assorted links

From the comments, on the Coase theorem

#1 on prefiguring of the so-called Coase theorem, consider also p. 396-7 of W.H. Hutt, “Co-ordination and the Size of the Firm,” South African Journal of Economics 2(4), December 1934:

“Now, under one ownership, their relations would, given competitive institutions, be exactly the same, provided that both methods were equally efficient from the social standpoint. There is no reason why the spreading of the lines of responsibility back to several sources should lead to less effective planning than subordinacy to an authority emanating from one source, given the equal availability of relevant knowledge to the managers who devise the plans…The most important significant difference between the two cases is that, in practice, in the one case there may not be the availability of relevant knowledge that there is in the other.”

That is from Daniel B. Klein.  And:

For a still earlier ‘discovery’ with transaction costs and all see my former colleague Yehoshua Liebermann’s “The Coase Theorem in Jewish Law,” Journal of Legal Studies, Vol. 10, No. 2 (Jun., 1981), pp. 293-303

That is from Moshe Syrquin, link for both here.

From the comments, on work hours and spousal distribution

#3) If working long hours is bad, “overworked” in the author’s language, then why would the author say that women are often “stuck” in limited roles or take a “back seat” to their husbands. Why not say that husbands most often bear the burden of overworking so that their wives can have a better work-life balance, even in cases where the wife has sufficient education to bear more overwork burdens? Conversely, if wives really are taking a “back seat” to their husbands, then it must be the case that workers *welcome the opportunity* to earn premiums by working longer hours. So, which is it, are husbands sacrificing home life for the benefit of their wives or do couples actually view higher “overwork” premiums as a welcome benefit?

Here is a logically coherent, self-consistent way of describing things: The percentage of women with advanced education has been steadily increasing. That liberalization, along with economic liberalization, has contributed to economic growth, especially for highly educated couples. Such couples are well enough off that, in many cases, both spouses don’t even have to work full time to generate sufficient income. Many affluent wives prioritize work-life balance over pure financial returns. With such a large fraction of highly educated workers prioritizing work-life balance, firms find it necessary to increase “overwork” premiums to attract workers to fill the most time-demanding roles. The tax wedge between taxed office work and untaxed home production (own childcare and enjoyment of spending time with one’s family) may also contribute to workers’ prioritization of work-life balance over pure financial compensation.

That is from BC.

Peter Thiel on medicine and longevity

Or is it that there’s something wrong with culture, with the funding?  Almost no grants go to younger scientists.  When it’s scientists under age 40 that make […] of the most big discoveries, 2% of NIH grants go to scientists under age 40.  That seems a little bit off.  You have a peer-review process where anything heterodox can’t get funded.  You have sort of a publish or perish dynamic where you have to do small, incremental things to publish lots of articles that don’t add up to anything ever…

And again, my sort of libertarian cut on what happened would be the history of was that we had a healthy, scientific world that was non-governmental.  It was decentralized.  It was idiosyncratic.  Different people were doing different kinds of things.  And in the 1930s, 1940s, it got centralized accelerated.  The Manhattan Project…there was actually a way you could accelerate science temporarily by adding tons of money and centralizing…

So the centralization worked.  But to use an ecological metaphor, it worked by creating a monoculture.  And we’re now two generations in to where that monoculture has been just catastrophic.

That is from this taped dialogue between Peter and Bill Hurlbut, previously linked on MR.

On hitchhiking, circa 1969, from the comments

I hitchhiked across the U.S. twice in 1969. Here’s what my 18-year-old white, male, hippie self learned:
1. Expect to get picked up and propositioned by homosexuals.
2. Everybody is really interested in drugs and wants to get their hands on some.
3. Drugs quickly went from being the pastime of a small, hip elite, to becoming the obsession of trashy, low-class types.
4. Cowboys or anyone who identified with them wants to kill hippies.
5. Mexicans want to kill hippies.
6. It’s possible to sleep in an empty lot in Seattle or Portland, but in L.A., you will be harassed.
6. Panhandling is the world’s most humiliating activity.
7. Day labor is shockingly arduous.
8. America’s roadsides are a continuous scroll of accidental beauty, dramatic vignettes, and surreal occurrences.
9. Even a single night in a small town jail is awful enough to dissuade any sane person from ever committing or coming close to committing an imprisonable offense.
10. Jesus communes and Hare Krishna people will take you in and feed you when no one else will. But they have their own problems.
11. Iowa is surprisingly beautiful.
12. We thought because we all had long hair, we were all on the same wavelength – we weren’t.
12. There are lots of smart, interesting normal people out there, and from them you learn that the best thing in life is to follow the straight and narrow, observe social conventions, work a steady job, and avoid extremes.

That is from Faze.

Was the Colombian peace deal so wonderful?

It seems to be increasingly unpopular with the Colombian electorate, and now there is this report:

Hundreds of Colombian farmers, activists, and community organisers have been killed over the past 18 months, despite the landmark peace deal that supposedly ended 52 years of war. For them, and for local leaders in the former conflict zones, the war – which left an estimated 220,000 dead and seven million displaced over five decades – didn’t end: it only became worse.

