Monday, January 25, 2010

Sandy Pentland: Honest Signals

Sandy Pentland's Honest Signals talks about subliminal cues we all emit and makes a case that they provide reliable clues about all kinds of social outcomes. It's a quick read (100 pages of text, 50 pages of Social Science appendices, 30 pages of notes, bibliography and index) and makes a reasonably compelling case that our unwitting signals accurately foretell outcomes in many situations. (negotiation, sales, poker and dating were all studied.) The cues themselves are described in the appendices, along with a discussion of the gropus who have learned to read them (salespeople, poker players). Pentland says it will soon be possible to produce portable devices to make the signals evident. Some of the experiments he reports on were done using prototype portable units, others were done in the lab with earlier versions.

Several important questions aren't covered in the book: Why do we signal this way but not notice it consciously?, How could we effectively learn to detect these signals?, Can people learn to change the signals they produce (either to conceal their motivations, or to steer situations to more desirable outcomes)?

Pentland does show that there's reasonable evidence that the signals occur early in a conversation, that they are reliable, and that most participants don't notice the signals, even though they usually realize how things went for them by the end of a meeting. He tries to argue that we can use the predictions made about job satisfaction and organizational stress to optimize the way work groups are managed, but there is little indication that the tools can be used for steering. When the metrics show that information isn't flowing freely across a geographical boundary within a group, there are obvious things to do to change that, but is there an obvious response if they indicate that one person has more influence than others? Maybe making diagnostic information about the form of the interactions visibly shared within a group would make it possible for someone to intervene, but we're a long way away at this point from knowing how to optimally intervene in group politics or communication.

Wednesday, January 20, 2010

Dani Kollin and Eytan Kollin: The Unincorporated Man

Dani Kollin & Eytan Kollin's The Unincorporated Manis a wonderful exploration of an economic idea, in the vein of Barry B. Longyear's Circus World series. Circus World looked at what might happen if a society tried to base all interpersonal actions on buying and selling. The citizens of that society were descended from a crashed circus spaceship, and they paid one another for everything: unsolicited advice, pulling out a chair, telling a story around a campfire. If the benefits weren't obvious, you might have to pay people to listen to your spiel, which is the position of the protagonist in that story. Building a story around the exploration of an outlandish idea is a common approach in science fiction, and this story is a great addition to that genre.

In this novel, the Kollin brothers explore an idea that might have been invented by Robert Shiller: fund education and other personal development by allowing investors to take a share of a person's future income. In the society presented here, everyone is incorporated, and the government, parents, higher education, and others own shares in a person to compensate them for the work they've done raising that individual. Most people start out with a minor stake in their own net worth, and many of their options in life are controlled by the investors. Those who do well can use some of their earnings to buy back shares and try to gain control. Getting to "majority" is a big deal, but it's not enough to be in control of your own destiny. You have to get to 70% or so in order to protect yourself from minor setbacks and lawsuits from investors who can claim that you aren't doing all that you owe for the shareholders' value.

There are obviously lots of potential drawbacks with this kind of system, and the events in the book illustrate them well. But there are also many ways that this could work out, and many people who might be better off if someone else would benefit from ensuring that they got all the training and support that would help them to provide the best value to the economy. Since everyone in the society takes the system for granted, they provide arguments and illustrations for how well it works, and how the system enabled them to reach their present position, even as they struggle to gain control of their destiny.

Into this society (a little more than 300 years in our future) steps a man from our present. Justin Cord was a successful industrialist, a powerful, ethical, individual achiever who built a business empire before having himself cryonically frozen in the face of a cancer diagnosis. Cord didn't trust the standard cryonics providers, guessing that they would be attractive targets in the time between his deanimation and revival. He is proven correct--many others were frozen, but all the known preserved remains were destroyed in the riots after the great collapse. Cord has a contemporary outlook, with a strong pro-freedom bias, and doesn't accept the idea that anyone else should own his shares. This causes numerous problems, which gives the Kollins many opportunities to explore the implications. Cord's struggles to remain free make him the target of the world's dominant company, which has some good reasons and some bad reasons for not wanting any exceptions to the world's economic set-up.

The characters are very well drawn; even the bad guys have a mix of noble and ignoble motives, and are smart enough to be worthy opponents. Cord himself has strengths and weaknesses, so his actions don't have an air of inevitable success (other than his ability to survive amazing attempts on his life.)

