Book Reviews

Entrepreneurial Economics

Posted by Peter on January 22, 2005
Posted in: Book Reviews, Economics, Idea Futures. Tagged: , , .

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.

Catastrophe

Posted by Peter on January 19, 2005
Posted in: Book Reviews, Economics, Idea Futures, Politics. Tagged: , , , .

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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Imperial Hubris

Posted by Peter on December 17, 2004
Posted in: Book Reviews, Mideast, U.S. Politics. Tagged: .

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.

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Hunger

Posted by Peter on December 16, 2004
Posted in: Book Reviews, Health, Politics, The Flynn Effect. Tagged: , , , .

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.

What is Thought?

Posted by Peter on December 15, 2004
Posted in: Artificial Intelligence, Book Reviews, The Human Mind. Tagged: .

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.

Commodifying Communism

Posted by Peter on December 15, 2004
Posted in: Book Reviews, China. Tagged: .

Book Review: Commodifying Communism : Business, Trust, and Politics in a Chinese City by David L. Wank

This book does a good job of describing typical small business activity in a city that the author lived in for a couple of years.

I have long been puzzled by the reports that China has a booming economy in spite of widespread corruption and hardly any rule of law, when those problems seem to ensure poverty elsewhere.

This book does a good deal to resolve this mystery. It suggests that Fukuyama’s claim that “there is a relatively low degree of trust in Chinese society the moment one steps outside the family circle” is misleading because the Chinese notions of family ties aren’t as rigid as in the west. Family-style trust is more like a commodity that can be readily acquired by most people who have decent reputations, via friend of a friend type connections between people. And the networks of reputation do well at ensuring the reasonableness of corrupt or arbitrary actors.

It would be nice if we could copy the good parts of these aspects of Chinese culture, but I suspect that’s as hard as copying the social capital that Fukuyama describes in his book Trust.

Here’s one isolated provocative comment to which I haven’t figured how to respond:

The premise that inequalities stemming from differential access to political capital are reprehensible, while those stemming from imbalances in access to economic capital are not, is a value judgment that elides how political power is always implicated in the structure of markets.

Innovation and Its Discontents

Posted by Peter on December 9, 2004
Posted in: Book Reviews, Economics, Politics. Tagged: , .

Book Review: Innovation and Its Discontents : How Our Broken Patent System is Endangering Innovation and Progress, and What to Do About It by Adam B. Jaffe, Josh Lerner

This book presents a clear, concise and convincing argument that subtle changes in U.S. laws starting in 1982 have broken a patent system that was working reasonably well until then. It will be more effective at convincing the average person than most other attempts have been, both because of its style and because it shows that the changes which broke the system shouldn’t have been expected to help anyone other than patent lawyers. Their analysis will be useful in helping to avoid the takeover of other agencies by special interests.

Their description of how the system should be fixed is less impressive. Their summary of proposed changes strangely fails to include undoing the change in appeals court jurisdiction which they suggest was a primary cause of the problems. Their argument in favor of patenting software, business practices, etc. is more radical than they seem to realize, as it appears to imply that patents should also be extended to mathematical theorems, yet they act as if the burden of proof should be on their critics.

It is hard to believe their proposals go far enough. One suggestion I have is that, in return for higher salaries, patent examiners should be unable to work as patent lawyers for a year or two after leaving their job. This would reduce the number of examiners who can expect to be rewarded for patents that create disputes.

Their confidence that a traditional patent system is better than no patents is unconvincing (but they do a good job of explaining why it is hard to know what the best system is). They support their position by a few examples such as Xerox, whose copier wouldn’t have been invented as it was without patent protection. But it’s much harder than they imply to determine that a copier wouldn’t have been invented some other way a few years later.

Book Review: Rare Earth by Peter Ward, Donald Brownlee

Posted by Peter on November 17, 2004
Posted in: Book Reviews, Fermi Paradox. Tagged: , , , , .

Rare Earth : Why Complex Life Is Uncommon in the Universe provides some fairly strong (and not well known) arguments that animal life on earth has been very lucky, and that planetary surfaces are typically much more hostile to multicellular life than our experience leads us to expect.

The most convincing parts of the book deal with geological and astronomical phenomena that suggest that earth-like conditions are unstable, and that it would have been normal for animal life to have been wiped out by disasters such as asteroids, extreme temperatures, supernovae, etc.

The parts of the book that deal with biology and evolution are disappointing. The “enigma” of the Cambrian explosion seems to have been explained by Andrew Parker (see his book In the Blink of an Eye) in a way that undercuts Rare Earth’s use of it (dramatic changes of this nature seem very likely when eyes first evolve). This theory was apparently first published in a technical journal in 1998 (i.e. before Rare Earth).

They often assume that intelligence could only develop as it has in humans, even suggesting that it couldn’t evolve in the ocean, which is rather odd given how close the octopus is to qualifying. But the various arguments in the book are independent enough that the weak parts don’t have much affect on the rest of the arguments.

I was surprised that they never mentioned the Fermi Paradox, which I consider to be the strongest single argument for their position. Apparently they don’t give it much thought because they don’t expect technological growth to produce effects that encompass more than our planet and are visible at galactic distances.

Their concern over biodiversity seems rather misplaced. I can understand why people who overestimate mother nature’s benevolence think that preserving the status quo is a safe strategy for humanity, but it seems to me that anyone sharing Rare Earth’s belief that nature could wipe us out any time now should tend to prefer a strategy of putting more of our effort into creating technology that will allow us to survive natural disasters.

I am disappointed that they rarely attempt to quantify the range of probabilities they would consider reasonable for the risks they discuss.

Stephen Webb has written a book on roughly the same subject called Where is Everybody? that is more carefully argued, but less entertaining, than Rare Earth.