Startup Geometry Podcast EP 002: Christoph Rehage

"Tourism is sin, and travel on foot virtue."

-Werner Herzog.

In this episode, I talk with Christoph Rehage, who filmed himself walking more than 5000km across China over the course of a year. Most of you will be familiar with him from the YouTube video that resulted from the trip:

He's also the author of three books, published in German and Chinese, an avid reader of travel books, collector of fine vodkas, filmmaker, photographer and newspaper columnist. We talk about his early travels, what China looks like beyond Beijing and the big cities, what Germany and China have to teach each other, and how travel improves our lives.

Show links:

ChristophRehage.com, his website.

His books, which I hope will be published in English in the near future:
 

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Links for Later 5-4-15

1. How has Investor-State Dispute Resolution been used after other trade deals?
2. xkcd: Physics vs. Biology
3. The joy of collecting books. Real, paper books.
4. Bruce Hornsby on his many piano-playing incarnations. He's most impressed by Keith Jarrett's improv capabilities, and rightly so.
5. Steve Rogers, Captain America, is almost certainly a liberal Democrat.
6. "Puddleglum in heaven."
7. Twelve hours as a conscript in Greece.
8. Joss Whedon has left Twitter after a number of abusive messages were sent to him to spend more time with his writing.
9. Tesla released a $3,500 battery for houses
10. Ta-Nehisi Coates: Nonviolence as Compliance

Paul Romer

Paul Romer's endogenous growth model (which treats ideas as part of the economic model, rather than something which is set outside of, or "exogenous to", the economic growth process) offers what I think is one of the most useful macro frameworks; however, it seems to have fallen out of favor for some reason.

In this interview with Cloud Yip of iMoney Magazine, he talks about the importance of urbanization, his growth model, and why non-rival, partially excludable goods (like ideas) mean that the primary micro market model to study is that of monopolistic competition (many competitors, differentiated goods, neither price taking nor price setting completely):

Q: So are you not going back to work on growth theory?

Romer: Actually I am writing something about growth theory right now, but it is mostly a commentary on what happened to growth theory. To be honest, I think that a substantial fraction of the work that people are now doing on growth has to be judged a failure from a scientific perspective.

In particular – and I apologize if this relies too much on the jargon of our field — monopolistic competition turns out to be just the tool for understanding the economic ideas. (It also turns out to be the tool for understanding international trade, economic geography, and macroeconomics.) But there has been a series of models that are associated with the University of Chicago – from what some people call the freshwater camp in macroeconomics – that are continuing a fight that George Stigler started in the 1930s to keep monopolistic competition from being used in economics. It is hard to explain to an outsider why a whole group of economists have ended up on the wrong side of scientific progress, resisting the direction that all of modern economic theory is taking, but they are.

In the economics of ideas, we have to be willing to at least consider the possibility that someone could have some control over an idea, hence some monopoly power associated with ideas. This could come from patent or a copyright. It could also come from secrecy.

Then we can ask if it is a good idea or a bad idea to have more intellectual property rights or more protection of ownership of ideas. We know that the answer here is mixed. Sometimes some amount of it can be good, but it can also be harmful if the property rights are too strong or are given to the wrong types of ideas. But if you don’t even allow for the possibility of ex post monopoly rents from the discovery of ideas, you can’t even ask the question.

So it is scientifically unacceptable to have people who say, “We will never, as a matter of principle, consider a model in which there are ever any monopolies. We will dogmatically stick only to models of price-taking competition.” I think this an untenable scientific stance.

I don’t think that this critique is going to reignite interest in growth theory. But like I said, when it’s time for interest to come back, somebody have a new take on growth theory, and work in this area will start again. But in the meantime, we have to stop tolerating work that is scientifically unjustifiable.

Q: I thought the endogenous growth model paved a new direction for growth theory to further develop, yet the academic interest in this theory just stopped. And even textbooks just briefly mention the endogenous growth model. What is the problem?

