Category: Web/Tech
What are the limits of economies of scope?
Amazon is launching its first high-tech hair salon, as the online retailer makes a surprise move into the beauty sector.
The salon, in Spitalfields, east London, will have an augmented-reality mirror showing clients different colours and styles before treatments.
The venue will also have magazines loaded on to tablets, for browsing.
Traditional services including cuts, blow-dries and colour treatments will also be available.
Here is the full story, via Michelle Dawson.
How will crypto wealth transform philanthropy?
That is the topic of my latest Bloomberg column, here is one excerpt:
If the price of Bitcoin were to reach $200,000, Coinbase Chief Executive Officer Brian Armstrong observed recently, half of the world’s billionaires would be crypto billionaires. Even at the lesser valuations that currently prevail, this crypto wealth has vast potential to reshape philanthropy. Expect a relative decline in the influence of longstanding nonprofit institutions — and more weird, stand-alone projects.
Bitcoin itself is a weird, stand-alone project. The true identity of its inventor, Satoshi Nakamoto, is still unknown, and the broader Bitcoin ecosystem is not owned or controlled by any company or institution. It has been self-sustaining since the beginning, and so it should hardly come as a surprise that Bitcoin billionaires take Bitcoin itself as a model for future institutions, including in philanthropy.
As philanthropists, Bitcoin and other crypto billionaires will likely look to support ideas that can launch in a dramatic way and quickly acquire escape velocity. They are unlikely to fund the ongoing labor costs of established cultural institutions.
Bitcoin and many other cryptocurrencies seem designed to stand independent of any government or mainstream financial institution. That too suggests that the philanthropic emphasis of crypto wealth will be on non-establishment, non-governmental organizations.
And:
Venture capitalist Paul Graham has pointed out that wealth is earned much more quickly nowadays, and that is all the more true in crypto, which after all is only 12 years old. Unlike many of the wealthy people in law or investment banking, these are not people who had to spend their lives working their way up, finally achieving a top position in their 60s. They either are founders of rapidly growing and scaling companies, or they bought large sums of the right crypto assets early on, or both. Either way, their temperaments are geared to expect immediate action and rapid results.
Nonprofits will have to adjust accordingly, even though speed is not typically their comparative advantage. That in turn suggests that the organizational structures of many nonprofits will have to change fairly radically. Many of them were designed or have evolved to be good at continuity, like the Cleveland Symphony Orchestra, which after all is still playing Beethoven with violins and cellos.
There is much more at the link.
The forthcoming Facebook audio product
Facebook is making a push into audio, launching a suite of new features that will allow users to host audio conferences and podcasts, in a dash to compete with up-and-coming apps such as Clubhouse. Mark Zuckerberg, chief executive of the world’s largest social media company by users, said on Monday said that over the next three to six months it planned to roll out live audio rooms as well as new tools allowing users to search for, listen to and create podcasts.
In addition, its live audio rooms, which will be available on the main platform and its Messenger app, can be saved and turned into podcasts. Zuckerberg also announced the launch of a feature called “Soundbites”, where users can post or listen to short audio clips that will be showcased in a continuous feed, in a similar way to its Reels video feed in Instagram.
Facebook plans to allow users to earn money from the podcasts and audio rooms they create — for example, by allowing users to charge for access to a room by purchasing it individually or as part of a subscription.
Here is more from The Financial Times.
What is the proper framework for thinking about cybersecurity?
Long-time MR reader here. I have a question: what is the appropriate framework to think about incentives (economic or otherwise) for electric power utilities to beef up their cybersecurity?
The Biden administration is reportedly putting together a plan to “rapidly shore up the security of the US power grid” [1]. As we know from the Solarwids hack, our nation’s cyber defenses (whether private industry or government) are inadequate [2], especially when targeted by nation-states [3].
The Bloomberg article says “The White House plan, which is voluntary, lays out a series of possible incentives to get power companies to sign on, a less politically precarious route than mandating their participation through regulation.”
