Curt Doolittle

Theme: Incentives

  • THE INTELLECTUAL DEBATE IS CHANGING, BUT TOO LATE It’s received wisdom among ort

    THE INTELLECTUAL DEBATE IS CHANGING, BUT TOO LATE

    It’s received wisdom among orthodox economists, that immigration is ‘good’. but the truth is, that it’s good for the upper classes, and bad for anyone else, and it’s only good in the abstract over the very long run.

    I’ve been arguing this same point for years, and I include in my arguments the cost of institutional conformity and increased frication and trust.

    The USA’s immigration history is also a received wisdom that isn’t true. Catholics and Jews had precisely the impact on freedom, civic virtue, manners, morals and ethics, that the protestants worried about. (Yes, it’s true.) Values aren’t arbitrary or neutral.

    THE ECONOMIC ARGUMENT TO THE BENEFIT OF IMMIGRATION IS FALSE for everyone except government employees and financiers. For everyone else it’s theft.

    http://cis.org/immigrant-gains-native-losses-in-the-job-market-2000-to-2013

    Source date (UTC): 2013-07-11 20:50:00 UTC

  • The Incentives of Scientists And Philosophers: A Virtuous Competition For Status

    [E]conomic reasoning would argue that people follow incentives. The incentives of scientists are to prosecute an idea regardless of its merit. Science does not progress because scientists are self aware, or because they employ rational criticism and judgement. (Although I think this criticism applies to the 90% at the bottom more so than the 10% at the top.) Science advances because either another’s career advance is obtained by discrediting an existing idea, or because its author dies and can no longer defend it from, or adapt it to, criticism. For these reasons, requesting that scientists demonstrate “understanding” of the philosophy of science is overrated – unless incentives exist to enforce that understanding. Since it is not in a scientist’s interest to use critical rationalism, it is very hard to imagine they will. [P]hilosophers are primarily cops: critics and articulators of what we humans say and do but do not fully understand. And honestly we are rarely inventors. And we function as critics of scientists, since it is in our interests to obtain status by criticizing scientists. A scientist collects data and forms hypotheses. We collect arguments in support of hypotheses and criticize those arguments. That is our incentive: it is our specialization. Not data collection: criticism. But it is patently irrational to expect scientists alone to demontrate behaviors counter to their incentives. It’s a division of knowledge and labor in real time. And we are supposed to be the rational ones after all.

  • THE INCENTIVES OF SCIENTISTS Economics would argue that people follow incentives

    THE INCENTIVES OF SCIENTISTS

    Economics would argue that people follow incentives.

    The incentives of scientists are to prosecute your idea regardless of its merit.

    Science does not progress because scientists are self aware, or because they employ rational criticism and judgement. (Although I think this criticism applies to the 80% at the bottom more so than the 20% at the top.)

    Science advances because either another’s career advance is obtained by discrediting an existing idea, or because its author dies and can no longer defend it from criticism.

    For these reasons, “understanding” is overrated unless incentives exist to enforce that understanding.

    Since it is not in anyones interest to be critically rational it is very hard to imagine they will be.

    Philosophers are primarily cops, critics and articulators of what we do but do not understand – and rarely inventors. And we function as critics of scientists, since it is in our interests to obtain status by criticizing scientists.

    But it is patently irrational to expect scientists alone to demontrate behaviors counter to their incentives.

    And we are supposed to be the rational ones after all.

    Source date (UTC): 2013-07-08 07:28:00 UTC

  • THE LONG TERM IMPACT OF DYSGENIC REPRODUCTION ON ECONOMICS AND NORMS UNDER DEMOC

    THE LONG TERM IMPACT OF DYSGENIC REPRODUCTION ON ECONOMICS AND NORMS UNDER DEMOCRACY

    (Work in progress.)

    If under manorialism, the breeding rate of the underclass is suppressed while the middle class increases, and under consumer capitalism, and redistributive socialism, the middle class suppresses its reproduction while the lower class increases its reproduction, in the aggregate we should see declines in middle class traits and increases in lower class traits.

    The social classes under consumer capitalism sort even more effectively than under agrarianism due to the flexibility of labor and movement.

    The social class distribution is highly correlated.with IQ. The beneficial distribution of british IQ for example is limited to the british middle class and there is very little rotation in and out of that class. Given that intelligence regresses toward the mean, in-class reproduction must be in place.

    While the flynn effect appears to produce a demonstrated improvement in test taking because of the universal environmental presence of scientific knowledge, it also appears that northern europeans should have been on par with askenazim only 150 years ago, but due to a return to unconstrained breeding, and highly constrained breeding in the middle and upper middle classes under consumer capitalism and social democracy, that we are in fact, in the aggregate, six or so points “dumber”. Which is approaching one half of a standard deviation in intelligence: 7.5 points. This fact correlates with the reproductive rates of the classes. Which is why Flynn has been investigating it and writing about it.

