Monthly Archives: June 2008

Zen and the art of entrepreneurial capitalism

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Many years ago, Robert M. Pirsig’s hippy cult novel Zen and the Art of Motorcycle Maintenance was one of my favourites.  A few weeks ago I discovered he’d written a sequel in 1991 called Lila: An Inquiry into Morals.  I’ve been reading it as a break from seemingly interminable marking of student essays and exams (now mercifully finished).

Like many a 70s hippy (including me), Pirsig seems to have mellowed and discovered the virtues of market capitalism as he aged, framing it with his trademark notion of Zen “Quality”. 

I found several interesting things about the passage from Lila reproduced over the fold.  One is that Pirsig seems to be channeling Austrian theoreticians (especially Hayek and Popper) without overtly referencing them or seemingly even being aware of their existence.

The other interesting angle, and the main reason for this post, is that it encapsulates a lot of my own thinking about human social and economic organisation especially the role of entrepreneurialism and innovation.  The need to avoid stifling innovation as the primary engine of capitalism’s remarkable success was Hayek’s principal answer to those who argued for socialism or even a strong social democratic welfare state.  I attempted to provoke discussion on this topic in a previous post, but it ended up being sidetracked by a prolonged argument about the virtues or otherwise of the libertarian LDP’s election policies.   It seems to me that the more general issues that Pirsig raises are much more interesting.  In particular, if we accept the general thrust of his argument (as I do), what does that say about optimal forms of social, economic and political organisation (particularly when social and economic activity should be regulated and what form regulation should take)?  And optimal in what sense?

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Strange Attractor

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One thing that I like about the new government is that they seem prepared to co-opt experts from anywhere.

One thing I dislike is that this seems to include some of my favourite bloggers. I am given to understand that Troppo’s own Nick Gruen is often consulted on this and that. Now comes the news that Andrew Leigh has succumbed to the siren song of Treasury. Joshua Gans is a bit misty about it. So am I.

So, as one of The Three Andrews leaves the Senate, another joins the Service. Good luck, Andrew and Andrew.

Missing Link missing again

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While some members of the Missing Link team have subscribed their selections and others have done so partially, others (where are you arts people?) haven’t done so at all. They’re no doubt as flat out as I am with work commitments. In my case it’s finishing exam and essay marking by a strict deadline of COB today. Thus I don’t have time time to supplement team efforts to get today’s edition into a publishable form. Hence no ML again today. With any sort of luck we should be able to return to a more normal format tomorrow (although I’ll be away conferencing next week, so we’ll probably miss a few days then too). Apologies.

Is Barry Jones obsolete?

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Barry Jones is a human search engine. Crawling over thousands of pages of words and numbers, he commits the data to memory and indexes it for regurgitation on demand. "When Mozart’s name is mentioned", he says "a detailed entry appears in the screen in my head, Mozart, Wolfgang Amadeus, (1756-1791), Austrian composer, born in Salzburg …" But who needs a human search engine now that we have Google?

Today almost any educated person can match Jones’ ability to produce names and numbers on demand. For example, what is the population of Australia? Who was the twenty-first president of the United States? What is the capital of Burkino Faso? What is the largest marsupial in Tasmania? Name two members of the extinct marsupial family Yalkaparidontidae.

Being able to answer questions like these from memory is now more of a party trick than a marketable skill. And this raises a question — what other cognitive skills will end up being replaced by technology? Interpreting Pap smears? Translating user manuals? Navigating a cab around London?

With the shift from wetware to software, what will we lose as human beings? Neuroscientists have found that there’s a part of the brain that grows larger in London taxi drivers as they gain experience. If cab drivers move to satellite navigation, will their brains shrink?

In the latest edition of the Atlantic, Nicholas Carr wonders "Is Google Making Us Stupid?":

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I hate to interrupt, however …

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Andrew Landeryou’s enthusiastic blog belongs in a genre all its own: lawsuit-bait. A lot of what he writes is shameless propaganda.

Take this latest effort, for example:

The conservatives had a stunning result in Gippsland.

In recent times, mainly after Nelson’s promises to cut petrol taxes, the OC has been thinking that the good doctor might just have what it takes to survive and even prosper as Liberal leader.

Um … what? Nationals candidate Darren Chester (I wonder if we’re related?) outpolled the Liberal candidate 2:1 on primaries. Oh, and the ALP candidate beat the Liberal candidate’s primary vote too.

In terms of a 3-cornered contest, the Liberals came last. There was, in fact, a swing to the Nationals. A terrible shock in a seat where the Nationals haven’t lost since the days of the Ford Model T.

