Math major from Germany, interested in a bunch of stuff. Find me on limerott.com
limerott
Karma: 92
A framework for speed reading
Economic Thinking
Hi! I’ve known LW for quite a while, but only now decided to join. I remember reading a comment here and thinking “I like how this person thinks”. Needless to say, this is not a common experience I have on the internet. What I hope to get from this site are fruitful intellectual discussions that trip me over and reveal the flaws in my reasoning :)
If the king is too gullible, the vassals have an economic incentive to abuse this through the various methods you described. This eventually leads to a permanent distortion of the truth. If an economic crisis hits the country, his lack of truthful information would prevent him to solve it. The crises would exacerbate, which, at some point, would propel the population to rebel and topple him. As a replacement, a less gullible king would be put into power. This looks like a control loop to me—one that gets rid of too gullible kings.
So, my strategy as detective would be to wait until the situation gets worse and stage a coup.
I want to argue that a healthy dose of artificial optimism can be useful (by the way, isn’t all optimism artificial? Otherwise, we would call it realism). This can be on a personal level: If you expect to have a good day, you are more likely to do things that will make your day good. Or, in your scenario, if a vassal whose region isn’t going great starts to praise it and gets more resources this way, he can invest them into rebuilding it (although I question the policy of assigning more resources to those regions that are faring well anyway).
As a side note, this reminds me of the Great Leap Forward under Mao, which caused millions of death by starvation. The main reason was deceitful reporting: as the information about crops needed to be collected at the central authority and it had to go through multiple levels (farmers themselves, districts, cities, counties, states) and at each level, the representatives exaggerated the numbers slightly, this added up and eventually led the top party officials to believe that everything was going great when millions were dying. (Of course, this is a hierarchical structure of vassals, but it’s still artificial optimism)
Congratulations on your success! A few questions that came to mind (I don’t expect you to answer all of them):
What did you give up to pursue trading full time?
How much capital did you start with? (6x is not enough to get to the size of a small hedge-fund if you start out with 50k...)
Do you use leverage?
Do you manage other investors’ assets or only your own?
Have you automated portions of your trading routine?
Do you base your buy / sell decisions on value alone or do you use technical analysis? If so, which concepts do you find most useful?
How much do you invest in cryptocurrencies?
I liked tip 7 the most. Reminds me of a quote from a chessmaster (Maurice Ashley): “The most important insight in chess is that the other person is more important than you are”
Thank you for this post. The personal experience certainly seeps through in your recommendations (which is a good thing).
I would like to mention another area: nutrition. A good chunk of your productivity depends on how well you eat. It also affects how well your body can fight the chronic condition. It also gives you another variable to play around with (do I feel better if I eat carbs?).
However, I don’t think it is as simple as “eat your veggies”. People with chronic illness should have a solid understanding of the nutrients the body needs to function properly (for example, the role of protein is often underestimated). They should also set up systems that allow them to fulfill these requirements in a quick and effective manner, without spending too much time and energy (e.g. through supplements, protein shakes, cooking in bulk). It is also wise to experiment with different diets and observe their effects on one’s health (e.g. ketogenic, raw, protein-heavy).
One caveat though: it is easy to get caught up in optimizing nutrition and delude oneself into thinking that the next supplement will lead to a breakthrough. But it is important to get the fundamentals right.
This takes on a higher level view of reading than I was intending to cover here. But nevertheless, this is a valuable resource. It reminds me of Adler’s How to Read a Book.
With regard to physics: You say at the end of your post that theories should stay inside their domain. I agree. But decision making and analysis of markets are not in the domain of physics, but economics.
Post-scarcity is an illusion. Even if we reach a very high level of development, there will still be scare resources left to distribute, such as time.
Maybe my post was unclear about it, but I am in favor of the time-efficient method of groceries shopping (provided one has enough income). It is definitely the better solution here, as you already pointed out. Thinking finitely about your time will lead you to the conclusion that you should think infinitely about (i.e. without considering prices) which groceries to buy.
While thinking about your comment, I understood that it’s useful to distinguish between implicit and explicit assumptions of infinity. In the first case, you simply ignore the prices and, thus, implicitly treat your wallet as infinite. In the second case, you would explicitly assume that you have an infinite amount of money, which would naturally change your decisions into buying as many valuable and durable goods as possible. With “thinking infinitely” I mean the first case.
I would definitely enjoy reading more about your frankenstein theory.
I think that you need to match the right tool to the right context. I’ve observed that in some contextes, the right tool would be finite thinking, but people tend to apply infinite thinking instead. For example, if you have a model of the world in which the law enforces itself automatically, you will be less likely to endorse policies that increase spending on police. That is a mistake.
