Book Review: The Armchair Economist: Economics And Everyday Experience by Steven Landsburg
This short and eloquent book does a mostly excellent job of explaining to non-economists how economic reasoning works in a wide variety of mostly non-financial areas. But it’s frustrating how he can get so much right but still demonstrate many annoying oversimplifications that economists’ biases make them prone to.
For example, on page 145 he claims that a trash collection company could cheaply prohibit Styrofoam peanuts in the trash by checking everyone’s trash once a year and fining violators $100,000. But anyone who thinks about the economics of such fines will be able to imagine massive costs from people disputing who is responsible for peanuts in the trash. Maybe there are cultures in which such fines would ensure negligible violations, but there are probably as many cultures in which disputes over people putting peanuts in someone else’s trash cans would produce more waste than the peanuts do.
His suggestion of applying antitrust laws to politicians is almost right, but ignores the public choice problems of ensuring that laws marketed as antitrust laws do anything to prevent monopoly. The details of antitrust laws are complex and boring enough that few people other than special interests pay attention to them, so special interests are able to twist the details to turn the laws into forces that protect monopolies.
On page 183 he says “Flood the economy with money and the nominal interest rate goes up in lockstep with inflation”. Given a sufficiently long-term perspective, this is an arguably decent approximation. But he’s disputing the common sense of a typical reporter who is more interested in a short-term perspective under which those changes clearly do not happen in lockstep (on page 216 he provides hints at a theory of why there’s a delayed reaction).
He makes some good points about the similarities between environmentalism and religion, but it seems these points blind him to non-religious motives behind environmentalism. He says on page 227 about relocating polluting industries: “To most economists, this is a self-evident opportunity to make not just Americans but everybody better off.” Maybe if he included a payoff to the U.S. workers whose jobs went overseas, this conclusion would be plausible. But it’s hard enough to figure out how such a payoff should be determined that I suspect he simply ignored that problem.
Book Reviews
Book Review: An Underground Education : The Unauthorized and Outrageous Supplement to Everything You Thought You Knew About Art, Sex, Business, Crime, Science, Medicine, and Other Fields of Human Knowledge by Richard Zacks
This book is an irreverent collection of interesting but mostly unimportant historical anecdotes.
A sampling of stories that I enjoyed:
The fork (at least as used for eating) was initially condemned as “the devil’s pitchfork” by priests who thought people ought to eat with their hands.
Witchcraft prosecutions were motivated at least in part by the desire of churches and civil authorities to get the property of the accused, until a legal change in 1630 prevented them from getting such property. Similar motivations for the inquisition, where property could be confiscated decades after the death of an alleged heretic how had owned it.
He describes mail order porn in 1863.
He has a photo of George Washington’s dentures, made from human teeth (presumably taken from dead soldiers).
The medieval church forbade doctors from dissecting human corpses to learn about anatomy and forbade surgery. Some of the other medical anecdotes suggest that there have been many times when patients would have been better off if the prohibition on surgery had lasted longer.
Don’t expect too much wisdom from these stories. One isolated place where he attempts a non-shallow analysis is when he asks “How did child labor start in America, and why was it widely tolerated”? Unfortunately, his attempts to analyze this merely consist of finding reports of child labor earlier than he thinks his readers expect. It doesn’t occur to him to ask whether people could even afford to do without child labor before the industrial revolution.
Accelerando! is an entertaining collection of loosely related anecdotes spanning a time that covers both the near future and the post-singularity world. Stross seems to be more interested in showing off how many geeky pieces of knowledge he has and how many witty one-liners he can produce than he is in producing a great plot or a big new vision. I expect that people who aren’t hackers or extropians will sometimes be confused by some of his more obscure references (e.g. when he assumes you know how a third-party compiler defeats the Thompson hack).
He sometimes tries too hard to show off his knowledge, such as when he says “solving the calculation problem” causes “screams from the Chicago School” – this seems to show he confuses the Chicago School with the Austrian School. He says that in the farther parts of the solar system
Most people huddle close to the hub, for comfort and warmth and low latency: posthumans are gregarious.
