Conciergery

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The livelihood of a hotel concierge depends on the maintenance of a complex facade: traditionally, he must be obsequious yet peremptory; menial and, at the same time, a bit of a snob. This makes the inner life of the concierge, like that of the psychiatrist or the pastor, the object of speculation. In Muriel Barbery’s novel The Elegance of the Hedgehog, a dumpy concierge nurses a private devotion to Tolstoy. In the 1993 movie For Love or Money, the concierge Doug Ireland (played by Michael J. Fox) must endure the whims, and walk the poodles, of such guests as Mr. Salvatore, who keeps asking for more of “dem things on the pillow,” by which, Doug finally figures out, he means mints.

From a delicious piece by Lauren Collins in the current New Yorker.

The Imperial Presidency

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Willem Buiter is in Martha’s Vineyard for his family holiday, which sounds nice — except for one thing. His blog post takes up the story.

The only blight on the landscape of this holiday is that, once again, a US presidential family has decided to vacation on Martha’s Vineyard during the month of August. From earlier visitations by the Clintons, I know that the arrival of the presidential hordes on the Vineyard represent a massive negative externality for all those who go there in pursuit of the same thing the president and his family seek: peace and quiet. Whether the local economy gets a temporary or lasting boost, I leave as a project for Econ 101.

The presidential party (or presidential court) that tags along on any presidential journey, let alone a temporary relocation involving the entire presidential nuclear family, looks and behaves like an occupying army. There are hundreds, if not thousands of persons charged with security, ranging from the secret service to the specially beefed-up state and local police forces. Communications experts, specialist medical personnel, myriad advisers and countless other presidential hangers-on cause the Vineyard to sink at least a foot deeper into the sea. The carbon footprint is bigger than that of the yeti. The press corps and assorted other media camp out all over the island, competing with the presidential staff for first place in the hot air emission stakes. Roads are blocked. Traditional rights-of-way are suspended. Beaches become inaccessible.

He’s seen this elsewhere too:

The only time I have been to Davos for the World Economic Forum (the event with the highest ratio of self-importance to importance of any gathering of humans anywhere, ever), president Clinton attended part of the circus. Let me emphasize that I was there ex-officio only – as briefcase carrier (aka chief economist) to the president of the European Bank for Reconstruction and Development. US security personnel simply took over the town, established a defensive perimeter and bossed and bullied everyone there, including the Swiss army and police, on the roads and in the meeting halls. The only time I have seen anything like it was when the Israeli prime minister visited the Binnenhof – the centre of government in the Hague, the Netherlands. Israeli security personnel took such a complete grip on that part of the Hague, that the Dutch prime minister had to argue with them to be allowed to use his own office.

I recognise that security considerations are important, and that the days when a US president could walk his dog down Main Street on his own are unlikely to return anytime soon. Even so, the in-your-face arrogance of the modern imperial presidency is breathtaking and, I would argue, dangerous to a democratic, open society. The gap between the president (or indeed the president-elect) and the average American becomes infinite as soon as the presidential election polls close. This isolation cannot be twittered or blackberried away. The president effectively becomes the prisoner of his court. As a president’s time in office wears on, this isolation leads increasingly to distorted views of reality, at times bordering on paranoia.

The force- and reality-distortion field that surrounds the US president is indeed extraordinary. In the last 15 years, the President and Vice-President have, on separate occasions, visited the village where I live. When the Prez (Clinton) came, an entire floor of the nearest hospital was commandeered (and closed to NHS patients) for the day of his visit. Not sure what happened when Al Gore came.

Lessig quits blogging

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Last post here.

So my blog turns seven today. On August 20, 2002, while hiding north of San Francisco working on the Eldred appeal, I penned my first (wildly and embarrassingly defensive) missive to Dave. Some 1753 entries later, I’m letting the blog rest. This will be the last post in this frame. Who knows what the future will bring, but in the near term, it won’t bring more in lessig.org/blog.

