is I believe Ethiopia’s third largest city. It has splendid castles and fortifications from the 18th century, with Moorish and Portuguese styles mixed in; at that time it was the capital. There are numerous monasteries and churches scattered throughout the area, many with impressive frescoes.
There is no week in my life in which I have seen as many donkeys as I have seen one day in and around Gonder.
I was surprised how good the area is for birdwatching, you don’t even have to try.
There is an Ethiopian Jewish village nearby. The Jews have left for Israel, but you can go see the synagogue behind a fence.
Two of my drivers have told me the exact same sentence: “They grow everything here: teff, barley, and wheat.”
If the people in the river village ask “do you wish to take out the small boat to go see the hippo?”, the correct answer is “No.“