Modern Polymathism

Cheap Insurance for Climate Change

The debate on climate change is a divisive one where one side says the science is settled and the other are skeptical of science itself. I see both positions as being rooted in fundamentalism. 

The Al Gore et al. would have us believe the if we don't act the earth will become completely uninhabitable and devastated. Even though the earth has been this temperature before and life flourished. Sure there will be extinctions, but there currently are a lot of extinctions. 

On the other side, we'll call them Dittoheads, act as if "only" a 1% change is so minor as to not affect a system at all. I'd like to see if they'd allow me to replace just 1% of their blood with a solution of potassium chloride which occurs naturally in the body (anything natural must be benign right??). I think they'd be quite unhappy with the result. 

Instead of being closed-minded, I think that we should instead look at the problem pragmatically. There are risks on both sides: the environment could be negatively affected in the medium and long terms so as to be very difficult to reverse (especially habitat and species loss). On the other hand, the ROI of current methods is very low, and even imposing crippling anti-carbon incentives would yield very little in benefits.

For these reasons, I think the best approach is from an insurance point of view. In fact insurance companies already do. We know there is a possibility that global warming could significantly affect our lives on earth. We've seen that climate change has occurred in the past. Why wouldn't we at least want to buy some insurance? I'd propose a very slight carbon tax (<1% of gross) as a way of raising money for research into methods of reducing carbon: from alternate energy to sequestration. This approach would allow us to have minimal impact on the economy (there will be losses no doubt) while increasing the ROI our technology will have to solve the problem in the future. 

For the skeptics, I don't think you're wrong to question the Greens. Their ideas have their problems and extremism. Carbon taxation would be massive governance problem with massive control issues. The system would need a way of decentralizing control while maintaining proper incentives to avoid power grab issues - a very difficult problem. However, you already believe that our foreign policy has an obligation to stop terrorism worldwide which has caused less than 4000 direct deaths of Americans (very low compared to heart disease which kills 459,000 Americans a year. Comparatively, climate change could be a far worse problem. 

For those who claim that we're all screwed if we don't act now, I think you're right to be very concerned over climate change. However, if we really want to save humanity and the environment as a whole we need to act in the proper way. If you believe the practitioners of climate science, shouldn't you also believe the practitioners of economics? Neither group are able to predict what happens next week, but they're the best we have to look to. These experts recognize that climate change is a very difficult problem which doesn't have obvious answers. You should likewise be compelled to look at the research on the science and economics in search for these non-obvious. 

Climate change is a very real possibility that we should take seriously. There is a chance science could be wrong, but we should at least buy some cheap insurance to make sure we're not screwed. Both sides need to explore the real risk and benefits of the issue. It's not a black and white issue, like the media would us believe. In times of crisis, we need to keep a cool head and think rationally about the issues - not become fundamentalists.

The Tyranny of Taste

I was at a gallery crawl recently with my girlfriend, and aside from the paintings, she was checking out the people themselves - an eclectic mix to say the least. I noticed something that seemingly always comes with an arts event - snobbery. I'm sick of elite art being put on a pedestal. Taste is, if anything, a construct we develop socially. I find that it expresses itself in a very tribalistic fashion: hipsters and country-folk will most likely have very different tastes - due in large part from their social surroundings. 

I don't think there is anyway to say that one sense of taste is somehow better than another, but that's almost always how it's viewed. It's not just the "hip" making fun of the supposedly "vulgar" either. I'd say that I've heard far more "even I could paint that" comments about a Jackson Pollock than I've heard "that's so bland / mainstream" about a Thomas Kinkade. 

I've always been taken aback when one of my friends make fun of someone's taste. So what if your friend listens to mainstream pop - it's what they like. It doesn't even necessarily code for their "tribe" - though it's often well correlated. I've heard countless people draw false conclusions on someone due to what music they were playing. I know someone quite well who can both enjoy gangster rap and also discuss at length the finer points of Nietzsche - to name one of very many.