It seems to me that the government offering money to private entities to buy some cybersecurity software products is not the optimal, and certainly not the sustainable, solution. There are needed investments in research & development, workforce training, and much more. Simply deploying today’s tech won’t solve this going forward.
So, what’s the right way to approach this from an incentives perspective? It seem to me that this is a very nuanced problem. We have no easy “target” to shoot for; there is no miles per gallon efficiency metric that can be used as a carrot.
That is an email from Matthew Backes.
My Conversation with Lex Fridman
2 hours 9 minutes long, Lex is one of the very best interviewers/discussants in the sector. Here is the video, here is the audio. Plenty of new topics and avenues, including the political economy of Russia (note this was recorded before the massing of Russian forces on the Ukraine border). Lex’s tweet described it as follows:
Here’s my conversation with @tylercowen about economic growth, resisting conformity, the value of being weird, competition and capitalism, UFO sightings, contemporary art, best food in the world, and of course, love, death, and meaning.
https://www.youtube.com/watch?v=7Grseeycor4
Recommended.
Which are the most striking elements of Monkey Pong?
Watch this if you haven’t already:
What comes to your mind is an interesting kind of Rorschach test. A few options (not necessarily endorsed by me) are:
1. Where did they get that background from?
2. Can I have some of what that monkey is drinking?
3. Wealth concentrations are going to make IRB regulations less relevant over time.
4. How many people want to play Pong against a wired monkey? Will we employ or enslave monkeys to enable this? What is in fact the relevant difference?
5. What else can that monkey (cognitively) do better than I can?
6. Which regulatory agency will have jurisdiction over the (presumably disabled) humans who want this as a medical treatment? What about the non-disabled humans? The Navy pilots?
7. Where does this all end?
8. Will this raise or lower the price of monkeys?
What else?
Vaccine passport sentences to ponder
From New York State:
Using Excelsior Pass is entirely voluntary, but it requires learning about the state’s system and mastering a few different websites and apps. It took me 20 minutes over Zoom to help an octogenarian set up his pass, though it was certainly simpler than mastering vaccine-appointment websites. And even when we thought we understood the system, Excelsior Pass didn’t always work: My tech-reporter colleague tried to use it to enter Yankee Stadium, but the system didn’t update with his clearance until after the game was over…
Testing Excelsior Pass, what surprised me most was how easy it is to fake. When you first sign up for your QR code on the state website, it asks a handful of questions based on your vaccination and testing records. But after that, you’re on the honor system — you can add the QR code to any phone without any more challenge questions.
Designed by IBM, here is the full story. I get that different parts of the country (Michigan…surge vaccine supply!) may need to proceed at different speeds, but basically it is time to plan a full reopening, and it seems that vaccine passports are more likely to hinder than to help achieve that end.
How open and face to face will fall semester be?
I am pleased to see Cornell mandating vaccination for all of its students. Of course other colleges and universities can do the same. Even if they do not take that step, it still seems it will be “safe enough” to hold most classes in-person in the Fall, if not sooner.
And yet.
Here is what I think is the issue. Universities these days are not very good at “leaving people behind,” at least not as an act of open and deliberate commission. What about students or faculty who just had organ transplants and who thus might have compromised immune systems and also high vulnerability to Covid? Rather than the Coase theorem being applied, schools might make professors offer a hybrid option, namely that some students take the class face to face, and other students take it over Zoom, with a computer hooked up to cover the classroom.
Of course the mixed mode doesn’t work very well. I’ve learned from meetings that an all on-line meeting usually is (much) better than a mixed meeting where some people are present and others on-line, or in the old days on the phone.
So imagine universities giving every student the option to check a box: “I want this class on-line so please make it a hybrid option.”
Except they don’t make anyone prove that they just had an organ transplant.
