Monthly Archives: September 2008

The Future of Economics: The Arational and the Irrational

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Back in 2000 The Economist ran an article titled “The Future of Economics” (4 March 2000, p. 80). It was largely a gloss on a symposium on the same from the Journal of Economic Perspectives (vol. 14, no. 1, Winter 2000). The authors acknowledged that economics was a faltering field. Setting aside the proposition that economics may simply have run it’s course and be into its dotage of diminishing returns, the article considers two possibilities for a way forward:

David Colander of Middlebury College, in an article that looks back on the present from an imagined 2050, blames the current discontent on the orthodox general-equilibrium model that underlies most of today’s economic theory. He favors a shift from the current approach, which has been called “loose-fitting positivism” (propose a model consistent with standard assumptions, then test it), to one based on “loose-fitting pragmatism” (forget about canonical principles, just search for patterns in the data).

Such an approach, he says, would be consistent with “the rise of complexity science within the scientific community generally.” Researchers sitting at their computers, subjecting data to a withering barrage of statistical analysis, would still hope to come up with laws of a sort, or regularities at any rate. But these “laws” would be regarded as provisional and ever-shifting: indeed, the claim is that changeless underlying patterns do not exist. Complex systems expand and evolve; even at the most fundamental level, these patterns are temporary. But whether this approach could still be called “economics” is debatable.

The second approach is much easier to reconcile with traditional methods. Its most celebrated exponent is Richard Thaler of the University of Chicago, who has also written a paper for the symposium. Mr. Thaler agrees that the canonical principles of orthodox theory have led economics astray, but he believes these mistakes can be put right. He seeks, in other words, a tighter-fitting positivism. You improve the fit above all, he would argue, by putting a more realistic account of human cognition at the center of the theory.

Orthodox theory famously assumes that people are rational. In reality, they are not. On the other hand, they are not crazy, or crassly incompetent — in other words, their behavior is not random. If economics could try harder to recognize that people try to be rational, but in certain, often predictable, ways fail to be, the positivist approach would have a better foundation. In essence, what Mr. Thaler calls for is a marriage, or at least much closer cohabitation, between economics and psychology.

I have thought of this article frequently since reading it back in 2000 when it was first published. Given the spate of books along these lines, especially the second, I’d have to say that this was one of the more perspicacious articles that I’ve ever read.

The first approach is an example of Petabyte Age type thinking, eight years before Wired put it on the cover. But of course it is an idea that had to incubate in the rarified world of advanced theoreticians for years before any eruption into the popular conscience. The main offering in this area would be Steven Levitt and Stephen Dubner’s Freakonomics (2005), though their book is not a fully atheoretic inquiry so much as putting of large questions to the test of large data sets. More to the topic would be Ian Ayres’s Super Crunchers: Why Thinking-by-Numbers Is the New Way to Be Smart (2007), though the fact that Mr. Ayres used the very methods he describes in his book to arrive upon a title casts a great deal of doubt on the soundness of said methods.

As for the build a better model of the economic corpuscles approach, it seems to have advanced along far enough that it is now also ready to be packaged up for mass consumption. And of course the psychologists have much more lucrative options in publishing than the mathematicians and computer scientists.

Judging by some of the key phrases in the Economist article (the predictably irrational stuff) I was pretty sure that they had in mind Dan Ariely’s thinking, published as Predictably Irrational (2008), but it turns out that Richard Thaler is, along with Cass Sunstein, the author of Nudge (2008). Rounding out the most omnipresent trio is Tim Harford’s The Logic of Life: The Rational Economics of an Irrational World (2008). Also on the list of offerings along this line would be Ori and Rom Brafman’s Sway: The Irresistible Pull of Irrational Behavior (2008) and Michael Shermer’s The Mind of the Market: Compassionate Apes, Competitive Humans, and Other Tales from Evolutionary Economics (2007).

So that’s the future of economic study. Either a discounting of human rationality in favor of the system effect of irrationality or allowing rationality to drop out in favor of the system effect of economic thing-in-itself.

Patterned Lawlessness

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Back in July Will Wilkinson made a point that I thought was interesting at the time, but that has stuck in my grey matter and is gradually working it’s way toward becoming a fundamental component of my worldview (“Note About Rational Scofflaws,” The Fly Bottle, 11 July 2008):

I wonder how many drivers exceed the speed limit basically whenever they judge that it won’t cause anybody any problems. I’d guess, approximately, all of them. Also, there are very clear laws about, say, using turn signals, or using turn signals when parallel parking (do you do this?), or not taking a right hand turn on red lights when it is marked, not double parking, even if you’re just going to be one minute while you fetch your latte. And so on. When’s the last time you jaywalked? Lunch? People are more or less rational and tend to respond to incentives, and therefore the roads are a zone of patterned lawlessness. We all know what infractions the cops care about — how much over the speed limit is too much over, etc. — and we tend to respond accordingly. We even tend to internalize and moralize the rules whose expected cost of violation is relatively high. It’s more efficient that way. And thus our huffing indignation is easily riled by those who face different incentives and so flout different rules than the ones we flout without reflection.

This morning on my ride to work I coasted through a stop sign in front of a police cruiser that was approaching from the road to my right. I gave a little embarrassed smile and a little wave. She made a little disapproving face and waved back. It’s anarchy I tell you. Anarchy! I got to work in four minutes.

I have always thought of anarchism as a proscriptivist political program. It’s never occurred to me to consider anarchism as a positivist description of what’s actually going on behind normal law-conforming behavior.

People have an imagination of the law as somehow an ultimately hard thing. We hear expressions like “the iron law of …” or we use the same word, “law,” in physics as we do in our social imaginings. By linking the law with morality and construing morality as partaking of the metaphysical, the associations flow back the other direction as well.