I appreciate you taking the time to share your thoughts.
To explain where I am coming from: My primary goal was to make sense of a somewhat fragmented field by developing my own philosophy behind it and turning it into concepts that I can use as thinking tools to better understand the world. My goal is not to make academic progress in that field, but to extract the viewpoint it (in my opinion) offers and use it for my own purposes.
In particular, I noticed that we are prone to treat finite (and even scarce) resources as infinite, such as making overly long book lists that would take 2-3 lifetimes to complete reading. This is non-sense of course and developing a sensibility for this bias (?) can have personal utility. I can imagine plenty of scenarios where this may be helpful, such as a boss overburden his workers with work, ignoring the fact that his workers’ energy is scarce.
Regarding the groceries shopping scenario: The mere fact that you did the analysis, i.e. used deliberate thinking to come up with options and weigh them against each other, implies some degree of finite thinking. Infinite thinking does not refer to explicit assumptions of infinity in your thinking, but rather to the fact that (to put it crudely) no thinking was done at all.
Finite and infinite thinking don’t have to be binary categories. Continuing with the groceries shopping example, consider three agents A, B and C. A is on vacation and does not care about neither time nor price, thus entering the first available shop that satisfies his needs. B is only concerned with price, so he drives to a supermarket that is far away (but offers the most competitive prices). C considers both price and money and decides that the time saved is worth the increase in price. You could formalize this as: What are the parameters of the utility function that I am currently considering? (For C, the utility function u(a,b,c) would be a function of “does the shop contain what I need?”, “what is the expected price?”, “how long will it take me?”). This would make it part of decision theory.
You are right in saying that, technically, what I mean by “infinite thinking” is really “not finite-thinking”, but as you may agree, the first term sounds a lot more catchy. It’s a trade-off that hopefully is not too obstructive.
You touched on the difference between finite and scarce with the Eskimos example. I want to note that what I mean by “switching from infinite to finite thinking” is equivalent to “treating a resource that is factually finite as being scarce”. So, you could say that “finite thinking” is really “scarce thinking”.
Concerning your hypothetical world, you already acknowledge that, in this case, mental resources (speed of thought, concentration, energy) become the bottleneck and thus the scarce resources to be allocated. I don’t think that we will ever attain a state in which we can completely abolish scarcity. When “real” economists talk about post-scarcity, they mean an abundance of elementary goods and services so that people don’t have to fight over water and food. If you take it by the letter, the only post-(formal scarcity) scenario I can imagine is us becoming floating bubbles of consciousness in space, eternally content and peaceful. But that would not be any fun.
I think that math, in its essence, is easy. If it weren’t for our faulty thinking apparatus, we would see that immediately. But the problem is that a lot of things that matter can only be accessed through vague notions without a technical definition at its heart.
What is your definition of productive enterprise, what is non-productive enterprise?
How about this? The person uses his social security to buy a new phone. This purchase increases the capital available to the manufacturer for R&D of new phones.
I googled the broken windows fallacy and this is the argument I got: “If he hadn’t paid for the broken windows, he could have gotten himself a pair of new shoes.” But the point is that he didn’t buy the pair of new shoes (he instead hoards the money), but he is forced to buy the new window (since it’s windy otherwise), creating demand.
The vague reflections you are referring to are analogous to somebody saying “I should really exercise more” without ever doing it. I agree that the mere promise of reflection is useless.
But I do think that reflections about the vague topics are important and possible. Actively working through one’s experiences, reading relevant books, discussing questions with intelligent people can lead to epiphanies (and eventually life choices), that wouldn’t have occurred otherwise.
However, this is not done with a push of a button and these things don’t happen randomly—they will only emerge if you are prepared to invest a lot of time and energy.
All of this happens on a personal level. To use your example, somebody may conclude from his own life experience that living a life of purpose is more important to him than to live a life of happiness. How to formalize this process so that an AI could use a canonical way to achieve it (and infer somebody’s real values simply by observing) is beyond me. It would have to know a lot more about us than is comfortable for most of us.
Let me clarify. If a group decides that it wants X, this does not imply that the individual member of that group wants X. What they usually want is to avoid work and let other’s do it or be told what to do. But if they agree upon the strategy “To achieve X, we agree that every member has to want X and, if he is capable, do X” (rather than “To achieve X, one leader tells everyone what to do”), then things would get done!
You claim that, in politics, rules with high cost of compliance are introduced to keep the fixed pool of resources from being divided between too many people. Is there an example of that? I think that this is mostly done not through laws, but through social affiliations. Those with the best connections get the job or the resources.
