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It may also be that people don't seem to get a lot of value for their training dollars

Russ Roberts/Econtalk recently did an interview with adam davidson. He looked at a manufacturing company (car parts). This company tried training their workers previously, and about half of the workers did not make it through the training (for various reasons).

Now these are unskilled workers, so maybe you think it wouldn't apply to IT workers. But IT is a very broad topic. If you're great at kernel programming, that doesn't tell me you would be great at game programming, for example. Or even that you would be able to learn it well enough to do a good job.

If you pay to train someone you may be paying them to leave

Davidson made this point as well. If the worker completes the training, they have more opportunities. They are more competitive, and more companies will be willing to hire them. At the very least, they expect to be paid more for their increased skills.

So a company pays to train the worker. Then they have to pay that worker more and/or the worker may leave the company for another company.

And that company the employee left for... they get to pay the same increased wage for that worker (as the company that did the training), and yet they did not pay a dime for that training.

So of course companies no longer pay for training.

This is the perfect crime for an early season of the Sopranos, which featured several episodes where "degenerate" businessmen engaged in acts of crime they couldn't refuse. One involved an executive at an HMO, another involved a sporting gear franchise. Difference is that the screenwriters probably weren't bold enough to make this one up.

And, for those wanting his head, it wasn't a horrible crime. It's stealing, since it's not his money, but the victim is hard to identify ...

David Rose on the Moral Foundations of Economic Behavior in which he discusses his new book by that title.

From the very loose transcript (my emph.):

[W]hat is required to live that way, doesn't require twenty hours of schooling. It requires many years of continuous reinforcement in order to build the character to produce the moral conviction behind a belief, but the beliefs themselves are pretty simple. Don't do stuff, don't do negative moral actions. Just don't do them; and just because nobody gets hurt, that doesn't mean you can do it, either. Because it's not about the person who is getting hurt or not hurt; it's about you. If you steal, even though nobody gets hurt, you are still a thief. So don't do it. Period. Don't even consider it. Don't even run it up the flagpole. That's not that complicated. And then secondly, if somebody says to you that you should do something that you know is wrong but it's okay to do it because there's this other good thing over here that you can make happen if you do otherwise, you need to realize that that is the language of a charlatan, that that is inappropriate, that you are being sucked in.

By the time you start rationalizing about the diffuse nature of the victim, moral laxity is already half-way up the flag pole.

David Rose knows your type:

The amount of cheating has never been zero, of course, but it has gone up dramatically in the last 25 years. Moreover, in the past when you asked students why they cheated and they explained why they cheated, they almost never excused the cheating; they never downplayed the moral import of it. They would say it was wrong but they had to do it. Today, though, increasingly--I don't remember the proportion but it's a shockingly high proportion--most of them report cheating at least once; and a shockingly high proportion of those who report cheating at least once say: What's the big deal? In other words, they make an argument that is very consistent with the absence of principled moral restraint. Because their argument is: I cheated; so what? Nobody got hurt. I didn't take anything from anybody. Nobody's worse off. Teacher's not worse off; I'm certainly not worse off; nobody in the class is worse off; what difference did it make? And the answer of course is, at that margin it makes no difference at all. But my point is that it's indicative of a shift in moral beliefs themselves, the way we organize our thoughts, and it's very frightening.

This dialog is a bit of a mess, but makes some good points: Taleb on Antifragility

These talks come with very loose transcripts. Here's the key passage at length as I shamelessly promote Taleb's upcoming book Antifragility , through I'm already certain I only agree with two-thirds of what he is putting forth (emphasis mine):

It's because of convexity effects, because small probability is very convex to error. [] Take the Gaussian distribution. And actually in a separate paper I finally proved something that has taken me three years. Take a very thin-tailed distribution such as the Gaussian. Thin-tailed, the normal distribution. You have two inputs, one of which is standard deviation. Standard deviation is very much your error. Now, if you take a remote event, say, 6, 7, 8 sigmas, you increase the standard deviation away from the mean; you increase the sigma by 10%, the probability of that is multiplied by several thousand, several million, several billion, several trillions. So, what you have, you have nonlinearity of remote events to sigma, to the standard deviation of the distribution. And that, in fact if you have uncertainty, the smallest uncertainty you have in the estimation of the standard deviation, the higher the small probability becomes and at the same time, the bigger the mistake you are going to have about the small probability. So, in other words, most of the uncertainty in parameterizing the model, most of the tails. So, you take an event like Fukushima, you see, where they said it should happen every million years; you perturbate probabilities a little bit and one in a million becomes one in thirty. Or the financial crisis. Or anything.

Some of those sigmas are model guards, not actual certainty.

I was not a fan of Cowen's arguments in two episodes of Econtalk, but there was a lot about his TED talk Be suspicious of stories that I really liked.

The first was that overuse of the good vs evil story mode lowers your IQ by ten points.

The second was that over-reliance on the story "we need to get tough with ..." is nearly as bad.

Here's Cowen being an idiot:
Cowen on the Great Stagnation
And here's the rebuttal, fresh off the press:
Ion Proton sequencer decodes DNA fast and on the cheap

The space program is big and impressive and you can pick up chicks by sneaking them into the JPL and letting them steer the Mars rovers. However, the entirety of the space program, IMHO, is bupkis in significance compared with sequencing the human genome and the era of proteomics now unfolding. Stagnation my ass.

In a terrorist society, only psychopaths commit crimes, of which there are plenty, as the society conspires to drive them to it.

What drives me nuts about this story is the tacit concession to escalationism. If you shoot at someone and later they stumble over your corpse, you can't say you didn't have it coming.

Urination = Disrespect
Bullets = Terminal Contempt

The urine perps should be disciplined, no question, but it's hardly legitimate fodder to order another cargo ship of Chinese machetes.

Nah. It's only better because they get lots more practice.

About the only time your average geek is not processing language at one level or another is when fingering the skin flute of visual recall, which opens the Temple Grandin floodgates to every shapely derriere and saucy come-hither freshly impressed upon the orbs of desire (or permanently engraved in the limbic arousal hall-of-fame since the eruption of first pubertal mole hair). Perhaps there are a few virtuosos of visual recall out there whose language system has languished and atrophied. For most of us, however, I suspect our downtime doesn't much impact our verbal SLA. Any day I sit in front the computer, I probably process a quarter million words, but then I put more comments in my code than most people, even if I have to read the comments 100 times each in passing before my code actually works.