The story does a very good job of showing both pluses and minuses for each side of the debate. The story is rich, and the characters constantly interesting. I think this book deserves to be a Prometheus award finalist. It takes a strong position that liberty is important and worth fighting for, and the characters spend their time pushing for different conceptions of what freedom is. I'll have to read a few more of the nominees before I decide whether it's my favorite.

Wednesday, January 13, 2010

James Case: Competition

James Case's Competition is a disappointing book. It starts out strong, covering competition in nature and game theory, and moving on to markets. But it's clear that Case doesn't actually like markets, and uses controversies about how trade and monopolies works as opportunities to attack markets and mainstream economics in general. One of his biggest weaknesses in his analysis and policy prescriptions is that he doesn't understand or believe in the possibility of progress. In the chapter on Policy implications, Case suggests that farm problems be solved by fining farmers for overproduction, so the "farm sector could [...] earn more money by producing less, as other oligopolies routinely do. A similar plan worked for many years in the oil industry." This might be beneficial for current farmers, but at the cost of their producing less food for the rest of us at higher prices. If you think of the market as a competition between different producers that should be made both fair and remunerative for them, you end up with a situation where they are taking advantage of their customers rather than serving them. The beauty of the market is that producers compete to satisfy their customers. Each of them has an incentive to undercut the others in order to better serve the customers. This does have the effect of driving the least efficient out of business. Everyone (all consumers, and we're all consumers) gets more over time, but everyone has to remain nimble. The alternative is that some people are comfortable in their inherited position, but then you've undermined not just the incentives for progress and improvement, but also destroyed the mechanism that makes it possible.

Case's review of the literature on competition is quite readable and thorough. He covers the theory of games between 2 players, many players, the effects of incentives in auctions, how game theory was approached historically, and the progress that has been made in the field. His antipathy toward markets may be tied in with his lack of an intuitive grasp of zero sum and non-zero sum games. In the preface, he argues that analysis of non-zero sum games and many player games is nearly intractable.

Whenever many-player games such as Scrabble and Monopoly are contested at the tournament level, the rules are altered to transform them into two-player zero-sum games. Many player and non-zero sum games are simply too confusing for tournament play. With three or more players, there would be no end of complaints from alleged victims of collusion.

For a book published in 2007, it's pretty surprising that he didn't consider tournament poker. People like it because of its complexity and the psychological analysis required for good tournament play. And formal analysis may be intractible, but there are very competitive programs winning real money from serious human players.

Sunday, January 03, 2010

Katherine Burdekine: Swastika Night

Katharine Burdekin's Swastika Night is an alternate history published in 1937. It projects a bizarre descendant of naziism 700 years into the future. If the author hadn't been female, I'd have called the book misogynistic; as it is I guess I'll have to say the society she depicts is misogynistic. Men have ruled the world since the death of Hitler, and they have suppressed women to the point that they're barely rational. Men visit women conjugally, but have little other contact with them.

Considering how early in Hitler's reign she wrote, the story show a remarkable prescience about Hitler's influence on the world--Burdekin describes an upper class that has nearly total control over the people toiling under them. Many of her reactions and projections are quite consistent with modern conceptions of Hitler's goals and methods. The women are isolated in camps, and Jews and Gypsies have been eradicated in Europe, and Christians are repressed in Britain. And the Japanese control most of the world outside Europe.

The story follows the interactions among Hermann (a devout Nazi of rather ordinary intelligence), Alfred, whom Hermann had met while doing his military training in England, and the Knight, the powerful local German noble who harbors secrets about the history of the current regime. Burdekin makes a point of showing lots of little ways in which history has been lost and misremembered. The Knight has inherited from his father and his paternal line going back 700 years a document showing something of how men and women lived and interacted in Hitler's times. Since these explicitly contradict the official doctrine of the Nazi church, he must keep it a secret, but for some reason he decides Alfred is worth trusting. Alfred takes the book back to England, where he hopes to use it to foment rebellion, but other than passing it on to his sons, he has little success in the face of the repressive government he faces.

It's hard to recommend this book. The action is slow, and other than Alfred, the characters are caricatures. Burdekin does a good job of showing that this society is dysfunctional and dystopic, but it's too hard to see how Naziism could have led here, and even if it had, the misunderstandings that everyone has of their antecedents softens any consequent blame for Hitler or the Nazis. Given the disparity between Burdekin's nightmare and what the world was actually like 70 years ago, that society could have as easily evolved from any other authoritarian beginnings. Yes, it's an idictment of authoritarianism, but the particulars of Naziism aren't really implicated. The resulting society maintained the style of Hitler's mistakes, but created their own substance.