Pity. He’ll be missed.

Feature creep

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There’s a nice piece in this week’s Economist about the menace of feature creep.

Look at what has happened to netbooks — those once-minimalist laptop computers for doing basic online chores while on the hoof. Though palmtop computers and sub-notebooks had been around for decades, a Taiwanese firm called Asus introduced the world to netbooks in 2007 with its ground-breaking Eee PC. The two-pound device had a seven-inch screen, no optical drive or hard drive, and occupied half the space of a typical notebook computer of the day. It had all the essentials (and no unnecessary extras) for doing the job, and could be slipped into a briefcase, handbag or raincoat pocket and hardly noticed.

Seeing a good thing, rival makers rushed in with me-too versions—each purporting to offer improvements. The original keyboard was only 85% as wide as a full-sized one. Many people thought that just fine, especially as it offered the luxury of a seven-inch screen. For the past 20 years, your itinerant correspondent has cheerfully used palmtops with 62% keyboards and six-inch screens to check his e-mail, surf the web and file stories from odd places. The me-toos, nevertheless, deemed 85% unusable and increased it to 92%.

With the increase in keyboard width came an increase in the netbook’s screen size, room for a fairly hefty hard-drive, additional ports, a bigger battery—and yet more weight. Today’s netbooks are now the size of low-end laptops, with up to 12-inch screens, 160 gigabyte drives, one or two gigabytes of random-access memory, a video camera, and cellular as well as wireless transceivers. As a result, they now weigh well over three pounds and need a padded case to lug them around. The original concept has been lost in a blizzard of feature-creep.

Spot on. I’ve tried a lot of these NetBooks and still haven’t found anything that beats the original ASUS. The worst culprit, in a way, is the HP MiniNote which is beautifully over-engineered and has a lovely screen but is too heavy and bulky to carry round.

Trink up

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And while we’re on the subject of how print publications might reverse the decline in their circulations, I should report that we are not the first generation of journalists to fret about these things. My illustrious countryman, Flann O’Brien, was much exercised by these matters and wrote about them often in his Irish Times column. In one, he reported on his Research Bureau’s work on a new form of ink, provisionally called Trink.

It looks for all the world like the ordinary black ink you can buy for twopence. ‘Trink’ however is a very special job. When put on paper and dried, it emits a subtle alcoholic vapour which will hang over the document in an invisible odourless cloud for several days.

The whole idea, he explained, was to print the Irish Times with it.

You will then get something more than a mere newspaper for your thruppence. You get a lightning pick-me-up not only for yourself and your family but for everybody that travels in your bus. Any time you feel depressed, all you need is to read the leading article; if you want a whole night out, get down to the small ads.

Like all great inventors, O’Brien foresaw opposition.

Every great innovation must expect it. Vested interests, backstairs influence. The Licensed Vintners’ Association will make a row; newsvendors will have to hold an excise licence or possibly the Irish Times will be on sale only in hostelries; the Revenue will probably clamp a crippling tax on every copy and compel us to print under the title ‘Licensed for The Sale of Intoxicating News, 6 Days’. All that will not stop us, any more than the man with the red flag stopped the inevitable triumph of the motor car. And no power on earth, remember, can compel your copy of the Irish Times to close down at ten. You and read and re-read it until two in the morning if it suits your book, and even tear it in two and give your little wife a page.

You may laugh, but this is at least as good an idea as some of the dafter wheezes dreamed up by marketing executives to persuade people to buy copies of print publications at newsagents. Of course nowadays, one would segment the market. The Sun and the Mirror would be printed using the cheaper Spanish reds, or possibly bulk-buy Retsina; the Financial Times would be done in one of the Duexieme Cru clarets, or perhaps a decent Chambertin; Vogue would be printed in champagne while Hello! would be admirably served by Tia Maria. The Guardian and Observer would be best suited by Chilean or South African Pinot Noir, I fancy. Loaded and other Lads’ Mags would be printed in Newcastle Brown. The Independent, for its part, would be done in non-alcoholic lager while the Tablet would be printed in communion wine (with the lonely-hearts page perhaps done in Holy Water to discourage fornication?) And of course the Telegraph would patriotically stick to the products of English vineyards.

