This is a quick one.
I found the blog Noahpinion as I was following a link from a silly article in The Atlantic from assistant finance professor Noah Smith at Stonybrook who thinks what the country really needs is 50 million more Asians. Having worked with Asians I can tell you that they’re just like any other immigrant group. Some of them are brilliant, some are average and some are highly overrated. And just like other immigrant groups, many of them work incredibly hard when they come here. But with so many of them laid off right now in my industry, I don’t think even they want 50 million more of them landing on our doorstep.
How would Noah Smith like it if there was another continent called Financia and, having an excess of well-trained finance specialists, they all wanted to move here and teach finance? Not only that but because they stand out in a crowd with their blue hair, the hiring managers become fascinated with them and their well tested ability to express multivariate statistics without a calculator? How many adjunct professors could Stonybrook absorb? Think that over, Noah, and then, maybe you should get out more and see how the pharmaceutical industry and its hundred thousand of unemployed scientists are doing. I think we can dispense with the notion that we’re all bad scientists because we didn’t get laid off piecemeal. It was 19,000 at a clip. Hardly discriminating, wouldn’t you say, Noah? The last thing we need is more unemployed scientists who will work for peanuts. I think there’s a finance paper in that somewhere.
Which brings me to the article that Noah discusses on his blog. It’s about a paper written by Daron Acemoglu and James Robinson about how all you really need to be a successful entrepreneur is an excess of hard work! Go Team America! I won’t even go into all of the details right now because it would take too long and my blood pressure wouldn’t like it.
Noah gets how faulty the reasoning is in this paper:
Given these assumptions, the result of the model is not hard to predict – when you let losers lose and winners win, innovators try harder. Not exactly a shocker, given the assumptions.So is this model counterintuitive? I argue: No. Instead, it is intuitive. It seems to have been built using intuition, and its results confirm commonly-held beliefs about the difference between “cutthroat” and “cuddly” capitalism. So I don’t think it makes much sense for Acemoglu and Robinson to defend their research from the bloggers by saying that the purpose of academic research is to be counterintuitive.OK, time for my second point. Mark Thoma wondered why Acemoglu, Robinson, and Verdier get the result they get. Isn’t it true that entrepreneurs have to take a lot of risk? And doesn’t that mean that social insurance, which reduces risk, should encourage entrepreneurs to take more risk, not less? How is it that Acemoglu et al.’s model avoids this effect?Here is the answer: it’s built into the math. The authors assume that the only cost of entrepreneurship is effort. From the paper:We assume that workers can simultaneously work as entrepreneurs (so that there is no occupational choice). This implies that each individual receives wage income in addition to income from entrepreneurship[.]
In other words, the authors have assumed away much of the risk of entrepreneurship! A failed entrepreneur gets paid exactly the same wage income as a worker who doesn’t try to be an entrepreneur at all! This automatic wage income reduces the risk of entrepreneurship substantially, and makes social insurance much less necessary for reducing risk.How realistic is that assumption? Well, in the real world, entrepreneurs in rich countries have limited liability, and can pay themselves wages out of their start-up capital. This means that many entrepreneurs can earn a wage even as they work to start businesses. But this wage is often much less than they could have earned otherwise, and if their business fails (a statistically likely event), they will be unemployed. So the “no occupational choice” assumption probably reduces the risk of entrepreneurship, relative to the real world.Also, the authors assume that entrepreneurs do not put up any of their own wealth as startup capital for their ventures, and they assume no heterogeneity between worker/entrepreneurs. This means that it is just as easy – and no more risky – for a poor person to start a successful company as for a rich person to do so.So to sum up my second point, Acemoglu, Robinson, and Verdier have assumed a model in which:
- Entrepreneurship is low-risk,
- Rich people have no advantage over poor people when it comes to starting companies, and
- Your probability of success depends entirely on how hard you work.
