Monthly Archives: November 2009

Elitism vs. Populism in Politics

Since the beginning of time political theorists have debated the relationship of power between the elites and the masses. Plato talked about it. Jefferson and Hamilton argued about it. Adams was wary of an overly democratic democracy; Paine championed the everyman. Contemporary thinkers have weighed in. Bill Buckley famously said he’s rather entrust the U.S. government to the first 400 people in the Boston telephone directory than the faculty of Harvard. A few months ago an editor from the Wall Street Journal told me he believes an illiterate Afghan has a “horse’s sense” for what’s right and therefore can make the right choice at the voting booth.

I am less instinctually trustful of the common man. There is a worldly wisdom that comes from walking the earth, but it’s hardly sufficient to be an informed voter or ruler. I sooner put my lot with the well-educated elite.

If your car is broken, you want a mechanic who possesses elite knowledge. If you’re going to get surgery, you want an elite surgeon — someone whose knowledge of the matter far surpasses the average Joe.

Shouldn’t you want the same out of the people in government? Yes, with two qualifications.

First, elites should rule but be able to be replaced by the masses. This is why we have a republican form of government.

Second, the ruling elites need to be humble. One reason why elites are more dangerous in politics than in the narrow sphere of car mechanics is that they can widely exercise unbridled ambition. The Obama cabinet is stacked with elites — very smart individuals. And they are probably trying to do too much. They are too ambitious and too confident in their ability to direct and organize events. It’s tricky because ambition and talent tend to go hand-in-hand. In politics we need the rare talent who’ll be very humble once in office.

Elitism, by the way, has come in all sizes. Some of America’s finest leaders did not possess elite educations or ex ante high brow status, but rather were in an elite category in terms of their fundamental decency and perseverance. George Washington and Harry Truman come to mind. It’s unlikely we’ll see this type of elitism in the future.

I’ve read two main concerns about elites in politics.

There’s first the Sarah Palin View. She sees the common man as a better representative of the aesthetic ideals of Americana, and thus more fit to participate in the democracy. She will crack jokes about latte drinking, New York Times reading, sushi eating elites who are “out of touch.” I believe Palin’s dislike of elites is fundamentally stylistic not substantive. She disrespects George Will and Maureen Dowd, even if Will shares some of her policy beliefs.

Then there’s the Arnold Kling View. Arnold’s wariness of elites stems from their substantive failures in the past and policy tendency toward state control. He’s disheartened by elites’ failures: he sees “mostly harm in the way educated elites have exercised power…from Vietnam to the current economic crisis.” He agrees that the common man’s ignorance can be dangerous, yet he also notes the danger that can come from over-confident elites:

The gap between what one knows and what one thinks one knows may be higher in the ranks of the elite. The result is supposedly-clever government interventions, introduced with excessive confidence, leading to disastrous results.

Bottom Line: I share Arnold’s conclusion: “I think that the best solution to the elitist/populist dilemma is an elite with humility. Don’t let the mob rule, but at the same time don’t let the elite get too sure of itself.”

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The “people” are stupider than you might realize. Here’s Robin Hanson reminding us of this fact. Here’s Bill Maher doing the same. Nick Shulz dubbed the following Summer’s Law, after Larry Summers’ utterance: “THERE ARE IDIOTS. Look around.”

The Intrapreneur’s 10 Commandments

If you find yourself in a big company, you can still be "intrapreneurial" — a term that refers to entrepreneurial activities in an otherwise non-entrepreneurial environment. Here are 10 Commandments of the Intrapreneur:

1. Come to work each day willing to be fired.

2. Circumvent any orders aimed at stopping your dream.

3. Do any job needed to make your project work, regardless of your job description. (BC: Or, as Eric Reis puts it: "In any situation it is your responsibility, using your best judgment, to do what you think is in the best interests of the company. That's it. Everything else [in your job description] is only marketing.")

4. Find people to help you.

5. Follow your intuition about the people you choose, and work only with the best.

6. Work underground as long as you can – publicity triggers the corporate immune mechanism.

7. Never bet on a race unless you are running in it.

8. Remember it is easier to ask for forgiveness than for permission.

9. Be true to your goals, but be realistic about the ways to achieve them.

10. Honor your sponsors.

A gentler version is here, both I think are attributed to Gifford Pinchot.