But most of what I know about the physics of computation suggests that warmth is a problem they will be trying to minimize.
The early parts of the book try to impress the reader with future shock, but toward the end the effects of technological change seem to have less and less effect on how the characters lives. That is hard to reconcile with the kind of exponential change that Stross seems to believe in.
He has many tidbits about innovative economic and legal institutions. But it’s often hard to understand how realistic they are, because I got some inconsistent impressions about basic things such as whether Manfred used money.
His answer to the Fermi paradox is unconvincing. It is easy to imagine that the smartest beings will want to stick close to the most popular locations. But that leaves plenty of other moderately intelligent beings (the lobsters?) with little attachment to this solar system, whose failure to colonize the galaxy he doesn’t explain.
Some interesting quotes:
humans will be obsolete as economic units within a couple more decades. All I want to do is make everybody rich beyond their wildest dreams before that happens.
“A moment.” Manfred tries to remember what address to ping. It’s useless, and painfully frustrating. “It would help if I could remember where I keep the rest of my mind,”
disaffected youth against the formerly graying gerontocracy of Europe, insist that people who predate the supergrid and can’t handle implants aren’t really conscious
And here’s one quote from the Fred in my reading group‘s discussion of the book:
The meat shall inherit the earth
Book Review: Women, Fire, and Dangerous Things : What Categories Reveal about the Mind by George Lakoff
I would have found this book well worth reading if I had read it when it was published, but by now I’ve picked up most of the ideas elsewhere.
He does a good job of describing the problems of the classical view of categories. His description of the alternative prototype theory is not as clear and convincing as what I’ve found in the neural net literature.
His attacks on objectivism and the “God’s eye view” of reality are pretty good. I found this claim interesting: (page 301) “to be objective requires one to be a relativist of an appropriate sort”.
The chapter on the mind-as-machine paradigm gives a superficial impression of saying more than it actually does. It discredits an approach to AI that was mostly recognized as a failure by the AI community when the book was published or shortly after that. He could confuse some people into thinking he discredits more than this by his strange use of the word algorithm. He says “Algorithms concern the manipulation of meaningless disembodied symbols”, and admits his arguments don’t discredit connectionism. Yet by the normal computer science usage of “algorithm”, it is quite sensible to say that connectionism uses algorithms to manipulate meaningful concepts.
Book Review: The Great Divergence: China, Europe, and the Making of the Modern World Economy, by Kenneth Pomeranz
This book does a good job of criticizing many Anglo-centric explanations of why Europeans industrialized first by providing detailed evidence that the area near the Yangzi river delta was mostly as advanced as England when England started the industrial revolution.
It does a less convincing job of arguing that coal and new world land were the main reasons for England’s success. I’m tempted to believe that American sugar provided desperately needed calories to break out of a Malthusian trap, but the evidence doesn’t show that became significant until the industrial revolution had already started.
Conveniently located coal undoubtedly gave England a boost, but not a big enough boost that there is a practical way to decide it was more important than the numerous cultural differences which might have given England the edge it needed.
The book makes a serious effort to dismiss those cultural explanations, but is not thorough enough. In particular, I’m disappointed with the cryptic way that it dismisses the relevance of the ideas in Helmut Schoeck’s book Envy.
The style is often deadening, with lengthy descriptions of details whose relevance is unobvious.
Book Review: The God Gene : How Faith Is Hardwired into Our Genes by Dean H. Hamer
This book is entertaining but erratic. To start with, the title is misleading. The important parts of the book are about spirituality (as in what Buddhists seek), which has little connection with God or churches. He does a moderately good job of describing evidence that he has identified a gene that influences spirituality. He makes plausible claims that spirituality makes people happy (that part of the book resembles the works of Csikszentmihalyi and Seligman). He makes a half-hearted attempt to argue that spirituality has evolutionary advantages which isn’t very convincing by itself, but in combination with the sexual selection arguments in Miller’s book The Mating Mind it becomes moderately plausible.
About halfway through the book, he runs out of things to say on those subjects and proceeds to wander through a bunch of marginally related subjects.