One of the most visible forms of taste is in the fashion of clothing. I see it as analogous to all forms of taste: that of a cultural signal. This is not to say that I'm divorced from the concept of fashion all together - I play the game as well. I see fashion as both for others and myself. 

I see this as a pragmatic decision - as it may be for the rest. I'd like to portray a few things:

• That I mean business, but that I'm casual/not-uptight.
• That I care about my appearance, but not to the point of vanity.
• That I'm not beholden to brands (I won't wear logos), but to quality.
• And to convince myself that I really am all of the above.

I was asked a question the other day: whether the pursuit of fashion as a career and passion is somehow antithetic to living a meaningful life. I'm still rather torn on this issue. I find that on the one hand "losing" a talented designer to fashion - as opposed to say designing products that change our lives in a more substantive manner (such as what Designer's Accord is doing), and on the other hand the pragmatist in me says that fashion could lead, in a very real way, to the furthering of these very same causes.

If I project the look of success and accomplishment, I have a better chance of influencing others to get more things done. It's a sad fact of life, but as a rationalist I must accept it. Perhaps a true injustice in the world of fashion is accessibility to even the basics of signaling fashion.

Look no further than to the success of campaigns like TOMS Shoes who give shoes to the Third World, and you'll see that it's in fact a real dilemma. In developing countries, if you don't have shoes you're not only uncomfortable and less healthy, but you're considered to be of a lower class. If we were to level the fashion playing field, we'd be able to bring true merits to the forefront of the conversation. This isn't to mention the fashion problems that plague even the wealthiest of countries in that ancient game of romance. 

This somewhat convinces me that there are still areas where fashion innovation (even in the non-functional aspects) is more than mere vanity and could actually have real humanitarian impact. This leads me to think that practitioners in this medium could have a nobel impact and hence one can be both a lover of fashion and a "good" person.

A Brief Case for Financial Innovation

Like getting fuel perks at the local gas station?

Like that you can use them while you use a credit card at the pump?

Like that you can lease the car that you drove to the gas station?

Like that cars are actually affordable by average people at all?

Like that you can pay for gas with dollars and not a commodity like chickens or oxen?

All of these are due to financial innovation. Fuel perks are an alternative currency. Credit cards are on-demand credit & electronic processing. Leasing is made possible by liquid capital markets and derivatives & swaps for auto resale & currencies. Global mass manufacturing can only work with complex financing (equity, debt, and combinations thereof), currency derivatives, commodity futures, and host of products that are all financial innovations.

I'm sick of people claiming that the financial industry "doesn't build anything". These, very often smart people, think that innovation is great in nearly every field, but that it's unneeded or even reckless in finance. I was at a meeting of scientists and engineers talking about economics, and they kept asking: "How can we stop financial innovation?!?". It's funny because I imagine what they'd say to: "Can't we stop X by banning research in that area?"

They do have a point in the short term though: often new financial products cause bubbles to form from poorly valued products and those can hurt people in the short term. In the long term though, these products are either discarded or refined. The problem isn't that new financial products are bad; it's that transparency in these financial products is bad. These people should be calling for transparency - not an end to financial innovation.

I think financiers (and no, not just "responsible" ones) should be given the credit for helping to create innovative ways to fund our dreams and cushy lifestyles. I'm not saying that I'm happy with the current oligarchy in the financial sector - far from it. I want increased competition and more innovation.

I don't care if they "don't make anything" directly - they provide the ability to. Ask an entrepreneur whether they'd prefer to have the skill to either raise money or physically "build things" - it's not the latter I assure you. Financing is a universal - every business, non-profit, etc. needs it. If you have money, you can pay the guys to build you something. 

If you don't have money, you need to talk to the finance guys - whether that's your rich uncle, a venture capitalist, or the bank down the street. Until we find another universal means of exchange, we're stuck with needing money to unlock many of our dreams.