Adjectives to Describe Impressiveness

On British novelist Zadie Smith's new collection of essays, entitled Changing My Mind, reviewer Ella Taylor writes:

Taken together, they reflect a lively, unselfconscious, rigorous, erudite and earnestly open mind that's busy refining its view of life, literature and a great deal in between. Delightful, painful and spontaneously funny…

Lively, rigorous, erudite, unselfconscious, earnestly open-minded, delightful, painful, spontaneously funny: not a bad set of adjectives.

I am always interested in how you can describe really talented people. "Smart" has been overused to be devoid of meaning. The most original and descriptive adjective from the above list is: unselfconscious.

Here's my review of Smith's On Beauty.

Blogs As Filters for Interestingness

Justin Wehr, a research assistant in behavioral health economics, blogs about posts-he-would-write-if-he-had-time. It's a smattering of interestingness:

A good question to ask anyone: "What don't you know, but wish you did?" [BC: Another good question to ask: What have you learned in the last year?]

Since discovering how to play audio faster (I am typically playing podcasts at 1.7x speed), it seems my comprehension has actually improved. Why might this be, and how can I test it?

Music is deeply personal and important to people, but at the same time it is incredibly boring to hear about other people's music preferences. Why is that?

Why don't retail stores (particularly Wal-Mart) generate revenue by allowing companies to put advertisements around the store?

Near death experiences. They have a fascinating history and are surprisingly common: 8 million people in the U.S. report having had one. Testable evidence for existence of the soul? There are many interesting studies on near death experiences and Duke even has a journal devoted to the subject.

Laughter, religion, and sleep: The three most puzzling things to psychologists.

Is productivity spiritually important as Marty Nemko suggests or just another form of hedonistic pleasure?

People should be paid for their attention on the internet. How can that be arranged? 

From this post alone it's pretty easy to tell that Justin would be a fun guy to have dinner with. Blogs are excellent filters in this respect. It's near impossible to write an interesting blog and be an uninteresting person.

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Speaking of interesting people, here's Stan James on how the complexity of a user interface evolves to meet a user's expectations. Compare the iPod of 2000 to the iPod of today. Here's Clay Shirky on the business model for local bookstores and the role they play in the community.

One of the Best Anti-Poverty Solutions: Immigration

Immigration
It is unfair that where you happen to be born matters so much to your potential success in life.

Warren Buffet has said that he won the "ovarian lottery" by being born in the United States — had he been born into a poor village in Peru, he says, his "talents" probably would have gotten him nowhere. "Lottery" is the right word: luck alone determined Buffet's place of birth.

The process of globalization has leveled the playing field a bit and reduced the relative advantage of being born in a rich country. Information and knowledge and physical goods now flow to the poorest corners of the earth. Over the last 50 years, with the rise of free trade and emergence of technologies like the internet, we've seen an extraordinary reduction of poverty. Hundreds of millions of people, mostly in Asia, now live above the poverty line.

But there is still work to be done, of course. Every night, in 2009, over a billion people in the world go to bed hungry. And just because someone isn't ultra-poor, doesn't mean he has the same opportunities or access as someone born in the United States.

So how do we make further progress toward the ideal of all people of the earth starting the race at the same point?

Here's an answer you won't hear from guys like Peter Singer or Jeffrey Sachs: immigration.

Or, to continue the globalization idea: more globalization, though a globalization that includes the free movement of people, not just goods and ideas. The champion of this cause is the economist Michael Clemens.

I recently met Michael at a conference in Miami and witnessed his presentation on migration issues. He began his talk with a moral question: why is it that a guy who happened to be born in the U.S. can do a certain job and get paid more than 300x that of a guy born in Haiti who's doing the exact same job, working equally hard, equally industrious. Why shouldn't the Haitian have the opportunity to move to the U.S. and receive the higher wage? We don't allow discrimination based on the choice-less facts of race or gender — why do we on place of birth?

He went on to debunk various myths: such as the idea that increased legal or illegal immigration depress U.S. worker wages or that the so-called "brain drain" hurts the countries exporting their people to richer places. In one jaw-dropping slide he showed a chart showing unemployment in the U.S. being inversely correlated with total immigration.