There's two halves to male performance: aptitude and attitude. Since men don't have much of a chip in the reproductive game until we accomplish something, we tend to stick with the dull stuff through thick and thin.

Sure, attitude is more amenable to social modification, but I don't think this comes for free. I think society would have to consistently incent women to behave more like men, not just jigger some baseline attitudes about what men and women are good for. Now it's starting to look like an active intervention rather than a sober rebalancing, and the fairness police have a lot more explaining to do. I'm a fan of fairness in the abstract, not so much of outcome based fairness, which smacks of utopian socialism, with possibly an extremely bitter aftertaste after the sugar wears off.

I quite liked this recent episode:

Baumeister on Gender Differences and Culture

I'm too lazy to look it up but the figure I remember seeing is that 25% of the world's hard drive manufacturing capacity has been impacted by the floods so the markup shouldn't be anything like 150%.

You do know that supply and demand is diagrammed with curves don't you? And since we live in a complex world where anything you make has a thousand inputs, the concept of leverage applies here: the other million dollars you spend on your server farm isn't worth much minus all the hard drives. Some people are willing to pay a big premium not to be left out in the cold when so much depends upon a red slider. And retail on the whole is in dire thrall to willingness-to-pay, which by most accounts of capitalism is how it should be.

Fungibility comes into play, but billion dollar facilities don't ramp up and down in the span of a retail hissy fit.

It would have taken you twice as long to figure this out as to spew your complaint, so I understand the latency of comprehension.

I like this first of these (it's low key but interesting about when we shouldn't put a price on things), can't vouch for the second one:

Satz on Markets
Munger on Price Gouging

A few hours of your time, and the world will become oh so much less mysterious.

I'm too lazy to look it up but the figure I remember seeing is that 25% of the world's hard drive manufacturing capacity has been impacted by the floods so the markup shouldn't be anything like 150%.

You do know that supply and demand is diagrammed with curves don't you? And since we live in a complex world where anything you make has a thousand inputs, the concept of leverage applies here: the other million dollars you spend on your server farm isn't worth much minus all the hard drives. Some people are willing to pay a big premium not to be left out in the cold when so much depends upon a red slider. And retail on the whole is in dire thrall to willingness-to-pay, which by most accounts of capitalism is how it should be.

Fungibility comes into play, but billion dollar facilities don't ramp up and down in the span of a retail hissy fit.

It would have taken you twice as long to figure this out as to spew your complaint, so I understand the latency of comprehension.

I like this first of these (it's low key but interesting about when we shouldn't put a price on things), can't vouch for the second one:

Satz on Markets
Munger on Price Gouging

A few hours of your time, and the world will become oh so much less mysterious.

I guess now we wait and see whom Apple will use this against?

What is "this" exactly? The fact that they now hold the patent, and might someday do something with it? Actual power obtained from this patent after surviving a legal challenge by a motivated and cash rich adversary?

If Apple didn't hold this patent someone else would use it against them.

This kind of circular reasoning is what tips the game theoretic balance against having the patent system in the first place.

I was pleased with the discussion about this kind of dynamic in Satz on Markets.

The old view that transactions take place between voluntary participants in the absence of negative externality is pretty much dead and buried given the complexity and interconnectedness of the modern economy.

Since I jumped into this thread with both feet, I might as well continue my self-dialog under the burning bush.

I suppose I've listened attentively to at least 50 Econtalk episodes, including Cowen on the Great Stagnation. It didn't make a particularly strong impression. Russ gives a good interview and he invites smart subjects. Often he goosesteps over the pearls of wisdom he elicits on his Route 66 to Hayekville. That's his loss at the end of the day. I get a lot out of it applying a broader filter.

I think the majority of the explanation lies in the transition to doing more with less. Our productivity figures are pretty insane when it comes to this kind of thing. Counterproductive cycles are double counted, while real progress self negates. If you go back and dampen those old productivity figures with the careless waste streams and hidden liabilities, we're not doing so badly in the present after all.

It's a bit like hitting the 4GHz barrier in CPU design. Innovation hardly ceased, but it's bounty has become a lot less direct. In the kinds of systems that will soon replace the laggard tail of the human bell curve, those multiple cores will find their use.

Asking a high price for batteries is in no way an exploitation and is actually very useful from an efficiency standpoint: http://www.econtalk.org/archives/2007/01/munger_on_price_1.html

Here's on the subject of ambulances: http://www.econtalk.org/archives/2011/06/munger_on_excha.html

Asking a high price for batteries is in no way an exploitation and is actually very useful from an efficiency standpoint: http://www.econtalk.org/archives/2007/01/munger_on_price_1.html

Here's on the subject of ambulances: http://www.econtalk.org/archives/2011/06/munger_on_excha.html

Now they graduate with a 3.something gpa despite having no critical thinking skills.

Coming from you, that's a small box indeed. Seriously, in an economy that is increasingly knowledge based (you have noticed?) what are you proposing: bottom entile of the workforce trained for manual labour, top entile of the workforce trained to rappel the jello stack, and the middle 1-2*entile (as en goes to zero) trained to do nothing at all?

The best credential is the one where you find yourself at the 25'th percentile of the super elite. Make the hurdle with enough clearance to bask in the glow of those people even brighter than yourself (hard to believe), yet not quite far enough at the back of the pack to be voted off the island at the first scapegoating. It kind of bugs you that you're now at the 90% percentile of your credential, whose value is diluted by all those wanna-be-employeds.

If my response seems harsh, demonstrate those critical thinking skills instead of talking about them. That's what they always say in screen-writing school. In any case, you're a lot brighter than any of the posters making jokes about the bail-out that will or won't happen without identifying who the creditors are.

Vincent Reinhart on Bear Stearns, Lehman Brothers, and the Financial Crisis suggests that bail-outs mostly have to do with protecting the right kinds of creditors.

