Why Elon Musk Wants to Go to Mars
Tim Urban at Wait but Why has a fascinating longform series on How and Why SpaceX Will Colonize Mars which itself is part of a longer series on Elon Musk and his companies. Here’s just one bit:
The Scary Thing About the Universe
Species extinctions are kind of like human deaths—they’re happening constantly, at a mild and steady rate. But a mass extinction event is, for species, like a war or a sweeping epidemic is for humans—an unusual event that kills off a large chunk of the population in one blow. Humans have never experienced a mass extinction event, and if one happened, there’s a reasonable chance it would end the human race—either because the event itself would kill us (like a collision with a large enough asteroid), or the effects of an event would (like something that decimates the food supply or dramatically changes the temperature or atmospheric composition). The extinction graph below shows animal extinction over time (using marine extinction as an indicator). I’ve labeled the five major extinction events and the percentage of total species lost during each one (not included on this graph is what many believe is becoming a new mass extinction, happening right now, caused by the impact of humans):1
…Let’s imagine the Earth is a hard drive, and each species on Earth, including our own, is a Microsoft Excel document on the hard drive filled with trillions of rows of data. Using our shortened timescale, where 50 million years = one month, here’s what we know:
- Right now, it’s August of 2015
- The hard drive (i.e. the Earth) came into existence 7.5 years ago, in early 2008
- A year ago, in August of 2014, the hard drive was loaded up with Excel documents (i.e. the origin of animals). Since then, new Excel docs have been continually created and others have developed an error message and stopped opening (i.e gone extinct).
- Since August 2014, the hard drive has crashed five times—i.e. extinction events—in November 2014, in December 2014, in March 2015, April 2015, and July 2015. Each time the hard drive crashed, it rebooted a few hours later, but after rebooting, about 70% of the Excel docs were no longer there. Except the March 2015 crash, which erased 95% of the documents.
- Now it’s mid-August 2015, and the homo sapiens Excel doc was created about two hours ago.
Now—if you owned a hard drive with an extraordinarily important Excel doc on it, and you knew that the hard drive pretty reliably tended to crash every month or two, with the last crash happening five weeks ago—what’s the very obvious thing you’d do?
You’d copy the document onto a second hard drive.
That’s why Elon Musk wants to put a million people on Mars.
On a related note the latest Planet Money podcast is How to Stop an Asteroid. It’s funny and informative and yours truly makes an appearance. Worth a listen.
Don’t test drive a new car before buying it
Why should you? They want you to do it, which is already reason to be suspicious.
It makes you all the more emotionally committed to buying a car whose immediate feel you enjoy. You might save a few hundred dollars on the bargaining by refusing to take that step of commitment.
Furthermore you might expect that every plausible new car can in fact survive a test drive from a potential customer. Let others test drive it for you.
And let’s say you didn’t so much like the test drive. Is that a bad sign or a good sign about the car? Does your dislike very well predict you will dislike it a month from now? I doubt that. In fact if you are somewhat typical and others dislike the test drive too, that might mean the car is all the more a bargain. And you are letting a mere mediocre test drive persuade you away from exploiting that bargain.
I readily admit this advice does not apply to very tall people and other outliers.
Question: to how many other spheres of life might this reasoning apply?
Further results in Austro-Italian business cycle theory
You may think this is from the Journal of Masonomics, but no it is an NBER Working paper:
Following the introduction of the euro in 1999, countries in the South experienced large capital inflows and low productivity. We use data for manufacturing firms in Spain to document a significant increase in the dispersion of the return to capital across firms, a stable dispersion of the return to labor across firms, and a significant increase in productivity losses from misallocation over time. We develop a model of heterogeneous firms facing financial frictions and investment adjustment costs. The model generates cross-sectional and time-series patterns in size, productivity, capital returns, investment, and debt consistent with those observed in production and balance sheet data. We illustrate how the decline in the real interest rate, often attributed to the euro convergence process, leads to a decline in sectoral total factor productivity as capital inflows are misallocated toward firms that have higher net worth but are not necessarily more productive. We conclude by showing that similar trends in dispersion and productivity losses are observed in Italy and Portugal but not in Germany, France, and Norway.
The authors are Gita Gopinath, Sebnem Kalemli-Ozcan, Loukas Karabarbounis, and Carolina Villegas-Sanchez. You don’t have to be a hard-core Austrian to think that malinvestment is the most under-used word in contemporary macroeconomics.
