For classical economics to work, the underlying assumptions must all be valid:
1) A large number or buyers and sellers
2) Information must be symmetrical (i.e. The two economic agents in a transaction have exactly the same information about the good or service taking place in the transaction)
3) Transaction costs are zero
4) All economics agents act rationally in their own self-interest
Of course, this is not how the world operates and economists are aware of this. Monopolies and cartels create powerful incentives for sellers to become price takers, buyers experiencing asymmetric information will pay for their ignorance (e.g. purchasers of insurance policies), transaction costs are almost never zero, and economic agents sometimes act irrationally.
While the first three assumptions have real world exceptions, the fourth does not. Steven Landsburg explains in his book More Sex is Safer Sex that he starts from the presumption that "when people eat sundaes, smoke cigarettes, and drive instead of biking, they're rationally (thought not necessarily consciously) weighing the costs against benefits and making the best choices they can. The riddle is: how can it be rational to try to restrain yourself from making rational choices?" He goes on to explain that by demonstrating self-restraint, one sends off a positive signal to potential mates and thus self-discipline is an evolutionary mechanism for attracting better fish in the sea. If we assume that all transactions and decisions are rational, the question then becomes: How can we create incentives for people engaging in seemingly irrational behavior (e.g., self-mutilation, homicide, suicide bombings) to desist?
I believe encouraging societies to live by the philosophies of naturalism, capitalism, and democracy. In a society where the rights of individuals' are protected against the wishes of the majority, where the supernatural is dismissed, and where individuals' are free to indulge in or avoid as much risk as they desire; only then will a society exist where violence and conflict are minimized. I hope to see that dream realized.
November 16, 2008
October 8, 2008
Media Bias
Thesis: The single most important challenge to a free, liberal democracy, is the preservation of the marketplace of ideas
1) Without a symmetric information market, a sub-optimal allocation of resources will result; in the case of society, inefficiency and possibly poor decision making
2) Individual actors in the information market have an incentive to maximize their self-interest by promoting a disproportionally higher level of truth, untruth to their arguments and that of their competitors
3) Thus, biases are inherently human nature and some level of bias is unavoidable
4) Yet, biases, like other competing externalities can be mitigated (internalized) by a system of checks & balances
5) What entity (or combination thereof) optimally ensures minimization of biases in information? (i.e., who bares the costs of production?)
a. Government – risk of pro-government stance
b. Corporate conglomerate – risk of pro-corporate interest stance
c. Stand alone operation / fully-supported by public – risk of issue polarization/more profitable in niche than mainstream (e.g. Fox News) OR not commercially viable (e.g., The Nation) OR risk of non-consumption or shift to lower cost ad-subsidized corporate entities (e.g., reading the Metro rather than the New York Times)
6) What are some potential solutions to this?
a. Blind ad system would ensure strong pull toward the middle as opposed to polarization (e.g., ad dollars flow to mainstream, accurate sources rather than partisan sources) – drawback: prevents advertisers from targeting demographics most likely to buy their product; Republicans and Democrats feel, think, act differently, buy very different products/services
b. Checks & balances both embedded within the information producing organizations and also in between entities public (PBS), private (New York Times), and consumers (Fairness and Accuracy in Reporting) – drawback: creates double-doing (e.g., Every information provider held to same standards)
c. Decentralization of news along the long tail – total available information increases – drawback: potentially leads to consumers to only select sources that propagate their incumbent viewpoints; may lead to enhanced levels of cognitive dissidence (e.g., no standards for news organizations, becomes more difficult for public to ascertain a given organization’s credibility)
Personally, I think we are on a course of decentralization. More broadly, old economy information aggregators such as the nightly news, newspapers and the like will be replaced by user-specific aggregators (e.g., Google Reader) that bring an array of diverse topics of a users interest to their attention forgoing unwanted articles. This can be both beneficial and dangerous as it will reduce information overload (hence increasing personal utility) but also runs the risk of reducing society's exposure to sources of facts and opinion that they were unwilling to subscribe to beforehand.
