In today’s press conference, someone asked Bush about how the turnout in the Iraqi elections would affect their legitimacy. The questioner seemed think that a very high turnout (such as elections in the Soviet Union produced) would make the results legitimate, but low turnout (such as typical local elections here in Silicon Valley produce?) would raise questions about the election’s legitimacy. Why do suggestions such as that not produce ridicule? Is it due to a preference for easily quantified criteria?
A few minutes later, Bush took great care to avoid supporting free speech for Muslims who hate the U.S (he was asked about Jordan, but could easily have talked about other parts of the mideast). This hints at a willingness to prevent jihadists who seem to have support from a nontrivial fraction of the Iraqi population from campaigning, which might lend some plausibility to their boycott of the elections.
Another issue that is important in determining whether the elections are legitimate is whether there is any reason for one part of Iraq to be subject to the ideology of the majority within Iraq. Iraq is hardly a nation in the normal sense of that word – it contains several cultures, not fond of the idea of nation-states, who were made into a country by British decree.
If I had somehow become U.S. president around the time that Saddam was captured, I would have dispensed with recreating a national Iraqi government, and simply held hasty elections for ruling councils in each town/city, then I would have withdrawn U.S. troops.
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Book Review: Entrepreneurial Economics: Bright Ideas from the Dismal Science, edited by Alexander Tabarrok
This collection of papers has a bunch of very good ideas.
The patent buyouts chapter shows how most patents could be put into the public domain (fixing some problems associated with monopoly) while also increasing the incentives for innovation (at least in areas such as drugs where the patent system works moderately well). Two minor weaknesses in the paper: it ought to explain why this is a better use of money than funding research directly (I expect this could be done by analyzing the incentives and track record of small startup drug companies versus nonprofit/government researchers). The joint randomization for substitutes works well if there’s unlimited money to buy patents, but if a patentholder can make joint patents too expensive to buy by falsely claiming that its patent is a substitute, then it’s hard to analyze whether problems result (although I’m fairly sure they could be dealt with).
The chapter on decision markets (aka idea futures) provides some hints on how many of the problems with democracy could be fixed. Hopefully this will encourage readers to seek out his more thorough argument.
The time-consistent health insurance proposal describes a good free-market alternative solution to many of the problems that government-run insurance proposals claim to address.
The chapter on gene insurance would address additional problems with people born with genes that scare insurers, but only if it were possible to require buying this insurance prior before an infants genes get tested for defects. But it’s unclear how such a requirement can be enforced – it seems possible that a mother will often be able to get a fetus tested secretly before the government realizes it’s time for the child to get insured.
The section on organ shortages provides some interesting arguments that the medical establishment profits from the shortage of organs created by laws against the sale of organs.
The chapter on securities regulation is too longwinded but contains good evidence that competition between securities regulators will help investors.
Book Review: Catastrophe: Risk And Response by Richard A. Posner
This book does a very good job of arguing that humans are doing an inadequate job of minimizing the expected harm associated with improbable but major disasters such as asteroid strikes and sudden climate changes. He provides a rather thorough and unbiased summary of civilization-threatening risks, and a good set of references to the relevant literature.
I am disappointed that he gave little attention to the risks of AI. Probably his reason is that his expertise in law and economics will do little to address what is more of an engineering problem that is unlikely to be solved by better laws.
I suspect he’s overly concerned about biodiversity loss. He tries to justify his concern by noting risks to our food chain that seem to depend on our food supply being less diverse than it is.
His solutions do little to fix the bad incentives which have prevented adequate preparations. The closest he comes to fixing them is his proposal for a center for catastrophic-risk assessment and response, which would presumably have some incentive to convince people of risks in order to justify its existence.
His criticisms of information markets (aka idea futures) ignore the best arguments on this subject. He attacks the straw man of using them to predict particular terrorist attacks, and ignores possibilities such as using them to predict whether invading Iraq would reduce or increase deaths due to terrorism over many years. And his claim that scientists need no monetary incentives naively ignores their bias to dismiss concerns about harm resulting from their research (bias which he notes elsewhere as a cause of recklessness). See Robin Hanson’s Idea Futures web pages for arguments suggesting that this is a major mistake on Posner’s part.
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Posner makes some good arguments against foreign aid, but his implication that the U.S. should do nothing to make AIDS treatments available to backward countries is misleading. Much of the cost of the treatments is the R and D cost of designing the drugs rather than the marginal cost of additional doses. The patent buyout scheme proposed by Michael Kremer (see the book Entrepreneurial Economics) provides a way to significantly reduce those costs, while probably benefiting wealthy countries. A government or charity would buy many patents and put them in the public domain. The price would be set by auctions which would be kept honest by sometimes selling the patent to bidders instead of making the patent free. Ideally the price would be a bit higher than the private value of the patents, to reflect the fact that the social benefits exceed the value that the patentholder would get from enforcing the patent, resulting in improved incentives for drug development and in the drugs being available to people who can’t afford the patent holders’ prices. The most likely downside is the cost associated with using taxes to finance the buyouts (can someone show that private charity would be able to handle this?).