Is Healthcare a Dichotomy?

Funny clip, but it kind of pissed me off. Jon Stewart is pretty left biased, but I'll give him credit in that he asks hard questions and seems pretty thoughtful and passionate about the issues. More than I can say for almost any commentator. 

However, I was saddened to see him still using the establishment's framing of the healthcare issue - as a dichotomy: either you're for universal healthcare & higher taxes, or you're for limited private healthcare. They act as if costs are given and unchanging. As if the system were a single knob to be turned one direction or another. It's not actually like this, however unfortunately these are the two most likely equilibria. 

Politics is an interesting game of power dealing where you have to find support groups that are willing to back you, and unfortunately for us the framing of the media is influenced by political realities - not real ones. People would be quite receptive to the true though: that the healthcare problem is a series of monopolies (patents, the AMA, the Bar Asso., corporations, unions, etc.) that each have an interest in maintaining a hold on their part of the system. Truly good change, disruptive change, could only happen if these groups weren't able to manipulate politicians and the people via the mainstream media - not likely.

Where are the open source activists? Why isn't their voice heard? I'm sure if you told people that these groups are extracting massive profits by manipulating the healthcare market, in the process harming millions of people, you'd get them as riled up as the banking issue. The MSM can't rock this boat though - read Chomsky's "Manufacturing Consent" for more info on why not. I can't wait to see them die off!!! These companies need to die, and the good reporters need to come together to form less biased new. I'm not sure if this is naivete, but I think it's a very possible (and bright) future.  

To reiterate my solution:

1.) Kill patents, increase research spending, subsidize FDA tests, have X-Prize for widepsread illnesses. This will vastly lower the true costs of medicine, consumables, and equipment - at the same time we'll get more research in solving real problems: not eyelash lengtheners! 

2.) Split up every monopoly healthcare labor association under the Sherman Act, prime suspect: the AMA. This will increase innovation in types of medical personnel, health treatment facilities, and med schools. All of this will encourage a broader market with vastly lower price levels due to increased supply, competition & innovation.

3.) Crack down on frivolous lawsuits. This will decrease the cost of care, as well as encourage new models, techniques, etc. 

So Jon, I just made it sunny without bringing the heat. What trick would you like me to perform next?

Agree? Think I'm crazy? Give me comments!

The Rational Road to Atheism

I went out with a bunch of friends last night, Thanksgiving Eve, which apparently is the biggest drinking day of the year. As I talked with an old friend of mine in the parking lot, we somehow got on the topic of morality, and it was at this time I decided to "come out" to her about being an atheist. It's something I haven't done much in New Castle, probably because of how little I'm there and how most people there are religious.

As I did so, she became quite noticeably relived and excited - a reaction I wasn't expecting. She then said to me that she actually had never felt there was a god either. It was an interesting moment of deep understanding between us, and her reaction afterward was of a desire to learn more, to explain to herself and to others why she feels this way and how to defend these views.

I think this is a topic that deserves a lot of attention, and in fact I'm often asked to explain this. I'm going to lay out below the case for an atheist / rational worldview using evidence from science, anthropology, and history through a series of videos.

What is Atheism?

Richard Dawkins' TED Talk



- This talk is a great intro to exactly what atheists are, what they believe, and the issues that they encounter in modern society.

Science

How was the universe created?

- This first video is a very brief explanation, the latter ones give a lot more substance.







How did life start on Earth?



- This video is a great explanation of how we go from basic chemicals to self-replicating life. It puts to rest the Christian argument that life is "irreducibly complex" by showing that early life was very simple and through competition.

How did modern animals and humans come to be?



- This video picks up where the top one leaves off. It goes from the simpliest of pre-evolutionary life to modern humans. It provides a deep look into just how amazing and diverse life really is. To me, this is far more powerful than the Bible's creation story, and instills a sense of awe in our world.

Humanity

What was the origin of religion?