... when I looked at Lehman's bankruptcy filing, its largest creditors in that filing were overwhelmingly Japanese and Asian banks.

I don't recall if it was this podcast or a different one, but Bear Sterns is reported to have had more internal, American creditors.

No chance the creditors are bailed out if they mostly live in China, but I'm not counting on our chances of pulling the same stunt twice.

In market theory, it's the creditors who are responsible to exercise adult judgement, unless the near-certain prospect of a juicy bail-out frees them from bearing this obligation of prudence.

This goes back a lot further than social networks. We all maintain multiple identities across different social circles, starting with the language we use while watching the hockey game with Dad when Mom is out of the house.

Blakley on Fashion and Intellectual Property

Fashion has always functioned as an identity hack. I'm as much into fashion as any fashionista, but not sartorial fashion; I mince, but not in drag; I'm queen of the lateral link; Uruk-hai ninja of the face-palm rebuttal. But not on my cravat or my crevice sack, by which I declare myself Puritan of Pattern Recognition. Nor have I scribbled on my leather pyjamas: I can't figure out which anthropic landscape to pick from; it seems premature. Blakley got my goat a bit by presuming that the game is only played on sartorial terms. Forgive me if that paragraph is not my regular office gab.

Hey, I've got an idea. Let's do it all online. What I say in the locker room, what I say to the girl I spoke about in the locker room, what I tell my parents when I come home late after speaking to said girl, let's make the whole thing part of a unified dossier. What could possibly go wrong?

I might work for a company that couldn't care less about my verbal excursions. But they might want to present me to an investor as a level-headed character who is the brains behind the operation. Now, the investors already know that it's a coin flip whether the brains behind the operation is a total flake in his private life. (So true.) Mostly, they don't really care. But if you rub their nose in it, they have to care. CF CYA.

A flake with the good grace to hide the fact will suffice if the job gets done. This becomes a tenuous proposition on Fishbowl+. (I'll learn to love that + sign yet. It goes anywhere. I could even print a T-shirt --Fishbowl+ if I weren't so busy hiding my other half; or my other half wasn't so busy hiding from me.)

It's also a sign of social grace is knowing when to let it go and not peering over the fence into ever aspect of the social lives of the people you work for, with, or employ.

From Mark Brezinski at Sennheiser CX 980 Comparison

The CX 980s have a slightly cooler-looking design on their ear buds and plug, but the mc5s have a splash of color to them and really, whoâ(TM)s studying your ears so much they notice a subtle design flourish on your in-ears? Creepy people, thatâ(TM)s who. What would your mother say if she knew you were deliberately accessorizing your ears for creepy people?

We'll all be accessorizing for creepy people if this direction continues. Kudos to Mr Brezinski for this wonderful send-up of coolspotting.

There's a connection here to rational ignorance. Rational ignorance is when you don't bother to understand and complain about the sugar quota, because it's only costing you a few dollars per year, whereas informing yourself and complaining about it would cost a lot more.

From George Will on America, Politics, and Baseball

It's the old point about the law that governs Washington is the law that concentrated benefits and dispersed costs. That's why we have sugar quotas; 308 million Americans eat sugar; a few thousand Americans grow sugar. We have sugar quotas. Why? Concentrated benefits, dispersed costs. Probably told this story on EconTalk before, but when I mentioned my distress over that fact to a Congressional staffer, he said--and I think I used hundreds of people grow sugar--he said: Well, it's more like a dozen. Even more depressing.

From An Interview with Milton Friedman

Very little. Because it's not in the self-interest of the recipients to figure it out. What housewife is going to spend the time to save the extra moneyâ"maybe it's $5.00 or $10.00 a year she pays extra on sugar? It doesn't pay to try to figure out. What you're dealing with is rational ignorance. The rational part is what I want to emphasize. It's not ignorance that is avoidable because it's rational to be ignorant.

The problem with this is that the sugar families note that hardly anyone is actively complaining and use this to argue "well, no one complains, so it's all right".

In the courts, the flow of money is tangible, whereas pervasive resentment masked by rational ignorance is not. JSTOR will attempt to use this to their advantage. The only way to drive a wedge into this equation is to make both sides tangible.

EconTalk (a great podcast) has an interview by a real economist and a BitCoin founder: http://www.econtalk.org/archives/2011/04/andresen_on_bit.html. Interesting listen.

Will airplanes also be powered by batteries? This guy says, no: http://www.econtalk.org/archives/2010/08/laughlin_on_the.html

BTW, methodology is the study of methods.

It took me only a few minutes to light this candle, I hope it helped you more than cursing the darkness.

P.S. I do not know or work for Dan Pink, have never seen him speak in person, and I can't personally endorse his message... but I thought the animation interesting enough to go look up his talk on RSA, which wasn't difficult. I hope it helped.

While we're on this topic, I recommend this recent hour-long interview with investigative journalist Brian Deer regarding his extraordinary effort to expose Andrew Wakefield's fraud.

Even something as obscure as the Breast Drill - http://www.lowtechmagazine.com/2010/12/hand-powered-drilling-tools-and-machines.html#more

Apparently can still be purchased at Sears. http://www.sears.com/shc/s/p_10153_12605_00934093000P

According to Kevin Kelley, Technology never dies. -- http://www.econtalk.org/archives/2010/11/kelly_on_techno.html
About midway through this hour-long podcast, Kelly describes an experiment where they took a 100 year old Montgomery Ward Catalog, and managed to find everything in it still being manufactured somewhere.

I myself still manufacture ancient Catapults and Trebuchets, -- http://www.rlt.com/ -- both small model and full-sized machines. (Fortunately, I was NOT the maker of the drug launching catapult found at the Mexican border that was in the news recently.)

Which may be because top execs determine the financial value of just about everything.

Congratulations! You win a free* course in introductory microeconomics, at http://www.econtalk.org/ and/or http://www.youtube.com/user/jodiecongirl#p/c/22785443C5FB0F83

(* Your labor opportunity cost will not be compensated.)

That's the sarcastic way of saying I disagree: while it may be the sellers that paint the price sign and hang it up where buyers see it, they choose the price as a function of their customers' and potential customers' collective ability and willingness to pay (or they lose the price competition and close up their shops).