1) Without a symmetric information market, a sub-optimal allocation of resources will result; in the case of society, inefficiency and possibly poor decision making
2) Individual actors in the information market have an incentive to maximize their self-interest by promoting a disproportionally higher level of truth, untruth to their arguments and that of their competitors
3) Thus, biases are inherently human nature and some level of bias is unavoidable
4) Yet, biases, like other competing externalities can be mitigated (internalized) by a system of checks & balances
5) What entity (or combination thereof) optimally ensures minimization of biases in information? (i.e., who bares the costs of production?)
a. Government – risk of pro-government stance
b. Corporate conglomerate – risk of pro-corporate interest stance
c. Stand alone operation / fully-supported by public – risk of issue polarization/more profitable in niche than mainstream (e.g. Fox News) OR not commercially viable (e.g., The Nation) OR risk of non-consumption or shift to lower cost ad-subsidized corporate entities (e.g., reading the Metro rather than the New York Times)
6) What are some potential solutions to this?
a. Blind ad system would ensure strong pull toward the middle as opposed to polarization (e.g., ad dollars flow to mainstream, accurate sources rather than partisan sources) – drawback: prevents advertisers from targeting demographics most likely to buy their product; Republicans and Democrats feel, think, act differently, buy very different products/services
b. Checks & balances both embedded within the information producing organizations and also in between entities public (PBS), private (New York Times), and consumers (Fairness and Accuracy in Reporting) – drawback: creates double-doing (e.g., Every information provider held to same standards)
c. Decentralization of news along the long tail – total available information increases – drawback: potentially leads to consumers to only select sources that propagate their incumbent viewpoints; may lead to enhanced levels of cognitive dissidence (e.g., no standards for news organizations, becomes more difficult for public to ascertain a given organization’s credibility)
Personally, I think we are on a course of decentralization. More broadly, old economy information aggregators such as the nightly news, newspapers and the like will be replaced by user-specific aggregators (e.g., Google Reader) that bring an array of diverse topics of a users interest to their attention forgoing unwanted articles. This can be both beneficial and dangerous as it will reduce information overload (hence increasing personal utility) but also runs the risk of reducing society's exposure to sources of facts and opinion that they were unwilling to subscribe to beforehand.
September 20, 2008
The New Democrats: Strengthening the center left
Bill Clinton's administration ran a fairly successful New Democrat ideology. Obama's tax plan, economic policies, and proclaimed approaches to domestic and foreign policy best embody where America should be heading and thus, I've been a supporter of his since the beginning. If anyone says Mrs. Clinton and Mr. Obama's had virtually the same Senate records and similiar political objectives, they are overlooking some apparently subtle, yet stark differences (e.g., a potential gas tax holiday and what universal healthcare really means).
Two things I wish Obama, and the Democratic party would sink their teeth into (read: embrace) are more competitive education and social security reform. School vouchers in some form, No Child Left Behind, and the privitization of social security are fundamentally steps in a better direction. The first two are often attacked by teachers' unions, the latter by groups such as the AARP. Yet, incorporating incentives and personal choice into both public education and social security would do wonders for both institutions.
Two things I wish Obama, and the Democratic party would sink their teeth into (read: embrace) are more competitive education and social security reform. School vouchers in some form, No Child Left Behind, and the privitization of social security are fundamentally steps in a better direction. The first two are often attacked by teachers' unions, the latter by groups such as the AARP. Yet, incorporating incentives and personal choice into both public education and social security would do wonders for both institutions.
September 16, 2008
Free Will versus Determinism? Or something else?
For many years now, I've pondered over the free will v. determinism debate. I tended to lean toward determinism as being more probabilistic, but as I was playing devil's advocate about six months ago with a close friend and philosophy guru in favor of free will, I came to the conclusion that strong determinism is probably false due to the uncertainty that prevades quantum mechanics. For example, you can predict that in general particles will act a specific way approximately X percent of the time but because the percentage is less than 100, that uncertainty could potentially manifest itself into an infinite number of extremely divergent types of universes in the long run. And as we know of the the cosmic scale of time, that's an extremely long run.
I would say that there is probablistic determinism or constrained determinism such that event A happening is likely to influence event B, event C...event n; that said I think it's impossible to calculate a future event even if all known information in the universe could be calculated using a quantum computer given the randomness involved. That said, I think we can safely rule out free will.