(No wonder liberals were not happy about this model, eh?)So to combine my two points: When it comes to this kind of modeling, what you get out is pretty much what you put in. If you start off with the intuition that success is a function of how hard you work, and how hard you work is a function of how much the government will let you keep your hard-earned gains – in other words, if you start off with the intuition of pretty much every middle-aged conservative guy in America – then your model will probably spit out the result that countries face a tradeoff between redistribution and innovation…again, fitting perfectly with the intuition of pretty much every middle-aged conservative guy in America.
Pretty much. Let me just add that the likelihood of this miraculous success coming out of the biotech world from all of the laid off scientists who don’t have the money for the start up costs to become entrepreneurs is vanishingly small. You might be able to make this case of Silicon Valley type entrpreneurships. In that case, coding and building new hardware are fairly predictable kinds of endeavors. You *can* work extra hard and code yourself into exhaustion and the results of your coding depend solely on your energy level and cleverness. You *can* design the next great iPhone device given Moore’s Law and the industrial engineers at Foxcomm who will rejigger the machines to your exacting specifications. But this doesn’t work in biotech or pharmaceuticals because we don’t know what the f^(* we’re working with yet.
What the finance people don’t seem to get yet is that if they force the scientists into the entrepreneur environment without a safety net of any kind, they are going to get back LESS, not more innovation than they would have gotten than if they had provided us with steady salaries over a long period of time. The problem is that it is hard to prove a negative. There will be some innovation. Some people will get lucky, independent of how much work they do. Some people will have a breakthrough and it will seem miraculous. The problem is that biology is so big and contains so many unanswered questions that the number of innovations that come out of just allowing people to work themselves to death without any visible means of support is going to be tiny compared to what the actual output could be. And maybe that’s not important to the financiers who only want a handful of blockbuster drugs to make their billions off of. But for patients with crippling diseases of all kinds, this period of just letting hard work be the main propulsion for innovation is going to be a tragic missed opportunity.
For some inexplicable reason probably having to do with the necessity of rationalizing why financiers and shareholders should take everything that isn’t nailed down to the detriment of everyone else’s livelihoods, the middle aged conservative is convinced that the rate limiting step when it comes to biotech is hard work. If only those overpaid scientists would get off their fat asses and crank out more stuff or whatever it is they do in those labs, there would be more innovative discoveries to sell! What’s really amazing is that they seem to have forgotten the billions of dollars large companies have spent on research on drugs that were never approved. How is cutting back the research budget to zero supposed to work anyway?? One of these days, the middle aged conservative guy’s perspective is going to become discredited. It will happen just about the time France and Germany become the world’s leaders in biotech. While we starve the innovators, the cuddly governments will keep the fires going, allowing more innovation to happen without killing the innovators from exhaustion and bankruptcy.
Why wait? Why not just have the government step in now and put our scientists to work? Pay them decent salaries, put a floor beneath them so they don’t fall through it and fund research. Sooner or later, it’s going to have to happen. It is time for American finance people to come to terms with biological research as being a fixed cost, not a variable one and certainly not one that can do it all by itself. Ain’t gunna happen.
Meanwhile, Derek Lowe at In the Pipeline reports on the latest casualty of the entrepreneurial biotechs:
It hasn’t been good over at Targacept. They had a big antidepressant failure a while back, and last month ended development of an ADHD drug, the nicotinic acetylcholine receptor ligand TC-5619.
They cut back staff back in the spring, and the CEO departed. Now the expected has happened: the company has apparently laid off everyone in research, and is conserving what cash it has to try to get something to the deal-making point. A sad, but familiar story in this business. . .sometimes companies come back after this point, and sometimes the event horizon turns out to have been passed.
More hard workers, probably a lot of Asians, scrambling for work on a daily basis is not a winning formula.
Filed under: General | Tagged: Asians, Daron Acemoglu, entrepreneurs, finance, James Robinson, MIT, Noah Smith, Targacept, The Atlantic |
The Confluence 
I horrified him, this thought: the ancient gigantic cannibal near-man flourishing now, ruling the world once more. We spent a million years escaping him, Frink thought, and now he’s back. And not merely as the adversary… but as the master.
“The man in the the high castle” (1962)
Philip K Dick
Not forever. The middle aged conservative will be around just long enough to ruin our careers but will eventually die off to be replaced with “Oh My God! We’re dying of staph infections!! We need to fund research!”. It’s coming.
