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Anthropic Bias

Posted by Peter on March 16, 2005
Posted in: Book Reviews, Fermi Paradox. Tagged: , .

Book Review: Anthropic Bias: Observation Selections Effects in Science and Philosophy by Nick Bostrom

This book discusses selection effects as they affect reasoning on topics such as the Doomsday Argument, whether you will choose a lane of traffic that is slower than average, and whether we can get evidence for or against the Many Worlds Interpretation of quantum mechanics. Along the way it poses some unusual thought experiments that at first glance seem to prove some absurd conclusions. It then points out the questionable assumptions about what constitute “similar observers” upon which the absurd conclusions depend, and in doing so it convinced me that the Doomsday Argument is weaker than I had previously thought.
It says some interesting things about the implications of a spatially infinite universe, and of the possibility that the number of humans will be infinite.
It is not easy to read, but there’s little reason to expect a book on this subject could be both easy to read and correct.
The author has a web site for the book.

Natural resource price expectations

Posted by Peter on March 3, 2005
Posted in: Economics, Investing.

Tyler Cowen claims that market prices say the “demand for raw materials will continue to outstrip the supply”. But I don’t see the market prices saying that. Tyler seems to be extrapolating from trends of the past few years.
He seems to be ignoring what futures contracts for delivery several years out are saying. Here’s what I see for commodities with futures contracts several years out:

Commodity Nearest future contract Farthest future contract
Silver $7.307 $7.848 (Jul 2009)
Crude Oil $51.15 $42.41 (Dec 2011)
Natural Gas $6.304 $5.721 (Dec 2010)
Copper $1.477 $1.255 (Dec 2006)

Gold and silver prices are expected (as usual) to maintain their purchasing power, while prices of other commodities that have had big run-ups recently are expected to fall.
I’ve been making some investments that are based on the belief that markets are underestimating Chinese/Indian demand over the next 5 years or so. But markets are clearly saying that the Hubbert Peak arguments are either wrong, or unimportant due to the likelihood of a switch to alternative fuels. And with metals, it sure looks like we are seeing merely a combination of asian demand and a weak dollar.

Book Review: Hubbert’s Peak : The Impending World Oil Shortage by Kenneth S. Deffeyes

Posted by Peter on March 2, 2005
Posted in: Book Reviews, Miscellaneous.

This book provides a moderately strong argument that the production of cheap oil is peaking, although it isn’t as conclusive an argument as I’d hoped for, and is only a little bit better than the brief summaries of Hubbert’s ideas that I’d previously seen on the net.
Much of the book consists of marginally relevant stories of his career as a geologist. He occasionally slips in some valuable tidbits, such as that Texas once had an oil cartel.
He does a mediocre job of analyzing the consequences of scarcer oil. He provides a few hints of how natural gas could replace oil, but says much less about the costs of switching than I’d hoped for. His comments on how to protect yourself are misleading:

In the past, a useful way of insuring major producers and consumers against the effect of a price changes was purchasing futures contracts. However, the ordinary futures contracts extend for a year or two. The oil problem extends for 10 years or more. The oil problem extends for 10 years or more. Anyone who agrees to supply oil 10 years from now, for a price agreed on today, very likely will disappear into bankruptcy before the contract matures.

At the time the book was first published (2001), crude oil futures contracts extended about 7 years out. They weren’t liquid enough to hedge a large fraction of consumption, but if a desire to hedge had caused them to say in 2001 that crude would be at $60/barrel in 2008 rather than saying it would be in the low twenties, that would both have signaled a need to react and reduced the risks of doing so. The idea that bankruptcy would threaten such futures reflects his ignorance of the futures markets. An oil producer who sold futures as a hedge will almost certainly not sell more futures than it has oil to deliver on. Speculators might lose their shirts, but futures brokers have the experience needed to ensure that the defaults are small enough for the brokers to absorb (see, for example, what happened in the gold mania of the late 70s).

Book Review: America’s Secret War, by George Friedman

Posted by Peter on February 25, 2005
Posted in: Book Reviews, Mideast. Tagged: .

The cover describes Stratfor (the intelligence company Friedman founded) as a “Shadow CIA”. By this book’s description of the CIA, this implies it has a lot of details right but misses many important broad trends. The book tends to have weaknesses of this nature, being better as a history of Al Qaeda’s conflict with the U.S. than as a guide to the future, but it’s probably a good deal more reliable than CIA analysis.
It describes a few important trends that I wasn’t aware of. The best theory the book proposes that I hadn’t heard before is the claim that the U.S. government is much more worried about Al Qaeda getting a nuclear bomb than the public realizes (for instance, the Axis of Evil is the set of nations that are unable or unwilling to prove they won’t help Al Qaeda get the bomb).
The explanation of the U.S. motives for invading Iraq as primarily to pressure the Saudi government is unconvincing.
The book’s biases are sufficiently subtle that I have some difficulty detecting them. It often paints Bush in as favorable a light as possible, but is also filled with some harsh criticisms of his mistakes, for example:

