You pays your money and takes your choice (of filter bubble)

This morning’s Observer column:

The only problem is that outside the Washington Beltway – DC’s version of the M25 – few people seem terribly excited about the supposed evils of Facebook, Google and co. (That’s not entirely true: lots of intellectuals and commentators not in the United States, including this columnist, are concerned about these companies, so for current purposes we can think of the “Beltway” as a metaphorical filter bubble.) But outside that bubble, life goes on. People log on to Facebook every day and use Google to find recipes or train timetables, regardless of whether these platforms might be playing a role in undermining democracy.

One can see why people don’t care. Antitrust lawyers and European commissioners may be concerned about the monopoly powers of internet companies, but it’s very difficult to persuade the average internet user that s/he is being gouged by outfits whose services are free. Given that, the prospect of a popular uprising against Google and Facebook seems pretty remote…

Read on

Keeping calm and carrying on, Cringely style

From Bob Cringely:

This is probably the last picture ever taken of our house in Santa Rosa, California. The time was 11:30PM Sunday and a neighbor had just pounded on our door. Fifty mph winds had been blowing all day but nobody expected fire. Yet the glow you see is from burning houses behind and beside ours. They, too, are gone.

We left with what clothes we could grab. I forgot my computer. I’m still blind and awaiting surgery so Mary Alyce drove one car and we left the other to burn.

By 8AM we were on the Mendocino coast with crappy Internet service and this iPhone. But we were all safe.

Certainly I’d been stupidly feeling a bit sorry for myself, but that ends now.

The schools are closed so with Fallon at my side we’ll buy a notebook and resume writing. Look for my next column as early as tomorrow.

The heading on this blog post is what caught my attention. “I Have No Boils” it read. Bob explains:

Finally, about the headline, my old neighbor Ella Wolfe complained to her doctor once that she was suffering all the trials of Job from the Bible (Ella was approaching 100). “You have no boils,” said her doctor.

Neither do I.

Heartwarming stuff. The good news is that he and his family are safe.

Intellectual imperialism and the behavioural turn in economics

Further to the decision of the Nobel committee to give Richard Thaler this year’s prize for economics (about which I bloggeda few days ago), Frank Pasquale pointed me to an interesting critique by Juan Pablo Pardo-Guerra, who picks out “three problems in economics and its relation to the ‘real world’ it inhabits”.

Firstly, it skates over the fact that what Thaler is being rewarded for — realising “that people can be influenced by (mostly social) prompts to alter their behavior” — was, well, rather old-hat in other social science disciplines. So the Swedish recognition of behavioural economics is really just “a legitimation of economic imperialism: a finding is only truly relevant if published by an economist (corollary: being an economist from Chicago helps).” Ouch!

Secondly, though Thaler’s contribution might make economics “more human—and real”, the behavioural turn “doesn’t make away with the ontological commitments of discipline, privileging market processes and individual action as the fundamental sources of virtue.” Take the metaphor of the ‘nudge’, as articulated by Thaler and Sunstein. “Rather than questioning the economics of general equilibrium”, says Pardo-Guerra, “‘nudging’ is a proposal in calculated engineering: we can build policies that create outcomes similar to those of theory by gently walking slightly irrational, bounded economic agents through the correct ‘architectures of choice’”. But who conceptualises those architectures? And within what ideological constraints?

And finally, this year’s prize confirms that to win a Nobel prize in economics, it really helps to be male and white. To date, only one woman — Elinor Ostrom — has been recognised, and Amaryta Sen is the only non-white laureate so far. I don’t know much about the overall demographics of the economics discipline, but if the Nobel list is representative then one can see why it might be more problematic than the Swedes recognise.

Sarcasm works — but will May & Co get the joke?

Lovely summary (from eiDigest) of a column in the independent:

UK politics

The Independent’s Mark Steel argues that to understand the success of the Universal Credit scheme that benefit claimants now depend on, you only have to look at the wise people who created it. The scheme was devised by Lord Freud, a city banker, and therefore ideally placed to understand the trials of living on benefits. It was carried forward by Iain Duncan-Smith, who had to struggle himself – but instead of wallowing in self-pity, he got off his backside and was given use of a Tudor mansion by his father-in law, the fifth Baron Cottesloe, which proves rewards come to those prepared to make an effort. Now that the scheme has run into trouble, the government should put together a team who similarly comprehend the emotions at the heart of poverty in modern Britain, such as Prince Harry, Simon Cowell and the Sultan of Brunei.

Hey — what about Jacob Rees-Mogg, the Hon Member for the 18th century?

Why do we allow Trump to play on our indignation?

IMHO, we liberals are paying far too much attention to Trump’s tweeting. In doing so we are allowing him to lure us into following his news agenda. So it was good to find that Jack Shafer sees it that way too. For example:

As cognitive linguist George Lakoff explained to On the Media’s Brooke Gladstone in January, Trump primarily uses his tweets to divert and deflect attention from news that threatens him, or to launch a trial balloon for one of his proposals. He also tweets to pre-emptively frame a topic before his opponents get a chance to comment, the best example being his categorization of news he doesn’t like as “fake news.” Consider the empty tweets he’s posted recently: He’s beefed about the fact that the late-night hosts ridicule him, demanding equal time to respond, even though equal time doesn’t apply to jokes about the president; he ordered NBC News to apologize to Secretary of State Rex Tillerson for reporting that Tillerson had called him a “moron,” even though Tillerson never denied it; he called critical coverage of his Puerto Rico response “Fake“ when anybody with a TV set and a pair of eyeballs knows he’s lying.