I would say that there is probablistic determinism or constrained determinism such that event A happening is likely to influence event B, event C...event n; that said I think it's impossible to calculate a future event even if all known information in the universe could be calculated using a quantum computer given the randomness involved. That said, I think we can safely rule out free will.
August 9, 2008
A Simplistic Theory of Liberalism and Conservatism
(Or: What is a long-run strategy for changing Red States to Blue States?)
There has always been tension between those that believe that society’s wealth should be distributed evenly and occasionally, disproportionably distributed to those with other non-monetary setbacks (e.g., special education for persons with disabilities, affirmative action, etc.) and those that believe in an absolutist adherence to individual responsibility and free markets in everything from goods, resources, ideas, and legal structures.
On the political compass, these extremes are statist and libertarian, with the other axis representing “social” issues or freedoms that range from liberal to conservative. This traditional political spectrum has liberals on one end, typically more secular in nature and more tolerant of other religions, sexual orientations, customs, etc. Conservatives take a “black and white,” “right or wrong,” “good versus evil” type of approach to thinking.
The key to coloring Kansas with a blue crayon is enabling self-identity to evolve from the “us versus them” mentality to a “we have common values: strong families, education for our children, hope for the future, security against injustices” and this will ultimately promote social cohesion.
My thoughts on “Purple America “– a dense population living is close quarters more likely to be forgiving of each other, a natural survival mechanism. The population will likely be even more liberal overall the less homogeneous it is. Liberal thinking and secularism go hand in hand.
Solution to ending the “Reign of the Red” and fostering a freer exchange of diverse opinions and ideas: Encourage more urbanization in the Red States; develop refugee/immigration programs in Red State cities to foster more cultural and socio-economic mixing. Encourage businesses both domestic and international to expand in “green fields” in Red States where Caucasian conservatives will work with and hopefully befriend people from different backgrounds thus eroding the “us versus them” mentality over time. For success, politicians must ensure the “they’re stealing our jobs” argument will be refuted by the “rising tides lift all boats” argument.
There has always been tension between those that believe that society’s wealth should be distributed evenly and occasionally, disproportionably distributed to those with other non-monetary setbacks (e.g., special education for persons with disabilities, affirmative action, etc.) and those that believe in an absolutist adherence to individual responsibility and free markets in everything from goods, resources, ideas, and legal structures.
On the political compass, these extremes are statist and libertarian, with the other axis representing “social” issues or freedoms that range from liberal to conservative. This traditional political spectrum has liberals on one end, typically more secular in nature and more tolerant of other religions, sexual orientations, customs, etc. Conservatives take a “black and white,” “right or wrong,” “good versus evil” type of approach to thinking.
The key to coloring Kansas with a blue crayon is enabling self-identity to evolve from the “us versus them” mentality to a “we have common values: strong families, education for our children, hope for the future, security against injustices” and this will ultimately promote social cohesion.
My thoughts on “Purple America “– a dense population living is close quarters more likely to be forgiving of each other, a natural survival mechanism. The population will likely be even more liberal overall the less homogeneous it is. Liberal thinking and secularism go hand in hand.
Solution to ending the “Reign of the Red” and fostering a freer exchange of diverse opinions and ideas: Encourage more urbanization in the Red States; develop refugee/immigration programs in Red State cities to foster more cultural and socio-economic mixing. Encourage businesses both domestic and international to expand in “green fields” in Red States where Caucasian conservatives will work with and hopefully befriend people from different backgrounds thus eroding the “us versus them” mentality over time. For success, politicians must ensure the “they’re stealing our jobs” argument will be refuted by the “rising tides lift all boats” argument.
July 29, 2008
An American [Corporate Serf] in London
Recommendations for those heading to London...
Key:
Recommended
Neutral
Lame/Disgusting
Tourist Sites
Tate Modern – Skip the Tate Britain (the British don’t do art very well), the Tate Modern is the MoMA of Europe and well worth the visit
National Portrait Gallery – Unless you like looking at hundreds of portraits of dead aristocracy this waste of time should be avoided completely
National Gallery – Although impressive, it would be my second pick (Tate Modern wins!) if I was to go to only one art museum in London
Buckingham Palace – Rarely can visitors get into the actual Palace, the changing of the guards is disappointing pageantry.
