Tag: value

What Intelligence and Insanity Have in Common

Isaac Morehouse

The brain’s ability to make connections.

There are many forms of intelligence. But all of them I can think of have a lot to do with making connections.

Mechanical intelligence sees the connections between parts of a machine. Social intelligence sees connections between people. Physical intelligence makes connections between actions and re-actions. Creative intelligence sees connections between disparate ideas. Entrepreneurial intelligence sees connections between different goods or services, or a new nexus between supply and demand.

A low intelligence person takes the discreet items in the world individually at face value. A high intelligence person sees causal chains, analogies, parallels, and processes that bind the discreet items in various webs.

If you’ve ever witnessed a high connections person in action, it’s fun and surprising. Where most people would see an umbrella over the lunch table, they’d see a wooden pole with canvas, think about their friend who sails boats, wonder about the material that makes sales vs. table umbrellas, then parachutes, then the different levels of wind-flow needed in each application. Before long they’re working out how you might have a single supplier for each item, or a new kind of material. This is how theories and businesses begin.

Our brain dices the world into discreet units for a reason. Seeing connections is a super power, but it can also be a curse. If you can’t unsee them, and your brain goes on a high speed runaway connection binge, you might lose your grip. Each event, object, and activity cannot be encountered and engaged discreetly if your brain is reeling six levels deep on connections.

There’s a reason meditative or hallucinogenic states where everything feels connected and all is one cannot persist while you try to brush your teeth and go to the office. Most of life is encountered in bites. And most of it has to be.

I think conspiracy theorists and paranoiacs have a ton of connection intelligence, but not a strong enough dissection filter. They see too many connections too much of the time. Pretty soon, everything reminds of everything else. Hence things like the “Illuminati confirmed” meme, where every shape, color, name, and logo on every product and commercial gets quickly connected to some kind of other symbol with occult meaning.

People often accuse paranoid conspiracy types of being stupid, or failing to see the meaning of things. The problem is they see too much meaning. They can’t stop seeing meaning.

The trope of the mad scientist, or brilliant mathematician who descends into ravings with old age show the same problem. Too many connections.

But there’s something interesting going on in there too. These are not stupid people, or people to dismiss out of hand. They see too many connections to handle, many of which aren’t useful. But they see a lot of useful connections the rest of us miss in our fragmented world. There’s insight to be found here.

I’m not sure exactly how to cultivate the ability to make connections and guard against connection overload at the same time. But I suspect most of us are in far more danger of making too few connections than too many.

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Why I’m an Economic Optimist but Happiness Pessimist

Bryan Caplan

Seven years ago, my mentor Tyler Cowen did an interview with The Atlantic entitled, “Why I’m a Happiness Optimist but Economic Pessimist.”  His point: Though GDP growth has been disappointing low for decades, the internet does give us tons of free, fun stuff.  The more I reflect on the Paasche price index, though, the more I’m convinced that Tyler’s picture is exactly upside-down.  At least in the First World, the sensible position is economic optimism combined with happiness pessimism.

How so?  To repeat, we shouldn’t take the ultra-optimistic Paasche calculations of GDP at face value, but neither should we dismiss them.  The judicious position is that U.S. growth has been excellent, though not astronomical.  Even so, we’re way richer than we were in 1990. Yet sadly, Americans’ measured happiness has barely changed.  We have abundance, but not bliss.

What’s going on?  Well, we already knew that income has a very modest effect on happiness.  But when you upwardly revise your estimate of prosperity, you automatically downwardly revise your estimate of the effect of prosperity on happiness.  Such is life.

When I insist that standard measures sharply underestimate economic growth, it’s easy to accuse me of motivated reasoning.  Before you make this accusation, however, consider the whole picture.  What possible agenda could I advance by simultaneously claiming that GDP has greatly increased, but brought us little joy?

So what’s the real story?  Simple: I look at the world and see great economic growth.  I take a second look at the world and see that money doesn’t buy happiness.  Then I report my observations.  This picture isn’t ideologically convenient for me.  But when I put ideology aside and stare at the world, this picture is what I see.