The greatest stagnation, the economy that is Japan
From the 4th quarter of 2013 to the 2nd quarter of 2015 the Japanese economy grew by a grand total of 0.1%. And the unemployment rate continued to fall, from 3.7% to 3.4%. That’s right, over the past 6 quarters the Japanese economy has been growing at above trend. But that blistering pace can’t go on forever. The unemployment rate is down to 3.4%, and unless I’m mistaken there is a theoretical “zero lower bound” on unemployment that is even more certain than interest rates. The Japanese economy is like a Galapagos tortoise that has just sprinted 20 meters, and needs a long rest.
That is from Scott Sumner, there is more at the link.
Monday assorted links
1. A new study of health insurer consolidation.
2. TSA pre-crime.
3. Using drones to capture whale snot (warning: link sets off a video, so that is a sign the article is interesting, given that I linked to it anyway).
4. “…the average salary of a doctor in China is 72,000 yuan a year (US$11,600)…”
5. Actual unemployment rates for China. And photo-essay on China’s deserted amusement parks.
Can China rebalance growth toward consumption?
No, not really. Rebalance, yes, but the growth part…not quite.
It’s not an aggregate demand problem where C + I + G is the useful way of thinking of the causal determinants of national income. So a lower I and a higher C will not leave future Y unchanged, even if the boost in C picks up the slack in the very short run.
China has been growing a lot because it has been investing a lot, and investing relatively well, at least compared to where it had been. Putting a given amount of yuan toward a well-placed road helps an emerging economy more than does spending that money on a bagel.
Turning more of that investment into consumption will mean a lower growth rate.
China of course can and should rebalance toward more consumption, because their investment has been growing increasingly wasteful. But that is not a path toward maintaining or restoring a seven percent growth rate. It is an admission that a seven percent growth rate will never be possible again.
China (Singapore) fact of the day
…the [Singapore] water transport segment…contracted on the back of a decline in sea cargo handled. On quarter, the sector contracted 10.3 percent, after gaining 6.5 percent in the first quarter.
There is more on the Singaporean economy here, finance and IT had robust growth, 7.1 and 4.5 percent respectively for the year. Retail grew five percent.
I wonder why that water transport figure was down? The manufacturing sector was strongly down too.
The twenty greatest English-language novels
A few of you wrote in and asked me to match this Guardian list of the top one hundred English-language novels of all time. (It is notable how many second-rate English novels made that list, and how few second-rate American ones did…) Well, one hundred is too many but here is twenty, in no particular order:
James Joyce, Ulysses
Jonathan Swift, Gulliver’s Travels
Herman Melville, Moby Dick
Charles Dickens, Bleak House
Wuthering Heights
William Faulkner, Light in August, Absalom, Absalom, As I Lay Dying, The Sound and the Fury
Huck Finn
Joseph Conrad, Nostromo
Virginia Woolf, To the Lighthouse, The Waves, Mrs. Dalloway
Nabokov, Pale Fire
Henry James, The Golden Bowl
Thomas Hardy, Jude the Obscure
J.R.R. Tolkien, Lord of the Rings
Lewis Carroll, Alice in Wonderland
Sterne, Huxley, Lawrence, Beckett, and Wharton are all knocking on the door and probably would have rounded out a top twenty-five. Scott and Trollope too, more Hardy. I consider the omission of Austen to be my flaw, not hers, but I just don’t love them.
You’ll note I made no attempt to be “balanced.” I gladly would have awarded all twenty spots to the same author, had such a choice been justified. There is also no attempt at racial, ethnic, gender, or geographic balance, none whatsoever. I simply picked what I think are the best books.
And if you think there are some obvious omissions, they probably are intentional. There are plenty of fine books, but no I don’t put 1984 in the top twenty, and while America has many very good novels from the latter part of the twentieth century, only a few (V?) would receive my serious consideration for a top thirty list or even top forty list. Not many are better than Ford Madox Ford’s The Good Soldier, or for that matter John Galsworthy.
The very slow European recovery
The German economy is only about five percent bigger today than in 2008. And they are usually considered one of the winners.
In Finland gdp has shrunk in eight out of the last twelve quarters.
Output in France, Italy, Netherlands, and Austria is just barely growing.
And that is with a lot of QE (more than a trillion), a weaker euro, and a favorable oil price shock.
Overall the eurozone economies are one percent smaller than they were in 2008.
A good sentence
Pretty much anyone can be a ‘rock star’ these days — except actual rock stars, who are encouraged to think of themselves as brands.
That is from Carina Chocano, the entire article is good.
Sunday assorted links
1. The Quay twins are leading a marginal revolution. “In a sense we are obsessive, and anything that we do, read, or any music that we listen to, we always look to each other and say, can that be — we use the word cinematized — can it be “cinematized”? And there’s nothing more that we like than to coax new material out of something that almost doesn’t have a potential. We could never do adaptations of famous pieces. We need the marginal. Whenever we’re reading a book, if it’s a research book, we always find that it’s the footnotes that open up new chapters of imagination.”