“Whenever we hear talk of peace, we worry,” says Anadelia Trochez, 43, president of the community council in El Ceral, a village in the Cauca Valley, the most productive coca-growing area in the country. “Out here, that usually means more trouble.”

Of course that is not the final word, but the evidence increasingly suggests it is a perspective to be taken seriously.  I recall how many outsiders swooned when the initial Colombian peace deal was first announced, and how tragic they considered it when the Colombian electorate rejected the first version of the deal.  Critics of the deal were considered warmongers.  Those are classic signs of mood affiliation.

The pointer is from Tom Murphy.

From the comments, on reverence for asceticism

…[the] US for instance…worships sex, and…celibates are viewed as “losers”. A Hollywood film that describes this social mindset is “40 year old virgin” that came out a decade or so ago.

India makes an interesting contrast. Though the life of the “married householder” is an ideal in India, celibates are viewed with respect and admired for their self-restraint. This is actually one important contributor to the charm and charisma of Narendra Modi – a celibate man, a teetotaller among other things. He is viewed as someone who has “conquered his senses” and is incorruptible.

This streak of anti-sensuality, very much a part of Indian culture, is not to be found in US.

More westernized Indians on the cultural Left, back in India, mock at the public’s fascination with Modi’s celibacy and his puritanism. There are jokes in this group that Modi is probably gay or asexual. No wonder he can stay single.

Again this highlights the large chasm between the attitudes of the modern western mind which does not choose to view sensual restraint as a virtue, versus more traditional societies where self denial and austerity command a certain awe.

That is from Shrikanthk.

Another unpopular idea about blockchains, from the comments

1 – My favorite unpopular blockchain ideas: 99% of corporate experiments regarding blockchains are better handled with Apache Kafka and multiple archivers. Anything that attempts to be a fast, global ledger has to accept the reality that global ordering is a limitation, not a feature, and instead use logical clocks. The intersection between blockchain enthusiast and distributed system researchers is close to zero. When we look back 100 years, Bitcoin itself will be seen as far more relevant in retrospect than blockchain technologies.

That is from MR reader Bob.

Clyde Schechter defends IRBs (from the comments)

This is not my view, but I am happy to present an alternative perspective for your consideration:

Yes, IRB’s sometimes do ridiculous things. But I served a total of 21 years on the IRB’s of two different institutions, and I’m sure I can match you anecdote for anecdote with obviously dangerous study protocols submitted by investigators, or protocols where the associated consent documents were blatantly misleading or so confusing that even professionals couldn’t understand them. It’s a small minority of submissions, to be sure, but it’s a recurring problem.

In my experience, most protocol delays in IRB review boiled down to issues of clarifying ambiguous language or providing additional background information so that the appropriateness of the proposal can be better assessed. I suspect that much of that could be avoided with better training of investigators on how to write their submissions. At one of the institutions where I served, my Department encouraged junior investigators to “pre-clear” their IRB submissions with me or another Department member who also served on the IRB. We were often able to spot the things that would likely catch the IRB’s attention and help those investigators revise their protocols before submitting them so that they would sail through approval without delays on the first try.

In my view, no person should ever be the judge of his/her own cause. There is nothing in the earlier rules, nor in the modified ones, that prevents an IRB from expediting the review of social science projects that plainly involves little or no risk. Such protocols can be turned around by a staff member in a day or two. But it should never be left to the investigators to make those assessments on their own.

Here is the link of origin.

Best movies of 2016

45 Years, British drama about a creaky marriage.

The Boy & the World.  A Brazilian animated movie, it actually fits the cliche “unlike any movie you’ve seen before.”  Preview here, other links here, good for niños but not only.  Excellent soundtrack by Nana Vasconcelos.

The Second Mother.  A Brazilian comedy of manners about social and economic inequality, as reflected in the relations between a maid, her visiting daughter, and the maid’s employer family.  Now, to my and maybe your ears that sounds like poison, because “X is about inequality” correlates strongly with “X is not very good,” I am sorry to say.  This movie is the exception, subtle throughout, and you can watch and enjoy it from any political point of view.  It helps to know a bit about Brazil, and it takes about twenty minutes for the core plot to get off the ground.  Links here.

Cemetery of Splendor, Thai movie by Apichatpong Weerasethakul, here is a good review.

City of Gold, a documentary with Jonathan Gold doing the ethnic food thing in Los Angeles.

Hunt for the Wilderpeople is an original movie, mostly about race, full of cinematic allusions (LOTR, First Blood, Smash Palace, classic Westerns, Butch Cassidy, Thelma and Louise, so many more) and Kiwi finery as well.  None of the reviews I read seem to get it and I don’t want to send you to any of them.

The Innocents, how did those Polish nuns get pregnant?

Maggie’s Plan, a fun comedy, not at the top of this list but intelligent comedies are a dwindling species.

Hell or High Water

Ixcanul, a Mayan movie from Guatemala, might this story of an unwanted pregnancy be this year’s best movie?  Here is one useful review.