Yes. Sadly, old age tends to follow middle age and opportunistic infections love old age, even bankers.
Sadly no, what with the print and broadcast news media doing all in their power to perpetuate the species.
Sooner or later the species adapts or dies. I’m betting on adaptation.
“It horrified him” instead of “I horrified him”. Messy monday 😛
When the Soviet Union collapsed not so very many years ago, there was a great deal of concern about the security implications of a lot of unemployed nuclear scientists and engineers and what some of them just might be desperate enough to do if their situations became sufficiently dire. I’m surprised there isn’t an equivalent level of concern about pharmaceutical and biotech workers in the US and Europe, but then I don’t move in those circles anymore. There is, after all, always a market for weaponizable technology.
It depends on your definition of “win”, I suppose.
r, btw what do you think are some of the best atheist/science movies? I was thinking “THX-1138” (1971).
I don’t know. I don’t go out of my way to look for atheist movies. I think I need to clarify that I am more of a panentheist/agnostic. I’m only an atheist when it comes to abrahamic religions. I’m pretty sure that THAT god never existed.
But Brook is an atheist and I understand where they’re coming from so that’s why they’re welcome here.
Please describe this theistic god that you are pretty sure about.
Agnostics are comfortable with ambiguity. We believe in possibilities.
But that god in the bible? Never existed. I’m pretty sure we can prove that.
If I could prove that, I would keep it to myself.
You see, I have heard of the traditional fate of the bearer of bad news. 😈
There is plenty of incontrovertible evidence that the god of the old testament is a complete fabrication. I’d be more than happy to discuss the evidence with you but you can find most of it yourself on YouTube and in any discussion of Mesopotamian deluge mythology. But it’s more than just the mythology of the great flood. There’s a lot more to it than that. There’s Canaanite mythology, Yahwehian mythology, the Babylonian influences, etc,etc, etc. it’s all there. That god was the synthesis of three competing gods. Biblical scholars have known this of more than a century. You can choose to believe it if you want. You would just be aware that what you are worshipping is an amalgamation of ancient levant area deities.
If you want to believe anything of the Judeo Christian tradition, stick to Jesus and the verified epistles of Paul, the Gospl of Thomas and that’s about it. The rest is just made up. That’s why I keep saying god is overdue for a rewrite. The first draft got almost all of it completely wrong.
“Agnostics are comfortable with ambiguity. We believe in possibilities.”
Ok, how about an approximation then. A theistic entity which intervenes in anyone’s life at will via
1. The subjugation of physical law such as FTL communication, sidestepping of symmetry laws we accept as reality-based.
2. Massive energy use that we cannot detect (heat).
3. Incalculable mass to zero mass, basic timelessness according to relativity.
4. The absence of a local, realist model that would explain the above states.
just a few off-the-top, what’s not to love?
You gotta prove it. Then you have to prove that THAT deity approves of the three thousan year old bronze age text that religious nutcases are determined to shove down your throat.
Everything eventually is explainable. It’s amazing what we know today that people thousands of years ago had old wives ales about or explained away as miracles. Science has come a long way. What seems like incomprehensible and only accounted for by a deity today may be a simple law of nature that everyone accepts (well, except for the fundies) 100 years from now,
If you are looking for God in things that cannot presently be explained, you are probably looking in the wrong place.
In any case, I am neither a cosmologist or a theologian. I’m just a humble scientist, stuck between knowing too much and not enough. I know enough to evaluate evidence though and I agnostics settle for nothing less.
Actually, I agree that most of the OT represents an often hideous misunderstanding of God, influenced by the three mythic traditions you mentioned. I would suppose that if one or more beings exist outside the physical Universe we know, any attempts on our part, or His/Her/Their part, to communicate would produce imperfect understandings at best. On our end, such attempts would be influenced, mostly for the worse, by our social-primate heritage (e.g., we would tend to assume that a god or gods would be as touchy about respect as an alpha primate would be).
But I ain’t doin’ any rewrite. To quote Rick Blaine out of context, “I stick my neck out for nobody.” 😈
Well, I somehow managed to put that reply in the wrong place.
