There is always the question of whether to study things bottom-up or top-down. These are bottom-up studies of what to do if you have a single infected patient. If you had an individual infected with a novel cold, that would be important, but we are generally interested in epidemics. In particular, why do colds go epidemic in the winter? We know there must be some environmental change. Maybe it’s a small change, since it only takes a small change in reproduction number to cause an epidemic. Then these controlled experiments might identify the main method of transmission. But maybe the change from summer to winter is a big change that swamps the effects we can measure in these bottom-up experiments.
Douglas_Knight
Karma: 7,766
I think Benquo’s claim is that most institutions do want financial fraud. Most people don’t, but a big constituency arranges to profit from it and to corrupt institutions. So his advice is aimed at the individual, not to blindly trust institutions.
Thanks!
I have a lot of quibbles about this, but going back to the main point, yes, this was a separate source of funding from stealing from customers and unlike Enron, not a rounding error compared to the first step.
via indirect channels like Alameda
What channels other than Alameda? If this was entirely about Alameda, how is FTT adding anything to the story above saying that they stole to give to Alameda? Who are they fooling other than their own internal accounts? The Coindesk article is very late in the story because no one saw the accounts before they tried to get a bailout from Binance, who wasn’t fooled.
If a customer puts up FTT as collateral to short bitcoin, then FTX is confused about how much collateral it has. But this is the customer exploiting FTX, not vice versa! This is FTX exploiting all the other customers by falsely claiming that it has hedged risk. But this isn’t what took it down. It did manage to largely liquidate shorts before they ran out of collateral.
Later you say that this is just one ingredient, but in the beginning you describe a rigid structure of compounding and shoehorn examples into bullet points. I think that structure is too rigid and I object to the examples. I think Theranos and academic Tessier-Levine fit it well. Indeed, for research, pretty much all people have is their reputation.
You describe Enron as a simple Ponzi scheme. I think this is just wrong. My understanding is that the main thing with Enron was a one-time shift from brokering energy today and owning the physical capital to deliver that energy, to brokering long-term deals that were purely virtual. By having unmoored forecasts, they could make arbitrary forecasts about the state of the company. It is not clear how much the senior executives knew they were doing this; perhaps they just accidentally designed poor incentives by allowing the salesmen to price their own deals and get an immediate bonus with no real-world feedback of how the deal turned out years later. You can certainly say that this is an example of extending credit from Enron’s old business to its new business, but I think it was a one-time change and not repeated compounding of credit. It is true that the new business having no physical capital was able to scale very far on financial credit. (Enron is my hobby horse. “Everybody knows” that you’re supposed to hold it up as an example, but it did 3 bad things and no one notices that other people are talking about different things. The main problem was that there whole business was mispriced. When the senior executives discovered this they something more like a Ponzi scheme, but that was just a couple billion, a rounding error. And the third was manipulating California energy prices.)
Similarly, FTX made a one time pivot from trader to bank. As I understand, it stole mainly to cover the trading losses and not to pay for advertising. If it had accepted the trading losses and wound down the trading, it wouldn’t have looked very different from the outside. Trying to convert its credit for trading to being trusted as a steward might be an example of the credit conversion you’re talking about, but not a compounded phenomenon. If that was central to its strategy, then maybe would make it hard to accept the loss and wind down that business.
What scale is “quickly ramping up their PR spending”? Theranos lasted 10 years. Enron lasted 15 years from the merger of much older companies. I don’t think a heuristic about speed would identify either of them. It sounds like you’re only talking about FTX.
The denominator isn’t fixed.
If you have a tool which does a good job at automatically generating a certain type of code, you should probably generate more of that type than you used to. This could easily balloon to 90% of your new code, but only replace a small amount of human coding. You seem to allude to this scenario when you talk about one-off scripts. Another example is automated tests.
During the last pandemic people were sometimes not allowed to wear reusable respirators, but required to drop down to N95. This is pretty strong evidence that people think they are weird.
Without disagreeing with the conclusion, I think this is a poor discussion of the pros and cons. The big con is weirdness points. That’s basically why people don’t do it. Probably if you articulate that it’s easy to see that it’s a win, but if you don’t articulate it...
Yes, they’re supposed to be more effective. I think this is emotionally difficult because it sounds like a Pascal’s Wager. Yes, you should invest at the prepper margin, but how far? How many other points are comparably far down the list? What should I do before this? Here’s a concrete point: if I have a beard and an N95, I will achieve more by shaving than by switching to a reusable mask. Shaving is pretty low cost (especially, conditionally shaving in the event of crisis), not a tradeoff with changing masks, but knowing to shave is important and competes with mental resources.
Here are two other advantages over paper masks: you say elsewhere that it is more cost effective than paper masks. If you are already committed to having a stock of masks, this makes it much less like a Pascal’s Wager and more of free lunch. And I suspect that they are more comfortable, which is important for actually using them.