Sausage Party, beyond politically incorrect, I kept on thinking I would get sick of the stupid animation and yet I never did.  I remain surprised they let this one play in mainstream theaters.

Sully.  He should have turned the plane around immediately under any plausible calculus, and he didn’t, so you have to give this movie the Straussian reading.

Weiner is a splendid movie with many subtle points, including in the philosophical direction.  In another life, Huma Abedin could have been a movie star.  She has exactly the right mix of distance and involvement, and she dominates every scene she is in, even when just sitting quietly in the background.  Um…I guess she is a movie star.  Starlet.  Whatever.

Difret, an Ethiopian legal drama.

Andrei Tarkovsky, Ivan’s Childhood (reissue).  This is one of Tarkovsky’s worst movies, and yet one of the best movies in virtually any year.

American Honey

Sky Ladder

The Handmaiden, by Park Chan-wook.  Imperfectly eroticized violence, but beautiful nonetheless.

Arrival

Elle, by Paul Verhoeven.

Nocturnal Animals, by Tom Ford.

The bottom line

My top picks are Ixcanul, American Honey, Hunt for the Wilderpeople, Cemetery of Splendor, and Sky Ladder, with Arrival being the best mainstream Hollywood movie.

From the comments, how to hit it big?

I am not endorsing these claims, but I do enjoy a good rant.  It is an object lesson in showing how (some) people think about jobs, status, rivalry, and money.

First venture capital is generally consider where washed-out Wall Streeters go, when they can’t cut it in real finance. Very few b-school students start out trying to get into VC. And no, generally Silicon Valley people are not nearly as smart as HFT/algo quants. The type of kids who go to Google or Facebook are generally the Ivy CS students from the upper half of their class who are good at white-boarding problems (e.g. reverse a linked list). The truly brilliant kids, Putnam winners, math olympiads, core kernel contributors, etc. disproportionately go the quant route. (In which at least half will wind up in Chicago).

SV is generally a worse deal than HFT or quant trading. Starting comp is at least 50% higher than the big five tech firms, and goes up at a much faster rate. And definitely way higher than startups, which nearly always under-pay. It’s true in tech you can become a multibillionaire, but that’s extremely unlikely even for the most talented. In general SV is a bad deal for everyone except the small set of people lucky or connected enough to be at the top. Outside founder level, virtually no one gets rich from startups anymore. The equity and options comp is pathetic at best, if not outright fraudulent. (“You’ll be getting 1% of outstanding shares… from this round…”). Even founders have to live on 70k salaries in the Bay Area, then are frequently screwed over or cliff’d by their VCs. For every Google, heck for every Apigee, there’s a thousand no-name flame-outs, where no one but the VCs walk away with a dime.

Compare to quant trading. Compensation is cold hard cash, usually paid out annually, if not quarterly. Not lottery ticket equity with four year cliffs, unlimited dilution and byzantine share classes. Most comp is directly tied to individual trading performance, with clear results from trading everyday. No politics, extremely meritocratic, no being at the random whims of whether your app takes off fast enough to overcome your burn rate. Firms actually compete for talent and pay accordingly, instead of colluding to keep wages suppressed. Unless your ambition is to top the Forbes list, HFT’s a much better deal for someone extremely intelligent like a Math Olympiad. The probability of making “f-you money” before 40 is at least an order of magnitude higher as a prop quant than in the Valley.

That is from Doug.

From the comments, on the Greek primary surplus

Tom Warner writes:

…the budget balance fell off a cliff in December. State budget revenues were only 2.4% below adjustment program target in Jan-Nov, but were 14% below target in December and 20% below target in January. That’s a huge shortfall – if a 20% revenue shortfall were to persist for the whole of 2015, that would be more than €11b euros of missing revenues and more than 6% of GDP.

So the issue now isn’t whether Greece can hit some pie-in-the-sky target, it’s whether it can get back to where it was in Jan-Nov of last year. Syriza’s going to have to get the state finances in order very quickly or they’re going to go boom.

Here is Tom Warner’s blog.

Why the Republicans are finding it hard to reform Obamacare

Ezra Klein has an excellent essay on this topic, reviewing the (very good) Philip Klein book.  Here is one bit:

Klein’s book is a service: it’s far and away the clearest, most detailed look at conservative health-policy thinking in the post-Obamacare world. But it can leave a reader with the impression that the important cleavages in conservative health-policy thinking are between the Replacers, the Reformists, and the Restarters.

It’s not. It’s between those in the party who want to prioritize health reform and those who don’t. And it’s worth being clear: those who don’t have a case. Health reform is an incredibly tough, painful project. Everything you do has tradeoffs, some of them awful.

And to sum up, the Democrats really cared about health care reform (for better or worse), but:

…that’s really the problem for conservative health reformers. For all the plans floating around, there’s little evidence Republicans care enough about health reform to pay its cost.

I am less positive on Obamacare than is Ezra, but still the piece is interesting throughout and a good challenge to would-be reformers.