Also this podcast: http://www.econtalk.org/archives/2010/06/blakely_on_fash.html

I listened to Spence on Growth the other night. He's the guy who came up with Signalling (economics) and won a Nobel prize for it, and then went off to do whacks of other high level stuff.

The premise of signalling theory is that the competence you gain from your education can be entirely ignored and the educational system would still have an economic function.

As for ethics, he's quite right his ethics are no worse than many of our leaders of the future. I have no doubt he does acceptable quality work. You can see that from the article. Students are pretty harried, so a lot of what even the good students produce is no great shakes. And he's a professional, with years of experience and crib sheets to draw upon.

My favorite part was that he "never edits" and gets thanked for the authentic mistakes. Just like slashdot, fire and forget.

The key assumption from Spence is that it costs less (by some metric) for a good student to earn the credential than the bad student. It's pretty clear at $2000 for a term paper, the bad student is taking it on the chin.

It's a basic problem in economics to determine who has the goods and who doesn't, without spending more on the discrimination than the discrimination is worth. University is the assembly line solution to this problem.

Shadow conformance is as inevitable as prostitution when society commoditizes human capital to the extent that global trade implies.

More of the problem explained here: Ken Robinson: Changing Education Paradigms

(Had dim recall of the particulars of that link. Search google on "the world is thinking" to recover FORA.tv, hadn't the first clue about the guy's name so I searched FORA for the keyword "sir", and it came up first hit. That's funny. I could have found him the long way through TED.

WARNING: FORA practices bait and switch: you think you're watching the whole video, but clips are cut off abruptly as unpaid previews. The clip by the good Malcolm Gladwell on taxation would have been interesting to watch to conclusion. It's like his brain is loaned out from the Men in Black brain archive, and gets recalled from time to time, and to kill time without it, he writes another book.)

Not (really) obvious

Uhm... it's a series of chained if-then-else statements. It's essentially the same as a firewall: does this packet match this rule? no? Then go to next rule (default: deliver).

The only non-obvious part (IMNSHO) is the insight---which we haven't, AFAICT, tested and verified, so the jury is still out---that there is a _market_ for this as a user-facing feature. This insight is a marketing insight, not a software insight.

if we're going to allow them at all, then this seems like one we should allow.

Again, I disagree. To explain why, I need us to take a step back and look at the point of having a patent system---it's a legal tool similar to (physical) property rights which is used to make us as materially prosperous as can be.

Having property rights and subsequently having cops and courts to catch bad guys who would steal our stuff lets us _not_ spend steel making locks and _not_ spend our time guarding our stuff. The steel and time can be converted to consumer goods; those goods would be lost without property rights.

Some ideas are expensive to have but cheap to copy and turn into products (or product features). The financial return one can expect from investing in the process of trying to have ideas might be negative (or less than one, depending on whether you have an additive or multiplicative wallet). The patent system is an attempt to fix this: by giving out temporary monopolies, they increase the return on the particular investment of trying to have (certain kinds of) ideas.

When a field contains both ideas that are cheap to have and ideas that are expensive to have, giving patents to all ideas in that field means one player gets to exclude other players from using the cheap ideas---or at least the cheap ideas that player got to have first. With enough big players, you get cross-licensing and the ability of the big players to shut out all the small players.

Ask any economist and they'll say (I think) that having small and medium-sized players in any sector of the economy is vital.

Software is a field with both cheap and expensive ideas. Software-wise, this patent is an idea that's cheap to have. Knowing that it's an idea people want to use is not a kind of ideas I'm familiar with, so I can't comment on whether it's a cheap or expensive idea to have.

Some of my local pizza shops put their menu on-line. This sounds like a good idea; if I'm going to order a pizza, I want to know (and decide!) what's on it, and I don't store menus (I'm a bad enough pack rat without them). But no pizza shop I know of has a patent on putting a menu on-line. The first pizza shop to do is has of course discovered a novel use of HTML, which is bound to be profitable: you'll out-compete those who don't do it. Should pizza shops be able to take out a patent on publishing their menus on the web?

I think this idea is similar. I think an economy without patents contains enough incentives to come up with this idea. It takes time imitating (reimplementing) your competitors' ideas. The first-to-market gap might be enough time to earn back what was spent discovering this idea---which I'm sure is a team of market analysts, two senior developers and a UI design comittee, sitting around for years going "how could we make our web site better? Hm..." /sarcasm

TL;DR: this patent is bullshit. Listen to Michele Boldrin for an explanation of why, at http://www.econtalk.org/archives/2009/05/boldrin_on_inte.html. You can read his book there as well (for free!) and I can recommend EconTalk if your podcatcher is hungry for feed(s).

I think Michele Boldrin agrees with you. His view is basically that the basic idea of patents is sound, but today's reality doesn't mesh well with that idea because of a radically different cost structure (i.e. the cost of starting a company and the cost of copying an idea is different from when patents where instituted).

Here's his discussion with economist Russ Roberts on the subject: http://www.econtalk.org/archives/2009/05/boldrin_on_inte.html (which links to his book, Against Intellectual Property, which you can read for free on-line).

[On a side note, I thumbs-up Econtalk, so if your podcatcher is hungry here's one more feed for it].

Bush started a war he didn't know how to finish, bungled Katrina, presided over the passing of the DMCA and Patriot acts, color-coded fear against Muslims, and was holding the wheel for eight long years when the economy drove off a cliff on the ideological experiment that greedy self-interest will self-regulate (a legitimate inheritance by birth and creed). If he got blamed for anything else, I was already past my saturation point. On the plus side, he galvanized.

Obama stabilized the banking sector, but not enough. He started the process of fixing the medicare problem, but left too much to be fixed later. He also failed to send U.S. nuclear submarines into the gulf to quell the oil leak, never mind that it wouldn't have worked. He failed to send U.S. nuclear submarines to deal with the corrupt bankers on Wall Street. It's not clear this lynching would have worked, either, without sinking everything. He capitulated to republican demands to prioritize a balanced budget over boosting employment. On the plus side, if you can stay awake, his sentences parse.