Romer: Well, I think the thing we learn from endogenous growth is something very simple. It is the notion of an idea as a nonrival good. The statement that an idea is a nonrival good is very powerful because what that tells you is the value of an idea is proportional to, or at least scales with, the total number of people who can use it. So it means that scale effects are at the heart of economic activity. This is why globalization is so important, because it is now possible for any idea to be used by everyone.

The Solow model already allows for a non-rival good, but the model also made it nonexcludable – which means that no one could control or own an idea. This turns a nonrival good into a public good. What endogenous growth theory said is that, there are some nonrival goods that can be at least partially excludable. This means that incentives start to matter, both for discovering ideas and for spreading ideas. The people who want to stick with price-taking never want to allow the possibility of that a nonrival good could be even partially excludable. Because of their untenable insistence on price-taking models, they have tried to stop the spread of the key insight from endogenous growth theory. And they have been at least partially successful in doing so.

Once you admit that there are some nonrival goods, globalization becomes much more important than standard theory suggests. And if you allow that some of them are partially excludable, then incentives matter a lot more than standard theory suggests, for better and for worse.

So for example, there is a non-rival idea that a firm can control. They can keep it secret. They can take it to work in a factory in India. If they want to locate in India but there are no gateway cities there, they may go elsewhere in the world. So the policies that make a place like Mumbai so dysfunctional influence growth for the entire country.

What a government can do is influence the incentives for people to bring ideas into a country. One way to think about why Shenzhen was so powerful is that it created incentives for firms to bring ideas into China and combine those ideas with Chinese workers.

You don’t even need a formal model for that. Once you see the underlying idea, sometimes the words and the clarity of thinking are what really matters, not the math. You can use the math to get there, but once you got there, you don’t need that anymore. It is unfortunate that these ideas are not being communicated to students in our textbooks, because these are the exciting ideas.

(via Mark Thoma/Economist's View)

Decision Making in a Nutshell

Justin Fox has a nice review article in the Harvard Business Review which reviews the three major schools of decision-making (decision analysis, heuristics and biases, and "we're not as stupid as we look"). Particularly fascinating, in an inside baseball sort of way, is the bit about how Gerd Gigerenzer "fatigued" Daniel Kahneman with his arguments:

During an academic year at Stanford’s Center for Advanced Study in the Behavioral Sciences, in 1989–1990, he gave talks at Stanford (which had become Tversky’s academic home) and UC Berkeley (where Kahneman then taught) fiercely criticizing the heuristics-and-biases research program. His complaint was that the work of Kahneman, Tversky, and their followers documented violations of a model, Bayesian decision analysis, that was itself flawed or at best incomplete. Kahneman encouraged the debate at first, Gigerenzer says, but eventually tired of his challenger’s combative approach. The discussion was later committed to print in a series of journal articles, and after reading through the whole exchange, it’s hard not to share Kahneman’s fatigue.

Startup Geometry Podcast, Episode 001: Steven Brust

Welcome to the Startup Geometry podcast, where we talk to the creators, innovators and explorers who make the world what it is.

In this episode, I talk with Steven Brust, author of the Vlad Taltos/Dragaera novels. We talk about his writing process, important influences and future plans. I've been a huge fan of Steven's, ever since his first novel, Jhereg, introduced us to wisecracking assassin Vlad Taltos and his sidekick Loiosh back in 1983.

His latest books are Hawk and The Incrementalists.

You'll notice that I immediately mispronounce his last name (which is pronounced BROOST, though spelled BRUST), despite having pasted a note with the phonetic spelling of his name to the microphone I was using at the time. Podcasting is HARD.

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Show links:
Dreamcafe, Steven Brust's homepage
His Twitter account: @stevenbrust

At the Tor.com site:

• An excerpt from Hawk
• An excerpt from The Incrementalists
• An interview with Jo Walton about the Dragaera books
• A short story set on Dragaera

Fritz Leiber
Michael Moorcock
Roger Zelazny
Skyler White
Emma Bull

The Isaiah Berlin quote I referenced with regard to Incrementalist politics was in an interview with him which was excerpted in The 50 Year Argument, a documentary on the New York Review of Books, where I first saw and heard it. Similar sentiments could be found elsewhere in his work, for example in Crooked Timber, a collection of his essays and lectures.