It is an extraordinary fact that in the U.S.-jihadist war, the only senior commander or responsible civilian to have been effectively relieved was Eric Shinseki, Chief of Staff of the U.S. Army, who was retired unceremoniously (although not ahead of schedule) after he accurately stated that more than 200,000 troops would be needed in Iraq

The person selected, Tom Ridge, had no background in the field and had absolutely no idea what he was doing, but that was not a problem problem since, in fact, he would have nothing really to do. His job was simply to appear to be in control of an apparatus that did not yet exist

But it’s hard to place a lot of confidence in theories that are backed mainly by eloquent stories. It’s unfortunate that the book is unable or unwilling to document the evidence needed to confirm them.

There’s a fair amount of agreement between this book and Imperial Hubris, but I’ve revised my opinion of that book a bit due to the disagreements between the two. The claims by Imperial Hubris that we don’t need to worry about a new Caliphate seem unpersuasive now that I see there widespread disagreement with that claim and weak arguments on both sides. The two books disagree on who’s currently winning the war, but I see no sign that defeat for either side is anywhere near close enough to be predictable.

Web form inefficiency

Posted by Peter on February 21, 2005
Posted in: Miscellaneous.

Patri Friedman asks why websites often require users to deal with annoying pulldown menus such as those listing 50 states. I expect that the main reason is that users who are allowed to type in text will enter it in nonstandard forms. For example, Massachusetts will be entered as Mass or MA, or if limited to 2 characters the user might not remember the correct 2-letter code. Sites that need to calculate sales taxes differently for different state, or who think (not necessarily with good reason) that they need to analyze customers by location for marketing reasons, need either standardized input or a good deal of imagination to predict all variants they will get. Imagination isn’t cheap.
I suspect there’s also a desire by some designers to show their status over users by preventing users from entering unexpected input.
I doubt these factors are enough to explain all examples of annoying pulldown menus, but I’d guess they explain at least half.

VeganEssentials

Posted by Peter on February 15, 2005
Posted in: Health. Tagged: .

I highly recommend VeganEssentials.com as a source of healthy and tasty food for when it’s hard to have fresh fruits and veggies available (e.g. hiking, snowboarding, kayaking). Some of my favorites are the Larabar (made entirely of fruit and nuts) and the mushroom jerky.

What a Futarchy should maximize

Posted by Peter on February 8, 2005
Posted in: Idea Futures. Tagged: .

For a long time I’ve thought that the weakest part of the argument for Futarchy is the problem of choosing a good measure of national welfare. Democracy is sufficiently subject to manipulation by demagogues (e.g. convincing voters that Saddam had some responsibility for Sept. 11 or that confiscating guns will make us safer) that turning politicized disputes about factual questions over to an institution that maximizes GDP would probably be an improvement even if the flaws in using GDP cause it to do foolish things like preferring Microsoft’s commercial crap to free alternatives. But it would be hard to convince people addicted to having democratic processes decide questions of fact to ignore such flaws.
I want to propose that such a system should be designed to maximize life expectancy instead. That measure seems to correlate fairly well with a number of things we value such as wealth and happiness. I’m not sure how it correlates with equality, and suspect it is imperfect at putting the optimal weight on increasing that, so I’m not claiming it’s a utopian solution. But I doubt there’s much risk that maximizing lifespans would increase inequality.
It would create pressures to keep peoples’ hearts beating when they’re brain-dead, and to put undesirable restrictions on activities such as skiing and rock-climbing. But it’s not obvious why that would be significantly different from the biases of existing governments.

Who’s the enemy in Iraq?

Posted by Peter on January 31, 2005
Posted in: Mideast, U.S. Politics.

Secretary of State Rice said on yesterday’s Face the Nation:

I’m quite certain that all Iraqis want to defeat this insurgency and get on with building a democratic Iraq.

I’m curious as to who she wants us to think make up this “insurgency”, if it isn’t Muslim jihadists, many of whom happen to be Iraqis. If they were all coming from outside Iraq’s borders, wouldn’t the administration be putting more effort into sealing the borders than in fighting them in cities?

Alarmism

Posted by Peter on January 31, 2005
Posted in: Politics. Tagged: , , .

Last week’s issue of Nature has a review of a recent Michael Crichton book (dismissed as “Viagra for climate sceptics”) which contains an interesting claim about the reaction to the movie The Day After Tomorrow:

Surveys of public opinion conducted before and after the film was released found that it made people think climate change is less likely

Apparently its obvious lack of realism caused people to associate the more respectable claims about global warming with Hollywood escapism.
I wonder if this is the tip of a much larger iceberg. It seems to me that a wide variety of political movements tend to promote the most alarmist versions of their ideas in order to get respect and/or money from their strongest supporters. I don’t find it hard to imagine that it is common for activist groups to hurt the causes they claim to be fighting for by sounding unrealistic to swing voters.