Saturday, December 15, 2007

Sometimes You Do Need a Weatherman to Know Which Way the Wind Blows

I found this story (found over at Cafe Hayek) about the emergency management strategies of big box chains to be unspeakably cool:
Along with traditional measures, such as wind speed, rain levels and satellite images, McDonald relies on hurricane-tracking software that uses 12 models to predict whether potential storm tracks lead toward Wal-Mart stores or warehouses.
In some cases, retailers have become so deft at handling emergencies that local governments turn to them. Washington state recently assigned an administrator to coordinate with the private sector in emergencies. Schortal of Home Depot said he had a get-to-know-you conference call with the woman a few weeks ago.

"Next thing you know, we're texting each other and exchanging calls for the real thing," he said.


Last weekend Jennifer and I went to the Sugarloaf Craft Festival, where among other things, we bought a couple of hats from an outfit called The Mouse Works. As we were cutting the tags off our purchases we noticed that as a result of the owner's efforts to be environmentally friendly, he generated just a single bag of garbage in 2004. Naturally, the first thing I wanted to know was, what was in that bag? Was there a single event sometime during the year that generated the unrecyclables, or did he accumulate them steadily over the course of the year? It seems strange to me that he was able to get so close to zero waste without reaching exactly zero. It's a bit like the fine-tuning problem in cosmology.

I think solid waste is a more serious problem than people realize, and certainly more serious than some environmental issues that get a lot more play in the media. Part of the problem here is that solid waste disposal is heavily subsidized in most places, so throwing stuff away is ridiculously cheap relative to the actual costs of operating a landfill. It's those rotten old negative externalities again.

We generate about a bag and a half of garbage per week, which seems pretty good relative to our neighborhood. I suspect there are quite a few things that we throw away that actually could be recycled, if only we knew the exact rules for what the recycling company will and will not take. As it is we only recycle the obvious cans, plastic, and glass. Maybe we should start experimenting. We also tend not to recycle things that would require extensive washing before we could put them in the bin. It's not obvious to me that running trash through the dishwasher so that we can recycle it is a net win, environmentally speaking.

As part of my research for this post I conducted an informal survey of our solid waste generation habits (i.e., I pawed through the trash until Jennifer told me to stop). The number one component seems to be junk mail. A lot of that could be recycled (and there is a lot more that we do recycle), but I was under the impression that glossy paper and envelopes with cellophane address windows don't recycle. Maybe it's time for a little experimentation at curbside pickup time. The other big component is packaging, mostly cardboard and cellophane. If we got rid of those two, then we could probably cut our trash output to 1/3 or 1/4 of what it is now.

Now, if you will excuse me, my wife tells me I have a year's worth of garbage (by mouse works standards) to take out.

Tuesday, December 4, 2007

Free Trade and Fair Trade on EconTalk

This week's EconTalk sees the return of my favorite guests, Mike Munger, to talk about Free Trade and Fair Trade. Munger has the best quote of the podcast (arguably any podcast) when he says, "I'm a big coffee drinker. Sometimes I apply it topically."

Apart from Munger's offbeat sense of humor, the interview is one of the best discussions I've seen in a while of the mechanics of how trade creates wealth for the parties involved and why attempts to channel extra wealth to one of the parties through Fair Trade premiums don't always work out as expected. They also address the common misconception that trade is a zero-sum process in which nations compete to capture as much as they can from a fixed-size pool of jobs. It's well worth a listen, if you have 58 minutes to spare.

Old-time futurism

Alexander Rose, from the Long Now Foundation points us to an article from the Ladies' Home Journal, published in 1900: "What May Happen in the Next 100 Years." Some of the predictions seem remarkably prescient, such as "Photographs will be telegraphed from any distance" or "Wireless telephone and telegraph circuits will span the world." Others, comically wrong ("Everyone will walk 10 miles a day"). A few are just bizarre, especially the author's obsession with gigantic food (peas as large as beets, strawberries the size of apples, and "One cantaloup [sic] will supply an entire family." WTF?)

