In Regard to Marc Andreessen’s “Why Software is Eating the World”

Millionaire entrepreneur and venture capitalist, Marc Andreessen, recently wrote an op-ed in the WallStreet Journal that went viral, entitled "Why Software Is Eating The World" In it he argues a few things. First that Software is taking over the world’s industries from retail to defense. Second, that we are not currently experiencing a bubble. And third, that this shift gives him optimism in the future growth of the world’s economies and stock markets. Once finished with the article, the reader can’t help but be overcome by a rosy outlook, one where software fulfills the imagined future of tomorrow that robots never quite delivered on.

Some reflection changed that. The problem: while he’s right about the explosive takeover potential of software, he grossly overestimates the future profitability of software and entirely overlooks the downside of a world where software replaces the jobs of actual humans.

I am not trying to put down the op-ed, rather just pointing to something that I think is an obvious preference *cough* bias *cough* in the journalistic outlook of the Wallstreet Journal.

On the point of profitability, are we in a bubble? Well besides his thesis of a “dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy” that I will get to in a moment, Marc’s case that we are not is not very strong when held up against a more scrutinizing look at the facts he references.

1) You can't have a bubble when people are constantly screaming "Bubble!”

Seriously? Maybe I only dreamt of the legions of pundits screaming “Bubble!” during the dotcom and housing bubbles.

2) Today's stock market actually hates technology, as shown by all-time low price/earnings ratios for major public technology companies. Apple, for example, has a P/E ratio of around 15.2—about the same as the broader stock market.

P/E ratios are constantly moving, but as of August 19, 2011, Apple a P/E ratio of 14.9 while the S&P500 (the closest proxy to the overall public equity market) had a P/E ratio of 6.6. That’s about 2.3x higher than the broader market. Without going into too much finance theory, this magnitude of difference is actually historically consistent with high-growth companies and therefore indicative of a market that expects a lot of growth from Apple.

The Majority of the op-ed though, points to the dramatic economic shift to software mentioned earlier. Here, a strong case is made for why software is poised to take over large sectors of the economy. The unanswered question remains – is this takeover necessarily a good thing for the markets and, more broadly, for all of our wellbeing?

Before the days of the internet, software was incredibly profitable. In those days, you sold software, and made a profit, a very straight forward, and pre-21st century business model that made guys like Bill Gates “I can get a way with killing someone” rich. Nowadays, making software, at least for broader consumers, requires more creativity to make a buck. So far the only business model that’s made Microsoft-in-the-90s type of profit is Advertising, and even there it’s been a winner-take-all game where Google (and to a lesser extent Facebook) owns the vast majority of that market.

The reason for this is two fold. One due to easier-to-learn technology and a demographic shift, there’s more engineers out there able to code, which leads to a greater supply of software out there, all competing for incredibly capricious consumer attention. And second, is the phenomenon of anti-profit digital culture. Charging directly for software has become almost taboo across both sides of the economic isle. Software engineers praise the merits of open source and building products for the egalitarian sake of it, and consumers are harshly suspicious of corporations charging them for what they see as their valuable digital attention. Call it 21st century entitlement. Call it a reaction to the gouging days of Microsoft’s monopoly. Either way, it doesn’t seem this trend is changing. Just ask the millions of up-in-arms Netflix users who recently had to pay a few dollars more for unlimited and instant access to thousands of movies, despite just years ago where the same would cost orders of magnitude more at a Blockbuster.

Allow me to take a quick detour to talk more about this idea of egalitarian and non-materialistic digital culture movements, like “open source”, so that I don’t give the wrong impression. Just to be extra clear, these are actually incredibly positive movements. Just because you can’t measure their impact in dollars and cents, doesn’t mean they aren’t marvelous sources of wealth for us all. Wikipedia is free and educates millions. The servers, databases, and free libraries out there spur digital innovation. And open-source operating systems and applications help give computer access to millions who can’t afford it. Now back to the main line of argument.

Software will take over the economy – probably. Will it bring with it incredible profits? Until it can find a way to make (big) money beyond advertising and online retail, which is already beginning to mature, I don’t think so.

Now to what is the most important point of all with respect to any optimistic outlook on technology. Technology concentrates wealth. It shifts profitability from labor to capital. Amazon revolutionized the sale of books (and now other products) but while it has proven incredibly profitable for early investors (capital holders), it now employs far fewer than those employed by the collateral damage of countless bookstores and brick-and-mortar retailers now closed.