Links for Later 3-14-15

1. Michael Lewis follows up on Flash Boys. Charles Schwab's sales of its customers' transactions and transaction data to third parties (HFT traders and others) comes up both in the article and the book.
2. Adam Nash of Wealthfront also has a bone to pick with Charles Schwab, citing hidden revenues in Schwab's investment strategy and sweep accounts.
3. Saras Sarasvathy's theory of effectual entrepreneurship gets some thumbs up.
4. Marina Warner's description of the many ways that higher ed is broken (in the UK especially, but a lot of this applies in the US as well).

The Science of Us

This series from New York Magazine takes a first-person view of several remarkable people--people like a tetrachromat, a woman with four receptors for color who sees millions of colors more than the average person,  and who has an opinion on that dress; a polyamorous genius; someone with Highly Superior Autobiographical Memory; and others.

Here Comes the Sun

Five years of video from NASA's Goddard Solar Observatory. Glorious.
(via boingboing)

Giordano Bruno on Prudence

Prudence is the state of things that leads a person to happiness and bliss in their life, and maintains them there, and ultimately returns great value. In this, children and fools differ from a man, and there are many who, regardless of their age, would reach the end of their course of days without having taken the counsel of maturity; these decrepit old men who have become worn out and unfit with age are the same ones who once tamed and subdued bulls and lions and bears. A prudent man is he who has proper regard for the things that must be done, who meditates upon the present, recollects the past, and provides for the future with forethought; it is not only that which is observable to the eyes which prudence considers, not judging only by what the eyes see or what the ears hear, but thinking over what possibilities and contingencies may truly happen in the future. He comes always by the correct path of nature and the divine, never by the broad path to Perdition, but travelling by the true ways of the past, by that called the hard, steep road by the Pythagoreans, diverting neither to the left or the right. He is prudent, wise and rational, who takes his seat in the stern of his soul, takes his counsel of the Almighty, in which he is preserved, exalts in the good he is able to do for others, and does not fear the murmuring of the fearful, insidious and wicked.

-Lullian Combinatoric Lamps

Section II, Chapter II, Member II 

 

 

From the first English edition of Bruno's commentaries on the works of Ramon Llull, coming out later this month.

Links for Later 2-1-15

1. The Parable of the Talents: How much should we think about how smart we are?
2. Tim Ferriss interviews Arnold Schwarzenegger.
3. Andrew Gelman on cognitive/behavioral economics.
4. Paul Krugman: I See Very Serious Dead People.
5. Xi Jinping's choices for reforming China & the Communist Party.
6. Psychedlics are back as therapeutic tools.

How to Decrease Inequality

The President's proposal to raise the capital gains tax rate to 28% is a good first step on the road to reversing some inequality-favoring policies. Cutting capital gains was meant to increase business investment, but what it's done instead is to provide convenient tax shelter for extremely wealthy individuals and an incentive to take one's compensation in the form of dividends. Here's a good summary of Danny Yagan's paper on the 2003 cap gains tax cut, Paul Krugman on the same. We should not, as a function of government, care how you make your money, so ideally, you would pay one set of progressive rates on the whole of your income, whether you got it as an hourly or annual wage, interest, dividend, or what have you.

Second, there needs to be an ongoing focus on deconcentrating industries generally and inhibitng large scale mergers & acquisitions among market leaders in particular. Why? Because these mergers have a hollowing out effect on the industry so that only very large scale companies remain. They also inhibit competition and internal investment, making inorganic growth more attractive. Access to public capital markets should be fostered instead, making public offerings simpler and less costly.

Third, intellectual property reform needs to move in the direction of weaker IP protection, with tighter restrictions on the length, breadth, and permissible categories of protection. Business process patents should be eliminated entirely, and safe harbor exceptions should be broad and automatically available. There exists a point at which additional protection actually decreases IP value, and I think it's clear we're well past that point. Some good signs are showing up in the new EU draft proposal in this area, but the current round of proposed trade agreements, starting with TPP, are unfortunately steps in the wrong direction.