Tower Bridge – Almost everyone thinks THIS is London Bridge, but in reality, the Tower Bridge is more spectacular than the lame-looking London Bridge.
London Bridge – I wish it fell down, and then this piece of concrete would be more interesting. This is actually the 3rd London Bridge, the first, as you may have heard…fell down. The 2nd is in Lake Havasu City, Arizona because some crazy American millionaire is, indeed, crazy. This is the 3rd, end of story.
Museum of London – Lame. If you go around seeing stuff in London, you wouldn’t have to go to this museum. Besides the history of London was fairly well described in
Victoria & Albert Museum – A must see! Britian’s collection of the world’s cultural treasures after nearly 600 years of global rule.
The British Museum – Also impressive, similar to the V&A, but I would see the V&A first, over the BM
Tower of London – executioner’s paradise and full of the world’s largest gemstones and things. Get your money’s worth by poking fun at the Beefeaters and taking pictures. But not too much fun…
Hyde Park (and Hyde Park corner) – save this for Sunday morning when all the crazies come out to speak about their crazy ideas. This is the only spot that the monarchy decreed is was okay to not face persecution from slander laws including disparaging remarks about the monarchy.
Architectural Highlights
· London City Hall
· Westminster Abbey
· St. Paul’s Cathedral
· London Eye
· Royal Albert Hall
· Shakespeare’s The Globe Theatre
· Parliament (w/ special guest: Big Ben)
The Essential Triangle
· Leicester Square
· Covent Garden
· Trafalgar Square
The Essence of London Activities
High Tea – There’s really only two places to do this proper: The Ritz and The Lanesborough.
Yo! Sushi – Tokyo-style conveyor belt wraps deliciousness around you; you pay per plate by color of the plate after you’re full
Nightclubs – While I only heard about incredible stories of China White, wikitravel also suggests Café de Paris, China White, Funky Buddha, Mahiki, Number One Leicester Square, and Paper. If you are into house like I am, then it is an absolute MUST that you visit, the original and premier house venue: The Ministry of Sound!!!
Take a double decker bus at night, sit on the 2nd floor in the front – that is, if there aren’t other drunk American tourists/students there already!
Shop on High Street – now you’re a baller baby!
Foods to try (for non-vegetarians)
Bangers n’ mash
Fish n’ chips
Yorkshire Pudding
Shepard’s Pie
Cornish Pastie
Foods to try (from grocery store)
· Twinnings tea
· Digestives
· Marmite
Beers to try
· Fuller’s London Pride (The Bud of London)
· Carling
· Boddington’s
· Guinness (It’s NOT like the one in America! It’s MUCH better!)
· Kronenburg 1664 (technically French, but still a staple)
· Magner’s Cider – for the girls, but give it a go
Old School Pubs
· The George Inn
· Jerusalem Tavern
· Ye Olde Mitre
· The French House
· The Coach and Horses
Useful notes
Take the Tube from Heathrow into the city; not a taxi – cabs will take just as long and will cost you 3x more
Beer is served at room temperature – it takes some getting used to, but it’s England, you know, old school
For cheap food check out a local grocer
Waitrose – high end = Whole Foods
Sainsbury’s – moderate = IGA, Giant, Stop n’ Shop, Shaw’s
Tesco – low end = Seven Eleven
Final Thought – I lived in London for four months and still never made it to all of the places I want to go. Even though this list is only the tip of the iceberg…it should give you a feel for the crème-de-la-crème of London during a smaller stint.
Enjoy and May God Save The Queen!
Key:
Recommended
Neutral
Lame/Disgusting
Tourist Sites
Tate Modern – Skip the Tate Britain (the British don’t do art very well), the Tate Modern is the MoMA of Europe and well worth the visit
National Portrait Gallery – Unless you like looking at hundreds of portraits of dead aristocracy this waste of time should be avoided completely
National Gallery – Although impressive, it would be my second pick (Tate Modern wins!) if I was to go to only one art museum in London
Buckingham Palace – Rarely can visitors get into the actual Palace, the changing of the guards is disappointing pageantry.
Tower Bridge – Almost everyone thinks THIS is London Bridge, but in reality, the Tower Bridge is more spectacular than the lame-looking London Bridge.