His descriptions of psilocybin, prozac, and ecstasy were interesting enough to make me want to learn more about those and similar drugs.
His claims that placebos are effective seem very exaggerated (see this abstract).
Book Review: Unconventional Success : A Fundamental Approach to Personal Investment by David F. Swensen
This book provides some good advice on how an amateur investor can avoid sub-par results with a modest amount of work. It starts by describing why good asset allocation rules should be the primary concern of the typical person.
I found this quote especially wise: “While hot stocks and brilliant timing make wonderful cocktail party chatter, the conversation-stopping policy portfolio proves far more important to investment success.” Fortunately for those of us who make a living exploiting the mispricing of fad-chasing investors, the most valuable points of this book aren’t in the kind of sound bite that will make them popular at cocktail parties.
But even if you choose investment ideas for cocktail party conversation rather than for building wealth, you should be able to find some value in his explanations of how to avoid being ripped off by fund salesmen and why ETFs are better than most mutual funds.
His attacks on the mutual fund industry are filled with redundant vitriol that may cause some readers to quit in the middle. If you do so, don’t miss table 11.3, which gives an excellent list of ETFs that most investors should use. I was surprised at how much I learned about the differences between good and bad ETFs from this book.
His arguments against investing in foreign bond funds are weak. I suspect he overestimates the degree to which foreign equities diversify exposure to currency risks.
He advises investing more in U.S. equities than in equities of the rest of the world combined, even though his reasoning implies more diversification would be better. But I’ve been slow enough to diversify my own investments this way that I guess I can’t fault him too severely.
He has a plausible claim that not-for-profit organizations that provide investment vehicles on average treat customers more fairly than for-profit funds do, he goes overboard when he claims not-for-profits have no conflict of interest. The desires for job security and large salaries create incentives that would cause many investors to be fleeced if they switched to not-for-profits without becoming more vigilant than they have been.
His faith in the U.S. government is even more naive. He says “U.S. Treasury Inflation-Protected Securities, which provide ironclad assurance against inflation-induced asset erosion”, “Treasury … bondholders face no risk of default”, and “The interests of Treasury bond investors and the U.S. government prove to be better aligned than the interests of corporate bond investors and corporate issuers. The government sees little reason to disfavor bondholders.” But a close look at the CPI shows that indexing to it provides very imperfect inflation protection (e.g. its focus on rents hides the effects of rising home prices), and the current reckless spending policies combined with large foreign holdings of U.S. bonds can hardly avoid creating a motive for future politicians to inflate wildly or default.
Book Review: The Singularity Is Near : When Humans Transcend Biology by Ray Kurzweil
Kurzweil does a good job of arguing that extrapolating trends such as Moore’s Law works better than most alternative forecasting methods, and he does a good job of describing the implications of those trends. But he is a bit long-winded, and tries to hedge his methodology by pointing to specific research results which he seems to think buttress his conclusions. He neither convinces me that he is good at distinguishing hype from value when analyzing current projects, nor that doing so would help with the longer-term forecasting that constitutes the important aspect of the book.
Given the title, I was slightly surprised that he predicts that AIs will become powerful slightly more gradually than I recall him suggesting previously (which is a good deal more gradual than most Singulitarians). He offsets this by predicting more dramatic changes in the 22nd century than I imagined could be extrapolated from existing trends.
His discussion of the practical importance of reversible computing is clearer than anything else I’ve read on this subject.
When he gets specific, large parts of what he says seem almost right, but there are quite a few details that are misleading enough that I want to quibble with them.
For instance (on page 244, talking about the world circa 2030): “The bulk of the additional energy needed is likely to come from new nanoscale solar, wind, and geothermal technologies.” Yet he says little to justify this, and most of what I know suggests that wind and geothermal have little hope of satisfying more than 1 or 2 percent of new energy demand.
His reference on page 55 to “the devastating effect that illegal file sharing has had on the music-recording industry” seems to say something undesirable about his perspective.
His comments on economists thoughts about deflation are confused and irrelevant.