Lullian Combinatoric Lamps - Giordano Bruno

Chapter VI
Member III

The width of the scale permits many ways of examination: | first, the extension of the meanings of the terms (of which more is said later), that is to say that goodness not only extends to its physical meaning but also to its ethical one (similarly applicable to greatness and the others); second by duplication of them in their concrete and abstract forms, so to speak, goodness and good, greatness and great; third by distinctions of -ivi, -abilis, and -are, for example, bonificativum [the capacity of goodness or to do good], bonificabile [the capacity to receive goodness or to be improvable], bonificare [to improve, reclaim, restore], where ivum signifies the active principal part, abile the passive principal part, and are the copulative principal part, or ivum the principal effective or communicative part, abile the principal receptive or participatory part, and are the principal connective or actual part; fourth, by distinctions of affirmative and negative, additive and subtractive, thus to the extent that one can be said to be taken affirmatively, the other is take negatively, where one is excessive, the other is deficient; fifth, by distinctions of explicit and implicit, because they are in terms not solely contained in their system, but also everything that can be said and imagined through absolute predicates, as is made clear in the Tract Regarding the Multiplication of the Terms; sixth by distinction of proper and appropriated, insofar as some of these have a natural convenience, some by and from themselves [per se & a se, instrinsically], others extrinsically and from others, some I say are from natural substance, some from infusion, some from acquisition.

Magnetic Memory Podcast

Anthony Metivier was good enough to interview me over at Magnetic Memory Method Podcast. We talked about Giordano Bruno, memory palaces, and how you can improve your techniques for learning and memory.

So, if you've enjoyed seeing me burble on in print, now you can get the definitive audio experience as well. Hope you enjoy.

Tatiana Plakhova - Globe

complexitygraphics.com

Best Books of 2014*

The Peripheral William Gibson
Multidimensional shennanigans, in which a possible future outsources work to a possible past, culminating in a series of capers.

 

Nothing is True, Everything is Possible Peter Pomerantsev Nonfiction that reads like fiction. A postmodern horror story about the changes in Russian society in the 21st century, featuring the PR flacks who run the media and opposition parties for the Kremlin, filmmaking gangsters, architectural historians, entrepreneurs hounded out of their own companies and country, and Vladimir Putin. America is exactly half as crazy as the Russia of this book, in many of the same ways.

Deathless Catherynne M Valente
Fiction that reads like the true history of 20th century Russia. Koschei the Deathless, Tsar of Life, marries Marya Morevna. This is the story of their marriage and their war with the Tsar of Death, set against the rise of communism and two world wars. Luxurious, funny and sad. Any book recommended to me by three people is a must read; this book was recommended by many, many more than three.

Redeployment Phil Klay

Short stories about soldiers in or returning from the wars in Iraq and Afghanistan. There are no protocols or etiquette to govern much of the modern experience of war, resulting in a lot of anxiety, restlessness and improvisation. If these stories are collectively about anything, they're about that.

Demon Camp: A Soldier's Exorcism Jennifer Percy

One day, while driving though rural Indiana, I heard a Pentecostal call-in show in which a listener called to ask for an exorcist, because demons were attacking her house right that minute. The hosts of the show promised to send someone over shortly. Apparently, this sort of thing went on a lot around there. Demon Camp describes that same sort of high-intensity, near hallucinatory religious experience among a group of people for whom PTSD, alcohol or sex addiction are caused by demons and healed by ritual.

 

Afghan Post Adrian Bonenberger
Bonenburger joined the military after graduating from Yale. This memoir in epistolary form describes an education before, during and after his wars. Like Jarhead in the previous generation of war memoirs, it's a search for meaning in experience, and for the meaning of one's experiences that drives the book.

 
The Goldfinch Donna Tartt
This was on everyone's Best List when it came out at the end of last year, and deservedly so. Starts with an art heist and kicks into high gear when Boris shows up. One perfect Tartt novel a decade is about right, but I don't know how she can hold herself back from writing faster.