Perhaps unsurprisingly, the author is most accurate where he is extrapolating from well established technologies of the day. Predicting that the telephone, telegraph, and railroad would all get better is pretty safe. His population forecasts are pretty good, but they are a bit high because he failed to predict the drop in fertility rates that accompanied industrialization. He does less well with technologies like aviation, which had not yet taken hold, vastly underestimating their prominence. Technologies yet unimagined in 1900, such as transistors and integrated circuits, are completely absent from his predictions, and when it comes to cultural trends he is all over the map.

Contemporary futurists can take some lessons from these predictions. Incremental improvements to existing technologies are easy to predict, but tend to underestimate the scope of technological progress. The real revolutions will come from new technologies not in common use today. Some of them, like aviation in 1900, may be right on our doorstep. And people will remain as stubbornly unpredictable as ever.

There is one thing, however, that I feel pretty confident about: no giant fruits and vegetables, ever. You can take that one to the bank.

Sunday, December 2, 2007

Virtually Everyone is Sincere, but They Still Can't Agree

Over at EconLog, Bryan Caplan makes a discovery:

Since the publication of my book, I've been meeting a much wider range of people.
What have I learned? Primarily, I'm more convinced than ever that virtually everyone is sincere.
This is not terribly surprising to me. Robert Heinlein said it a long time ago: "Your enemy is never a villain in his own eyes Keep this in mind; it may offer a way to make him your friend," and he doubtless ripped that off from somewhere else much older. So, if we're all sincere, why do we disagree so vehemently, particularly about issues of politics? Caplan continues:
Even when you've got undeniable facts on your side, your opponents probably think that those facts don't matter...
I think Caplan is on to something here, but I think he doesn't go far enough. Often you won't even be able to get your opponents to agree on the facts in question. What fraction of taxes are paid by "the rich"? Does the Canadian health care system make people wait a long time for treatment or doesn't it? These are strictly positive questions that should have answers that everyone can agree on. Yet, when you listen to people argue about the issues surrounding these questions, often their versions of the facts are so different that if you didn't know better you'd conclude that they must live in two very different countries.

Even if we could agree on the facts, there would still be plenty of room for disagreement over the normative aspects of the problem, but if you can't agree with your opponent over the basic facts surrounding the problem, then the argument probably isn't worth having in the first place.

Sunday, November 25, 2007

Children and Opportunity Costs

In our ongoing debate on whether IQ is an anti-survival trait, my good friend Mike opines that having children might enhance career prospects.
I have no idea if having children actually reduces someone’s future earnings and career prospects. You *can* make a case in the opposite direction — that having children gives greater work motivation, forces better time management and has a positive social impact leading to better career prospects.
In my experience, based on numerous examples in both industry and academe, having children seems to reduce workers' willingness to travel or work long hours, both of which are potentially career limiting, at least for some kinds of jobs. Moreover, for women the taking maternity leave can have additional deleterious effects on their careers. A woman's job may be held open until she returns, but whatever project she was working on will generally march on, meaning that she will have to relinquish any leadership position she might have held. When she comes back to work she must either rejoin the project in a non-leadership role or find a new project. The final result is often a significant career setback.

On the empirical side, Phillip Longman (PDF, audio) cites some data that might shed some light on the situation. He summarizes:
Today, in the United States, only four percent of adults say
they will be satisfied if they never have children, according to a
recent Gallup poll. And among those who have reached middle
age without producing children, the vast majority express regret.
So, evidently people think that having children is costly enough that they can't have as many as they would like, which is evidence enough for me.

Finally, I spoke of opportunity costs. Foregone career opportunities are one sort of opportunity cost, but there are others. The direct costs of child rearing and the indirect costs of lost leisure time are significant, and they cause people to put off starting a family "until they can afford it," and it's distressingly common for that to turn out to be "never."

Editor's note: This post was actually by Robert, but a SNAFU has caused it to display as a post by Jennifer, and we can't figure out how to fix it. Can you tell we're new at this?