It's a complicated issue, to be sure. While I'm persuaded by the short and long run economic gains of immigration, I have lingering doubts about a country's ability to weave together floods of people from varied backgrounds. I wrote a long review of Samuel Huntington's arguments about the challenges of assimilating immigrants into the national fabric. Clemens, for his part, praises mongrelization and notes we've assimilated immigrants successfully in the past. (Not all agree with even this. Mark Krikorian bizarrely argues that our past experience with immigration is no longer relevant; he says we're a post-immigrant country.)

Here's Will Wilkinson in praise of the "intellectual rigor" of Clemens' work. Here's Jeff Jacoby on why conservatives have it wrong in their outrage over illegal immigration. Here's another Jacoby piece that Lou Dobbs should read. Here's an extremely simple, easy to understand chart that explains how the immigration system works in America. Here's a photo that should convince any foodie to think twice before protesting against immigration.

Bottom Line: Immigration is one of the best anti-poverty solutions. We need to reform immigration policy to make it easier for (non-terrorist, healthy) people to enter the U.S. Hail Michael Clemens' work on this topic.

Book Notes: From Poverty to Prosperity

From Poverty to Prosperity: Intangible Assets, Hidden Liabilities, and the Lasting Triumph Over Scarcity by Arnold Kling and Nick Schulz sketches out “Economics 2.0” — economic models to understand a world driven by the positive forces of creativity, innovation, and advancing technology. A theme that runs throughout is the centrality of entrepreneurship and innovation to economic growth. The authors explore it themselves and via transcript-interviews with several of the most prominent living economists.

This is a book for people interested in economics first, entrepreneurship second, and globalization third. It’s a book for people looking for contemporary insight on the ideas of people like Hayek, Drucker, Schumpter, and Smith.

Entrepreneurship still gets short shrift in economics textbooks. I recently flipped through an international economics textbook and looked up the word “entrepreneur” in the index. It appeared three times in a 300 page book. On each page, it was referenced only in passing and the one definition of “entrepreneur” read: “Someone who takes risks and makes decisions.” Yikes.

Also, besides the entrepreneurship theme, Kling and Schulz discuss Masonomics principles such as “Markets fail, use markets” (instead of “Markets fail, use government”).

For more academic / economic readers who can mine insights from interviews (ie, it’s not spoon-fed in bullet points), this is a great read. Here were my favorite bits:

Robert Solow: “It is far from obvious to me that the way to foster competition is to leave the private sector alone. The private sector does not much like competition; it has its own ways of creating monopoly power, restricting access to wealth (and therefore to political rights), and preserving vested interests. It is no easy matter for a society to get the benefits of competition without the disadvantages of oligarchy, and there is no reason to believe that laissez-faire will do the trick.”

Paul Romer: “Everyone wants growth but nobody wants change. You’ve got to have both or you’ve got to have neither.”

Paul Romer on American culture: “It’s the kind of culture that can tolerate rap music and extreme sports that can also create space for guys like Page and Brin and Google.”

Arnold and Nick: “The three ideal elements of a prosperous society would be self-reliant families, effective institutions of civil society, including business firms; and good government. These elements are more likely to be present together than individually, because they are mutually reinforcing.”

Douglass North: “The natural state is a mixture of mutually interdependent economic and political interests that reinforce each other. The economic interests are the elites that produce economic activity. But they tend to support political groups that in turn will protect them from too much competition. The interplay is the elites in the political world protecting the economic elites from too much competition and giving them monopolies, while on the other hand the economic elites provide the funds that support the political elites.”

Amar Bhide on what a government can do to promote entrepreneurship: make the basic governmental functions work. Property rights, provision of roads, water, electricity. (BC: Simple, but so true. Screw incentives, tax breaks, etc. Just do the basics.)

William Lewis: Education level of the labor force isn’t as important to the overall economic performance of a nation as commonly thought. Processes, culture, etc can be imparted even on uneducated people. One example showed that uneducated people in the U.S. did a task four times as fast as people in Sao Paolo of the same level of education people.

(Full Disclosure: Nick is a friend of mine and Arnold has been generous over email and blogging the past few years.)