    Now the reasons that I care are:

    1) Corruption increases rapidly aggregate IQ declines. So does mysticism.

    2) It appears that it requires an IQ of about 105 to articulate ideas or repair a machine.

    3) Any norms in any society are dependent upon the distribution of ability to adopt them. Rationalism cannot exist or function as a norm if there are insufficient numbers of people capable of rationalism.

    4) Under the “Pareto rule if thumb”, 1% of people create all the marginal value and 19% propagate that idea, and that 20% controls 80% of the property and resources in the society. As such the distribution of ability of that group must stay above 105 in order to maintain the high trust society, which is the source of the western economic advantage in risk taking.

    5) it appears that the benefit of industrialization has been equilibrated – been fully utilized. It appears that vast numbers if people mist subsist on service jobs. It appears that while aggregate human intelligence was wasted on the farm and enabled by industrialization, that the 105, and perhaps 110 levels are downward limits to calculative ability, and all jobs in society of value require calculation “that which we cannot sense without measurements and formulae as a proxy”.

    6) People demonstrate that they overwhelmingly prefer to reproduce, associate and work in homogenous groups by race, class and culture – except at the margins. Further, these groups maintain their own identities, mythologies and signaling economies, such that in group status signals are discounted cost in relation to out-group status signals. And the vote that way. As competing blocks seeking status. (Rents). Furthermore the distribution if ability in these groups means that reproductive rates under consumer capitalism, social status, economic productivity, and opportunity will increase in friction.

    7) for these reasons, diversity decreases trust and increases the scope of the state under democracy. (Unlike under parliamentary nationalist monarchy. )

    In other words we aren’t insulated by our sentience from evolutionary biology. And the net result is indeed “dysgenic”, conflict inducing, and a threat to the goal of a positive egalitarian society.

    The only evidence we have suggests that small homogenous states in grat variety will allow us to produce through cultural competition what political cooperation will actually prevent.

    Source date (UTC): 2013-07-08 07:21:00 UTC

  • STUDENT LOANS If you want to fix student loans, the incentives in the university

    http://online.wsj.com/article/SB10001424127887324688404578541372861440606.htmlFIXING STUDENT LOANS

    If you want to fix student loans, the incentives in the university system are currently perverse, and you can’t fix student funding without fixing university incentives.

    1) zero interest. Any amount. Six total years of coverage. This process can be repeated every ten years for lifetime performance.

    2) The amount is paid back as a payroll deduction over thirty years at fixed, x% of income . (This effectively reduces the student cost to zero, but doesn’t allow students to abuse it.)

    3) Colleges and Universities must use 100% of the money for undergraduates ONLY for the undergraduate program, only for undergraduate departments, only for undergraduate teachers who teach, and many not use any for research, sports, or for their endowment. Undergraduate departments must perform as teaching departments not reserach departments, and all publication requirements for teaching professors must be removed. No exemptions or devices for circumvention in theory or practice. Limit administrative overhead costs to 20%. And that will take care of the economics of the system, and make sure our students have the best professors in the world.

    4) Since all financial barriers are removed, then remove all quotas, and require domestic students receive full access prior to foreign students.

    Most of these are Sowell’s ideas.

    Source date (UTC): 2013-07-02 10:55:00 UTC

  • WHY DONT FIRMS IN TROUBLE RAISE PRICES? They should. But…. (Cross posted from

    WHY DONT FIRMS IN TROUBLE RAISE PRICES? They should. But….

    (Cross posted from reply on Econlog)

    Firms rarely trade in commodities and benefit from the anonymity associated with commodities. They work in a network of established customers and distributors all of whom are more knowledgable about the relative strength of the firm in relation to its competitors than are members of the firm itself. (Yes, really.)

    If your failure is an internal one ( a well known tech harware manufacturer had incentives to keep costs down which later nearly killed the company as venors started absndoning the paltform because it was too difficult to learn the many minor differences) then if your brand supports the price you can do it and use the money to correct the problem.

    But the real problem is this: a very. Small number of people in any organization provide the entire marinally competitive difference, and if those people feel the company will fail they will leave. (We have pretty good data on this now. ). If knowledge of even short term failure leaks into the organization itself the consequences for quality, priductivity, retention, access to credit, will produce a deterministic result.

    Firms do raise prices in duress. (Microsoft prior to Vista for example. ) I advise it all the time in order to prune unprofitable customers when companies are under duress. You just cant get away with it for that long.

