This year for Halloween we went out in the Castro. It was a fun night, but to be honest the costumes were not as interesting or outrageous as I expected them to be.
I had planned to go to the Dia De Los Muertos event in the Mission a couple of days later, and post photos from both days in one set, but I messed up, and went to MoMa the day of instead, so you only get the Halloween photos. Sorry. More...
If you have been following along lately, I’ve been talking a lot about tech and politics. Here, Ben Thompson summarizes last week’s hearings. He describes the controversy as “largely centered within the coastal tech-media bubble,” and I could not agree more. The real question is what average Jane and Joe in the rest of the country think about this, and those are exactly the voices that these politicians (in theory) represent. I’m convinced the hearings were useless in the grand scheme of things, but the arguments presented will be tested in other arenas in the months to come - I can’t wait to see where this ends up…
…Especially because government doesn’t seem to be the right answer here. Regulation of tech companies is especially hard because the zero marginal cost model in which they operate does not match the original point of antitrust. Consumer surplus might be high, but the real problems being tackled here are not simply about prices, supply, and demand. Having the government police feeds is a freedom of speech question, but we also don’t want Zuck & friends to explicitly start censoring what can and can’t be seen. Lots of stuff to think about.
There are interesting questions about centralized decision making, organization, and coordination here. For example, if the same people own all the airlines, via indexing, does competition still emerge? The answers matter, but I think we’re still pretty far from having enough concentration of capital for this to be real concern.
The internet has changed a lot in the last 20 years. Ford does a little recounting of his time online, and the rise of walled gardens versus the open web.
Square is a more interesting company than Twitter. They don’t sell ads, nor nudge customers into buying things. Their product reduces friction in other companies’ transactions, which sets them apart from the rest of the pack of Silicon Valley startups. I am particularly intrested in how quiet Square (and PayPal and Stripe and others) has been about crypto. I wonder not what Chase and Goldman are planning to do with these new technologies, but what Stripe and Square have in store.
I like Evans’ analogy of Facebook as a company that surfs on user behavior. As he says, “we attribute vastly too much power to a handful of product managers in Menlo Park, and vastly too little power to the billions of people who look at their phone screen and wonder which app to open.”
In this column, Smith discusses Richard Florida’s argument that “by creating a good environment for knowledge workers […] cities could attract the human capital that would bring in businesses and ultimately re-invigorate their economies.” As Noah points out, and Florida concedes, this helped many American cities kickstart a new phase of growth, but that came together with increased inequality, and other undesired side effects. I agree with Florida that cities should “invest in things that improve the lives of their poorer residents,” but I am skeptic of Noah’s claim that the federal and state governments should get more involved. There is too much local knowledge required to solve urban ailments, but in the end, these are problems of fragmentation, and short vs. long term incentives, both of which governments are well fit to solve…
…speaking of which. Krause makes good arguments of how to fix up San Francisco. Some make sense, and some don’t. I agree with him that it’s not a problem of resource constraints. It’s an issue of political will. There’s no BART going up to Marin because of NIMBYs, not because there was no money to build it. I remember listening to a similar arugment on the YIMBY pocdast, where they discussed how the arbitrary geographic divisions in the Bay Area’s landscape makes coordination basically impossible.
Investing is hard. Mostly because of the uncertainty, but also because even the parts of it that seem intuitive are underneath quite complex, making us wrong more often than not. This article discusses optimal strategies for repeated bets (aka the Kelly Criterion) in the context of the stock market. Their test seems biased, given the strategy’s return over the bull market of the last ten years, but the article is interesting nonetheless.
In a short conversation, Levine and Cowen discuss recent innovations in the fintech space. From blockchain, blockchain, blockchain to index funds and globalized diversification, the two bring up good examples across the spectrum. What’s interesting, and which neither Cowen nor Levine really discuss is the fact that the surplus of innovation in finance has not really gone to the consumer. Perhaps the only exception mentioned is the expansion of access to credit products, which is not necessarily a net positive.
With everything happening in Cataluña right now, this was a timely podcast. I did not know the back story behind the cathedral, but now that I’ve learned a bit more about it I am even more excited about visiting Spain at some point in the near future.