I am not a luddite and I don’t mean to imply software companies like Amazon are doing something wrong. There is no right and wrong here, but there is change. We are in a recession and media outlets like the Wallstreet Journal would have us believe that what we need are more open markets, more unabashed capitalism to take us out of it. Here’s the problem. The old pre-recession jobs are not coming back. The twin forces of technology and globalization have eliminated those jobs. There is a systemic shift where the size of the pie is growing, but with it come income disparity and the array of consequential social problems that would derail this article too much should I try to get into them. The solution: simply put, socialism. We need a social safetynet to protect and give dignity to those who can’t find a place in the musical chairs game of capitalism we are headed for, and training programs to help those who can.

Dani Rodrik, Economics Professor at the Harvard Kennedy School of Government and one of the world leading experts on globalization, in a paper commissioned by the IMF proposed just this. My personal antipathy for economics aside, most of the academic community also supports socialist ideas like this. It is no longer crazy liberals who support this view, rather only ideologues who reject it.

So will software take over the world? Probably. Is it guaranteed to be good for us? At least in the short term, unclear. While promising movements like open source are showing us that technology can benefit us without creating huge groups of haves and have-nots, politicians haven’t yet come to the conclusions that many software engineers and digital innovators have reached long ago.

Corporations: Don't hate the player. Hate the game.

Burns

In a television show centered on playing with the stereotypes of modern America, Mr. Burns, of The Simpsons, takes on the caricature of the soulless capitalist elite. He has a stranglehold on the town's energy and capital, and in return the people of Springfield are mired into a hostile but dependent and sometimes exploitive relationship with him.

Quick - think of some extraordinarily wealthy people! Bill Gates and Warren Buffet probably come to mind. But, those two are maybe better known for their philanthropy efforts and their charitable personalities than any Burns-like megalomania. They don't hold up to the stereotype. Maybe the wealthiest amongst us have become better people, or maybe they've just invested more in their PR. Or maybe the true source of malevolence, namely the corporation, was too complex of a beast for a 1990s cartoon targeted at adults but mostly watched by children.

Sure, there is some truth to caricature. There are greedy people amongst us, probably sitting at a desk right now, furrowing their brows and gently tapping their fingertips together ahead of their lips, pondering how much lead in the toothpaste is too much lead, and whether they have enough plausible deniability should the unbribable members of the FDA catch on. But even the most criminal executives do their worst damage through the corporation, relying on it as both their canvas and curtain.

Human nature has not changed much in the past few thousand years. Conflict resolution has evolved from cannibalism and throwing poo at each other to court hearings through steady evolution of social contracts and regulation, and in that spirit, curtailing the malignant decisions of individuals within a corporate system will require reform of the system. Bad people will continue to do bad things, and everyone will continue to make decisions in their self-interest. So while there is some cathartic pleasure we can all take in watching the Bernie Madoffs of the world walk handcuffed into a court room, imprisonment of select miscreants is little more than theatre starring a sacrificial lamb, crafted to pacify us while real problems continue to persist backstage.

The strange thing is that even corporations are not exactly the problem. That is to say, attacking single corporations, much like attacking specific individuals ignores the system. It's about the system maaaaan! The troubles with the modern multinational corporation are rooted in two related and seemingly innocuous features. First, there is no centralized heart of responsibility to shoulder the blame in the case of, say, environmental catastrophe. And second, everyone now has their hand in the corporate pot: government, labor, and the public at-large. What is created is an incentive system where a massive and diverse set of stakeholders mandates corporations and their executives to pursue the one interest they all share in common: make money.

The BP deepwater oil spill, cited by many as the worst environmental disaster in US history, is an interesting case study of how this all works. Perhaps the leading narrative championed by the media was that a foreign oil company had carelessly exploited American shores and that they must be punished. This oversimplifaction creates a suitable villian for public outcry, but doesn't teach us anything about how to avoid corporate negligence in the future.