    Positivistic error/error of induction: assuming quantities contain sufficient information for other than commodities, when commodities are unique in this condition.

    Source date (UTC): 2013-07-01 07:22:00 UTC

  • “For the countries that in the no-migration counterfactual would have higher pop

    “For the countries that in the no-migration counterfactual would have higher population welfare losses are larger in the short run. The reason is that, besides the loss of remittances, the wave of newly returned migrants is absorbed through the creation of new firms with below-average productivity.”

    Source date (UTC): 2013-07-01 05:44:00 UTC

  • HOW TO ADVERTISE ON FACEBOOK SUCCESSFULLY Create a ‘comic strip’. A series of fr

    HOW TO ADVERTISE ON FACEBOOK SUCCESSFULLY

    Create a ‘comic strip’. A series of frames (posts). No less than three to five. No more than twelve to sixteen. The second points to the first. The third points to the second. Then, the first to the second if it’s published. The second to the third if it’s published, and so on. Then release a new frame every few days. And try very hard not to repeat the same frame to the same people. You can then repeat these series every six to twelve weeks, without annoying your advertising base.

    If you can create characters who the user can become familiar with then that’s even better.

    This method is so effective that FB should create a tool to assist advertisers in doing it. (I suppose I could put a company together that did that without too much difficulty. But I’m kind of busy at the moment.)

    This method a form of narrative ‘gamifaction’ that won’t invoke the “I’ve seen this image before in my thread and it’s annoying” response from the audience, and will encourage them to explore and reward them for exploring. It will actually work as long as the FB model/medium combination works for its users.

    Static pages, or static magazines, require static ads. Video requires the user enter the time space of the video, and is too demanding of his attention (and bandwidth). We have been using the comic frame format for a very long time, and it is a structured equivalent to the facebook news stream, rather than an interruption of it (video) or an abuse of it (static ads that repeat.)

    Production costs are not high. However, it is much harder to create narrative arcs that negatively affect the brand than it is static images that affect the brand, so one does need a better class of creatives (usually someone who produces narratives already).

    I haven’t been able to come up with another way to advertise here that will work other than this sort of narrative pseudo-gamification. If your subject doesn’t support that format, then get a better ad agency, or stick with the sponsored ad’s on the side column.

    I like it as a business model because it creates a higher barrier to entry for competition. I like it because as a viewer, especially if it’s character driven, not only won’t it bother me, but it’d be interesting.

    This makes it possible for large brands to advertise and tell narratives. But FB is a narrative experience. And ads in FB must be narrative to stay within that system.

    Source date (UTC): 2013-06-30 03:22:00 UTC

  • Why Is Gold Considered So Precious And Why Does It Have Such High Prices, And What Satisfaction Do People Derive From This €˜precious’ Metal?

    These answers are pretty humorous.  But the correct answer is quite simple:

    **Everybody wants gold because everybody else wants gold, and its hard to get.**

    I mean, really, that’s the reason it’s so precious.

    The real question then, is how did everyone come to want gold so much? Originally it was ornamental – desirable as a demonstration for status. It still is. Most metals served as some sort of barter device in history.

    But, we mostly want gold today, because every government in the world has resorted to fiat money (‘confetti and electrons’), and so gold is the only ‘naturally occurring’ currency that everyone understands is a currency. And they understand it because everyone else understands and wants it as a currency – for partly historical reasons: it was part of the balance-of-power system in Europe when Europe had its great leap forward.

    After gold, the USA’s currency is more valuable and stable and lower risk, since it’s such a large economy, and has such a large military force, and that large military force controls the sea and air lanes, and as such can dictate the world terms of commerce and trade (to some degree at least) both by trade policy, monetary policy, and strategic policy.

    So gold the best currency to flee to when the demand for (value of) the USA’s currency is in doubt. You cant easily make more gold, so it’s not going to lose value until the confidence in some OTHER currency is higher than the confidence they have in the price of gold. 

    Because, say, If the USA disappeared tomorrow so would the value of all dollars world wide. But not the value of gold. Everyone remaining would still want it. And until some other hegemon arose that gave them the same confidence, gold would remain in high demand at high price.

    https://www.quora.com/Why-is-gold-considered-so-precious-and-why-does-it-have-such-high-prices-and-what-satisfaction-do-people-derive-from-this-‘precious’-metal

  • Two economists walked past a Porsche showroom. One of them pointed at a shiny ca

    Two economists walked past a Porsche showroom. One of them pointed at a shiny car in the window and said, “I want that.” …. “Obviously not,” the other replied. – Ransom @Marginal revolution (I’m guessing Greg Ransom?)

    Source date (UTC): 2013-06-27 15:31:00 UTC