Have I mentioned today that WordPress sucks like the surface gravity of a neutron star? 😛
Btw, you are assuming that a god, if it exists, is interested in intervening on your behalf, in a rather arbitrary fashion, I might add. There’s no particular reason to believe that such is the case. It might be something you fervently hope for and desperately want to believe but I see no evidence that such is the case. You must entertain the possibility that either god has no interest in your particular life more than any other life in the universe or that god chooses to make itself present in ways you do not presently comprehend.
In which case, it doesn’t do you any good to be judgmental or treat people badly because you may be stuck here on this planet left to your own devices while god does his or her own thing. In the absence of a deity, your job is to make the most of the time you have and to leave the world a better, happier place and not worry about what comes after.
I wonder how many of those humans who do accept the idea of death as The End, no ifs, ands, or buts are truly content with that, rather than wearily resigned to it because they have been convinced that no rational human can believe otherwise.
I would also expect that many of the humans who are wearily resigned would pretend to be content, because one is not supposed to admit to being afraid or weak, especially if one is male.
Hence, I suspect we are simply going through the latest phase of waning belief, in a series of waxings and wanings of belief which has characterized Western civilization since the Enlightenment began to percolate down to the masses. I would assume that there is some inherent human desire to believe in one or more gods and/or afterlives, which is naturally stronger in some people and weaker in others, just as the desire for food is naturally stronger in some people and weaker in others. Otherwise, one would expect that as grounds for questioning the foundations of religions became stronger, the prevalence of religious faith would weaken more or less steadily, until it vanished. Instead, it wanes and then waxes again, then wanes again, etc.
Also, witness the Soviet bloc–as soon as the Communist regimes, and their repression of religion vanished, back religion sprang (though as we both know, that hasn’t been all for the best). I rather doubt that could have happened if the will to believe were entirely a product of social conditioning.
But then, the smile has left your eyes.
(Oops, wrong Asia song title.)
But then, only time will tell.
“In the absence of a deity, your job is to make the most of the time you have and to leave the world a better, happier place and not worry about what comes after.”
If nothing comes after, then where is the reward for such altruistic behavior? If there be no artificial rewards for altruistic behavior, and/or no artificial punishments for sociopathic behavior in this life or any hypothetical afterlife, and sociopathic behavior naturally reaps rewards, as the continued success of the banksters, among a legion of other examples, makes clear–then are not the sociopaths right after all, and being nice is for fools?
You want me to be a good trained seal? SHOW ME THE FISH. 😈
Looks like the Monster from the Id came back in that last post.
But then, I guess he’ll always be a part of me–a part who believes, rather like Batman, that people will prey on each other unless they are frightened into avoiding predatory behavior.
What makes you think there has to be a reward for YOU for altruistic behavior? The point of it being altruistic is that it is selfless. You do things for people because it makes their lives easier and happier. Happiness is not a finite resource.
As for predatory behavior, it ALWAYS backfires on the practitioner. It might not be immediate and it might affect a lot of people negatively at first. But it can never last and the reasons should be obvious.
Whether or not you are resigned to death doesn’t stop its inevitability. And you’re not going to know what happens next until you get there. So, why worry about it? Why not focus on the here and now?
Very well, why is true selflessness, as you define it, NOT foolish?
Define foolish.
You seem to have added something to your last comment while I was replying.
If the here and now doesn’t, and can’t, have any value for me, why focus on it beyond whatever degree of focus is necessary for survival?
You seem to assume that this world and our lives in it can be made worthwhile. What if the metaphorical deck is so stacked against us that it can’t be made worthwhile?
Foolish, here, means you won’t get anything, tangible or intangible, of enduring value in return for your effort.
Or foolish can also mean spending my life visiting anyone’s political blog, especially if this is indeed my only life.
I think I need a break from political stuff. Maybe only for a day, maybe for the rest of my days, maybe I’ll compromise and just lurk. I don’t know yet. Good luck to you and your loved ones. We’re all going to need it.
OK, I missed one thing.