I listened to a great EconTalk podcast last night on the destructive nature of letting people patent the wrong things.

Heller on Gridlock and the Tragedy of the Anticommons. Heller hails from the Columbia Law School.

One of the lessons from Iraq is that it is easier to tear something apart than put it back together again. This is why republicans barely try to address problems such as health care reform. The nice thing about foreign adventures is leaving the mess behind.

Tell me, what was the Bush legacy on building up government institutions for the long term? If you count the Patriot Act, I think American should fold up shop on exporting freedom. If that's not what America wants to be, so be it.

And it's not like strengthening government has to lead to big or expensive government. Fixing the patent system would be good for American competitiveness, and probably save money as well.

Some of these measures would be unpopular among circles that peddle influence. They get away with this under the cover of media that inflames polarization until the average voter can't distinguish better from worse. Obama doesn't appear to have the backbone to get on TV and challenge this, a monumental missed opportunity considering that W handed him the worst mess since the great depression.

Because the word 'liberal' begins with the same first 5 letters as 'liberty' does not mean the two have anything at all to do with each other.

Try listening to Wolfe on Liberalism. The correlation increases with education. But I concede your point in the case of Liberia.

Liberalism comes up on EconTalk fairly regularly. If this is the lecture I recall, Liberals were originally people who opposed intrusive, proscriptive behaviours of the church (sometimes a state church).

The quick and dirty transcript gives the flavour right off the top:

Three aspects of liberalism: substantive, procedural, and temperamental. Definition: Liberalism has a set of principles; liberals are committed to the principle that as many people as possible should have control over their lives as feasible. Substantive: In competition with other ideologies, so if you are a substantive liberal, you are not a conservative or a socialist, etc. Also, liberalism is about procedures: commitments to open government, separation of power, checks and balances, suspicion on absolutist rule. Can be a substantive conservative and still be a procedural liberal. Temperament: openness to the world, willingness to experiment and be inventive. A lot of Manhattan leftists who have tenure and live in rent-controlled apartments who temperamentally are not liberals because they are so completely shut off to changing anything.

Apologies to Russ Roberts if I quote too much. Of course, not everyone agrees, which does not, however, erase history. Control, in particular, is a slippery word, but potentially resolvable by the one child per planet policy.

Chapter 8 of How To Save Jobs contains a nice discussion of the U.S. health care system. Since David Gewirtz has kindly made this book free to download, I've taken the liberty of quoting more than I might otherwise, concerning bankruptcy and rescission (emphasis mine):

Three-quarters had health insurance. Put those two numbers together. 60% of all bankruptcies in America were driven by people who couldn't pay their medical bills, most of whom actually had health insurance.

...

Most insurers claim the rate of rescission is fairly small. In testimony before the U.S. House of Representatives Committee on Energy and Commerce, Don Hamm, CEO of Assurant Health stated "Rescission is rare. It affects less than one-half of one percent of people we cover."

And yet, according to a story by Karl Vick in the September 8, 2009 issue of the Washington Post:

In the past 18 months, California's five largest insurers paid almost $19 million in fines for marooning policyholders who had fallen ill. That includes a $1 million fine against Health Net, which admitted offering bonuses to employees for finding reasons to cancel policies, according to company documents released in court.

Amazing statistical coincidence that the rescission rate mirrors the relatively low rate in modern society of personal health catastrophe.

Gewirtz is an odd duck, with significant background in both politics and technology. If your response to Gewirtz is to pigeon-hole him for easy target practice at one end or the other of the ideological spectrum, good luck with that. If he's as clever as I think he is, his misguiding jingoism on "buy American" could be cured by a close listen to Rustici on Smoot-Hawley and the Great Depression, another flawed discussion which nevertheless can not be resolved by means of a circular pigeon dance. In the end, I rejected about a quarter of what Rustici puts forward, but felt edified by the other three quarters.

I'm about halfway through The Baroque Cycle which has an an organizing theme tumult in the understanding of financial markets and the stability of credit and currency. If Neil's super-great (mostly paternal) granddaughter Nellie Stephenson were to write the Barack Cycle several hundred years from now, it would focus on the present tumult and disorder in our health insurance industry, with lobbyists in Washington taking center stage as the imposing yet perhaps doomed palace of Versailles.

America fails to reform it's health care system because it is now in the late phase of the French disease, terminal narcissism. Debate rarely turns on what needs to be done until coinage runs short. From what I've read, mission accomplished. Will the American empire make it to the next gas station running on fumes? America is not to be underestimated, but far enough back, hard to believe, neither was France.

These kinds of laws are a lot like Smoot-Hawley. The elite has a shallow hand-waving understanding of how this implicates tax revenue (shared by few of the wonks), while totally failing (with scant concern) to wrap their minds around the larger consequences.

Fortunately, there are economies gaining steam in other corners of the world less set in their sumptitude, that sucking glissando you hear as you circle around the velvet drain pipe.

In a vigorous nation, it might be prudent to fix this while time remains, starting with a cold hard look at some of these small fish nourishing larger ponds.

There's a famous quote, "The graveyards are full of indispensable men."

I'm surprised more of them weren't cremated with the share certificates from the ventures they founded. Buried right beside them are the alcoholics who bet their future comfort on the wrong horse. Of course, that was before the invention of spare livers.

Unfortunately, this phrase suffers the usual semantic debasement in the shallow minds of the harried until it often means "without that fellow around, I'd actually have to show up and earn my living". Ask any plantation owner. Paradoxically, nothing boosts productivity like an indispensable head rolling down a splintered plank, so beware of second-order effects.

For some reason, my warning bells go off whenever Dave Winer enters the conversation.

It might be a mistake to define Google's business model so narrowly as advertising. There are broader perspectives on this ecosystem.

Munger on Middlemen

Amazing that Winer inherently proposes replacing the existing N:1 + 1:M model with an N:M model. When does that ever work? Middlemen exist for a reason. Is Winer's position that not tantamount to claiming that corporations will evolve to bypass the stock exchange and go direct to the shareholder? Why should NASDAQ take a cut of the pie? Parasites, all of them.