- Great video on the origins of religion. Further reading: http://en.wikipedia.org/wiki/Evolutionary_origin_of_religions


How did religion spread?



- Great high level view of the spread of religion. Further reading on even earlier religions: http://en.wikipedia.org/wiki/Timeline_of_religion


How did morals come about?



- Great interview on primate morals. Further reading: http://www.nytimes.com/2007/03/20/science/20moral.html

How do we create and justify our morals?




Conclusion

The progression of this post, from origins of the universe, to primitive life, to humans, to primitive religious belief, to organized religion, to morality itself and finally how, in the absense of god, we can define morality, was to demonstrate a narrow core of a logical worldview of atheism and rationality. There is much more where this comes from, but I think this is good start down the rational road of atheism.

Now, I will go to eat Thanksgiving at a friend's house who are religious and will doubtlessly say grace. This should be interesting!

News Flash! Non-coder does the impossible: multi-cal Pittsburgh event calendar!

Healthcare - A True Cost Approach

Healthcare is in the news more than any other issue but the recession it seems, and just like the recession few people have any clue as to the real problems and the talking heads & politicians only have bad answers designed to get increase votes - not lifespan.

As is my way, I'd like to distill the problem into its essence and decompose the critical factors, here's my approach. What is the problem in healthcare? Fundamentally, the issue (like most things) comes down to money. If great healthcare was $10 a month, a crisis there would not be. So the objective is to raise the nations' life expectancy and quality of life (let's call them life-factors) with the maximum return on investment vis-a-vis greenbacks.

Up until now, everyone has been talking about lower "costs", but what they really mean is "price" - as in what we pay for service - not how much it really costs. Let's look at each true cost components to see where the money in going. All the prices for these are vastly inflated over their actual costs, and its because of the same reason: monopoly. Let's look further and then see how we can solve each of these problems.

Medicine costs + Equipment / Technology:

- R&D - nearly all new drugs that increase life-factors are subsidized by government money (NSF & NIH)
- FDA approval - very costly, and this is most of what drug companies are for - taking research down the last mile to the marketplace.
- Sales / distribution - these cost BigPharma ~2.5x their R&D budget.

Solution
-Increase NSF / NIH funding (it's only like $18B a year) to produce more drugs and technology that actually improve life-factors - as opposed to vanity drugs like Latisse.
-Decrease / eliminate patents to allow generic drugs and equipment. Most people don't know that drugs cost less than 1% of their purchase price to manufacture and can be easily reverse engineered in about 6 months. Equipment is the same game.
- Subsidize and streamline FDA the approval process so that high life-factor increasing drugs are approved quickly and at low cost.
-Sales & distribution is a generic problem that FedEx has solved very well. The only need is a system that the doctor or the patient themselves can use to get updates on the latest medicine, etc. Expert systems can already do this.

Labor Costs:

- Price to pay doctors, nurses, etc.

Solution
-Subject the AMA, ADA, etc. to the Sherman Anti-trust act. Break them up to increase standards competition. Did you know the hospitals, medical programs, and doctors must be approved by the same agency: the AMA. There's a shortage of medical staff for a reason. The AMA rose to power when healthcare was provided by fraternal organizations like the Elks. They'd make them bid against each other for retainer costs.
- Allow increased automation - many people don't realize that doctors are often less accurate than expert computer systems, but the AMA, et al. argues against widespread use of these cost-saving (doctor replacing) technologies.
-Medical tourism - allow healthcare plans to use overseas doctors that are up to a sixth of the cost with similar / better recovery rates.

Risk Premium:
- This is related to the risk insurance companies charge to mitigate.

Solution
- Allow genetic / blood testing based health premiums (with non-disclosure). This would mean that you could filter for all the healthy people, incentivize them to engage in good lifestyles, as well as help prevent diseases early.

- Lawsuit restrictions - we need the Edgar Snyders of the world to stop increasing our pricing. Of course you should be allowed to sue - but I can see caps for "pain and suffering" at $1M. Of course, they have to pay medical costs, lost wages, etc.