If there is one thing I love (and also hate) about EconTalk, is that nearly every episode ends up with me adding a book to my list. In this case, its Rasmussen’s book on the Hume and Smith, and their role in the Scottish Englightenment. I keep thinking that I should just go back to the origin, and read the classics first - Hume’s Treatise on Human Nature and The History of England, as well as Smiths’ The Theory of Moral Sentiments and The Wealth of Nations - and then go into the modern analysis of their work, but it is nice to have your hand held as you learn these. I always thought it was odd than in 4 years of economics courses I was never asked to read any Smith. As an aside, I found Smith posthumous editorializing of Hume’s work to be fascinating.
A story of the discovery of insulin, and the strange interaction between disesases, cures, and time.
A book about the history of mathematics made me think of the future of computer science. Continue reading...
Brown brings up Vonnegut’s Player Piano, which features a dichotomous society where “only engineers and managers have gainful employment and meaningful lives.” Connecting the novel’s dystopia to the present isn’t too hard to do. What’s interesting is Brown’s connection to retirement investing. The origins of retirement come from not being able to do your work - i.e., losing your good hand, and with it your ability to work the land. Only in the past few decades did this financial structure evolve to the 401k’s and IRAs as we know them today. What if we’re going back to the origins of the model, except not as insurance for health, but for disruption? Replacement insurance. We invest in FAANG and reap the benefits.
So much of this seems familiar. The “thinking as a form of emasculation” and the attacks on “modern culture and the liberal intelligentsia for betraying traditional values.” Reading Eco’s memories of his childhood in Italy, and comparing them to today’s environment is frightening. In short some features of fascism as described by Eco are:
- Cult of tradition.
- Rejection of modernism.
- Veneration of action for action’s sake.
- Repudiation of criticism - disagreement is treason.
- Fear of difference, structured against the intruders.
- Appeal to a frustrated middle class, suffering from an economic crisis, and frightened by the pressure of lower social groups.
- Lack of a clear social identity. The only privilege is to be born in the same country, with identity defined by enemies within and without.
- Shifting rhetoric - the enemies are at the same time too strong and too weak.
- Life as permanent warfare.
- Aristocratic and militaristic elitism, which implies contempt for the weak. Power is based upon the weakness of the masses.
- Heroism as the norm, which leads to a cult of death.
- Disdain for women, and intolerance and condemnation of nonstandard sexual habits.
- No Individuals rights - The People conceived as a monolithic entity expressing the Common Will. The Leader pretends to be their interpreter.
- Impoverished vocabulary, and an elementary syntax, in order to limit the instruments for complex and critical reasoning. Newspeak.
Anyway go read Eco instead of my crappy summary.
Uber, like most modern companies utilizes randomized and semi-randomized experiments all the time to imporve their product. In most cases, these are externally labeled as promotions, or offers. In a strange case of these “deals,” Uber recently offered its drivers to pay a fee for the chance to get higher pay rates in the future. However, since Uber has nearly full control of the system - and specifically, the dispatch - this smells like a scammy pay to play. How can drivers trust that Uber won’t throttle their rides as they get near the break-even? This is hard to prove, unless you’re Uber. Over on HN, the discussion turned to ways that Uber could be cut up in an antitrust case. One company as the dispatch, the other handles the rest. That could work. We’ll have to wait and see what happens now that Lyft has some new air.
I recently had a conversation with my girlfriend about how IP is a system of the past that is about to change. Here, Stiglitz and friends agree with me, and say that the solution should look a bit like open source software, but don’t really give a good answer to the question at hand: how can we change international IP law to maximize welfare in the long run? I’d love to learn more about this topic.
We’re humans and, inevitably, we tend make examples out of innocent people when we try to solve hairy problems. I am sure there are ten psychology papers about this somewhere, most unreplicable, and most covered in some pop-science magazine with an accompanying TED talk. I am sorry for Cuddy. What she’s going through must suck. However, I am convinced that the overall movement will benefit the field, and science as a whole.
I realize that in a way this is an ad for USV, but it is also a good explanation of how the VC business works, and its cyclical nature. I wish Fred had expanded more on how the new paradigm of cryptographic tokens and decentralized applications will change their model. I guess that’s the secret sauce, and we’ll have to wait and see.