And then ten percent of the students prefer to live in Pakistan, California, Florida — wherever. Those students check the box to make the class a hybrid option. What happens?
Many classes “might just suck.”
Another option is that the class evolves into mainly on-line as a least worst option.
Another option — #3 — is that the university forgets about the box-checking option but nonetheless uses this as a chance to evolve toward a larger and more sensible on-line presence.
#3 might happen, but I don’t think it will be in place by this fall. And thus you can see my worry about the pending fall semester in many institutions. Will they have the stones to say “No, we’re just going to offer this one face to face”?
Stay tuned.
What should I ask Pierpaolo Barbieri?
I will be doing a Conversation with him, here is the opening part of his Wikipedia page:
Pierpaolo Barbieri (Buenos Aires, May 17, 1987) is an economic historian, researcher, Executive Director at Greenmantle[and founder of Ualá, an Argentina-based personal financial management mobile app. He is the author of the book Hitler’s Shadow Empire: The Nazis and the Spanish Civil War. He has been featured in publications like Financial Times, New York Times, Foreign Affairs, El País, and The Wall Street Journal.
Ualá has been highly successful as of late in the payments space, including with the unbanked, and here is Pierpaolo on Twitter (mostly Spanish language).
So what should I ask him?
Conversations with Tyler Clubhouse session
This coming Monday, 9 p.m. EST, 6 p.m. Pacific, here is the link. With myself, Jeff Holmes, Marc Andreessen, Hollis Robbins, and illustrious others, discussing the podcast and everything else too.
Please do join us, and if you have done a CWT as a guest we would love to call you up to the mike — please raise your hand to ensure we see you!
My Conversation with Sarah Parcak, space archaeologist and Egypt lover
Here is the audio, video, and transcript. Here is part of the summary:
She joined Tyler to discuss what caused the Bronze Age Collapse, how well we understand the level of ancient technologies, what archaeologists may learn from the discovery of more than a hundred coffins at the site of Saqqara, how far the Vikings really traveled, why conservation should be as much of a priority as excavation, the economics of looting networks, the inherently political nature of archaeology, Indiana Jones versus The Dig, her favorite contemporary bluegrass artists, the best archeological sites to visit around the world, the merits of tools like Google Earth and Lidar, the long list of skills needed to be a modern archeologist, which countries produce the best amateur space archeologists, and more.
Lots of talk about data issues and rights as well. Here is one excerpt:
COWEN: Here’s something that struck me studying your work. Give me your reaction. It seems to me your job is almost becoming impossible. You have to know stats. You have to know trigonometry. You have to know geometry. In your case, you need to know Egyptian Arabic, possibly some dialect, possibly some classical Arabic, maybe some other languages.
You have to know archaeology, right? You have to know history. You must have to know all kinds of physical techniques for unearthing materials without damaging them too much. You need to know about data storage, and I could go on, and on, and on.
Hasn’t your job evolved to the point where you’re almost . . . You need to know about technologies, right? For finding data from space — we talked about this before. That’s also not easy. Isn’t your job evolving to the point where, literally, no human can do it, and you’re the last in the line?
PARCAK: I am, I guess, jack of all trades, master of a few. But that’s not true either because I have to know the remote sensing programs. I have to know geographic information systems. I have to be up to date on international cultural heritage laws.
I think I’m not special by a long shot. Every archaeologist is a specialist. This archaeologist is a specialist in the pottery of this period of time, or does DNA, or excavates human remains — they’re bioarchaeologists — or they do computation. We all are specialists in a particular thing, but that’s really broad. My unsexy, more academic term is landscape archaeologist, so I’m interested in ancient human-environment interaction, which encompasses a lot of different fields and subfields. I’ve taken many courses in geology.
All of us who study Egyptology — we do a lot of training in art history because, of course, the iconography and the art and the objects that we’re finding. It takes a lot, but I would say most of the knowledge I’ve gotten is experiential. It’s from being in the field, I’ve visited hundreds of museums. I’ve spent countless hours in museum collections learning, touching objects.