Experts Who Predict the Future

This week I witnessed two presentations by New York University professor Bruce Bueno de Mesquita, a noted political scientist and futurist. His latest book is called The Predictioneer’s Game and claims to use complex game theory to predict political and economic events. He claims his predictions have been 90% accurate, which is why the CIA and others pay close attention to them. He never told us exactly how his models work, except to say several times that they are “very complex.”

As he spoke about the world and proffered future events — Iran will not develop a nuclear weapon, Colombia and Venezuela will not go to war — it was clear that Mesquita is a smart man who knows a great deal about international politics. He also is a talented public speaker.

Yet something bothered me. During his talk my buddy Justin Rockefeller (also in the room) texted me, “What do you think?” I replied, “Entertaining but I’m deeply skeptical. Nassim Taleb would have a field day.” He replied, “Yep.”

In Fooled by Randomness, Taleb talks about “why human beings are so prone to mistake dumb luck for consummate skill.” The idea of survivorship bias figures prominently in Taleb’s work. If I play the lottery 100 times, and I win every time, this doesn’t necessarily mean I’ve developed the skill to regularly win the lottery. Someone has to win. We ignore those who lose.

Mesquita wasted no breath acknowledging the improbability of developing a mathematical model that reliably predicts world events. He offered no qualifications on how much of his success might be due to luck and randomness. Instead, he dished predictions with breathtaking arrogance and certainty, returning again and again to his 90% success rate. He never once elucidated how this 90% number got calculated (I predict Hugo Chavez will die, eventually) despite it being the source of his credibility.

It took only a few minutes of Googling to find long, detailed criticisms of Mesquita. You’d think such a body of criticisms would temper his certitude. No sirree.

Surprisingly, people in the room seemed taken by Mesquita. He had spot-on observations, to be sure, about the selfishness of Mother Theresa or the self-interest of the Iranian regime. But why didn’t more people eye his prediction schemes with skepticism?

Charisma, for one. He was entertaining. We are so often bored by speakers that anyone who can dance a gig on stage gets a vote for “keeping us awake.” I hear that. But it is a dangerous heuristic — equating entertainment with substance.

He wasn’t just charismatic; he was an “expert.” In general, people are too deferential to experts who make predictions inasmuch as experts sometimes do no better than laypeople at predicting. In particular, people are too deferential to experts toting fancy credentials (such as a PhD), even if those credentials have little to do with the topic at hand. We should be especially skeptical of experts who feel a need to remind us again and again of their expertise, as Mequita did.

Look, Mequita is more than qualified to riff on current affairs and the state of the world. He has written a dozen plus books on international politics and economics and he is more knowledgeable than me on most of the issues he discussed. But it’s unimpressive to commentate under the vague guise of “complex game theory.” Do analysis and make assertions as an informed pundit, like everyone else, not some mathematically gifted prophet whose models only the CIA understands.

Bottom Line: Nassim Taleb’s popularity notwithstanding, there are still intellectuals who take their knowledge too seriously, confuse luck and randomness with skill and foresight, and pontificate with inappropriate levels of certainty in an uncertain, complex world.

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Seth Roberts takes Elizabeth Kolbert to task for putting faith in scientists over science. Seth writes about “practically all science journalists”:

They take the consensus view too seriously. In case after case — so many that it’s hard not to draw sweeping conclusions — the consensus view about difficult topics is more fragile than an outsider would ever guess. It’s not necessarily wrong, just less certain.

Quote of the Day from Cormac McCarthy

Continuing the James Ellroy theme of talented people being obsessed, here's writer Cormac McCarthy in a rare interview with the WSJ:

I'm not interested in writing short stories. Anything that doesn't take years of your life and drive you to suicide hardly seems worth doing.

The pointer is from Roger Ebert's very interesting Twitter feed. Elsewhere in the interview McCarthy explains why he doesn't travel.

Of course, most Americans are not working on activities that drive them to suicide. The average American spent nearly five hours a day watching television in last year's TV season. It's the highest ever — up 20% from 10 years ago.

Book Review: The Glass Castle by Jeannette Walls

The Glass Castle by Jeannette Walls is a marvel of a memoir: a remarkable story of a materially impoverished yet highly intellectual family, told in the humane and empathetic voice of one of the daughters, Jeannette.