Let's start with the first claim. BP is a foreign corporation. The Company is headquartered in London, but is otherwise truly international in every sense of the word. It operates in over 80 countries and the majority of its shareholders are, in fact, not British. Americans own 39% of BP. Furthermore, 79% of BP is owned by institutional investors, with mutual funds, pension funds, and index funds often comprising a big chunk of that. So who owns BP? If you're retired, own a pension, belong to a union, or own any index or energy mutual funds, then odds are you do. The same goes for Coca Cola, GE, IBM, Exxon Mobil, and practically every other multinational.

Other BP stakeholders include politicians who rely on them for campaign finance, trade unions who rely on them for jobs, governments who rely on them for tax revenue, and a slew of others, ironically even including environmental agencies whose contracts with big industrial firms run in the millions of dollars.

And what about the executive suits at BP? The role of executives as outlined by the modern corporate ethos is to do one thing and one thing only: maximize profits. The free-marketier's rationale for this is that the dollar is the only regulatory mechanism required and that consumers (and sometimes governments) will "vote with their feet" if they disagree with management's decisions, which creates a self-regulating sandbox that executives can play in. There is some talk of a more-egalitarian "triple-bottom-line" in some academic circles, but there is a price to a more caring corporation, and this strategy fundamentally relies on consumers and stockholders paying higher prices for these corporations to compete, and with a few exceptions, so far it looks like consumers prefer Wal-Mart.

The answer, then, remains unclear and is certainly open to debate, but here is an idea that might be a reasonable framework for discussion: if the problem with corporations as argued earlier is too many stakeholders without a center of responsibility, let's think of ways to limit stakeholders and strengthen centers of responsibility. For example, campaign finance reform can help separate corporate interests from politics and corporate legal reform can hold executives more responsible for the actions of the companies they run.

Corporations are not faceless boogiemen. Nor are they only a collection of scheming executives. They are organizations whose tentacles incestually reach out to all of us: we are almost all corporate stakeholders. Blaming Goldman Sachs for legally making billions without creating real value for the rest of society, or Exxon Mobil for contributing to global warming, or Wal-Mart for paying millions minimum wage is kind of like taking bread from Robin Hood and then calling him a crook. That is a very harsh analogy and this author is not exempt from its conclusions, but without this type of radical rethinking of our role in this all, we are all bystanders.

My fruit roll-up has a few specks of dog poo on it. I'll just eat around it.

I hate being called a cynic, or a pessimist, or whatever else word people choose to surreptisciously criticize my better sense of reality. See it occured to me a while ago that my kind understands that life, from pretty much birth onwards, is a steady cascade of compromise. Others? Well they're either too ignorant or self-absorbed to notice. I'm done pretending in my miasmic way that their worldview is somehow of equal value to mine; that cosmic greaterness ordains that their's balances mine through some mysterious harmony too transcendent for me to understand. No, like a baby of just a few months, their assured wonder is predicated on ignorance - an ignorance dependent on the rest of us for sustanence. It's nice that children, free from any responsibility, can think whatever they want, but they need adults to bear the remaining burden, and in that same spirit, I can't shame optimists for their naievity - it's just that sometimes I fantasize about some kind of thank you. "Thank you, Charles," they will say as I enter their yoga studios, "take a towel for free". Ha look there! I reserve my optimism for fantastic orgies of pandimonium and symphony - also known as free towels at yoga studios, and perhaps permission to lay down my fastedious guard in just one downward dog and stare at the girl's ass in front of me.

Let me return to compromise. Some people are born and die - that's all they do. Each day I could sacrifice a few of my modern conveniences and probably save a life, and each day I don't. Life itself is dependent on the death - of plants and animals and our fellow women and men. Our first compromise? Acknowledging death. Our second? Acknowledging evil in others. Our third? Acknowledging evil in ourselves.

Affirming life is dependent on some kind of humble awe that comes with the pessimism I'm talking about. The kind of "it's all going to be better, roses and lolipops" attitude is an insult to the observed life and religions, to rational empiricism, and to irrational play. God himself, in every religion I can think of, as ruler and as metaphor for the eternal self, is a caprcious bastard. Jesus died on the cross to give us the freedom of pain. Mohammed proclaimed life as submission. Buddha took it a step further and said it's suffering.

This is why I laugh when I fall. Why inconvencies are gifts of discipline and love lost is emotion at its most primal, just in the opposite direction. Hope is, I guess, the best word for it. I'm not talking about glass half full. I'm talking you've spit in your own cup, filled it up about an inch of the way up, and are ready to relish what refreshing goo is in there, not worrying about how hard it is to drink it once its external to yourself, even though you swallow it all the time.