2. Uber plus randomized Yelp, you could toss in randomized Tinder too. What else?
3. Scott Sumner makes the bull case for China.
4. William MacAskill’s doctoral dissertation (pdf), and MacAskill on “the infectiousness of nihilism.” In addition to his work on effective altruism, MacAskill is in the running to become one of the world’s most interesting moral philosophers.
5. The superb Matt Rognlie on the minimum wage and the likelihood of perfect offset, very good points.
Effective Altruism: where charity and rationality meet
That is the title of my current column at The Upshot. I very much enjoyed my read of William MacCaskill’s Doing Good Better: How Effective Altruism Can Help You Make a Difference. The point of course is to apply science, reason, and data analysis to our philanthropic giving.
I am more positive than negative on this movement and also the book, as you can see from the column. Still, I think my more skeptical remarks are the most interesting part to excerpt:
Neither Professor MacAskill nor the effective-altruism movement has answered all the tough questions. Often the biggest gains come from innovation, yet how can a donor spur such advances? If you had a pile of money and the intent to make the world a better place in 1990, could you have usefully expected or encouraged the spread of cellphones to Africa? Probably not, yet this technology has improved the lives of many millions, and at a profit, so for the most part its introduction didn’t draw money from charities. Economists know frustratingly little about the drivers of innovation.
And as Prof. Angus Deaton of Princeton University has pointed out, many of the problems of poverty boil down to bad politics, and we don’t know how to use philanthropy to fix that. If corruption drains away donated funds, for example, charity could even be counterproductive by propping up bad governments.
Sometimes we simply can’t know in advance how important a donation will turn out to be. For example, the financier John A. Paulson’s recently announced $400 million gift to Harvard may be questioned on the grounds that Harvard already has more money than any university in the world, and surely is not in dire need of more. But do we really know that providing extra support for engineering and applied sciences at Harvard — the purpose of the donation — will not turn into globally worthwhile projects? Innovations from Harvard may end up helping developing economies substantially. And even if most of Mr. Paulson’s donation isn’t spent soon, the money is being invested in ways that could create jobs and bolster productivity.
In addition, donor motivation may place limits on the applicability of the effective-altruism precepts. Given that a lot of donors are driven by emotion, pushing them to be more reasonable might backfire. Excessively cerebral donors might respond with so much self-restraint that they end up giving less to charity. If they are no longer driven by emotion, they may earn and save less in the first place.
On Paulson, here is Ashok Rao’s recent post on compounding returns.
Lunch with Mariana Mazzucato
That is today’s FT “Lunch with” piece, by John Thornhill, and of course she is an economist at Sussex. I hope the article is not too gated for you. Here is one bit:
As professor in the Economics of Innovation at Sussex University, Mazzucato is much in demand on the international lecture circuit for her iconoclastic views about how wealth is generated and the public sector’s vital role in promoting innovation. She is as forthright in her opinions as she is eloquent in expressing them.
She also has four children and I can testify she is what they call “a commanding presence.” In Singapore not long ago I told her she should have her own TV show, and I would not be surprised if this someday came to pass. Here is more:
Even Silicon Valley’s much-fabled tech entrepreneurs are not as smart as they like to think. Although Mazzucato lavishes praise on the entrepreneurial genius of the likes of Steve Jobs and Elon Musk, she says their brilliance tells only part of the story. Many of the key technologies used by Apple were first developed by public-sector agencies. Most of the key technologies that do the clever stuff inside your iPhone — including its geo-positioning system, the Siri voice-recognition service and multi-touch screen — were the offspring of state-funded research. “Government has invested in basic research, it has invested in applied research, it has invested in concrete companies [such as Tesla] all the way downstream, doing what venture capital should be doing if it was really playing the role it says it plays,” she says. “It is an incredibly active, mission-oriented role.”
In my view she overstates what are essentially some worthwhile points. For more you can read her book The Entrepreneurial State. Here is her home page. Here is her Wikipedia page. Here is her TED talk. She is here on Twitter.
From the interview, I enjoyed this line:
I walk in as an economist and I walk out as a life coach…
She ordered the soup and the duck.
Saturday assorted links
1. Liz Lutgendorff is offended by fantasy and science fiction novels.
2. There is no great stagnation, drug delivery edition. And the value of certain and immediate rewards.
3. What do we infer from disclosure?
4. “Superfluids aren’t usually purely super…”
5. More on why fair trade doesn’t work.
6. Greece just got fifty-five billion euros in debt relief.
7. The LKY Musical: Singapore’s history set to song.
8. Oliver Sacks on his cousin Robert Aumann. And other things.