I like the idea of a do-ocracy. It’s like saying “The only rule is that don’t look for rules to do what needs doing”. But the crux is that this seeming anti-rule is actually a rule that needs to be followed. If there were absolutely no rule, and everyone were allowed to do what they wanted, nothing would get done. So, for this to work, first, a consensus has to be established that no consensus needs to be established!
I feel that we are getting off-topic and I also think that I don’t follow some of your thoughts.
The danger that you refer to may be laissez-faire capitalism and its effects on governments, societies and the environment. But this has nothing to do with the original post.
I think that you may be throwing out the baby with the bathwater. The fact that there are problems with the current implementation of economics (aka globalization, multi-national cooperations, inequality etc.) does not preclude economic ideas, or ideas inspired by economics, having merit.
If you interpret scarcity as scarcity of basic resources, then the robot agent scenario does fit the post-scarcity idea. But to get there, we need technological advancement and higher productivity. And for that, economic thinking may be useful.
I have never suggested to adopt the whole field of economics as one’s dominant way of thinking. I am strictly against taking ideas, from any field, at face value without critical thinking.
Thank you for the post and the analysis. I enjoyed this insight and I recall having the feeling that everything is a trade-off at least once. This explains it clearly and succinctly.
Maybe we should make a collection of solutions that did not make it, just to acknowledge their existence, like all sorting algorithms that are strictly worse than mergesort.
Thanks for the kind words. I will do my best.
Your struggles with coordinate vectors sound familiar. I remember that, in the book I used, they introduced for a basis and called a coordinate vector of iff ( is left general on purpose). This explicit formulation as a simple bijective function cleared up the confusion for me. You can do neat things with it like turn an abstract map into a map from one basis to another: for linear .
But of course, from a practical standpoint, you don’t think about vectors this way. As with proofs, once you heard a plausible argument and accepted it, there is no reason to go back to them. So, I am somewhat critical of your book not introducing matrix-vector multiplication, as this is an obvious centerpiece of linear algebra (especially considering that its historic roots lie in solving Ax=b).
A misconception about immigration
This reminds me of focused/diffuse thinking.
Focused thinking is rule-based, mechanical, goal-oriented, precise, strictly sequential, logical, works in small steps.
Diffuse thinking is creative, open-ended, creates long connections, produces leaps of insight that are impossible in focused thinking.
The best example of this is solving math problems. Paradoxically, it requires to alternate between these two modes frequently and fervently—something that people generally struggle to do. After all, most people either think like bureaucrats (like me) or they think like artists. But in this case, and in any other complex endeavor, you need both.
Different life phases require different focused:diffuse ratios. The primary variable for that is slack.
My opinion is that, in almost all scenarios, if you have a question, you should always ask it. Why?
If this question occurred to you, it probably has occurred to many other people. Thus, there is likely to be general interest.
The speaker (or author) has the opportunity to share more of his expertise, even if he is not about directly answering the question [this one is very underrated; I’ve had a lot of interesting conversations develop from seemingly foolish questions]
This gives the author the chance to explain his perspective more clearly. Your question may have implicit assumptions that the author rejects; this gives him the opportunity to state what his assumptions were (and thus, his frame of reference)
It allows a dialogue to happen between author and reader, which may result in even more insights (if you have a format in which this is allowed, such as a discussion board)
You will invariably have a slightly different perspective to the author. Two perspectives clashing result in interesting ideas
If the author forgot to write something down that he wanted to say, it gives him the opportunity to state that
The author may wrongly assume certain background knowledge. If your question indicates that his assumption was wrong, he has the opportunity to back up and explain it.
It makes the whole conversation a lot more interesting and engaging, it emboldens others to join it and contribute as well.
Foolish questions are especially useful, as they address the basic concepts of a subject. This is a lot more important than expert question if you want to get a coherent view of it.
The answer provided by the author will ALSO be helpful and beneficial to the other students / listeners / readers. By making him expand on his topic, you are benefiting everyone [also very underrated!]
Authors are often passionate about the topic they are writing or talking about. Giving them the opportunity to talk more about it, or to challenge them with difficult questions, or to ask things that they have never been asked before is something they, too, deeply appreciate.
As long as you stay within reasonable (context-dependent) limits (for example, you should not be the only one asking basic questions while everybody else looks bored) -- you should ALWAYS ask questions. It is definitely worth overcoming the fear of looking foolish. There is nothing more sad than somebody giving a talk and nobody asking follow-up questions. I mean, why not?