I tell you, we’re onto something here.

‘Free’ news: the bottom line

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Succinct wisdom from Peter Feld about the proposition that putting out news free on the web cannibalises one’s print edition:

The flaw in the print person’s perspective is in thinking that there is any relation between your print audience and your web audience. There is none. You are not undercutting your print product by publishing a website because the people who you can reach online have almost no overlap with the people who you reach in print. Your print readers don’t want your website, and your web audience doesn’t. want. your. paper. (or magazine). (There’s a small overlap for whom that’s not true — many of whom are the mediavores who read articles like this one.) Audiences are more stratified by media habits than they are united by common interests.

So, you will not send people back to your paper by eliminating your website (though you’ll save the cost of operating a website — maybe that’s the real consideration) — you’ll send them to other websites. And if you do maintain a website with a prohibitively high paywall, to try to send people to print, you have the worst of both worlds: a website that costs money to maintain, and no audience or revenue.

The real error of print people is thinking that cost is a factor driving people from print to the web — as though people go to the web to save the price of a newspaper or magazine. Wrong. They go to your website because the web is where they hang out, and because they are hoping to find something that would be fresher than they could in a paper printed last night and filled with yesterday’s news.

Motoring, French-style

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Every time I go to Provence I am reminded that these Citroens (and the Deux-Cheveaux that preceded them) were ideal cars for this climate. If I lived there, I’d try to buy one. But I guess that by this stage it’d have to be from eBay.fr.

Flickr version here.

The dismal (and dangerous) science

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One of the most enjoyable pieces of academic work I’ve ever done was in the late 1970s when my philosopher friend Gerard de Vries of the University of Amsterdam and I did a study of the epistemological status of econometric models. (It was later published in the Dutch philosophy journal Kennis en Methode.) As an engineer I’d been intrigued by the way economists became increasingly obsessed with statistical models, and puzzled by the way in which the discipline gradually morphed into a branch of applied mathematics. This seemed to me to be yet another example of the pernicious attractiveness to social scientists of TS Kuhn’s notion of a ‘paradigm’: they convinced themselves that the way to make their subjects academically respectable was to give them an empirical core — just like physics. What none of us really appreciated was that this pathetic addiction to abstract models might have some sinister consequences.

What brought this to mind was an intriguing set of exchanges involving — of all people — Her Majesty the Queen. In November she visited the London School of Economics and, en passant asked some of the academics there why “nobody [had] noticed [before September 2008] that the credit crunch was on its way?” Which, when you come to think of it, was a bloody good question. On June 27 the British Academy, which is to the humanities what the Royal Society is to scientists, held a symposium on the subject, after which two of the eminent LSE professors who had attended wrote to the Queen, summarising the conclusions of the symposium. (Text of their letter is available here.) “Everyone seemed to be doing their own job properly on its own merit”, they wrote. “And according to standard measures of success, they were doing it well. The failure was to see how collectively this added up to a series of interconnected imbalances over which no single authority had jurisdiction. This, combined with the psychology of herding and the mantra of financial and policy gurus, lead to a dangerous recipe. Individual risks may rightly have been viewed as small, but the risk to the system as a whole was vast”.

If you’re of a suspicious turn of mind (and I am), this smacks of establishment cant. What it’s basically saying is that everyone’s to blame, which is another way of saying that nobody’s to blame, Ma’am. But in a way one could have predicted the contents of the letter by simply inspecting the list of invitees to the British Academy think-in: it’s a roll-call of establishment worthies — a Cabinet secretary here, a former Deputy-Governor of the Bank of England there, some prominent academics, a brace of retired Chief economic Advisers to the Treasury, etc.