Can drinking cold water help you lose weight?

My housemate recently bought a copy of The 4-Hour Body: An Uncommon Guide to Rapid Fat-Loss, Incredible Sex, and Becoming Superhuman. The author, Timothy Ferriss, professional sociopath and narcisism-how-to-guru, goes through a laundry list of both obscure and obvious tips to "become a superhuman". One claim he makes, that seems to be the buzz lately, is that you can lose weight by being cold: sleeping cold, dressing cold, and drinking a lot of cold water.

I already prefer sleeping in the cold, and being cold all the time sounds like more work and less fun than just excercising, so I was most curious about the drinking cold water claim. Clearly warming up water to body temperature requires energy, but whether that amount of energy is significant enough to help you lose weight isn't obvious. So let's put it to the test.

Waterglass

The Math

First, let's assume you're drinking an incremental two litres of cold water a day (that's a little over a half gallon for the yanks out there). Two litres is a lot of additional cold water to drink, but at roughly four tall glasses, it's manageable and well below toxicity levels.

Let's assume you're drinking very cold water at about 5 degrees Celcius. That's about 41 degrees Farenheit. This is about the temperature of a typical glass of refrigerated water.

Warming up two litres of water by one degree Celcius takes 8360 Joules of energy, or about 2 kilocalories ("calories" in the food and nutrition lexicon actually refer to kilocalories). To get the water to our body's temperature of 37 degrees, therefore requires about 64 calories of energy.

Now, we actually need to burn more than 64 calories to warm up that water. This is because of energy loss. In modern powerplants, fuels like natural gas, oil, or coal, operate at about 30% efficiency. That is, only about 30% of the fuel's energy content is succesfully converted to electricity, or useful power. Our bodies, like electical plants, are not 100% efficient. To estimate how much energy we need to burn to heat up the water, we need to know the thermal efficiency of a human body.

It's easier to measure the mechanical efficiency of a human, the energy efficiency of converting food into a muscular movement, than thermal energy efficiency. Apparently you can literally tie someone up to a rowing machine and measure the input and output of energy with instrumentation! Studies place our mechanical efficiency at about 20% for a healthy young person. Turns out we're less efficient than a powerplant turbine. There goes my idea of cloning an army of myself, putting them on electrical bikes, and feeding them a calorie-rich goo. Back to the story. Outside of extreme conditions that would cause shivering, the energy required to heat up water in the body is mostly not muscular, but a result of mitochondria directly converting fat into heat energy. The efficiency of this process seems to roughly run at 40%.

At that 40% efficiency, your body burns 160 calories to heat up two litres of water. Getting rid of a pound of fat requires burning roughly 3500 calories, which amounts to about 22 days of drinking a lot of cold water. Drinking water has been shown to supress appetite, and assuming you don't change your diet to reward yourself new calories burnt, it seems like Timothy might be on to something.

Well that's that. Look for my next article: Can too much water kill you?

TLDR: Drinking an additional two litres of cold water daily burns about 160 calories, or a pound of fat over 22 days.

How come so many business people are douchebags?

You might start by thinking, “what a spectacularly ignorant title for an article! There’s douche bags in all slices of professions and people.” But while that’s true, let me try to convince you that business people (managers, lawyers, bankers, you know) happen to have an unusually large slice of douche bag. I’m talking really fat-guy slice of pie huge. With whip cream and strawberry preserves straight from your grandmother’s estate in southern California. And oh yah – that’s strawberry preserves on a fucking strawberry pie. That’s a big fucking slice! Okay the analogy teetered off a bit at the end there. Like “hey he was talking about the size of the slice but then to emphasize the slice’s size (slices size – what a fucking crazy tongue twister) he starts talking about its decadence? What is that about?”

Alright so business people’s douchebaggery – that’s what we’re talking about. First let me try to summarize an academic and metaphysical perspective on people and material success. Essentially it’s the anticipation and hope for success that makes us happy and gives us meaning in life. Once that success is achieved, there’s no more “that coming thing” that will make us happy. There’s no more hope. See at some point, what you wanted that whole time, that house, that high-paying job, whatever it is, you’ll get it, and then you’ll notice that nothings really different. This is by no means my idea. Alan Watts used a beautiful analogy to describe it here.