London Bridge – I wish it fell down, and then this piece of concrete would be more interesting. This is actually the 3rd London Bridge, the first, as you may have heard…fell down. The 2nd is in Lake Havasu City, Arizona because some crazy American millionaire is, indeed, crazy. This is the 3rd, end of story.
Museum of London – Lame. If you go around seeing stuff in London, you wouldn’t have to go to this museum. Besides the history of London was fairly well described in
Victoria & Albert Museum – A must see! Britian’s collection of the world’s cultural treasures after nearly 600 years of global rule.
The British Museum – Also impressive, similar to the V&A, but I would see the V&A first, over the BM
Tower of London – executioner’s paradise and full of the world’s largest gemstones and things. Get your money’s worth by poking fun at the Beefeaters and taking pictures. But not too much fun…
Hyde Park (and Hyde Park corner) – save this for Sunday morning when all the crazies come out to speak about their crazy ideas. This is the only spot that the monarchy decreed is was okay to not face persecution from slander laws including disparaging remarks about the monarchy.
Architectural Highlights
· London City Hall
· Westminster Abbey
· St. Paul’s Cathedral
· London Eye
· Royal Albert Hall
· Shakespeare’s The Globe Theatre
· Parliament (w/ special guest: Big Ben)
The Essential Triangle
· Leicester Square
· Covent Garden
· Trafalgar Square
The Essence of London Activities
High Tea – There’s really only two places to do this proper: The Ritz and The Lanesborough.
Yo! Sushi – Tokyo-style conveyor belt wraps deliciousness around you; you pay per plate by color of the plate after you’re full
Nightclubs – While I only heard about incredible stories of China White, wikitravel also suggests Café de Paris, China White, Funky Buddha, Mahiki, Number One Leicester Square, and Paper. If you are into house like I am, then it is an absolute MUST that you visit, the original and premier house venue: The Ministry of Sound!!!
Take a double decker bus at night, sit on the 2nd floor in the front – that is, if there aren’t other drunk American tourists/students there already!
Shop on High Street – now you’re a baller baby!
Foods to try (for non-vegetarians)
Bangers n’ mash
Fish n’ chips
Yorkshire Pudding
Shepard’s Pie
Cornish Pastie
Foods to try (from grocery store)
· Twinnings tea
· Digestives
· Marmite
Beers to try
· Fuller’s London Pride (The Bud of London)
· Carling
· Boddington’s
· Guinness (It’s NOT like the one in America! It’s MUCH better!)
· Kronenburg 1664 (technically French, but still a staple)
· Magner’s Cider – for the girls, but give it a go
Old School Pubs
· The George Inn
· Jerusalem Tavern
· Ye Olde Mitre
· The French House
· The Coach and Horses
Useful notes
Take the Tube from Heathrow into the city; not a taxi – cabs will take just as long and will cost you 3x more
Beer is served at room temperature – it takes some getting used to, but it’s England, you know, old school
For cheap food check out a local grocer
Waitrose – high end = Whole Foods
Sainsbury’s – moderate = IGA, Giant, Stop n’ Shop, Shaw’s
Tesco – low end = Seven Eleven
Final Thought – I lived in London for four months and still never made it to all of the places I want to go. Even though this list is only the tip of the iceberg…it should give you a feel for the crème-de-la-crème of London during a smaller stint.
Enjoy and May God Save The Queen!
July 28, 2008
Worst Cities in America
Forbes Magazine came up with this ranking of the "most miserable cities" in America. Having grown up in suburban Philadelphia and continue to make frequent visits there, I was extremely surprised to see New York City as "more miserable" than Philadelphia.
Forbes Ranking
1 Detroit, MI
2 Stockton, CA
3 Flint, MI
4 New York, NY
5 Philadelphia, PA
6 Chicago, IL
7 Los Angeles, CA
8 Modesto, CA
9 Charlotte, NC
10 Providence, RI
Chicago more miserable than LA? Chicago was Fast Company's Fast City 2008 and having personally spent time in both, my vote is that LA is a dirtier, less happy place than Chicago.