The letter clearly irritated some economists, chief among them my friend Geoff Harcourt, one of the greatest living experts on Keynes and a life-long believer in the proposition that there’s a lot more to economics than applied mathematics. So he and his buddies set to and composed another letter to Her Majesty (text here) which seems a lot more sensible to me, mainly because it attributes some of the blame to the way in which the teaching of economics over the last two decades has been perverted by an obsession with mathematical theory and a lack of interest in what actually goes on in the real world. (Like, for example, the emergence of an unregulated ‘shadow banking’ system which came to overwhelm the normal, regulated, system.)

Geoff and his co-signatories point out that the British Academy letter

“does not consider how the preference for mathematical technique over real-world substance diverted many economists from looking at the vital whole. It fails to reflect upon the drive to specialise in narrow areas of inquiry, to the detriment of any synthetic vision. For example, it does not consider the typical omission of psychology, philosophy or economic history from the current education of economists in prestigious institutions. It mentions neither the highly questionable belief in universal ‘rationality’ nor the ‘efficient markets hypothesis’ — both widely promoted by mainstream economists. It also fails to consider how economists have also been ‘charmed by the market’ and how simplistic and reckless market solutions have been widely and vigorously promoted by many economists.

What has been scarce is a professional wisdom informed by a rich knowledge of psychology, institutional structures and historic precedents. This insufficiency has been apparent among those economists giving advice to governments, banks, businesses and policy institutes. Non-quantified warnings about the potential instability of the global financial system should have been given much more attention.

We believe that the narrow training of economists — which concentrates on mathematical techniques and the building of empirically uncontrolled formal models — has been a major reason for this failure in our profession. This defect is enhanced by the pursuit of mathematical techique for its own sake in many leading academic journals and departments of economics.”

Now enters, stage right, the formidable Richard Posner, who finds fault with both letters and calls for “a more focused criticism”. The Queen, he points out, was asking about the failure to foresee the financial collapse of last September, rather than about the health of modern economics in the large. “That failure”, he writes

“was I think due in significant part to a concept of rationality that exaggerates the amount of information that people have about the future, even experts, and to a disregard of economic factors that don’t lend themselves to expression in mathematical models, or are intractable to formal analysis. The efficient markets theory, when understood not as teaching merely that markets are hard to beat even for experts and therefore passive management of a diversified portfolio of assets is likely to outperform a strategy of picking underpriced stocks or other securities to buy and overpriced ones to sell, but as demonstrating that asset prices are always an adequate gauge of value — that there are not asset “bubbles” — blinded most economists to the housing bubble of the early 2000s and the stock market bubble that expanded with it. In modeling the business cycle, economists not only ignored, because difficult to accommodate in their mathematical models, vital institutional detail (such as the rise of the ‘shadow banking industry,’ which is what mainly collapsed last September) — often indeed ignoring money itself, on the ground that it doesn’t really affect the ‘real’ (that is, the nonfinancial) economy. They also ignored key concepts in Keynes’s analysis of the business cycle, such as hoarding and uncertainty and business confidence (‘animal spirits’) and worker resistance to nominal (as distinct from real) wage reductions in depressions. Lessons of economic history were ignored, too, leading to a belief that there would never be another depression, let alone a collapse of the banking industry. Even when the collapse occurred, in September, many macroeconomists denied that it would lead to anything worse than a mild recession; the measures that the government has taken to recover from what has turned into a depression owe little to post-Keynesian economic thinking; and the economists cannot agree on what further, if anything, should be done, and which of the government’s recovery measures has worked or will work.”

The truth of the matter is that large chunks of the analytical apparatus of modern economics has been shown to be a house of theoretical cards. But given the profession’s huge investment in said cardboard structures, it’s probably incapable of admitting its colossal mistake. Time for a Kuhnian revolution?