Yeah, it’s a lot, but it’s also the field of archaeology. That’s why so many people really love it — because you get to touch on so many different areas. I would never, for example, consider myself a specialist in bioarchaeology. I know a tibia. When I find pitting on a skull, I know what that could potentially mean.
But also, I’m in a position now where I’m a dig director, so that means I’m in charge of a large group of humans, most of whom are far smarter, more capable than I am in whatever they’re doing. They’re specialists in pottery and bone, in rocks — project geologist — and conservation in art. We have project artists. We have specialists in excavation, and of course, there’s my very talented Egyptian team. They’re excavating. I’m probably a lot more of a manager now than I ever expected to be —
COWEN: And fundraiser perhaps, right?
One of my favorite CWTs in some time. And here is Sarah’s book Archaeology from Space: How the Future Shapes Our Past.
Google Trends as a measure of economic influence
That is a new research paper by Tom Coupé, here is one excerpt:
I find that search intensity rankings based on Google Trends data are only modestly correlated with more traditional measures of scholarly impact…
The definition of who counts as an economist is somewhat loose, so:
Plato, Aristotle and Karl Marx constitute the top three. They are followed by B. R. Ambedkar, John Locke and Thomas Aquinas, with Adam Smith taking the seventh place. Smith is followed by Max Weber, John Maynard Keynes and the top-ranking Nobel Prize winner, John Forbes Nash Jr.
…John Forbes Nash Jr., Arthur Lewis, Milton Friedman, Paul Krugman and Friedrich Hayek are the most searched for Nobel Prize winners for economics, while Tjalling Koopmans, Reinhard Selten, Lawrence Klein, James Meade and Dale T. Mortensen have the lowest search intensity.
Here are the Nobelist rankings. Here are the complete rankings, if you are wondering I come in at #104, just ahead of William Stanley Jevons, one of the other Marginal Revolution guys, and considerably ahead of Walras and Menger, early co-bloggers (now retired) on this site. Gary Becker is what…#172? Ken Arrow is #184. The internet is a funny place.
I guess I found this on Twitter, but I have forgotten whom to thank – sorry!
Twitter macro and Twitter economics
I’ll compare Twitter macro to blog macro throughout, and here is how I see the strengths and weaknesses of Twitter macro:
1. Super-fast speed of response, and less repetitive than the old blog world. It is easy to comment right away on the most current happening. Unlike with (some) blogs, no wind-ups are required. On Twitter both good and bad ideas go viral far more rapidly.
2. It is more fun than blog macro, and attracts fewer hobby horse drones.
3. It is too easy to tell people that they “completely misunderstand” something, because links, while they exist on Twitter, are not the prime currency. This leads to many bad tweets, typically tweets that…completely misunderstand something or someone, yet with less verification possible.
4. It attracts a younger set of writers than blog macro did. That makes it both more left-wing and also less informed about economic history, recent decades in particular. Very recent evidence and experience is considerably overstressed in its relevance, and this is reinforced by the fad-like nature of Twitter opinion.
5. Twitter macro is poor at spelling out the entirety of an empirical literature on an empirical question. I am not sure whether this is intrinsic to the medium, but I observe this regularly. Blogs in contrast are/were most likely to take a more exhaustive approach to literature survey, sometimes too exhaustive rather than focusing on the single best argument.
6. Twitter macro is poor for spelling out mechanisms. Most coherent macro mechanisms do in fact take more than 280 characters to spell out. Tweet storms are useful, but more for a series of sequential observations on some new data, rather than for mechanisms per se. Overall Twitter is poor for “grasping the whole elephant” approaches to economics, and for that matter to other topics as well.
7. It is easier to learn from other people on econ Twitter, due to the “rapid scan” and retweet and “comment on tweet” properties of the system. At the same time, econ Twitter is more prone to fads and bubbles of opinion, for broadly the same reasons.
