The Bitcoin/blockchain story: a mixture of greed and idealism

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This morning’s Observer column:

Because I write about technology I am regularly assailed by people who are exercised about so-called “cryptocurrencies” like bitcoin, which most of them regard as a scam. But when I reply that while bitcoin might be newsworthy, the really important story concerns the blockchain technology that underpins it, their eyes glaze over and they start looking for the nearest exit as they conclude that they are in the grip of Coleridge’s Ancient Mariner.

And, in a sense, they are. Blockchain technology is indeed important, but it seems largely incomprehensible to ordinary mortals, even though the web teems with attempts to explain it…

Read on

Keep a record of what matters

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Dave Winer’s mother died recently and he’s been clearing out the family home. Which prompted this reflection

In hindsight, I realize we should have done a video walkthrough of mom’s house as it was when she left us. Exactly as it was. Now it is staged for sale, all the personal stuff is out. It’s a house transitioning to be a new family’s house. It was our family house for over 50 years. I didn’t think of it because at the time, the way the house was set up was the most normal thing. I never thought that it was an archive of lives that were now over, that it was about to disappear. I mention this so if you end up being the one to close up shop on a family house, take a good video snapshot before you start taking it apart. #

The problem with welfare states

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Interesting WashPo essay by Megan McArdle

Notably, almost all the foreign programs that American social democrats envy were enacted during Europe’s long post-war economic and demographic boom. That meant that the initial cost of these systems was fairly low — young people don’t need much in the way of health care or pensions, and economies at full employment don’t spend a lot on unemployment insurance or job retraining. As incomes soared, it was comparatively easy for government to skim some of the surplus for their new social insurance schemes, because even as their taxes went up, workers still got to take more money home every week. Governments ran into problems when the boom stopped, of course, but by then, political sentiment had cemented those programs in place.

What was easy in 1960 looks herculean as 2020 approaches. Economic growth has slowed, and populations are aging, which raises the cost of any proposed program and requires you to fund heavy losses on someone to fund it, either workers in those industries, or taxpayers. As psychologists tell us, people are “loss averse” — they care much more about losing something they have than about equivalent potential gains. Given the mammoth cost of socializing the U.S. economy now, and the huge number of people who face substantial losses, I’d argue that we should probably change “herculean” to “impossible.”

The dysfunctional republic…

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…and how the US became one. This from Dana Milbank in the Washington Post:

Political scientists have observed that American politics has deteriorated into an unstable combination of weak parties and strong partisanship — dry brush for the likes of Trump and Blankenship to ignite. The 2002 McCain-Feingold campaign-finance reform restricted party fundraising, and the Citizens United Supreme Court ruling in 2010 essentially destroyed parties by giving everybody else freedom to spend unlimited sums to buy politicians. The moderating influence of parties was replaced by the radicalizing influence of dark money.

Related to this, partisanship in Washington escalated, aggravated by partisan redistricting that puts almost all House members in safe seats where the only threat comes from primaries. Primary voters tend to favor extreme candidates — who, once in Congress, turn politics into warfare.

How about an Angry Founders Club?

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Lovely rant by Dave Winer:

We should start an “Angry Founders of the Internet” social club to discuss what the fuck happened and how can we tell people about the magic that underlies the crapware that the bigco’s are shoveling at us. It really is beautiful and amazing in there. Think of it this way. It’s easier to take the Interstate highway everywhere, but if you do that, you miss the charming B&Bs, the dramatic beaches, restaurants, jazz clubs. The thrill of riding a bike, hiking the Appalachian Trail, skiing. All that intellectually unperpins this.

I’m not a ‘founder’ — though I count some of them among my friends. But I sympathise with Dave. The technology remains as magical as ever. It’s the corporate capture of it that rankles — plus the passivity and gullibility of so many of our fellow-humans.

A simplistic theory of political polarisation

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From Bryan Caplan

Leftists are anti-market. On an emotional level, they’re critical of market outcomes. No matter how good market outcomes are, they can’t bear to say, “Markets have done a great job, who could ask for more?”

Rightists are anti-leftist. On an emotional level, they’re critical of leftists. No matter how much they agree with leftists on an issue, they can’t bear to say, “The left is totally right, it would be churlish to criticize them.”

Caplan explicitly calls it a simplistic theory, and it is. But it’s not bad as a first approximation — as George Hawley suggests:

If out-group hostility is more important to party identification than support for particular policies or ideologies, we may not actually place very many ideological demands on our parties. Defeating our enemies may be more important than advancing specific liberal or conservative agendas. According to Groenendyk: “If partisans’ identities are increasingly anchored to hatred of the outparty than affection for their inparty, electoral dynamics are likely much more fluid than many accounts suggest. Thus, insurgent candidates with questionable ideological credentials (e.g., Donald Trump) may be more appealing than one might expect in the age of ideologically sorted parties.”