Most people have this realization earlier on. But business people almost by definition are still after that golden chicken type of success because in most business, wealth and status are not the peripheral outcome of a core pursued passion - they are the primary goal. They are working hard for a very generic, and when you step back to think about it a very vacuous type of, success, and are either not self-reflective enough to understand this, or worse, too sociopathic to care. It’s like natural selection of douche bag personality - an idea I have to believe Darwin was working on when he noticed that monkeys who more frequently threw their shit at other monkeys were more likely to set up market exchanges for bananas and other shit monkeys like.

Granted – there’s overly-self-interested, shallow douche bags in all walks of life, but it’s just not as dense. Take like the job of a teacher or a carpenter. There’s no promise there of much material reward. People who do those jobs likely end up doing them out of an underlying passion. And in terms of jobs that you could argue aren’t driven by people’s passions, like janitorial work, part of me has to believe that by virtue of doing work that other’s wont do, a humble realization grows that even though riches might make you happy, there’s no real hope that you’ll get there. They begin to look for more robust sources of wealth like family and relationships, which both require a selflessness and empathy to develop. Paradoxically, they may end up happier in the long run.

So there, business people are douche bags by selection. Oh and if you’re interested in why excessive wealth doesn’t make them happy, aside from the teachings of Buddha and frankly every prolific religious leader (besides scientology maybe), there’s a lot of interesting studies around long-term sources of happiness. Check out hedonic adaptation.

 

The-men-s-health-staff-001

"We are the richest people in the world, and most of our businessmen go around in dark suits looking like undertakers" - Alan Watts

Fulfilling work

An article from an old blog

We spend a lot of time at work.  I spend my waking life at work. With all this time and all the luxuries of the developed world, are we happy?

No. And taylorism, I think, is at least partly why. Since human labour was specialized and became a cog in a system of production, we have lost some of what I think is the natural way of things. We used to spend our days with a diversity of work: cooking, cleaning, building, farming, and whatever else we needed to do to survive. Whereas in the past you may have been a cabinet maker, responsible for all aspects of your business, now you may be the accounts payable manager at a company that makes the hinges used in cabinets, or arguably worse, an assembly line worker that fits hinges to pieces of a cabinet door. Specialization has taken the play out of work.

For many, the only escape is to make sure you’re at the top of whatever productive business you’re a part of. Makes sense – making it to “management”, with a greater diversity of work and fewer people dictating your daily routine, is desirable over checking for defects in Barbie doll torso pieces on an assembly line. I think this only underscores people’s desire to escape their menial work. I grant money and power have something to do with it to, but for a surprising many aspiring people I talk to, both are almost secondary to not being someone’s bitch.

It takes me a few hours, maybe days, to get bored of what I’m doing. When I’m at work typing away at a keyboard, all I can think of is working with my hands. After hours of working with my hands, I want to stop and stare at the many faces of nature or my surroundings. That staring leads me to read. When I read, I want to create something. And so it goes. This is a cycle that seems so natural to me, like sleeping and waking, but for some reason, the systems of lives we’ve created aren’t very accommodating. But even sleep we’re beginning to compromise now – it’s a thing for the weak. Our deeper needs, like diversity of work, meaningful relationships, self-understanding – well forget about those. No time for foolish things like that. I digress.

Thousands, no millions, of years of evolution have made us who we are: curious, many-skilled, adaptable to any environment. Ironically, it may have been those people with what we now call ADHD, the superlative need for diversity of work, that were most adapted to the nomadic complexity of our lives then.

I am not suggesting we abandon our system economic system of specialization and go back to some fantasy of the glory days. I like that we can mass-produce penicillin or pay a single person in a family enough to be able to send his children to school. But maybe there’s more of a middle ground?

I believe in progress – I’m not sure that preserving people like me is a good thing. People who, who described by an antagonist, get bored easily or overinvest their time and concentration on some obscure problem. If what it takes to be a “successful” human is, after all, the ability to work in the specialized economic system we have created and be happy doing it, then nature will run its course. However, if the universe as change is a game to be bet on, I would like to see my side win. A good friend of mine recently told me about his response to people asking him what the hell he’s going to do with his life: “I don’t really care. I figure I’ll follow my curiosities, and if that leads me somewhere respectable in life, that’s cool. If not, I’ll select out because my genes obviously don’t work”. I can’t say it much better.