Spot on.

The interview with Lakoff is worth listening to, btw.

Quote of the Day

“For all the ways this technology brings us together, the monetization and manipulation of information is swiftly tearing us apart.”

Pierre Omidyar, founder of eBay, writing in today’s Washington Post.

Richard Thaler’s Nobel Prize

It all came from a list he maintained on the blackboard in his office under the heading: “Dumb Stuff People Do”. Eshe Nelson has a nice piece in Quartz which summarises some of them. They include:

The endowment effect — the theory that people value things more highly when they own them. In other words, you’d ask for more money for selling something that you own than what you would be willing to pay to buy the same thing

Loss aversion. “People experience the negative feeling of loss more strongly than they feel the positive sense of a gain of the same size.“

Anchoring. “If you are selling an item, your reference point is most likely to be the price you paid for something. Even if the value of that item is now demonstrably worth less, you are anchored to the purchase price, in part because you want to avoid that sense of loss. This can lead to pain in financial markets, in particular.”

Planning vs doing. The internal struggle between your planning self and doing self. One way to avoid this conflict is to remove short-term courses of actions. Goes against the traditional economic notion that more choices are always better.

Nudges. “Thaler and Sunstein pioneered the idea of using nudges to create alternative courses of actions that promote good long-term decision making but maintain freedom of choice. One method of doing this they found is simply changing the default option—switching users from opt-in to opt-out, for example. “ (Piece includes interesting map of the world showing countries where nudging has become government policy.). The overall philosophy is: if you want people to do something, make it easy to do. Internet companies have become very rich by understanding this.

The availability heuristic. “People are inclined to make decisions based on how readily available information is to them. If you can easily recall something, you are likely to rely more on this information than other facts or observations. This means judgements tend to be heavily weighted on the most recent piece of information received or the simplest thing to recall.” So if you’ve been to a store that had a few spectacularly low-priced items you’re inclined to think that it is, in general, a low-priced store.

Status-quo bias. “Most people are likely to stick with the status quo even if there are big gains to be made from a change that involves just a small cost. In particular, this is one of the implications of loss aversion. That’s why a nudge, such as changing the default option on a contract, can be so effective. Thaler’s research on pension programs shows that while employees can choose to opt-out of a plan, the status quo bias means once they are in it, they are actually more likely to stay put.”

In a way — as the FT points out — Thaler’s biggest contribution was in persuading the economics profession that behavioural traits ought to be included in economic theory and practice. “If economics does develop along these lines”, he wrote, “the term ‘behavioral economics’ will eventually disappear from our lexicon. All economics will be as behavioral as the topic requires.”

Asked how he proposed to spend the money, he replied “as irrationally as possible”.

Social media, anger and the Russians

From the NYT:

YouTube videos of police beatings on American streets. A widely circulated internet hoax about Muslim men in Michigan collecting welfare for multiple wives. A local news story about two veterans brutally mugged on a freezing winter night.

All of these were recorded, posted or written by Americans. Yet all ended up becoming grist for a network of Facebook pages linked to a shadowy Russian company that has carried out propaganda campaigns for the Kremlin, and which is now believed to be at the center of a far-reaching Russian program to influence the 2016 presidential election.

A New York Times examination of hundreds of those posts shows that one of the most powerful weapons that Russian agents used to reshape American politics was the anger, passion and misinformation that real Americans were broadcasting across social media platforms…

What’s coming across loud and clear from the emerging realisation of the extent of Russian meddling in the US election confirms my long-held view: that the only two regimes in the world that really understand the Internet are the Chinese and Russian governments. They have different understandings, of course. For the Chinese version, see the work of Rebecca MacKinnon and Gary King. The Russians have understood the dilemmas (and opportunities) of postmodernism, and act accordingly. They have also have integrated information-warfare into their strategic military doctrine.

The MBA: a Grand Tour in the age of Airbnb

Lovely column in today’s FT (behind a paywall, alas) about the MBA degree, a qualification that I’ve long regarded as pernicious. The peg for the piece is the fact that King’s College London is launching a new business school which is very pointedly not offering an MBA. At one point, Broughton retells a story about the “marshmallow challenge” invented by Peter Skillman (a former smartphone company executive):

A team of four or five people is asked to build the tallest possible structure using 20 strands of dry spaghetti, a roll of tape, a ball of string and a marshmallow, in 18 minutes. Mr Skillman found that the most successful were children just out of kindergarten. They immediately began building, and if their tower collapsed they would build again. The worst were recent MBA graduates. They would start by arguing about who had the most expertise, then sketch blueprints and make calculations before constructing a tower. If it collapsed, they had no time to start over.

That sounds too good to be true. Still, as the Italians say, if it’s not true it ought to be.