I don't get how the corporations are going to actively "come to me". I've mostly locked my work process down so that this can't happen. Direct telephone marketers still make my phone ring despite fierce efforts to the contrary. Hope the telcos are enjoying the Google rope trick. Hard to think of an industry more deserving of an internal-rope keel-hauling.

From Google's perspective, I've long thought that monetizing clicks was a perilous revenue model. I've never suspected that Google's security as the world's ultimate middleman was in any real jeopardy. There could be interesting ahead times if Google has to reinvent their revenue generation model from their position of power.

One guess is that Google ends up creating a user-pay micro-payment model for *highly* customized search results, exploiting semantic data-mining on a scope only possible to an organization sitting on 10^18 bytes of storage.

Or you can sit there and perform a hundred Google searches by hand to piece the same results together yourself. They don't have to take that away. What's your time worth? If you're in the group who never clicks on ads, your time is probably of enough value to expedite progress.

If you think Google is vulnerable on this front, good luck with your efforts to raise venture capital to compete against them. They've got an exabyte head start. Make sure your prospectus includes a good explanation of the zetta scale and the need to arrive their to achieve financial victory. You don't want to be busted by the stock exchange for deluding old ladies. First stop on your direct sales pitch should be Dave Winer. He's already declared himself sympathetic on two separate fronts. No wait, I forgot, Winer believes in an N:M routing around the leviathan with no interior infrastructure. Whew, that sure beats having to compete.

Yeah, he probably wouldn't be able to do such useful things as remembering the whole phone book or recalling which baseball player did what in each year.

Or design and implement bittorrent, and run a company around it; see http://www.businessweek.com/magazine/content/08_43/b4105046863317.htm

Or win the Nobel Prize in economics; see http://en.wikipedia.org/wiki/Vernon_L._Smith and http://www.econtalk.org/archives/2008/03/vernon_smith_on_1.html

(Okay, that's Asperger's Syndrome; but I think that's within the scope of this discussion)

He might be able to button his own shirt or wipe his own ass, though.

Or it might be that he is better able to communicate with other people; he might have an easier time stumbling unto the idea that if he asks someone a question and silence is the answer, it might be because of an internal struggle between not wanting to lie and not wanting to admit the truth. And that he can gain something by not putting people in that situation again.

Imagine that! Competition works!

I hear that's why the US has such fast internet and cheap, reliable telephony service, both with excellent customer service of course, especially compared to the EU and Japan.

</sarcasm>

Sorry if I'm pushing it here. It's just striking to hear about the abuse US ISP and telecomms customers (apparently) have to put up with, compared to what I experience in Denmark.

On the other hand, your government isn't doing much better than failing markets. For instance, take a listen to a recent EconTalk episode about market failures and government failures at http://www.econtalk.org/archives/2009/12/winston_on_mark.html

In summary: it's the lobbyists.

If I recall correctly, the guest, Winston, only looked at government failure in the US. Extrapolating from there to government failure in general might be a wee bit hasty.

The really provocative statement would be that right-wingers don't get that government intervention is the right solution in theory, what left-wingers don't get is that it rarely works in practice, and the elephant in the room nobody is doing anything about is that the lobbyists screw up The Right Thing, making it Not The Right Thing, and so nothing works (as well as it could).

2.) Liberals love the idea of government control. It's the solution to absolutely everything.

Economic theory suggests that the Free Market Is Good. It also suggests that sometimes it fails. In those cases, Government Intrusion Is Good.

One case is public construction: in areas with very high fixed costs, it's more efficient to only build one of "them" and let everyone use it, rather than have several parties each build their own. Good examples are roads, electricity, telephony, internet.

Another one is natural monopolies, most often seen with network effects, where the value of "owning it" increases with how many people also "owns it". Again, roads, telephones, internet. Also Facebook accounts, and other networks overlaid on the internet.

If government did its job well, government stepping in would actually be The Right Thing.

What (some hardcore) right-wingers don't acknowledge is the sound theory. What (some hardcore) left-wingers don't acknowledge is the unsound practice of said theory.

If you want to know, empirically, how well the theory is converted into practice, I recommend the most recent episode of EconTalk (grab it at http://www.econtalk.org/archives/2009/12/winston_on_mark.html), where the guest talks about exactly this.

I think the Pax Romana and the Pax Britannia were nicer. They actually developed their colonial areas.

Paul Collier has a different opinion on this. He might be wrong, but he at least RTFA. In fact, I suspect he read the entire fine literature, which requires a time frame known by the ancient unit of "year".

Paul Collier on the "bottom billion"
Collier on the Bottom Billion
Marshall Plan

America has arguably done as much to revitalize Western Europe and Japan in the aftermath of WWII as nation in history. Because they had to slow the Red Menace.

For the guy who thinks that the American empire is overextended like the Roman empire, one small difference is that ability to collect information about how the far flung empire is functioning.

Ancient Rome measured this in fortnights, modern America measures this in milliseconds. Roman conquerors had world maps skirted with sea monsters. American school children pan and zoom the world over at the resolution of habitable structures or backyard orchards. I don't see *any* grounds for useful comparison. America is a fickle beast of a strange new stripe. Historical antecedents merely confuse matters. I don't understand this thread at all.

Better than Collier is the Mesquita interview on EconTalk. He's a much darker pessimist, who doesn't think America does a lot in this world entirely out of the goodness of its heart.

Bruce Bueno de Mesquita on Democracies and Dictatorships

He does concede that the American political system still runs on the production of public goods (aka policy), and not pure kleptocracy--yet--though IMO the system is increasingly straining in that direction.

I think I've posted this one before. The dark banking sector scares me, in combination with the technology and will.

Misha Glenny investigates global crime networks

That's fairly grim. This next fellow is perhaps too dour to be much use to anyone.
Bill Joy: What I'm worried about, what I'm excited about

But above all, what we have to do is we have to help the good guys, the people on the defensive side, have an advantage over the people who want to abuse things.

The problem is, he's probably right, and some of those "advantages" are going to look ugly by the standards of fraternal liberty.

I think the Pax Romana and the Pax Britannia were nicer. They actually developed their colonial areas.