The Stigma of Sadness

An article from an old blog

As a matter of general disposition, I am a pretty happy person. Why is everyone trying to convince me I’m not? 

Anyone who’s ever spent a hung-over Sunday afternoon half asleep channel surfing in front of the TV knows how many people are out there selling us happiness: sermons from an assortment of religious clerics and motivational speakers, smile-filled adds for anti-depressants whose scientific names no one can pronounce, and a far fetched, twenty dollar bottle of miracle water capable of curing your depression and facilitating divine deposits into your back account. The message I hear is this: you are sad and it’s not okay. 

It’s working. Maybe it’s just me, but when people ask me how I’m doing, “I’m feeling down” is rarely the appropriate answer. For one, it leads to a knee-jerk conversation with someone who wanted to just politely exchange pleasantries. More to my point though, sometimes sadness is taboo; it requires explanation. When family or friends call to see how I’m doing, I wont get much more than a “that’s good” if I happen to be in a great mood at that at moment, but even something as moderate as “things could be better” requires an explanation, and some kind of resolution. If you’re anything but happy all of the time, there’s something wrong with you. 

It really is not okay to be sad. It’s a kind of weakness – admittance to the world that you are somehow unfit. In the same way we cover-up our fatness, baldness, or bad skin, we cover-up our sadness, like it is something deserving shame. Take photos, for example – no pun intended. Forget the fact that photos probably once functioned to capture the poignant moments of our past (like the few photos I have of my parents in their youth); their purpose is now more sinister: to document our happiness, not for its own sake, but as proof of our social fitness. I make it a point sometimes to frown in photos. I mostly do this to be an asshole and ruin an otherwise good photo, but I still find it interesting how I never see these photos again. A frown in a photo is a blemish like a thumb on a lens, closed eyes, or an exposed nipple. 

Side note: it would be egregious for me to post impressive photos of my giant cock on the internet, but hundreds of undifferentiated poorly-lit photos of me embracing people I barely know at some undistinguishable club – that’s cool. I once read an article about how the number and gaiety of photos on social networking websites is a sign of narcissism. Really? I always thought it’s a sign of insecurity. The narcissists I know, the ones who really love themselves and ooze with confidence, I admire them. Real narcissism is practically a virtue. 

The reason for this attitude towards sadness is more philosophical and less institutional than what I just wrote might imply. The western world was founded on humanist concepts that embrace the greatness of the individual and advocate individual freedom and, consequently, responsibility. With this attitude in hand, you are expected to create for yourself what you want. Therefore if you are sad, it is an inherent flaw in your character – a personality trait only you are responsible for. Well isn’t that a great burden to carry? That kind of attitude, that sadness is weakness, is inherently self-perpetuating. But sadness is not a personality trait, really. It’s nowhere in any contemporary taxonomy of personality traits. 

Sadness is an emotion, something we all feel, agnostic to any conception of right or wrong, strong or weak. It is a necessary precondition to happiness. Life being fundamentally dualistic as it is, there is no happiness without sadness as there is no sadness without happiness – there is only dullness. This is both logically true in the same way there is no object without space, no light without dark; but also physiologically true in the way our body regulates the chemicals of happiness through hedonic adaptation. 

In this way, sadness is a fundamental and natural part of the human experience. But we continue to feel it’s something shameful and aberrant, like a twelve year old religious boy is meant to feel about masturbation. I think it’s ironic that when I’m experiencing a bout of mania, what I think are my most clearheaded thoughts would not conventionally be considered happy, rather they are objectively both my grimmest and most optimistic ideas, like what I write now. 

When I was seventeen, I needed to have surgery to repair a deviated septum in my sinus cavity. Coming out of surgery, I reacted to the anesthetic, giving me feverous chills and constipation, which combined with other discomforts like the blood, mucus, and two meters of gauze jammed in my nose, were worse than any of the surgery’s pain. The morning following the surgery, I had had no sleep and the chills were only beginning to temper. My sister, in her strange sense of humor decided it would be funny to photograph me that morning. The look on my face was a combination of pain, sleeplessness, and delirium – and my puffy eyes and the coagulated blood drying between my upper lip and nose suggested why. The pain gave meaning and contrast to the highs that followed. I love this photo.

