Wednesday, February 3, 2016

Steven Johnson Is A Chanidget

Reply to story: Maximum Wage by Steven Johnson


You're walking in your neighborhood when all of a sudden Usain Bolt, the world's fastest man, sprints past you with an obese midget clinging to his back.  You think to yourself... "Ahhhh... he is able to run so fast because he has a very fat midget clinging to his back."

You're a chanidget.   You think that countries prosper because of governments...

[Silicon Valley] is both an apex of modern capitalism and one of the most politically progressive sectors in the country; that it celebrates entrepreneurial energy but also has a passion for radically different economic models; that it rewards both garage startups and open source-style projects like Wikipedia; and that its long history of building on government-funded innovations makes it much more appreciative of the role of the state in driving progress than most business sectors. 

In order to help you understand the problem with the state's role... lets first consider some common ground...

But even in the tech sector there are zero-sum games that must be accounted for: most importantly, the zero-sum game of attention and passion. There is a finite pie of human intellectual talent available to us at any given moment — the pie is growing, but it’s finite nonetheless — and how that attention and passion gets directed has a dramatic impact on the slope of the progress curve. Every market sends out signals encouraging certain kinds of problem-solving, certain kinds of skills. Nine years ago, the loudest signal was telling college students to become experts in credit default swaps and collateralized debt obligations. I think we can all agree on how that worked out. When markets send out signals this conspicuous, attention and interest are like a giant field of sunflowers; they shift, slowly but inexorably, toward the brightest light. Through that shift, other, fainter stars lose their followings. That is zero-sum gameplay, too.

For the most part this is correct.  I've written about value signals before and have even terribly illustrated the concept...

Batman isn't omniscient.  So if the city really needs him... then it would behoove the city to display the bat signal.  Producers aren't omniscient either.  So if we want them to produce valuable things... then it behooves us to accurately communicate our valuation of the things that they produce.

Personally... as somebody who loves plants... I think your sunflower comparison might be better than my batman comparison.  Maybe it wouldn't even be too difficult to terribly illustrate some sunflowers facing a bright sun with a dollar sign on it.

Here's where you shoot yourself in the foot...

Right now the tech market, even with its admirable pay ratios, is signaling to the world that inventing a new app for teenagers to flirt and banter can be thousands of times more valuable than becoming a high-school principal in a troubled district. 

Of course the sunflowers face the sun (inventing new apps) rather than the moon (becoming a high-school principal).  Inventing a popular new app is incredibly more profitable than becoming a popular high-school principal.  Here's how I've terribly, and randomly, illustrated this concept in the past...

I shared this illustration in this blog entry... Don't Give Evil Robots A Leg To Stand On!  Don't give evil robots a leg to stand on?  Yeah... right?  That makes sense doesn't it?

Here's a less random, but equally terrible, illustration...

Your argument is that the tech market overvalues apps.  You're arguing that there should be maximum wages.   You're arguing that the sun is too bright.

But is the problem really that the sun is too bright?  What if the problem is that the moon isn't nearly bright enough?

You started your story praising the government's role in driving progress.  Your basic premise is that the government is somehow good at picking winners.  Except... here you are entirely neglecting the fact that the government also determines the value of plenty of high-school principals.   Yeah it's true that the private sector determines the value of apps... but it's also true that the public sector determines the value of many high-school principals.  So given that you're so certain that high-school principals are incredibly undervalued... then perhaps you should take a closer look at your basic premise.

The best way to take a closer look at your basic premise is to consider the fact that people can't choose where their taxes go (pragmatarianism FAQ).  Right now you can't reach into your pocket... pull out some tax dollars... and give them to a high-school principal.  No matter how undervalued you believe the principal is... you can't give him your public dollars (aka "taxes").

Can you give your private dollars to the principal?  Of course you can!  I really love the idea of people voluntarily giving more money to the government.  Unfortunately... for some reason... liberals really hate this idea.

Anyways, I'm pretty sure that you're not going to give very many of your private dollars to some principal.  But the question is...  how many of your public dollars would you give to some principal?  This is a wonderful question.  I'm pretty sure that this is the most important question ever.

In your story you mentioned Linux...

The Android operating system is a fork of the open-source operating system Linux, which was collectively authored by thousands of people all over the world, with no traditional ownership model for their creation. 

Not sure if you're familiar with what Eric Steven Raymond has written about Linux...

The history of Unix should have prepared us for what we're learning from Linux (and what I've verified experimentally on a smaller scale by deliberately copying Linus's methods [EGCS]). That is, while coding remains an essentially solitary activity, the really great hacks come from harnessing the attention and brainpower of entire communities. The developer who uses only his or her own brain in a closed project is going to fall behind the developer who knows how to create an open, evolutionary context in which feedback exploring the design space, code contributions, bug-spotting, and other improvements come from hundreds (perhaps thousands) of people. - Eric Steven Raymond, The Cathedral and the Bazaar

See the part about harnessing the attention and brainpower of entire communities?  This is why markets work.  Everybody participates in the creation of value signals.  Therefore... the value signals in the private sector reflect the maximum amount of attention and brainpower.  Valuation in the private sector is inclusive rather than exclusive.