Apparently, I’m not the only one who loved it: more than 2.5 million copies are in print, the book spent over 100 weeks on the NYT Bestseller List, and it has 1,330 mostly five-star customer reviews on Amazon.com to boot.

Here’s the description:

Jeannette Walls grew up with parents whose ideals and stubborn nonconformity were both their curse and their salvation. Rex and Rose Mary Walls had four children. In the beginning, they lived like nomads, moving among Southwest desert towns, camping in the mountains. Rex was a charismatic, brilliant man who, when sober, captured his children’s imagination, teaching them physics, geology, and above all, how to embrace life fearlessly. Rose Mary, who painted and wrote and couldn’t stand the responsibility of providing for her family, called herself an “excitement addict.” Cooking a meal that would be consumed in fifteen minutes had no appeal when she could make a painting that might last forever.

Later, when the money ran out, or the romance of the wandering life faded, the Walls retreated to the dismal West Virginia mining town — and the family — Rex Walls had done everything he could to escape. He drank. He stole the grocery money and disappeared for days. As the dysfunction of the family escalated, Jeannette and her brother and sisters had to fend for themselves, supporting one another as they weathered their parents’ betrayals and, finally, found the resources and will to leave home.

What is so astonishing about Jeannette Walls is not just that she had the guts and tenacity and intelligence to get out, but that she describes her parents with such deep affection and generosity. Hers is a story of triumph against all odds, but also a tender, moving tale of unconditional love in a family that despite its profound flaws gave her the fiery determination to carve out a successful life on her own terms.

It will resonate with different types of people: those who were raised in poverty, those who feel at once very angry and very grateful about their parents, or simply those who can appreciate good writing and feel grateful anew for their favorable number in the ovarian lottery (that’s me). I highly recommend it.

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Here’s Laura Miller on a new book on the history of memoirs. It touches on the two questions I always ask myself when reading memoirs: Is it true? How much does truthfulness matter?

Benjamin Kunkel three years ago wrote about memoirists. He says the motto of the typical contemporary memoirist is: “I survived that. Unwittingly, I had earned a Ph.D. in survival.”

Reasons to Follow Sports (and Bill Simmons)

Over the last ten years my interest in sports has shifted away from closely following teams and players and towards:

1) maintaining cultural literacy and facilitating social bonding by understanding the basics of the most popular sports and the most important facts associated with them (e.g. who Lebron James is or which teams are in the NFL Superbowl).

2) following how sports generally affects culture and the economy. What's the economic impact on a country when its team wins the World Cup?

3) using the rich examples in sports to learn about widely-relevant ideas.

#3 is most important to me. For example, I'd rather read about how Baron Davis manages side projects than follow the Warriors' specific wins and loses. Other examples:

  • One way to think about the general idea of whether you'd want to be universally loved or loved and hated to a greater degree is to compare Kobe Bryant and Steve Nash.
  • One way to think about the general idea of how superstar contributors affect group dynamics is by pondering Barry Bonds' impact on the Giants.
  • You can discover the power of framing by reading about the non-differences between dog fighting and the NFL.

General ideas found in sports are served up regularly by some excellent sports journalists whose writing you can admire even if you can't keep up with all the details. Frank Deford has interesting things to say on NPR. Gregg Easterbrook mixes smart commentary on sports with nuggets on economics and finance. Even if Rick Reilly is past his prime, he's wise and still finds inspirational stories.

But the most famous sports writer of today is Bill Simmons, who writes for ESPN.com. Here's a quick take on Bill Simmons' new book with this interesting nugget:

Mr. Simmons may be the first sports writer to see the games purely from the view of the fan — and a very modern, unsentimental fan at that. As Mr. Simmons sees it, his job is not to get into the heads of the players, but into the heads of his readers.

Tyler Cowen says, "Bill James and Bill Simmons are two of the greatest living social scientists. Seriously."

Bottom Line: Even if you're not a hard core sports fan there are still good general lessons to be taken from the sports world and excellent writers, such as Bill Simmons, who can deliver them to us.

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If you want to experience the fascinating and under-researched phenomenon of goosebumps caused by an emotional reaction and not cold weather, watch this clip of ESPN highlights from the past 100 years. One word: goosebumps.