Game Theory and Why Diplomatic Transparency is a Good Thing

When Wikileaks released the censored videotape of US gunners killing unarmed journalists, my reaction, aside from the initial visceral disgust and anger over the careless taking of life, was that of support for the leaks. The gunners were not rogue agents. Death from above like an all-too-real parody of a well-known video game, was in fact the rule of engagement. The video put a real face to the war that the government and the media had largely censored up to that point. Call me a heretic in these growingly-Orwellian times, but I don't think you can be a believer in democracy and articulate a compelling argument against that leak.

The leak of the diplomatic cables, though, is a bit different. I, like most people, don't fully understand how international diplomacy works, and when governments report that the leaks could seriously jeopardize their function, it seems like they might actually have a point. So are these leaks really a net benefit to society?

The answer, I think, is dependent on one question: is covert international diplomacy a zero-sum game? Otherwise put, assuming each nation is after some "good", for example marbles (though better examples would be peace, oil, or environmental health), does hiding diplomatic dealings increase the supply of marbles or just determine how they're distributed?

Diplomacy is often referred to as a grand game of poker, which ironically is a zero sum game. If this is the case, then a transparent diplomatic system doesn't really change anything in the long term. It changes the rules of the game and arguably makes the outcome more equitable, but doesn't fundamentally change the supply of "goodness" in the system - only its distribution.

If however, an opaque (vs. transparent) diplomatic system actually increases the shared good, then there's a reason to be wary of these leaks, and more importantly the shift in information transparency that technology might just make inevitable.

There is a third answer to the question I've ignored until now, and it's that opaque diplomacy actually reduces the supply of goodness. Or put otherwise, is a race to the bottom. 

While in reality, the answer differs depending on what "good" you're talking about - whether it be peace, jobs, or something else, I think considering what we've seen of the cables thus far, there's a strong reason to believe it might actually be a race to the bottom.

For example, we learned that the US and China worked jointly to sabotage the Copenhagen climate summit. While the outcome was (arguably) positive for those two countries, unless you don't believe in man-made climate change, the outcome to the system was overwhelmingly negative. We also learned that King Abdullah of Saudi Arabia had called Iran a threat and encouraged the US government to attack Iran, which is no friend of its neighboring Arab states. Before I continue, for full-disclosure's sake, I'm an Iranian born Canadian. A poll of the Saudi population asking what they thought was the biggest threat to their Country came up with 90% answering Israel and 70% answering the US, with only 10% answering Iran. An attack never happened, bur these cables highlight how diplomats and governments can so overwhelmingly defy public interest, or as Noam Chomsky hyperbolically put it, “[the leaked cables reveal] America's profound hatred for democracy”.

Here’s a more abstract argument. With or without transparency, the job of a diplomat is to represent the interests of his or her country on the international stage – not to increase the good in the system. There is a strong analogy to the classic prisoner dilemma game. I’m hoping most readers are familiar with this game. If there is secrecy in the system, where your actions are not known to other players, there is no “learning” from successive iterations, and so each player will assume everyone else is willing to screw them, and will in turn do the same. However, in a game with transparency, where each player can see the moves of the other, after multiple turns, players begin to cooperate and the total good in the system rises. 

Even with all this postulating, it’s impossible to really know what the outcome of a fully transparent state would be.  But here’s a thought. If the American government believed there was a good chance their efforts to sabotage the Copenhagen talks would be made public, the outcome could have been very different. And while you can argue it might not have been a win for the US, it would probably have been a win for democracy.

 

Why "Star Wars" Created a Fanatical Subculture and "American Pie" Didn't

Why is it that science fiction sagas seem to create fanatical subcultures in a way that romantic comedies cannot? Popular thinking seems to have us thinking that that type of unrelenting fandom is an inherent characteristic of the nerd mind that also spawns boisterous attraction to things like Mountain Dew. That’s perhaps slightly true. But that argument mistakes the source of Science Fiction’s profundity with qualities of its follower rather than the intrinsics of the material itself.

Joseph Campbell, practically the father of comparative mythology and who George Lucas credits for inspiring the motifs of Star Wars, has a much more compelling argument. It’s simply this: space is now the unknown frontier that the seas and foreign lands once were, and the mystery of the cosmos is canvas upon which the artist can paint and rouse the curiosities of our consciousness.