- Transparency - I'd like to every insurance product to be modeled in an open file format that allows ease of pricing and higher liquidity. This would allow insurance assets to be bought and sold more easily - creating a secondary market that would low rates and lower barriers to entry/exit.

Conclusion:

Each of these factors is disruptive to the industry's ability to make profit. Conservatives: no this isn't business hostile - think of them as carriage makers when Ford came around. Liberals: Stop supporting plans that give money to big business and tax us all. If you want REAL change, let's not let the establishment set the dialog.

I'd love some feedback on this!

Pragmatic Protests

Today was the first day of the G20 summit in Pittsburgh, and it was quite eventful. More important than the public spectacle it became was the insight I got from being at the protests. I wanted to get a good view of both sides, so I not only talked with and interacted with the security forces, but I also participated in an unsanctioned protest march.

I'm not an unrealistic hippy / anarchist who thinks they should be allowed to smash windows, etc., but I'm also someone who feels the constitution does grant us the explicit right to peaceful protest (public marches, demonstrations, speeches, etc.). I've also been around a good amount of law enforcement / military types to have sympathy for their concerns as well.

By the end of the march, I found a lot of flaws in the police tactics. Firstly, the whole practice needs a good dose of pragmatism. The question of whether protests are achieving anything real is for another post, but the question is how to balance free speech, security and the public good (ie broken windows, inconveniencing others, etc.).

Today's events show the limits of blunt force policing. From their angle, these must be their goals: protect G20 summit from real security threats, prevent damage to property, and ensure public safety & convenience. Their tactics were typical a large display of manpower in force along with light armor and psy-ops (sound equipment, formations, etc.), but they failed to achieve the last two goals.

From my vantage point, if you want to accomplish those goals you need to wield power with discretion – not bluntly. The city should have issued the protest permit, closed down Penn and allowed them into downtown outside of the secure zone. This way traffic would have been predictably routed onto Liberty and the protesters could march at will to downtown in peace.

I don't think everyone was there to start a fight – most were happy to chant and wave signs. The protests started off very calm – people were happy, but as the police continued to confront them, everyone became pissed off and police force was stepped up even further. Not only did this lead to many being gassed and beaten, but also severely disrupted many neighborhoods by playing cat and mouse with the protesters.

This all could have been avoided if they just let them go downtown. The fences were already in place to keep most protesters back, and anyone who crossed the barriers would be the troublemakers who deserve to be confronted.

Force must be wielded with a focus on achieving the overall goals – not just security at all costs.

Governance for Self-actualization

As you know, I think that self-actualization should be everyone's goal, and that it can be best had when we have the most capabilities and least coercion. The issue is finding the proper balance, and this is easier said than done. I've been reading an amazing book: Amarya Sen's Development as Freedom. The concept that comes out more and more is that, not only must the dials of governance be set properly, but that every society has its own optimum settings as seen through the lens of its core beliefs.

A great example of this is a comparison of income inequalities and unemployment in Europe and the United States. The basic argument is that in Europe there is lower inequality of incomes than in the US, however the US has vastly lower unemployment rate. Sen believes, justifiably by my take, that the difference is mostly philosophical. The US believes more in rugged individualism so we're more appalled by unemployment than the EU, and conversely the EU believes more strongly in income equality and hence their system reflects this.

There is no overall “right” answer as is proposed by the partisans – there are only gradients between many points of view (as opposed to the usual two). If we're to self-actualize and achieve happiness, what is the best system? We know there can really be only one system implemented at a time and place. Is there a system that allows everyone to set the dials of government as close to their beliefs as possible?