Saturday, November 24, 2007

Robert's Reading List: Halting State, by Charles Stross

I just started Halting State, by Charles Stross. I'm only a few pages into it, but the plot is shaping up to be about a heist in a virtual world. Apparently, a bunch of orcs with a dragon in tow for muscle have knocked over the central bank in the virtual reality game operated by a start-up company in London Edinburgh. The story opens with our protagonist, a police sergeant, interviewing the company executives about the crime. The executives are quite distressed over the matter, acting as if this theft could jeopardize the fledgling company. It's not yet clear whether these dire consequences are because the virtual currency is freely convertible, like in Second Life, or because the company has spent a great deal of effort to develop a realistic economy which now stands to be disrupted. Anyway, our hero. . .

Wait a minute!

A bunch of virtual characters residing on a company's server walked into a virtual bank residing on the same server and stole a bunch of virtual money by debiting it from the bank's account and crediting it to their own (after beating up the virtual guards and, one imagines, blowing the virtual vault virtual door). Does anybody else see this as just a bit too much analogy between virtual worlds and the real one? Why does the bank in a virtual world need an actual in-world location where the money is stored? That's necessary in the real world, since (some) money is made up of physical tokens that must be stored someplace when they aren't in use. Even in the real world this isn't strictly necessary; a bank could in principle just print off the bills (which are just placeholders for the "real" money recorded in the bank's ledger) as necessary, but this turns out to be impractical. Neither of these concerns apply in a virtual world because money in most virtual worlds works like debit accounts; you can complete a transaction anywhere, any time with no need for "physical" banks and currency tokens.

An even bigger head-scratcher is that the entire caper occurred within servers that are owned and controlled by the company that was victimized. They watched the whole thing occur in real time. Why not boot the offending characters from the game when you realized what they were doing, rendering them unable to complete the theft? Failing that, the backend database that stores the game data almost certainly has the capability to reverse transactions as necessary, so why not just have your sysadmins put the gold back where it belongs?

Charles Stross is my favorite contemporary writer; I've enjoyed everything of his that I've ever read, and I don't doubt that he will come up with something that will make all of this seem reasonable. However, for the moment this seems like an instance of a trope that I've seen a lot lately (including an episode of Numb3rs from a couple of weeks ago). Virtual worlds emulate certain aspects of reality, but they don't simulate reality in every detail. Right now, they can't simulate every detail because the computational power isn't there, but even once they can there is no reason to assume that they will. Many aspects of reality are the way they are because in reality we can't conjure objects into or out of existence whenever we want to. Those features don't have to carry over into virtual worlds, and where they are inconvenient, they won't. I don't expect to see virtual banks that can be robbed in future virtual worlds any more than I expect to see virtual landfills to hold all the virtual gewgaws that players no longer want. They don't add anything to the game (unless the game is a cops-and-robbers sim, of course), and, unlike in the real world, they aren't necessary.

Wednesday, November 21, 2007

What price, voting?

At the Freakonomics blog, Ryan Hagen asks, Is it Smarter to Sell Your Vote or Cast It? A recent poll asked students at NYU whether they would sell their right to vote either in the next election or in perpetuity for a variety of proposed compensations. It turns out that over 60% of them would sell their 2008 vote for a year's tuition, and around 50% would sell their vote in perpetuity for $1 million.

What is a vote really worth? The poll questions seem to concentrate solely on the supply side (i.e., what would students sell their votes for, irrespective of whether there is anyone actually willing to pay that), which would suggest that we're trying to get at voters' personal valuation of their voting rights, all else being equal. So, let's assume that this opportunity is being offered to me only. The effect of my individual vote on the election's outcome is for all practical purposes nil, so from the standpoint of influencing the results of the election it is worth nothing. However, I do derive some personal satisfaction from voting that, on reflection, I'd value at a few tens of dollars; $50 would be a reasonable estimate. So, I should be willing to sell my vote for anything more than $50 (although I'd try to get the best price I could, of course). To sell my vote in perpetuity I'd want the discounted value of all of those future $50 votes. At first blush I might want some sort of risk premium, in case there might be some election in the future that I really want to influence, but since my probability of successfully influencing such an election is so small, that component is basically negligible. Depending on what discount rate you assume, that works out to about $2000 (assuming only one vote per year; if you include primaries and such it could come to several times that). Considering how many people voluntarily abstain from voting for no compensation at all, that seems like a reasonable number.