Paul Collier has a different opinion on this. He might be wrong, but he at least RTFA. In fact, I suspect he read the entire fine literature, which requires a time frame known by the ancient unit of "year".

Paul Collier on the "bottom billion"
Collier on the Bottom Billion
Marshall Plan

America has arguably done as much to revitalize Western Europe and Japan in the aftermath of WWII as nation in history. Because they had to slow the Red Menace.

For the guy who thinks that the American empire is overextended like the Roman empire, one small difference is that ability to collect information about how the far flung empire is functioning.

Ancient Rome measured this in fortnights, modern America measures this in milliseconds. Roman conquerors had world maps skirted with sea monsters. American school children pan and zoom the world over at the resolution of habitable structures or backyard orchards. I don't see *any* grounds for useful comparison. America is a fickle beast of a strange new stripe. Historical antecedents merely confuse matters. I don't understand this thread at all.

Better than Collier is the Mesquita interview on EconTalk. He's a much darker pessimist, who doesn't think America does a lot in this world entirely out of the goodness of its heart.

Bruce Bueno de Mesquita on Democracies and Dictatorships

He does concede that the American political system still runs on the production of public goods (aka policy), and not pure kleptocracy--yet--though IMO the system is increasingly straining in that direction.

I think I've posted this one before. The dark banking sector scares me, in combination with the technology and will.

Misha Glenny investigates global crime networks

That's fairly grim. This next fellow is perhaps too dour to be much use to anyone.
Bill Joy: What I'm worried about, what I'm excited about

But above all, what we have to do is we have to help the good guys, the people on the defensive side, have an advantage over the people who want to abuse things.

The problem is, he's probably right, and some of those "advantages" are going to look ugly by the standards of fraternal liberty.

I just spent several hours reviewing various axiomatic treatments of probability theory and then ... this. Major train derailment. Stick accordion self-compacted for hundreds of yards. Tragic loss of brain function for all involved. Luria weeps at the carnage.

What people self-report on exit polls proves bupkus all. Most people suck at preference reporting (ask any economist). This nut case is thinking that if a person self-reports incorporating "is black" in their preference determination, that Michael Vick would have prevailed over Abraham Lincoln on every one of these ballots.

The sad fact of life in America is that a man who is regarded as a black man experiences life differently--and usually not better. Would it were not the case that Obama had a longer row to hoe to get where he is now. And I'm not even counting overcoming negative precedent: that no black had yet accomplished this feat. Could it be that most black people in America have a stronger sense of Obama rose above, having faced it themselves? Empathy considered harmful. What next?

Likely many of these people voted for Obama because he rose above his blackness, and made it a non-issue, which would be hard to accomplish (the rising above part) if he wasn't *black* in the first place. (Zeno's unknown paradox of non-issue making.)

I'm sure the average exit poll carefully distinguishes this sentiment from the depiction in the word salad above. And then this nameless worm goes on to complain that the major media didn't smoke his troll weed.

I'm never given a rat's ass about the Turing test, but I sure would like to code a reliable troll detector, one that isn't fooled by sarcasm or wit, because we sure need more of that and less of this.

Voting on the basis of skin color is quite acceptable by today's moral standard.

Concluding sentence: slime-factor bonus +5

"on the basis of skin color" => via mental processes too unseemly to state clearly; to the exclusion of all other factors

"quite acceptable" => passive-aggressive fang-baring under cover of triteness

"today's moral standard" => we're all going to hell in a hand-basket

Surely these are easily detected memes? The indirection isn't terribly clever.

From transcript gloss for Ayres on Super Crunchers and the Power of Data

83 legal experts vs. crude statistical algorithm tried to predict Supreme Court, yet the statistical algorithm did better than the legal experts at predicting the Supreme Court's decisions. Supreme Court hates the 9th Circuit, California, but legal experts can't bring themselves to take that history into account.

Russ Roberts made a rebuttal to this guy's claims in a following podcast, but I think statistics goes a long way, applied appropriately. What I would like to correlate are the predictable trappings of the sleaze module when forced to intertwine emotion and logic in certain styles of pathological prose.

We've spent too much time trying to understand the logic of language, when often there isn't any. Why aren't we studying instead the pragmatics of sleaze?

Mr Silvia sticks the blowhard back flip, difficulty level 1.5.

Although many aspects of the proposed regulations may seem fair and not as burdensome to comply with now, there is no limit to how restrictive such regulations may become in the future.

Yes, in an open market for electricity, with an unregulated price signal, there's no limit to how high the price might rise, either. Especially in California.

As for the law of unintended consequence, the California propositional voting system is unintended consequence writ large. There was a discussion of this in an EconTalk video I listened to recently, which might have been this one.

Caplan on the Myth of the Rational Voter

Among other things, about an hour in, there's this remark: "Gray Davis, governor of California, gave people what they asked for but was thrown out."

Here's another one which discusses the validity of ex-ante regulation within an exchange of views on Libertarian Paternalism with Smith-Hayek in the water supply.

Cowen on Liberty, Art, Fetish

The cool thing about the "law of unintended consequence" is that this process never begins until someone else does something you don't like, and never for the valid reason that the other side is already trying to make the best of unintended consequence that landed on their heads. Entirely in the spirit of pulling up a lawn chair to observe, speculate, and ridicule. Nothing promotes debate like beer hats and belly paint.

He's a good relationship management tool: never tell the other person they've just made a good decision, it only encourages them to do more. Shame on Vizio for feeding the trolls.

Mr Silvia sticks the blowhard back flip, difficulty level 1.5.

Although many aspects of the proposed regulations may seem fair and not as burdensome to comply with now, there is no limit to how restrictive such regulations may become in the future.

Yes, in an open market for electricity, with an unregulated price signal, there's no limit to how high the price might rise, either. Especially in California.

As for the law of unintended consequence, the California propositional voting system is unintended consequence writ large. There was a discussion of this in an EconTalk video I listened to recently, which might have been this one.

Caplan on the Myth of the Rational Voter

Among other things, about an hour in, there's this remark: "Gray Davis, governor of California, gave people what they asked for but was thrown out."

Here's another one which discusses the validity of ex-ante regulation within an exchange of views on Libertarian Paternalism with Smith-Hayek in the water supply.