There is - the answer is that we need to change the “place” part of that equation. We need government to have to compete for citizens / residents just like any business has to today. The idea is to move each dial of governance to the lowest possible level so that they have the highest relevance for each citizen. By doing this, you democratically capture the beliefs of the area so that the dials can be set to each area's optimum setting. If you happen to have minority beliefs in your area, move to one that better represents you. In this way, you can live under whatever system you'd like from communism to minarchism, and should you decide you don't like it – just move.

What's the form of these areas? They could be similar to the current system of states with counties with districts and cities with wards. The issue here is which dials are located at which level. The deciding factor here should be externality effects. For instance, environmental issues would have to be decided at the highest possible level because regulating only the upstream part of a river makes no sense – as does CO2 emissions in only one state. For other issues such as gun rights there are gray areas that could be construed as externalities, such as guns passing from pro-gun to anti-gun states, however it seems that most of these cases are usually unenforceable – even a draconian government can't regulate guns or drugs well.

There's an issue though with this though: a local system favors some systems of living over others. For instance, if one state were to enact higher labor laws many businesses would move out to other states with less strict laws – as they do today already. The issue is that income distributive systems require either corporations and/or the rich to subsidize everyone else's activities, and if they move away this can't happen. This is truly a conundrum.

One of the issues we're fighting against with this more localized form of governance is switching costs. In the US, moving from state to state isn't a big deal - you just change your residency. Moving from country to country however has always been very difficult. What this does is vastly increases switching costs that makes everyone think twice before changing citizenship. The same issue is true with states as a whole. The US Civil War decided that no state may secede, which is nothing but massively increasing the switching costs from the national government. I see no good reason that a state can't secede and/or join another country (Canada maybe?) or even form another nation itself. Anything else is coercion.

So would a system like this really encourage a variety of settings for their dials of governance? I believe it would – of course many options aren't as likely such as pure communism, however I think a very similar thing such as the US & EU belief/policy gap would take place. Each area would decide where it wanted to set to the controls, and adjust accordingly. Let each area make its own decisions, bounded by limits of reality – not national coercion. In this way, we'll allow everyone to live as close as they can to their belief optimum.

Zero Sum Economics

I heard someone the other day say that capitalism must grow or die, but is this true?

I'm guessing that they're using capitalism to mean: private ownership of assets and very free markets. Using this definition, can capitalism work in a non-growth economy? By “work” I'm going to define this as: “is capitalism better than a more socialistic system in a zero-sum game?” I would argue that capitalism / free markets are far better at allocating resources in a zero-sum game.

Economics is the study of allocating scarce resources. This is Econ 101. Scarce usually means “non-infinite” - it's easy to allocate infinities such as information – just copy-paste it. The difference in scarcity here is between growing finite resources and a fixed amount of resources. If we assume we can only use Earth as our source, then yes at some very high level we have a zero sum game due to the law of conservation of mass. However, we're currently not close to tapping all the resources in the Earth so we can assume a growing resource base.

What if we imposed a system where everything had to go back to its original form though? Many environmentalists support this view. If we extract coal, we need to sequester the carbon – perhaps underground again. Can free markets still allocate resources in this extreme environment? Of course.

Can value increase in a zero-sum materials game? I think we've already seen this answer. A ton of iron ore, limestone, coke, energy, etc. is worth less than the steel it creates. A car is worth more than the weight of its steel. Value is about the organization of matter into more useful forms. Materials science is showing us that ubiquitous carbon promises to be a miracle material when ordered the right way. When a sheet of properly ordered carbon a few microns thick is stronger than an 1/8” sheet of steel and was produced from perhaps 1mL of carbon powder and some electricity – I think anyone can see that value is being added above and beyond mere raw materials and labor.

If we apply this to the economy at large, we see that the zero-sum resource game actually can work quite well – thought with slower growth of course. This eliminates the argument for capitalism needing a growing pie to survive. Socialistic measures would have the same problems they experience today - improper allocation of resources due to the effects of: “some of us aren't smarter than all of us”. In other words individual economy agents make better decisions about material allocation and conversion than a leviathan of a state.

Thoughts?