The Bone Clocks David Mitchell
There's always one of the linked novellas in any Mitchell book that make me want to throw the book across the room. Here, its the fourth section, which focuses on the intrigues of a writer who unknowingly writes books about the supernatural conspiracy underlying the other sections of the book. Holly Sykes and Marinus, however, the two main characters throughout, are full people, and worth the read. It's rare to find characters who change over the course of their life as believably as Holly does, or across their multiple lives, as Marinus does. Also on a lot of Best lists this year.

Zero to One: Notes on Startups, or How to Build the Future Peter Thiel and Blake Masters

Excellent advice on thinking big and building things that matter. Occasionally slips into Randian sermons, but otherwise one of the better books on entrepreneurship that's out there.

Capital in the Twenty-First Century Thomas Piketty
The most important book on economics in the past year, even if you don't agree with it. The concentration of wealth in the OECD economies will present a huge challenge over the coming decades, and understanding the history of the issue is a good first step to working our way out.

Derek Jarman's Sketchbooks Derek Jarman
Gay punk filmmaker Derek Jarman made movies of astonishing beauty and invention on a microscopic budget, and in the process turned his entire life into art. Here's what the inside of his head looked like.

What Makes This Book So Great Jo Walton
Literary criticism at its best. This book will remind you why you liked all of those science fiction and fantasy books you read as a kid, and how those informed your life & writing. At least, it did this for me.

The Magician's Land Lev Grossman
Brilliant conclusion to the trilogy. Quentin Coldwater grows up at last, and all of the women wronged in the course of the books end up getting justice. Worlds end, worlds are born, and we find out who's the greatest magician alive today, this side of the Neitherlands.

*Read, not necessarily published, in 2014. This post was originally sent out to my mailing list. To subscribe, enter your email in the form located to the right of this page.

Links for Later 11-2-14

1. Judex: "There has been a bird."
2. "What David Fincher doesn't do"
3. The evolution of Robert Bork's Constitutional and jurisprudential theory. 
4. What is the male equivalent of "distaff"?
5. Underdressed for flying in a Speedo and inflatable ducky.
6. Tim Geithner's uncharitable opinions of everyone else during the crash.
7. Vladimir Putin gives a speech. Club Orlov applauds. Everyone else shrugs.
8. Jeff Hawkins: Why neural networks are not the road to strong AI.
9. Josh Seiden: “When you are writing, you are not a samurai. You are a waterfall or some shit”
10. Keynes was right.
11. Syllabus for an Archives, Libraries & Databases class by Shannon Mattern
12. Alchemical processes represented by birds.
13. Sharp waves organize memory/recall & possibly decision-making as well.
14. Would like to know more about this: "cells from [presumably olfactory bulb] used to regrow man's spinal cord."
15. Better headline: "You have chemoreceptors in every cell of your body. Some of these are also part of your sense of smell."

Laurie Anderson - Another Day in America

A Gentle Risk Assessment

Just a reminder: No matter how many people terrorists kill, the current Ebola outbreak will kill a thousand times more. Where should those dollars and our attention be directed? No matter how many people the current Ebola outbreak kills, AIDS will kill a thousand times more. Diabetes will kill a thousand times more. Which one are you most worried about? No matter how many people all three of these diseases will kill, global warming could kill everyone. Where do you put your attention?

Book Release: Giordano Bruno - On the Infinite, the Universe and the Worlds

The new English translation of Giordano Bruno's On the Infinite, the Universe and the Worlds is now available in several locations online and in the real world. Buy it at:

Amazon:

 

Barnes and Noble

For NOOK eBook

 

 

On the Infinite is one of Bruno's most insightful cosmological works. Written in 1584, it argues for a boundless, infinite universe, containing innumerable planets, all of which are inhabited. This was a revolutionary idea for the day, opposed to the traditional Aristotelian model of a unique Earth-centered system, encapsulated within a set of planet-bearing crystalline spheres, and surrounded by an outermost sphere of fixed stars.

Bruno's ideas and struggle with the Church authorities were recently featured on an episode of Cosmos, and excerpts from the book 

73 Questions with Daniel Radcliffe

Q. What's the most American phrase? A. A whole 'nother.