If we consider the possibility of the same deal being offered to everybody, then it gets a little harder to calculate a reasonable price. It's not too difficult to come up with our buying price for such a scenario. One or another candidate is bound to favor policies that will either cost us money directly or eliminate some benefit that we previously enjoyed. With a little work we could attach a value to those policy differences. To use myself as an example, my interaction with the government is primarily through taxes, but some policies might affect the costs of things I use. Let's say, for the sake of argument, that the present value of the benefit comes to $20k (although the fact that I would have a hard time telling you which side provides the benefit suggests that the number is actually much smaller than that). Suppose it takes about 5M votes to change the results of a large election. Then we're looking at about half a cent per vote. Clearly vote buying isn't a good strategy for little old me. For someone more entangled with government the total would be higher; someone standing to gain a billion dollars from having his candidate elected should be willing to pay $200 per vote in our example.

Clearly a rational selling price should be higher than the buying price, but how much? The total benefit from the preferred candidate winning provides an upper bound, since that price fully compensates the seller for having the unfavorable candidate win, but should he be willing to accept less? That depends on the probability that the seller and others like him will actually change the results of the election through the sale of their votes. For example, if you think there are 10:1 odds against your vote sale affecting the election, then you might be willing to accept $2000 for your vote. The exact odds calculation depends on who's buying and what their motivation is, but something in the $1k - $10k range seems plausible. One of the commenters at the Freakonomics site opines that the bid-ask spread in vote-buying is likely to be large. Evidently, this is borne out by our analysis.

For selling your vote in perpetuity in this scenario, risk comes to the fore. You may be fairly confident that the value of this election to you is small, but what about all future elections. What if Dr. Evil decides to run in 2024? In this case the risk premium you would have to assign is large enough that the practical answer is "not at any price".

My takeaway from all of this is the result that although the right to vote is precious to residents of a democracy, the act of voting itself is of little value to us. This result seems curious, but it makes a kind of sense. The right to vote ensures that in a broad sense candidates are aligned with the will of the voters in a way that they generally aren't in nondemocratic governments, so voting rights serve a useful purpose. Once that is established, however, the purpose of democracy has been served, and actually going to the polls to vote serves no further purpose.

Saturday, November 10, 2007

Time to get my blog on...

Robert and I have talked about blogging for quite some time, but between work and the wedding, we haven't really had time. I hope we can change that soon.

I'll admit, I fear that blogging might be similar to keeping a journal -- something that sounds like a great idea for a creative outlet, but quickly becomes one more thing to put off doing.

I do keep a blog for my Western Civ classes at George Mason University and I have been pleased with it as a tool. It saves time and paper to be able to communicate with my students via the web. I am currently composing a post that is titled (in my head) "Why your papers sucked..." I hope that it will be an easier dose to swallow by reading it in a blog than by me devoting a third of the class to a stern lecture.

But anyway...

I know that one of the reasons that Robert and I wanted to blog together is because we have these incredible conversations that can touch upon any conceivable topic and we wanted to share some of that with our friends and family. It is not uncommon for the two of us to ponder what the human species will be like in 5000 years or to muse about what a Kucinich vs. Paul campaign would look like in 2008, but those conversations can be a little more difficult to start with others. In this forum, we hope that you will be able to see our often complementary and sometimes competing viewpoints, while we hope to see what our friends and family think about a range of esoteric topics. Maybe it will change the way we talk (verbally and virtually) with others.

I hope, too, that the blog allows us to keep people informed about what's going on in our lives. I know that I can be too busy to call, but I still find time to read my friends' blogs, Live Journals, Twitter accounts, etc. I like to keep up.

As for "The Oort Cloud Archives" -- well, it's astronomy and it's history. It has something to do with our wedding rings and with a great day in a North Carolina park. And it makes us laugh.