“Predatory behavior ALWAYS backfires on the practitioner”?
Proof, please?
Ahhh, I see the influence of the Clown here.
Yes, I do believe that predatory behavior always comes back to bite the practitioner. Look at Pol Pot, the French Aristocracy, the Soviet Union, the bankers of the 1920’s. Eventually, they ALL get what’s coming to them. It will happen this time as well.
If you want to hurry up the process, you need to protest and get angry. *I* did that. I will keep doing that. The Clown will tell you not to do that because it is disrespectful of authority, just what the predators want to hear.
As for foolishness, I prefer to follow Tolkien on this. Live like a hobbit. You don’t need wealth to be happy. You shouldn’t expect anyone’s gratitude. If you have enough to live comfortably and you aren’t sacrificing your own ability to take care of yourself, then what does it matter? BUT you should fight against the predators who would keep anyone from living comfortably.
Check out if you want but if you continue to listen to what the klown is telling you, then maybe you should ask yourself who he is working for. The only way you triumph against the bad guys is by fighting back by speaking up and protesting. If someone tells you NOT to do this, what is their agenda?
Look, I don’t have time to deprogram people who have been hanging out with the Clown too long.
If you don’t want to despair about losing to the predators, don’t hang out there. The way you fight back is to protest and speak up, neither of which the Clown approves. In fact, he offers no solutions to you except picking on people more vulnerable than yourself. That’s selfish and unkind and if you are a Christian, Jesus would most certainly NOT approve.
You don’t have to spend time at any blog but you are not allowed to spread the ultra conservative message of unlimited meanness and selfishness and judgementalism on mine.
I liked you better when you were the Ivorybill
I want to clarify that I do not practice the ultra-conservative message; I simply don’t see why it’s pragmatically wrong, as distinct from morally wrong. I don’t see any worldly negative consequences falling on, for example, Geithner.
Nor do I intend to follow the Holers’ example of picking on people even weaker than myself, assuming I could find someone weaker.
I don’t plan to become a predator myself.
I have simply reached a point where fighting the predatory tendencies of other humans, rather than dodging them, seems as pointless as fighting the Second Law of Thermodynamics. Even when a movement for change “succeeds”, it simply replaces one set of predators with a different set of predators, with a different ideology to excuse the predations. The Jacobins and Communists come to mind.
I think we talking apes are simply too deeply marked by our behavioral adaptations to survival in the amoral and pitiless biosphere, to behave better than that. When we built civilization, we brought the law of the jungle with us, etched into our DNA. I don’t think we’ll adapt beyond that in time to save ourselves.
The overall morality of theistic belief isn’t as interesting as its mechanism, for now.
Whatever. Knock yourself out.
Thing is with these finance guys and like MBA’s they have no conception how it works outside their field. I’m guessing they have a Tom Swiftian view of innovation and discovery in the sciences. So stupid or ignorant that they don’t realize that Victor Appleton was the name of a group of writers authoring the series. The blind leading the blind and everybody else off a cliff.
Our mission, should we decide to accept it, is. . . . to figure out how to make sure that They and Nobody else BUT They . . . are the people who go over the cliff. In other words, how do the rest of us turn
the cliff they hope to lead us off of . . . into their very own personal Buffalo Jump?
The .9999 % have and will continue to have access to excellent health care and drugs They see no need what so ever to lift a finger to see to it others have anything decent, much less similar care or drugs….or schooling, jobs, the list goes on and on
The current tainted steroids scandal is a case in point. This 3rd world lab in MA makes the stuff for 25.00 a shot …Pfizer makes it for 46.00 per shot. Health care for profit Inc buys it from the 3rd world lab of course ( while mostly likely charging the patient the Pfizer price) . Now thousands of people who had back pain are infected with fungal meningitis . This business model will continue…even cries that germs are no respecter of persons and the .999 itself will suffer as well if this continues , will fall on deaf .999% ears. imo
How would Noah Smith like it if there was another continent called Financia and, having an excess of well-trained finance specialists, they all wanted to move here and teach finance?
lol…it’s AMAZING how that would change someone’s perspective ain’t it .