As Campbell writes in his book “Pathways to Bliss”, “[George Lucas] has an artist’s imagination and a great sense of responsibility to his public that what he is rendering must have value. And with all the galaxies out there to work with, he’s got the kind of open field that the early poets used to have. For example, when the Greek Argonauts go up into the Black Sea, where nobody had been, they could meet all kinds of strange monsters and strange people – Amazons and such. It’ a blank sheet for the play of the imagination.”

Then perhaps the fans aren’t far off when they dramatically describe their love for Star Trek, Star Wars, or whatever else it may be, as near religious. Perhaps a star trek convention isn’t far different from a church, and the episodes something like a bible at a time when the written medium is outdated. It’s easy to make fun, but it’s hard to question the authenticity of their zeal.

Campbell was a believer in the monomyth – a single pattern in all the world’s mythology that captured the desires, fears, and curiosities of our collective consciousness. To him, mythology, something he sardonically described as “someone else’s religion”, had value rooted far deeper than superficial elements of stories made irrelevant by changing time and culture.

He describes the first function of mythology, “to evoke in the individual a sense of grateful, affirmative awe before the monstrous mystery that is existence”. The second function is to explain the phenomenon like the seasons and functioning of the cosmos.  The third function is to ordain and maintain some kind of sociological order. And finally the fourth function is what Campbell calls psychological, to “carry the individual through the states of his life, from birth through maturity through senility to death”.

An overarching theme of Campbell’s lectures and works is that while the second and third functions are no longer relevant, the first and last are as relevant now as ever. We are at turning point in our history when mythology no longer plays a definitive role in our lives, and with that a vacuum of our imaginative and inquisitive outpouring is emerging – a vacuum that can be filled in part by the works of artists.

I wanted to finish this with some kind of call to action but there isn’t really a “point” to what I’m writing. So abrupt as it may seem, I’m going to stop here.

 

Careers as Efficient Markets

Efficient market hypothesis (EMH) is a powerful idea. It started as a way to explain how prices of tradeable securities will reflect their real value. Essentially, if people all have access to the same information, that information will be reflected in the price of securities and any new information (like higher interest rates) will immediately be reflected in security prices. The implication: you can't game the system.

In the same way that the idea of natural selection extended beyond its original realm of evolution into exploring phenomenon like meme propagation, EMH is an idea that can maybe give us a lesson on our life choices.

The explanation of how is best supported by an example. Let's say you work at a bank. You grew up working with your hands and wanted to be a sculptor, but you were convinced that wasn't a career, and so you settled for this. Work is okay, but you aren't exactly happy - and if it weren't for the pay, you would have left long ago. You also get the feeling your colleagues like the job more than you. For some bizarre reason, they seem to enjoy the work you see as so menial and perhaps the money means more to them.

Utility

Now let's add a few numbers. This job, would have to pay you at least $100,000 to keep you, and since it happens to pay $100,000, you continue to stay. You are the marginal producer at your work - you get no surplus pay beyond the bare minimum you need to stay. You take a survey, and it turns out that on average your colleagues, who also earn $100,000, would take the job for $40,000, or make a surplus of $60,000.

Graph-b

You probably made a bad decision. The market has priced the value of someone in your position based on an average group of employees who, all things considered, get more out of the job than you do. You have let the market fuck you. If EMH tells us anything - it tells us that. You want to buy shares of GE because you like the stability, but rather than pay a market price of $10, you pay $20. You could have bought Apple stock for less than its market price, but you didn't because Apple is risky and everyone else is buying GE.

The analogy isn't perfect, but the idea is simple (and maybe obvious) in its core. Two people with the same job may get the same monetary compensation, but their total utility (or happiness) is based on a number of factors, so it turns out that some people are holistically better rewarded at work than others. The "efficient" salary for a job will be based on the absolute utility of the marginal worker, and so the marginal (or least happy) worker will just barely enjoy his or her work, while someone who enjoys their work will be rewarded handsomely.

Graph-c

 

The lesson, as I see it. Pursue your passions. If you do, you will always be in an advantaged position of getting more out of it than your peer group, some of whom will not love it nearly as much as you.