I can’t remember where I read (heard?) this argument, but I think the real issue is not so much that there is no upcoming technical revolution, but that the behemots have learned to disrupt themselves. The FAANG companies are pouring resources into areas that undermine their cash cows. Google is investing in one-shot answer voice assistants that can’t show ads. Apple is developing hardware like the Watch and the AirPods, whose goal is to distance us from our iPhones. Whatever can’t be done in-house in a reasonable timeline is solved by acquiring or copying. This hampers bottom up Clay Christensen style disruption for sure, but I am by no means as bearish as Jon Evans is in his piece. Technology never ceases to amaze us, and the paradigms keep changing. More on this topic, by Farhad Manjoo here.
The demographics of the US Military are interesting, but I won’t pretend to know anything about them. The fact that there is such a strong divide on who signs up for it is a problem. Eventually, seemingly cohesive identities break. The distance is not only geographic.
When I first read George, it just clicked. It seems beyond logical that windfalls should be taxed at a high rate, especially when said taxation is paired with a fixed market size. If you want to go back to the source, read this excerpt, but Noah’s piece is a good window into how the land lays today. Pun intended.
A lucid explanation of the technological breakthroughs of Bitcoin and other cryptographic assets. A bit long, but worthwhile. Ludwin’s main point is that this technology created a new kind of asset - one that enables decentralized applications to be financed and operated. Whether there is a real need for these DApps is still TBD, but Ludwin is (cautiosly) bullish in the long term. The Dimon thing is just clickbait, and Ludwin hedges his bets by acknowledging the frothiness in the crypto market. As an aside, Nick Tomaino’s The Slow Death of the Firm from earlier this week is even more bullish on decentralized applications, and also a good read.
More on the social cost of Twitter, and the kind of dynamics enabled by having social networks without strong principled moderation. It is always intriguing to read opinions that have morphed over time, and to go back to the origin story that most observers can’t tell first hand.
Totally related to Monteiro’s post above. McArdle and Roberts discuss how internet communities have inherited all the bad things about small-town dynamics, but shed most of the positives. When all of history is a few clicks away, errors become much more costly. This is one of the better EconTalk episodes in recent memory.
Hearing Benedict Evans and Tim O’Reilly discuss O’Reilly’s new book was good, but a lot of it was a rehash from the previously shared EconTalk episode. About halfway through there’s an interesting discussion on optimization. We’ve created institutions that optimize for certain metrics at all cost. At the micro level, we have companies building machine learning models to drive engagement, but at the macro level we expect companies to maximize shareholder value. This is a human decision, codified into law to maximize welfare - at least in theory. Perhaps trusting the market mechanisms and the individual search for arbitrage opportunities is no longer enough. There might be other trade-offs to consider in how companies, and the market at large, are run. In a way, the market acquires a life of its own, not too differentt from a paperclip maximizer.
I have been enjoying More Perfect recently. It has good insights into American History, and why things are the way they are in this country. They go deep. For example, there is a whole section of this episode about how the Black Panthers played a key role in the revival of the Second Amendment, and the rights to own guns. I had no idea, and fact that even this has a racial component is says a lot about the United States. On that note, if you have any general American History book recommendations, let me know, I’d like to learn more.
I read a bunch of stuff this weekend. Most of the things I read were about the interactions between tech and policy. There is a strange techno-skeptic somber mood that makes me feel weird about the future, and I am trying to read and write a lot about it to clear my thoughts.
I’m part of a generation that never knew the world before the internet. Did it always feel like we’re in a dystopia?
As I’ve mentioned again and again, the value of ICOs, tokens, and cryptocurrencies is in the new economic structures they enable. In her post, Ou goes through some late 90s/early 00s history of failed protocols and ideas which are now actually possible thanks to blockchains. However, the point of her post is that the potential benefit of the introduction of blockchain comes hand in hand with an increased friction in the form of transaction costs. Whether the benefit of deploying these ideas is greater than the friction introduced remains to be seen, and that is what will make or break each of these crypto projects.