I don’t think MZB or Breen ever lived in Oregon. They moved to Berkeley for grad school in the mid 60s and except for some time on the east coast, lived in the Bay Area for the rest of their lives.
The points about IQ seem parochially American, not applicable to the rest of the West. But aren’t you British, not American? Does this really seem so central in Britain?
Until quite recently, modification of dogs was to make them specialized workers. The teacup poodle was created as a pet, but the standard poodle was created for duck hunting. That doesn’t seem a terrible fate.
I don’t see how usefulness explains which animals were bred frivolously. I guess the long experience breeding dogs for work could turn into breeding dogs for appearance, but in the 19th century there was frivolous breeding of pigeons, which had previously been bred for food.
The Scottish fold and (American) Persian cat were directly selected for appearance and their health problems are directly related to that feature. Maine coons seem to be natural (“landrace”). Their sixth toes and health problems might be the result of a population bottleneck 400 years ago, or the rapid selection for a new environment, but they were brought for work. I don’t know about their friendliness. It makes sense that someone would breed for that for pets, but I don’t think that’s what happened. Rag dolls going limp when held seems disturbing to me. The one I met seemed more frozen with fear than happy with humans.
You had a lot of sources in this post. Half of them are only about ownership, because that’s easy to measure. Do you believe them? If not, why cite them? If so, then why not talk about mere ownership?
But the other half are even less believable because control isn’t measureable. Good governance is good. But how can you even classify governance as democratic? Are the Southwest town halls democratic? Or are they classified as democratic because the writer like the company?
Your previous post mentioned a lot of pitfalls, but I don’t think the United example fell into any of them. And I don’t think they are important. Most employee stock is voting shares, but there are so few votes it hardly matters. What is important the large number of small decisions.
You start by talking about democratic governance, but then switch to firm ownership. Employee ownership is easy to measure, but does it actually result in information flows? Some people insist that there is a big difference.
To see the difference between merely giving stock and letting workers shape their destiny, look at the airline industry. In return for lower wages in 1994, United Airlines pilots and mechanics got more than half the company’s stock. But life inside the cockpit and at loading ramps barely changed. By contrast, Southwest Airlines employees own only about 11% of the company’s stock, but the company works to encourage and implement workers’ suggestions, in part through town hall-style forums with top management. While there are other important differences between the carriers, workplace culture is a big reason United posted record losses last year while Southwest made a healthy profit–as it has for 29 years.
Southwest had good governance. Did this have any connection to distributed equity? How?
Anyhow, from a theoretical perspective, owning 1/1000 of the firm while having 1/1000 of the responsibility is pretty big free rider problem. If you can make your small part of the firm more efficient, it won’t show up in your equity. But just being an employee is theoretically a big incentive to keep the firm surviving. The 1/1000 of the equity seems negligible compared to that.
There is value figuring out what is going on in America. But since the same thing is going on elsewhere, answers unique to America are incorrect.
Focusing on the US seems like a mistake, since Dominic Cummings worked in the UK, yet the situation seems to be substantially worse, despite, eg, there being no separation of powers.
How to find workers that will do with Dominic Cummings wants? He found it quite easy to recruit from people already employed by the Department. He didn’t need a lot. He couldn’t manage a lot. If the masses had ignored him, it would have been fine, but they actively sabotaged. And lots of people he found productive left because it was too difficult.
When you step into a liquor store, the majority of the alcohol you see will likely be sold to people whose health it’s significantly harming
This does not follow and is probably not true. Heavy drinkers tend to consume low-profit cheap forms, often highly concentrated. Most of visible inventory is advertising diversity and trying to get moderate drinkers to buy something more expensive.
I’m not sure how relevant this is to the rest of the argument, but I see people assert that this is true and relevant all the time and I must rebut.
The default on Polymarket is no expiration. It is only after actively choosing to have an expiration date that it goes to 1 day. I suspect that is so short that it encourages people not to choose it. Similarly, the default with Manifold is not expiring. But if you do click to change, it offers 5 options from immediate to 1 month.
Both sites encourage market orders over limit orders. Polymarket makes limit orders visible but not default. Manifold buries them under “advanced.” So the people Joern profited off of were sophisticated enough to choose the “advanced” options but not sophisticated enough to choose good expiration dates.
Encouraging people to use limit orders is a step in the direction of a smoother market. Limit orders with 1 month expiration are somewhat like a sequence of monthly auctions. But they may be harder to understand and require more UI work.
This is standard today, but how recent is it? It looks like the industrial age to me.
How much of institutions is about solving akrasia and how much is about breaking the ability to act autonomously?
We get the word akrasia from Plato, but was he really talking about the same thing?