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Paasche Says Progress

Bryan Caplan

When economists debate economic stagnation, I routinely recall my undergraduate macroeconomics textbook, Dornbusch and Fischer’s Macroeconomics (5th edition). In Appendix 2-1, these famed economists introduce readers to two main contrasting price indices: the Laspeyres, or base-weighted, and the Paasche, or current-weighted:

While this may seem technical, much is at stake. Suppose a stagnationist belittles the economic importance of the internet. “So we get some free stuff. How much can it possibly shift official GDP calculations?” The answer: Tremendously.  Why?  Because calculations of real GDP use the GDP deflator, and the GDP deflator uses a Paasche price index.

Let’s set our base year to 1990 – the very year my old textbook was published. Now consider Youtube. Its measured annual contribution to GDP is about $15 billion. Relative to GDP, that’s a pittance, right? But Youtube consumption is about 1.5 billion hours per day. Back in 1990, a typical video rental cost $2.49. So even ignoring the massive increase in consumer choice and convenience, the annual contribution of Youtube measured in base year prices is 1.5B*$2.49*365.  That’s roughly $1.4 trillion dollars.  Paasche power!

The results for Google are even more dramatic. People run an average of 3.5 billion searches a day. Back in 1990, you would have been lucky to get comparable service for $20 – perhaps by hiring someone to spend a couple hours pouring through the Reader’s Guide to Periodical Literature. So while the value of Google’s services in current prices is about $100B a year, the value in base year prices comes to over $25 trillion dollars.

You can see where this is going. If we sum the current revenue of the top internet companies, it’s probably well under $1T per year. However, if we sum the value in 1990 prices of the cornucopia they provide, it easily exceeds $50 trillion a year. Yes, much of this consumption happens abroad, increasing Gross World Product rather than U.S. Gross Domestic Product.  Yet using a Paasche price index, there’s still no doubt that the GDP deflator has sharply fallen since 1990. That means decades of non-stop deflation. This in turn implies that real GDP has risen far more than almost any respectable economist will admit.

Switching to the Laspeyres price index naturally makes this stunning result go away. If we take 1990 output at today’s prices and divide it by 1990 output at 1990 prices, we’ll only see modest progress. A few sectors – like video rental – will basically vanish from the numerator, but they’re only a small component of the denominator.  For example, using a base-weighted index, the value of video rentals in 1990 at today’s prices is roughly zero because video is now virtually free.  But the value of video rentals in 1990 prices is also modest, because when video was $2.49 a pop, total consumption was modest.

So which method of price indexation is correct?  Once they understand what’s at stake, dogmatic optimists will say, “Paasche!” Dogmatic pessimists will naturally answer, “Laspeyres, of course.” I say both sides should be more broad-minded.  Yes, there is a sense in which progress since 1990 has been modest. However, there is another important sense in which progress since 1990 has been astoundingly awesome.

If you don’t remember 1990, the modern world is easy to take for granted. The rest of us, however, know – or at least ought to know – that modernity is a living miracle. Though we don’t own fifty cars each, we still enjoy fabulous luxuries beyond of the budget of the richest residents of 1990. Stagnationists live to belittle these gains, but that’s not science; it’s perspective. Paasche points the way to a radically different yet equally scientific conclusion. The judicious approach, though, is not to pick a side, but to triangulate. Economic progress is complex. In some major ways, it’s been slow; in other major ways, it’s supersonic. And overall? Seems speedy to me – and not because I don’t know the numbers.

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Big Government and Big Tech versus the Internet and Everyone

Thomas L. Knapp

Governments around the world began trying to bring the Internet under control as soon as they realized the danger to their power represented by unfettered public access to, and exchange of, information. From attempts to suppress strong encryption technology to the Communications Decency Act in the US and China’s “Great Firewall,” such efforts have generally proven ineffectual. But things are changing, and not for the better.