Cowen on Liberty, Art, Fetish

The cool thing about the "law of unintended consequence" is that this process never begins until someone else does something you don't like, and never for the valid reason that the other side is already trying to make the best of unintended consequence that landed on their heads. Entirely in the spirit of pulling up a lawn chair to observe, speculate, and ridicule. Nothing promotes debate like beer hats and belly paint.

He's a good relationship management tool: never tell the other person they've just made a good decision, it only encourages them to do more. Shame on Vizio for feeding the trolls.

Marxism is more realistic.

Despite evidence?

Judged on ambition, rhetoric, and failure, the evidence that AI can't work is at least as compelling as the evidence that Marxism can't work.

I don't particular wish to see Marxism successfully debugged, and from time to time I wonder what kind of anti-nirvana AI might lead to. The killer-app for AI seems to be circumventing the "Are you human?" question, and it's heavily funded by the fastest growing sector of the global economy.

Misha Glenny investigates global crime networks

Likewise, the failures of Marxism 50 years ago have about as much present relevance as the failures of AI 50 years ago. The world has changed. Furthermore, the old binary world view has become increasingly less relevant.

Hans Rosling: Let my dataset change your mindset

Many different outcomes, which fail to line up nicely on either side of the gym according to gender and bench space.

At their most naive, a libertarian reasons "big government can't be right, so small government can't be wrong". The device here is to make size the defining factor. But it's not. There are tolerable large governments (Sweden and Singapore could be doing a lot worse) and execrable small governments.

Here is quite a different theory about why size matters in government.

Bruce Bueno de Mesquita on Democracies and Dictatorships | Library of Economics and Liberty

The basic idea is that corruption in government is in an inverse relation with the size of the ruling coalition. If the coalition is diffuse enough, the honcho in chief must sway the coalition through the creation of public goods; if small enough, the coalition can be bought through private corruption.

My personal beef with libertarianism is the naive suspension of emergent behaviour: that personal liberty is some kind of magic stable equilibrium point. The usual argument is "except for all the rest" meaning everyone who thinks government is part of the solution spoiling the situation. Kind of like telling someone driving in Sao Paulo for the first time "you won't crash if you don't flinch". All those white and yellow lines are overrated. Who needs them?

How to Cross the Street in Rome

For all its counterintuitive sense, crossing the street like a Roman can be summed up in one sentence: Step off the curb with a confident stride and the traffic will stop. But for the amateur street crosser, wait for a native to cross and then follow. Watch as they step off the curb with what appears to be reckless but suave abandon and, like Moses parting the Red Sea, the traffic magically stops.

I read that as a pretty good summary for the libertarian model of how to reform government. I'd like better insight into the "magically stops" part. Something more sophisticated than "size matters". Perhaps something that takes into account Sapolsky as a leading authority on emergent behaviour.

Back to coalitions and public goods, open source is pretty much the definition of a public good. It's highly compatible with a subtle form of libertarianism not well suited for shouting about from roof tops. My sense of it is that the cohort of subtle libertarians is a pretty small voice in the weeds.

This thread contains lots of great perspectives on Ahmandinejad, election fraud, and the Iranian presidency. Unfortunately most of the world is missing the point.

I'd like to point that Ali Khamenei has been the supreme leader (dictator) of Iran for 20 years. During an EconTalk podcast on August 11 2008, expert Bruce Bueno de Mesquita comments that after interviewing over a dozen Iranian political specialists, his research concludes that Ahmandinejad is the 18th most powerful person in Iran.

The Iranian president is an important and powerful person in absolute terms. In relative terms it's a public relations office. So yes, election fraud was committed. Yes, their disinterest in concealing the fraud conveys the extent to which they believe it makes a difference.

However, everyone just take a deep breath, and understand that the electoral system and eligibility of candidates is up to the complete discretion of Ali Khamenei.

One book that looks at both of those countries specifially is P.J. O'Rourke's "Eat the Rich." P.J.O'R is certainly "conservative" (actually, quite libertarian in most aspects, I think, which is why I've just scare-quoted that word) and could I think be called a free-market evangelist, but I don't think political orientation of any sort would be a sticking point in finding the chapters in which he describes and contrasts Sweden and Cuba interesting / informative / enjoyable.

I don't have the book in front of me to quote, but it's recent enough and high-selling enough it shouldn't be too hard to find, if you're in the U.S.

You'll also find plenty of Sweden and Cuba mentions in the podcasts at econtalk.org; for instance, this one: http://www.econtalk.org/archives/2008/10/bernstein_on_in.html

Cheers,

timothy

Here is a very insightful discussion of this topic. To sum up: schools get more money to help with the failing kids. Unfortunately, good teachers and bad teachers both like money, and too often, both get the money equally. So there really isn't much incentive to do better at teaching. In fact, in this scenario there is more reward for kids doing badly than there is for kids doing better.

I think the best TED talks have been Steven Levitt talking about crack dealer business, and Paul Collier on the Bottom Billion.

All the technology in the world isn't going to fix developing countries where the laws, regulations, and corruption will keep the economies from growing to the point where the technology can be used efficiently. Once those barriers are gone, it isn't like people are stupid, they'll immediately use the appropriate needed technologies.

I suggest:

Michael Walker talking about his work on the Economic Freedom of the World index, and how economic freedom correlates with GDP, life expectancy, and other variables.

Karol Boudreaux from GMU's Mercatus Center talking about African governments bear much responsibility for driving formal-sector entrepreneurs out of the housing market and for driving their citizens into slums.

Robert Anderson on his book Just Get Out of the Way: How Government Can Help Business in Poor Countries.

Tyler Cowen form GMU on almost anything in economics: the future of culture in a globalized world, How to Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Dentist, and much more.

Don Boudreaux from GMU about the issues he has interviewed people for on Econtalk: car salesmen, signaling through educational diplomas, whether the gold standard is a good idea, challenges in health care, and much more.

Arnold Kling on Crisis of Abundance: Rethinking How We Pay for Health Care

Or a Nicholas Stern versus William Nordhaus debate on global warming costs versus benefits and their viewpoints on appropriate discount rates for the calculation?