I have long held the view that governments operate with relative ignorance from what their constituents want - not because of nefarious reasons, but because humans are humans and communicating our needs and desires is individually really hard, and nearly impossible at the collective level. The Silicon Valley mindset has its blind spots, but the fixation on experimentation and short feedback-loop iteration is something that could improve policy decisions. It is good to see the top brass realize some changes need to happen outside of the market.
Today, unlike in the past 50 years, there isn’t one big tech company at the helm directing the path of technology a-la IBM/Microsoft. Instead, incessant competition between the big four means these companies are always on their toes, and that they are always thinking of how to reinvent themselves. This is a point that Evans has been making a lot lately, and which makes me optimistic about the future of technology. However, these companies are huge, and growing bigger day by day in a way we have not experienced before. The implications of that are not clear. Pardon me the long quote, but it’s too good to pass up:
There probably won’t be a technology that has 10x greater scale than smartphones, as mobile was 10x bigger than PCs and PCs were bigger than mainframes, simply because 5bn people will have smartphones and that’s all the (adult) people. There will be something, though, and though ’something will change, but we don’t know what’ is an unfalsifiable point, so is ‘nothing will change’, and I know which side of that argument I find more likely.
I started reading Scott’s book, Seeing Like a State, and found it super dense, but also super interesting. I need to finish it, and then also read his new book, which is covered in the article. The origins of the state, and the coercive systems that come with it are fascinating. At some point people agree that the overall benefit from these institutions is higher than any alternative, but the state machinery quickly becomes a self fulfilling prophecy - path dependence is real. Upending our understanding of how states came about could really change what we consider as possible paths forward, which is what’s most exciting about understanding them in the first place.
A highly dystopian article. The presentation of this gig economy company as a consumer education platform is frightening. The fact that a team of engineers is building this, consciously, makes me upset. This is not an algorithm pulling the wrong thing into a feed, or acting upon the biases in a training dataset - these are people building the infrastructure for an ominous future. Why watch Black Mirror when non-fiction reads the same?
The article was really good. However, it’s something that the average person outside SV does not find problematic. People think of FB/Google/Amazon/etc as benign - we use them because they’re better than alternatives. The problem is, the more we use them, the more they become irreplaceable. Network effects/economies of scale here are a strange loop. Google is good because it has all our data, it’s bad because it has all our data. There’s a lot to be worked out here. How much of it is narrative, versus actual skepticism.
With in depth stories like these, it is clear that the NYT is working hard on showing more stories of Trump’s middle-America. There are many interesting topics here: identity and the meaning of work, the decreasing role of labor unions in US businesses, the politics and incentives of health care, the education system, race, gender, otherness, etc. What I was least expecting were the direct comparison between the Mexican workers and the Midwesterners - one’s perception of the other as rich with their multiple-times higher salary, and the other’s misconception of what things are like outside their geographic bubble. This is good reporting.
With this blog post, Krugman seems to have forgotten some of his pre-election punditry. Nevertheless, he makes a number of great arguments, backed by data and peer reviewed studies. Since most of you won’t click through, here’s the TLDR (all these are lies being fed to the American public):
- America is the most highly-taxed country in the world
- The estate tax is destroying farmers and truckers
- Taxation of pass-through entities is a burden on small business
- Cutting profits taxes really benefits workers
- Repatriating overseas profits will create jobs
- This is not a tax cut for the rich
- It’s a big tax cut for the middle class
- It won’t increase the deficit
- Cutting taxes will jump-start rapid growth
- Tax cuts will pay for themselves
I knew that Amazon employed a ton of seasonal workers, but I had no idea of the extent of the program, nor the fact that most of the laborers were retirees. Bruder does a great job in this exposé, giving us a window into the dystopian labor conditions that her protagonists endure. Most interesting is the fact that for a non-insignificant group of the population, the pangs of the financial crisis are still very much alive. I also read a review of her book in the NYT, where the reviewer pointed out a fact I kept thinking about as I read the column - this is all about old white people. A big error of omission in an otherwise great read.
Technology is also interesting sometimes, not just dismal and apocalyptic. The printing press is a good example, and Smith starts his story there, leading all the way to today’s tooling. A somewhat misleading title, as it actually covers way more than just mathematic typography.
To close on a good note, here is a cool project - training crows to collect cigarette butts, with computer vision and creativity!