The devil, as they say, is in the details. The flaw with the Forbes methodology is given equal weight to commute time and violent crime, equal weight to income tax rates and superfund sites (obviously a proxy for pollution). However, I suspect most of us would prefer an extended commute than to be robbed or stabbed. I also assume that most of us wouldn't mind paying slightly higher than average taxes than live next to a toxic waste dump.
So I decided to play with the numbers, giving more weight (1.5x) to unemployment and violent crime, holding superfund sites constant, and giving (0.5x) to commute time, income tax rates, and weather. Miserable maybe, but certainly a second tier of misery.
Zaanlooper ranking:
1 Detroit, MI
2 Stockton, CA
3 Flint, MI
4 Modesto, CA
5 Los Angeles, CA
6 Philadelphia, PA
7 Charlotte, NC
8 Chicago, IL
9 New York, NY
10 Providence, RI
This seems more reasonable based on my own observations of said locales (although I have not personally been to Stockton, Flint, or Modesto)
Do you think a crowd-sourced survey of U.S. cities would yield similar results?
Forbes Ranking
1 Detroit, MI
2 Stockton, CA
3 Flint, MI
4 New York, NY
5 Philadelphia, PA
6 Chicago, IL
7 Los Angeles, CA
8 Modesto, CA
9 Charlotte, NC
10 Providence, RI
Chicago more miserable than LA? Chicago was Fast Company's Fast City 2008 and having personally spent time in both, my vote is that LA is a dirtier, less happy place than Chicago.
The devil, as they say, is in the details. The flaw with the Forbes methodology is given equal weight to commute time and violent crime, equal weight to income tax rates and superfund sites (obviously a proxy for pollution). However, I suspect most of us would prefer an extended commute than to be robbed or stabbed. I also assume that most of us wouldn't mind paying slightly higher than average taxes than live next to a toxic waste dump.
So I decided to play with the numbers, giving more weight (1.5x) to unemployment and violent crime, holding superfund sites constant, and giving (0.5x) to commute time, income tax rates, and weather. Miserable maybe, but certainly a second tier of misery.
Zaanlooper ranking:
1 Detroit, MI
2 Stockton, CA
3 Flint, MI
4 Modesto, CA
5 Los Angeles, CA
6 Philadelphia, PA
7 Charlotte, NC
8 Chicago, IL
9 New York, NY
10 Providence, RI
This seems more reasonable based on my own observations of said locales (although I have not personally been to Stockton, Flint, or Modesto)
Do you think a crowd-sourced survey of U.S. cities would yield similar results?
July 1, 2008
Want versus Need
With the majority of the world’s population living on less than a few dollars a day, how does this guy really expect me to feel bad for him?
If I take out non-essentials: landline phone (you have a cell phone!), cable, entertainment, pet expenses, vacations, and gifts – we get up to $1,030.
Then there’s clearly a double counting issue. If you’re spending $225 per month on household items, which I can only assume include toilet paper, hand soap, etcetera, how are you spending $550 per month on just food? I spend around $150 per month on groceries; that includes food, paper towels, and it includes the fact that I’m not buying inexpensive, I’m always buying high end foodstuffs. I can easily imagine feeding a family of four for a month on much less than $550 per month!
On the other hand, if you’re including TP and detergent as groceries, then are you spending $2,700 a year on pillows and potted plants for the living room? Clearly, you could get this grocery figure down significantly if you really wanted to.
Word of advice: You’ll probably want to increase your annual 401(k) contribution if you enjoy wasting money as much as you seem to do.
If I take out non-essentials: landline phone (you have a cell phone!), cable, entertainment, pet expenses, vacations, and gifts – we get up to $1,030.
Then there’s clearly a double counting issue. If you’re spending $225 per month on household items, which I can only assume include toilet paper, hand soap, etcetera, how are you spending $550 per month on just food? I spend around $150 per month on groceries; that includes food, paper towels, and it includes the fact that I’m not buying inexpensive, I’m always buying high end foodstuffs. I can easily imagine feeding a family of four for a month on much less than $550 per month!
On the other hand, if you’re including TP and detergent as groceries, then are you spending $2,700 a year on pillows and potted plants for the living room? Clearly, you could get this grocery figure down significantly if you really wanted to.
Word of advice: You’ll probably want to increase your annual 401(k) contribution if you enjoy wasting money as much as you seem to do.
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