The European Parliament recently passed a “Copyright Directive” which, if implemented, will force Internet platforms to actively monitor user content instead of putting the burden of proving copyright infringement on those claiming such infringement. The Directive also includes  a “link tax” under which publishers will charge aggregation platforms for traditionally “fair use” excerpts.

The US government’s Committee on Foreign Investment is attempting to force the sale of Grindr, a gay dating app, over “national security” concerns. Grindr is owned by a Chinese company, Beijing Kunlun. CFIUS’s supposed fear is that the Chinese government will use information the app gathers to surveil or even blackmail users in sensitive political and military jobs.

Those are just two current examples of many.

Big Governments and Big Tech are engaged in a long-term mating dance.

Big Governments want to regulate Big Tech because that’s what governments do, and because, as with Willie Sutton and banks, Big Tech is where the Big Tax Money is.

Big Tech wants to be regulated by Big Governments because regulation makes it more difficult and expensive for new competitors to enter the market. Facebook doesn’t want someone else to make it the next MySpace. Google doesn’t want a fresh new face to send it the way of Yahoo.

It’s a mating dance with multiple suitors on all sides.

The US doesn’t like Grindr or Huawei, because FREEDUMB.

The Chinese don’t want uncensored Google or Twitter, because ORDER.

The EU is at least honest about being sexually indiscriminate: It freely admits that it just wants to rigorously screw everyone, everything, everywhere.

Big Tech wants to operate in all of these markets and it’s willing to buy every potential Big Government as many drinks as it takes to them all into the sack.

Everybody wins, I guess. Except the public.

Governments and would-be monopolists are fragmenting what once advertised itself as a Global Information Superhighway into hundreds of gated streets.

Those streets are lined by neatly manicured lawns per the homeowners’ association’s rigorously enforced rules, and herbicide is sprayed on those lawns to kill off the values that made the Internet the social successor to the printing press and the economic successor to the Industrial Revolution.

As Stewart Brand wrote, “Information Wants To Be Free. Information also wants to be expensive. … That tension will not go away.”

Big Tech and Big Government are both coming down, increasingly  effectively,  on the side of “expensive” and on the side of Ford’s  Model T philosophy (“you can have any color you want as long as it’s black”).

They’re killing the Internet. They’re killing the future. They’re killing us.

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The Depression Preference

Bryan Caplan

When I describe mental illness as “an extreme, socially disapproved preference,” the most convincing counter-example people offer is depression.  Do I really think people “want to be depressed” or choose depression as a bizarre alternative lifestyle?

My quick answer: These objections confuse preferences with meta-preferences.

No one chooses to have the gene for cilantro aversion.  Yet people with the cilantro aversion gene are perfectly able to eat this vegetable.  They just strongly prefer not to.

Similarly, when I say that alcoholics are people who value heavy consumption of alcoholic beverages more than family harmony, this doesn’t mean that they like having these priorities.  If they could press a button which would eliminate their craving for alcohol, I bet many alcoholics would press it.  But given their actual cravings, they prefer to keep drinking heavily despite the suffering of their families.

The same holds even more strongly for the typical person diagnosed with clinical depression.  Most people with loving families and successful careers are happy.  Clinically depressed people, however, often have both loving families and successful careers, yet still want to kill themselves.  Their preference is so extreme that it confuses the rest of us.  They’d almost surely rather have a different preference.  But it is their preference nonetheless.

Not convinced?  Think back to the early 1970s, when psychiatrists still classified homosexuality as a mental disorder.  I object, “Mental disorder?  No, it’s just an extreme, socially disapproved preference.”  When critics incredulously respond, “Do you really think people choose to be gay?,” I say they’re confusing preferences with meta-preferences.  To be gay is to sexually prefer people of your own gender.  This doesn’t mean that gays want to feel this way.  If a gay-to-straight conversion button existed in the intolerant world of 1960, I bet that most gays would have gladly pushed it for themselves.  Even today, I think many gay teens would press the conversion button to fit in and avoid conflict.  But so what?  Hypothetical buttons can’t transform a preference into a disorder.