8. Econ Twitter involves more “don’t really know anything at all” kinds of people, and sarcastic people, in the discussions. Overall this has a negative external impact on the tone and thoughtfulness of those who do know something. In the blog world, we all made each other a bit more “cross-checking, linking, and drone-like.”
9. I genuinely do not understand why more tweeters do not set up free blog or Substack accounts, and, if only five times or so a year, write a longer post or column explaining and defending their views and tying them into the broader literatures. This seems to me to betray a certain kind of intellectual laziness, which the Twitter medium itself encourages and amplifies.
10. Entry barriers are lower with Twitter, so there is a much broader diversity of opinion. This can be very good, but see #8.
11. It is easier to express meaningful agnosticism in a successful blog post than in a successful tweet. This is one of the biggest problems with Twitter macro, and indeed with Twitter more broadly. It is also hard to express trade-offs in a successful tweet, another major problem. “We must do this” kinds of thinking are instead encouraged.
12. Both blog posts and tweets very often mix in normative judgments with the positive analysis. But it is much harder to be sophisticated on the normative side on Twitter. The morality is often third-rate or worse.
13. The one-sentence (supposed) refutation is very much overrated on Twitter, even serious Twitter. Such dismissals are usually wrong, or at least seriously incomplete, and their possibility and popularity discourage people from developing deeper understandings.
14. Is Twitter so great for methodological self-awareness? Yes, you could do a tweet storm but this kind of analysis, as embodied in this post itself, seems harder to do on Twitter, and harder to receive non-sarastic feedback on.
Profile of Beeple
Winkelmann grew up in a small town in Wisconsin, and quickly gravitated to technology. His father, an electrical engineer, taught him how to program. The only art classes that he ever took were in his freshman year of high school. At around the same time, a friend introduced him to the electronic-music label Warp Records, and to bands like Aphex Twin, the stage name of Richard David James. “What can one person and a computer do?” Winkelmann said. “That has always been a really cool concept to me, because it’s the equalizer, in a way.”
Winkelmann went to Purdue University and entered its computer-science program, but he eventually found himself adrift. Programming, he said, was “boring as shit.” Instead, he shot narrative short films with his Webcam and learned digital design. Inspired by the video artist Chris Cunningham and the British studio the Designers Republic, he created loops of animated geometric shapes synched to his own electronic music. He posted the results online. In 2003, when he was twenty-two years old, he took the name Beeple, after an old Ewok-like stuffed animal. He now collects Beeples from eBay. While we were talking, he grabbed one from his desk and held it up to show me. When Winkelmann covered the furry toy’s eyes, it emitted a wild beeping sound in protest. The name seemed apt, he said, because a similar interplay of vision and sound animated his videos.
India collateralized smart phone markets in everything
…the easiest way for retailers and online stores to get high-end devices into working-class people’s pockets has been through a new method of lending: collateralizing smartphones. Vendors are selling smartphones to first-time borrowers on high-interest payment plans financed by loan companies, but only after users install an undeletable app at the point of sale. The apps can then monitor repayment behavior throughout the duration of the loan. One late payment leads to instant blocking of the phone, rendering it useless. For loan providers and smartphone sellers, this form of lending opens their products to a new class of consumers…
Datacultr uses a laundry list of techniques to force borrowers into paying. The app starts by sending audiovisual prompts in regional languages as reminders. If the user misses their first repayment, it forcefully changes the wallpaper on their cellphones. If Datacultr’s data scrape reveals a user to be a prolific selfie-taker, for instance, the app will send notifications every time the camera function is opened. If the user continues to default on the loan, frequently used messaging and social apps like Facebook or Instagram are progressively blocked, severely restricting the use of the device and ultimately shutting down all of the phone’s functionalities.
Be careful if you buy a used phone! Here is the full story, via the excellent Samir Varma.