From hereon in I leave the field to the psephoes and observe in passing that the LDP candidate got 4.6% of the primary vote.

Why can’t Linux beat Windows?

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OK Geeks, I have a question for you.  Tell me where my reasoning is wrong.

  1. Linux is in many respects a superior operating system to Windows, and seems to work perfectly well for people who know what they’re doing as a desktop operating system.
  2. The runaway success of products like the ASUS Eee PC shows that Linux can be made sufficiently user friendly for ordinary mugs to use it – at least as an OS on their backup PC.
  3. There are a bunch of things it seems that Linux continues to do less well.  I haven’t used it – except to boot it from a CD and it seemed to work fine, but I didn’t do much on it – but I understand that there are quite a few details like picking up drivers and so on that can be painful on Linux.
  4. So my main question is why Google and/or a consortium of large firms in the industry (and perhaps elsewhere like Wal-Mart for instance, not to mention Asian governments and businesses) don’t band together to lead an open source initiative to produce a version of Linux that maximises userfriendliness. (Part of the problem is the fragmentation of standards – there are lots of Linux distros out there, so just agreeing on one they’d promote would be very helpful).  IBM spends something like a billion dollars annually on Linux coding, you’d think it wouldn’t take much of a share of this – especially with other firms and individuals chipping in – to get Linux to at least the state that Windows is at.  Windows Vista is a big ugly morass of programming, so now couldn’t be a better time.

So what am I missing?

Joshua Gans and game theory on parenting

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About a year ago Joshua Gans showed me some draft chapters for a book on parenting at which he’d been working away.  To use an expression from the AFL, Joshua has a high ‘work rate’ and he writes blog posts in the morning over breakfast – and perhaps at some other times.  Anyway, in addition to his main blogging site, he’s been musing for some time on his blog Game Theorist about applications of game theory to child rearing.

You can overdo the analogy between parenting and game theory.  We are dealing with little humans, not lab rats.  But Joshua does offer his thoughts without claiming that his perspectives are any more than one way of looking at and thinking about a situation. And there are lots of interesting ideas in the book about techniques for finessing tricky situations.

And I spend a lot of my time tearing my hair out while my wife nags her son to eat, and I tell her that she’s not only not doing any good, she’s making things worse by making his lack of eating her problem rather than his.  All my suggestions boil down to game theoretic approaches – not that you’d need to know game theory to come up with them, you just think of the incentives and try to set them up to get what you’re after.

Be all that as it may, as Joshua tells us on his blog, his book Parentonomics has just been published and you can bid in an auction for the first copy (the price has gone from around $19 to $51 while I’ve written this, so bidding is brisk). Proceeds from your purchase will to the MS readathon (a worthy cause and one of the only ‘athon’ exercises that don’t involve doing something silly or at least useless to raise money – the readathon gets young kids reading at a great rate).  Joshua will then match your donation with his own. (A little game theory there folks!  Or perhaps just a little psychology)

So jump in and bid, and if you can’t spare $52, have a squiz in your local bookshop and tell us what you think of Parentonomics.

Postscript: The book is now yours for just $203 – and $406 to the MS Readathon.

Good Question Barry

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Peter Martin highlights an excellent column by Barry Hughes, but the part of the column I’d stress is not the idea that the RBA shouldn’t be slowing the economy (and as a result increasing unemployment).  As Hughes says, this is appropriate to prevent the current increase in price rises in our economy entrenching itself into inflation.

But as Barry says- referring to Glenn Stevens’ comments:

On this short-term response he cannot be faulted, but what comes after the emergency is controversial. Hitherto, bureaucrats have fudged their unease over recently falling unemployment with a tautology that Australia was coming closer to capacity (the production equivalent of the natural rate). Now, they have been emboldened by rising inflation to break cover.

In addition to Stevens’s judgment of a “pretty fully employed” economy, Treasury said at budget time that future growth would have to be dependent on new productive capacity “rather than any [my emphasis] further soaking up of spare capacity”. In other words, Australia has reached its unemployment limits.

These thoughts have been lurking in the background for some years. For example, for more than three years since February 2005 (when unemployment exceeded 5 per cent) the bank has warned about a need to keep spending growth within the limits of potential gains in output. Economists recognise this as code for no further falls in unemployment.

But is higher inflation a one-off from external food and oil shocks or is it a consequence of an overheated economy? As Stevens admits, wages still show no general symptoms of overheating, while the issue of the whereabouts of full employment remains unsettled in the research literature.