On page 92 he says “Is the problem that we are not running the evolutionary algorithms long enough? … This won’t work, however, because conventional genetic algorithms reach an asymptote in their level of performance, so running them for a longer period of time won’t help.” If “conventional” excludes genetic programming, then maybe his claim is plausible. But genetic programming originator John Koza claims his results keep improving when he uses more computing power.
His description of nanotech progress seems naive. (page 228) “Drexler’s dissertation … laid out the foundation and provided the road map still being followed today.” (page 234): “each aspect of Drexler’s conceptual designs has been validated”. I’ve been following this area pretty carefully, and I’m aware of some computer simulations which do a tiny fraction of what is needed, but if any lab research is being done that could be considered to follow Drexler’s road map, it’s a well kept secret. Kurzweil then offsets his lack of documentation for those claims by going overboard about documenting his accurate claim that “no serious flaw in Drexler’s nanoassembler concept has been described”.
Kurzweil argues that self-replicating nanobots will sometimes be desirable. I find this poorly thought out. His reasons for wanting them could be satisfied by nanobots that replicate under the control of a responsible AI.
I’m bothered by his complacent attitude toward the risks of AI. He sometimes hints that he is concerned, but his suggestions for dealing with the risks don’t indicate that he has given much thought to the subject. He has a footnote that mentions Yudkowsky’s Guidelines on Friendly AI. The context could lead readers to think they are comparable to the Foresight Guidelines on Molecular Nanotechnology. Alas, Yudkowsky’s guidelines depend on concepts which are hard enough to understand that few researchers are likely to comprehend them, and the few who have tried disagree about their importance.
Kurzweil’s thoughts on the risks that the simulation we may live in will be turned off are somewhat interesting, but less thoughtful than Robin Hanson’s essay on How To Live In A Simulation.
A couple of nice quotes from the book:
(page 210): “It’s mostly in your genes” is only true if you take the usual passive attitude toward health and aging.
(page 301): Sex has largely been separated from its biological function. … So why don’t we provide the same for … another activity that also provides both social intimacy and sensual pleasure – namely, eating?
Book Review: Nanofuture: What’s Next For Nanotechnology by J. Storrs Hall
This book provides some rather well informed insights into what molecular engineering will be able to do in a few decades. It isn’t as thoughtful as Drexler’s Engines of Creation, but it has many ideas that seem new to this reader who has been reading similar essays for many years, such as a solar energy collector that looks and feels like grass.
The book is somewhat eccentric in it’s choice of what to emphasize, devoting three pages to the history of the steam engine, but describing the efficiency of nanotech batteries in a footnote that is a bit too cryptic to be convincing.
The chapter on economics is better than I expected, but I’m still not satisfied. The prediction that interest rates will be much higher sounds correct for the period in which we transition to widespread use of general purpose assemblers, since investing capital in producing more machines will be very productive. But once the technology is widespread and mature, the value of additional manufacturing will decline rapidly to the point where it ceases to put upward pressure on interest rates.
The chapter on AI is disappointing, implying that the main risks of AI are to the human ego. For some better clues about the risks of AI, see Yudkowsky’s essay on Creating Friendly AI.
Book Review: Freakonomics : A Rogue Economist Explores the Hidden Side of Everything by Steven D. Levitt
This book does a pretty good job of tackling subjects that are worth thinking about but which few would think to tackle. Their answers are interesting but not always as rigorous as I hoped.
The implication that this is an economics book is a bit misleading. While it is occasionally guided by the principle that incentives matter, it is at least as much about Kelvinism (the belief that we ought to quantify knowledge whenever possible), but then some of the book consists of stories which have little to do with either.
My favorite parts of the book explore the extent to which experts’ incentives cause them to pursue goals that don’t coincide with their clients’ interests. But his arguments about realtors exaggerate the extent of their conflict of interest – it is likely that part of the reason they are quick to sell a client’s house more cheaply than they would sell their own is that the realtor is less likely to need to sell by a deadline.
I am left puzzled by the claim that crack gang leaders want to avoid gang wars, but gang members are rewarded for starting violence with promotions. Who’s controlling the rewards if it isn’t the leader? Why can’t he ensure that members who engage in nondefensive violence aren’t promoted?