You also mentioned Wikipedia in your story.  But did you know that Wikipedia was inspired by an essay by Friedrich Hayek?

The problem is thus in no way solved if we can show that all the facts, if they were known to a single mind (as we hypothetically assume them to be given to the observing economist), would uniquely determine the solution; instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge. To assume all the knowledge to be given to a single mind in the same manner in which we assume it to be given to us as the explaining economists is to assume the problem away and to disregard everything that is important and significant in the real world. - Friedrich Hayek, The Use of Knowledge in Society 

What Raymond said about Linux is exactly the same as what Hayek said about markets.  Raymond and Hayek used different words and different examples but it was the same exact concept...

Google and IBM’s Watson can discover patterns in the big data they vacuum up, as can NSA surveillance programs. But compare the viewpoint of a GoogleMaps car that indiscriminately records everything as it drives down the street to how two people can walk down the same street and notice entirely different things with respect to shops, restaurants, and passersby. People have different perspectives. Individuals are curious about different things. They assign different values to what they encounter. - Richard E. Cytowic, Your Brain on Screens

People are different so they spot different things... and they also spend different amounts of money/time on the different things that they spot.  The more people that spot, and spend more money/time on, the same thing... the more likely it is that other people will also spot it and spend on it.  Spending allows us to bring valuable things to the attention of others.

How many of your tax dollars would you spend on some principal?  I don't know.  The government doesn't give you the chance to spend any of your tax dollars on any principals that you happen to spot.  The government doesn't give me the chance to spend any of my tax dollars on any principals that I happen to spot.  Nobody is given the chance to spend any of their tax dollars on any principals that they happen to spot.  Why isn't anybody given the chance to use their tax dollars to communicate their valuations of any principals?  It's because you don't believe that the public sector needs our attention or brainpower or knowledge.   Therefore, the value signals of principals in the public sector do not reflect the valuations of consumers... they reflect the valuations of committees.   There's a name for this type of system: socialism.

You think that our country prospers because of socialism.  This is what makes you a chanidget.  But you really don't have to be a chanidget.  You're a smart guy.  And I already showed you where the bug is in your premise.  If you agree that it's a bug... then all you have to do is remove it.  If you don't agree that it's a bug... then... I'm all ears.  Use your knowledge and brainpower and talent and creativity to convince me that the public sector doesn't need your knowledge and brainpower and talent and creativity.

Regarding inequality... if we created a market in the public sector... do you think principals would all receive the same amount of money?  Do you think teachers would all receive the same amount of money?

Do you think any teachers would be a superstar like J.K. Rowling is a superstar?  Can you imagine yourself giving your public dollars to a teacher in England like you give your private dollars to an author in England?  Can you imagine J.K. Rowling giving her public dollars to Salman Khan like Salman Khan gives his private dollars to J.K. Rowling?

A global market for public goods would be just as beautiful as a global market for private goods.  Imagine everybody in the world being free to spend their public dollars on education, conservation, space exploration and cancer research.  Imagine when we have just as many superstars in the public sector as we have in the private sector.  Imagine when we have more superstars in the public sector than in the private sector.  

Is the sun too bright?  Nope.  The moon isn't bright enough!

See also: An Economic Critique of Peer Progressivism

Bueller's Basement

Last night I had a dream that I was talking to my girlfriend in the living room.  I went to another room... where, much to my surprise, I found my girlfriend.  How could she possibly be in two places at the same time?  My brain jumped to the most logical conclusion.  Evidently I had been dating twins all along!  The next conclusion that my brain jumped to was also very logical... threesome!!!  Unfortunately... as soon as I came to this conclusion... I woke up.  Evidently the conclusion was too logical.  Ughhhh.  I really robbed myself!

When I told my girlfriend about the dream she laughed and said that I was being greedy.

I really love the dynamics of relationships.  Which is why I really love the idea of threesomes.  Adding a third person to a relationship makes the relationship far more dynamic... and far more fascinating.

So it makes me really sad that there are so few movies and shows that really dig into the dynamics of three-way relationships.  In fact, only two movies come to mind.  What makes it terribly tricky... is that I can't even mention these two movies without spoiling them.  They are fucking wonderful movies but I can't even mention them!   All I can say is that they are foreign and on Netflix.

Given the opportunity to allocate my Netflix fees... then I would certainly allocate a huge chunk of my fees to these two movies.  I wonder how many other people would also do so?   How bright would the value signal be?  How many producers would respond to it?

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