Is this all just a word game?  No.  The economic distinction between preferences and constraints that I’m drawing upon has three big substantive implications here.

First, people with extreme preferences could make different choices.  People with cilantro aversion are able to eat cilantro.  Alcoholics are able to stop drinking.  The depressed can refrain from suicide.  And so on.  This is fundamentally different from my inability to bench press 300 pounds – or live to be 150 years old.

Second, as a corollary, people with extreme preferences can – and routinely do – respond to incentives.  People with cilantro aversion are more likely to eat cilantro if other foods are expensive or inconvenient.  Alcoholics respond to alcohol taxes – and family pressure.  Depressed parents may delay suicide until their kids are grown.  Even in a tragic situation, incentives matter.*

Third, as a further corollary, people with extreme preferences can – and routinely do – find better ways to cope.  People reshape their own preferences all the time; perhaps you can do the same.  Failing that, perhaps you can discover more constructive ways to satisfy the preferences that you’re stuck with.  For example, if you’re extremely depressed despite great career success, you really should try some experiments in living.  Perhaps you’ll be miserable whatever you do.  But if you’ve only experienced one narrow lifestyle, how do you know?  Maybe you’d feel better if you tried putting friendship or hobbies above “achievement.”

It’s tempting to insist that there’s something pathological about having conflicting preferences and meta-preferences.  On reflection, however, these conflicts are a ubiquitous feature of human existence.  Almost everyone would like to feel differently in some important dimension.  Almost everyone reading this probably wishes they were less lazy, more patient, more outgoing, more loving, more ambitious, or more persistent.  But you still are the preferences you really have.  There’s plenty of room for improvement, but that doesn’t mean you’re sick.

* I’m well-aware that many physical symptoms also respond to incentives.  You can pressure a diabetic to lose weight, which in turn reverses his diabetes.  But all of these incentive effects require time to work.  The symptoms of mental illness, in contrast, can and often do respond to incentives instantly, because they are choices that are always within your grasp.  “I’m divorcing you unless you stop drinking right now” is a viable threat.  “I’m divorcing you unless you stop being diabetic right now” is silly one.

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Am I a Writer? Are You? Does it Really Matter?

T.K. Coleman

I have never troubled myself with a preoccupation over the following question: “Am I a writer?”

I simply write.

Sometimes I do a decent job. Sometimes I do it poorly. At ALL times, I do it in ways that could use some improvement. The most important thing to me, however, is that I do it at all.

For me, to write is to have something to say and to face the challenge of trying to get your point of view across.

I have something to say. I’m willing to face the challenges involved with saying it. So I choose to write.

Does that make me a writer? I have no clue. That’s other people’s question to answer. Some will affirm it. Others will deny it. But I will have nothing to do with those discussions.

My job is to do the work, writing or otherwise, that my heart compels me to do. My job is to keep finding ways to say “yes” to what makes me come alive.

It’s not my job to convince others that I deserve some kind of special label or title for what I do. And it’s not your job either.

Instead of defending your status as a writer, as a creative, as an entrepreneur, or as a whatever, why not use that time and energy to show up for the work your soul summons you to perform?

It’s far more important to do the work than it is to debate your status as someone who does that kind of work.

Actual participation in the creative process has way more value than any in-group label you could chase.

We all have interests and ideas that we want to explore, but sometimes we get stuck in an identity game of thinking “I need to be the kind of person who does X before giving myself permission to experiment with X.”

That’s a trap.

You don’t need to define yourself as someone who does interesting things as a prerequisite for doing the things that are interesting to you.

You don’t need to know all the answers about who you are before you can begin being true to what fascinates you in the present moment.

You can create BEFORE you settle the identity debate.

And here’s the paradoxical thing: you’ll come up with better ideas about who you really are by trying to create things than by trying to figure out if you’re the kind of person who has the right to create things.\

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