It is unclear whether the simpler approach of making exceptions to patent laws for backward countries would work well. It would depend on how hard it is to smuggle drugs from those countries to wealthy countries (which would harm the incentives to develop new drugs).
I returned home from a weeks vacation and discovered on Friday morning that one of my investments (Phazar Corp, symbol ANTP) had doubled since I had last looked at it. While there is a slight chance that this was due in part to buyers with inside information that it’s likely to sell equipment used in new tsunami warning systems, it looks like most or more likely all of the buying came from momentum players whose connection with reality is more tenuous than normal. So if I had been following the stock instead of snowboarding, I would almost certainly have sold before Friday at a lower price. As it happened, I had the patience to postpone my sale until Monday morning, getting what I expect will prove to be an unreasonably good price, and also delaying taxes on the profits. This is not the first time I’ve seen evidence that slightly slower reactions to price changes would be profitable, but it’s certainly the most dramatic.
Be sure to have any guests at your celebration of Isaac Newton’s birthday sign a Guest Liability and Indemnification Agreement (PDF) before you overfeed them.
The latest issue of my favorite investment advisory newsletter, The Whitebox Market Observer, has a good point about industrializing countries:
It is nonsense to think that China as a whole will become rich because the Chinese individually are poor. The ugly truth is that poor people don’t matter. They don’t matter as consumers because they don’t have any money; they don’t matter as producers because once they start producing they do not stay poor for long. Show me a persistently poor factory worker and I will show you a rotten factory, no threat to the U.S. or anyone else.
and goes on to note the similarities with Japan of the 1960s and Taiwan and South Korea of the 1970s, which started competing with U.S. companies using low wages to make up for their mediocre reputation for quality, and within about two decades switched to competing on quality.
Book review: Imperial Hubris : Why the West is Losing the War on Terror, by Anonymous
This disturbing book whose author has now identified himself as Michael Scheuer, the former chief of the CIA’s Osama bin Laden unit, claims that bin Laden is being effective at persuading Muslims to wage a defensive jihad against the U.S. by making straightforward arguments based on scripture and descriptions of U.S. actions toward Muslims that are close enough to the truth to convince many Muslims that it would be sinful not to fight the U.S. He is succeeding because he ignores such U.S. offenses as alcohol, gay rights, man-made law and nation-states, and focuses on U.S. meddling in the Mideast.
Book Review: The Escape from Hunger and Premature Death, 1700-2100 by Robert Fogel
This book presents good arguments that hunger was a major cause of health problems everywhere a century ago, and that the effects last long enough that even the richest countries are still suffering from problems caused by hunger. His arguments imply that experts persistently underestimate improvements in life expectancy, and even with little improvement in medical technology life expectancy will improve a good deal because people born today have much better nutrition than today’s elderly had as children.
This goes a long way toward explaining the Flynn effect (even though the book doesn’t mention Flynn or IQ). It correctly implies the biggest intelligence increase should be seen at the low end of the IQ range, unlike a number of other interesting theories I’ve come across.
Another peculiar fact that the book helps to explain is the high frequency with which the tallest presidential candidate wins. Fogel’s arguments that height has been one of the best indicators of health/wealth suggest that this is not an arbitrary criterion (although it is probably a selfish I-want-to-ally-with-a-winner strategy that may be obsolete).
The book is mostly non-idealogical, but occasionally has some good political arguments (page 42):
government transfers were incapable of solving the problems of beggary
and homelessness during the eighteenth and much of the nineteenth centuries,
because the root cause of the problems was chronic malnutrition. … At
the end of the eighteenth century British agriculture, even when supplemented
by imports, was simply not productive enough to provide more than 80 percent
of the potential labor force with enough calories to sustain regular manual
labor.
(page 106):
Readers may be surprised that I have not emphasized the extension of health insurance policies to the 15 percent of the population not currently insured. The flap over insurance has more to do with taxation than with health services. … Most proposals for extending health insurance involve taxing their wages for services they already receive.
See also Mike Linksvayer’s comments.
Book Review: What is Thought? by Eric Baum
The first half of this book is an overview of the field of artificial intelligence that might be one of the best available introductions for people who are new to the subject, but which seemed fairly slow and only mildly interesting to me.
The parts of the book that are excellent for both amateurs and experts are chapters 11 through 13, dealing with how human intelligence evolved.
He presents strong, although not conclusive, arguments that the evolution of language did not involve dramatic new modes of thought except to the extent that improved communication improved learning, and that small catalysts created by humans might well be enough to spark the evolution of human-like language in other apes.
His recasting of the nature versus nurture debate in terms of biases that guide learning is likely to prove more valuable at resisting the distortions of ideologues than more conventional versions (e.g. Pinker’s).
His arguments have important implications for how AI will progress. He convinced me that it will be less sudden than I previously thought, by convincing me that truly general-purpose learning machines won’t work, and that much of intelligence involves using large quantities of data about the real world to choose good biases with which to guide our learning.