And reference to the law would serve as a good explanation in most instances. Why does everyone so assiduously follow the lines painted on the roads, or when they drive over them, do so in such a regular fashion? And thus we might explain the vast middle hump of the bell curve of driving behavior. But then someone swerves over the line into oncoming traffic. To account for all driving behavior — the outliers as well as the vast middle of the curve — another theory with more breadth is required.

I also like the way that this theory strips morality of its metaphysical pretensions, paints the metaphysics as mere rhetorical device, or sees the inclination to render our ordering prescripts as fundamental as merely a pragmatic shorthand, or as the ideological reification of particularly strong emotions. Really we just react in a pragmatic way to the incentives that we find around us. It should be noted that some of those incentives are natural and some institutional. This is perhaps part of the basis for distinction, a la Elliot Turiel, between prohibitions of morality and prohibitions of social convention.

Patterned lawlessness is also a description of affairs that comports with the existential account of law-conforming behavior. So entrenched is our notion of the law as somehow inviolable, or so cowed is our thinking by the high wall of consequence erected by the law that we are prone to see dictates of the law as things about which there simply is no other option but to do as we are told. Existentialism was born in part as a reaction to the horrors of amorality and unreason to which people were pushed at the behest of state bureaucracies in the Twentieth Century, namely the Somme, the Holocaust. Existentialism contains the admonition that at every moment we stand free to do otherwise, even where the law is concerned.

Federal Reserve Balance Sheet

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Amid news that the Federal Reserve is establishing this multi-billion dollar line of credit, extended that many billion in overnight repurchase agreements, contributed $30 billion to the J.P. Morgan buyout of Bear Stearns and spending $83 billion for the purchase of A.I.G., the question lingering in the back of my mind is how is the balance sheet of the Federal Reserve looking right about now. The Federal Reserve doesn’t have unlimited resources at it’s disposal. It has about $800 billion in assets which only buys it a limited amount of credibility. It’s not all that much relative to the scale of modern financial flows.

Anyway, wonder and The Wall Street Journal will deliver (Blackstone, Brian, “U.S. Moves to Bolster Fed Balance Sheet,” 18 September 2008, p. A3 [subscription required]):

Federal Reserve assets, The Wall Street Journal, 18 September 2008

The Treasury, responding to worries that the Federal Reserve could be running out of financial ammunition to deal with the credit crisis, moved to reload the Fed’s gun with $100 billion worth of bullets.

The central bank’s bailouts of Bear Stearns and American International Group Inc., as well as lending programs created in the past year, are putting the Fed’s once-mighty balance sheet at risk. Financial markets have begun to fear that if nothing is done, the Fed might have trouble putting out fires in the future.

The Fed held close to $800 billion in Treasury securities a year ago. By last week, that had dwindled to just under $480 billion. The amount drops to less than $200 billion if the $200 billion pledged to the Term Securities Lending Facility — a Fed lending program created in March for investment banks — and the full $85 billion line to AIG are accounted for, Fed watchers say.

“The tally is so low that it is becoming imperative for the Fed to take actions to enlarge its balance sheet,” said Tony Crescenzi, a strategist at Miller Tabak in New York.

When the Fed lends money to a financial institution, it usually sells an asset such as Treasurys separately in the market and absorbs the cash created by the loan. The goal is to keep a proper level of money flowing through the financial system. If the Fed were to run too low on Treasurys to conduct these operations, it could lose its ability to drain money from the banking system and control inflation.

On Wednesday, the Treasury announced a temporary program to bolster the Fed’s balance sheet and sold $40 billion in 35-day Treasury bills. It announced later in the day that it would hold two additional auctions of Treasury bills on Thursday totaling $60 billion. In effect, Treasury is auctioning off more securities than are needed to fund the federal government, and carrying out the draining function in place of the Fed. The cash from the Treasury’s sales is parked at the Fed.

Of course the government has infinite money, but it comes at a cost. As long as the Fed coffers are topped off, Chairman Bernanke is his own man. But already Federal Reserve assets are approaching levels where he will increasingly be at the behest of Treasury Secretary Paulson and House Financial Services Committee Chairman Barney Frank.

Et Tu, T-Bills?

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The yield on Treasury bonds went negative yesterday for the first time in history. Investors are so desperate to avoid risk that they would rather a known small loss than lend to an unknown. Reuters has considerably more information on the state of public sector debt risks and they make it sound much worse than the passing reference in the Financial Times (Siew, Walden, “S&P Says Pressure Building on U.S. ‘AAA’ Rating,” 17 September 2008):

Pressure is building on the pristine triple-A rating of the United States following a federal bailout of American International Group Inc., the chairman of Standard & Poor’s sovereign ratings committee said Wednesday.

…

The cost of insuring 10-year U.S. Treasury debt against default rose Wednesday to a record high, a day after the government rescued insurer AIG with an $85-million loan. …

Ten-year credit default swaps, or CDS, on Treasury debt widened three basis points to 26 basis points, according to data from CMA DataVision. This means it costs $26,000 per year to insure $10-million of U.S. Treasury debt against default.

Five-year credit default swaps on Treasury debt were steady at 21.5 basis points. That compares to 9.8 basis points on German five-year CDS and 13.2 basis points on German 10-year CDS, CMA said.

A graph of various CDS rates would be a visual of the rise and fall of the great powers.

Capitalist Systematics and Individual Freedom

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In his economic speech on Monday Senator McCain had the following to say about the present financial crisis:

The top of our economy is broken. We have seen self-interest, greed, irresponsibility and corruption undermine the hard work of the American people.

Then on Tuesday morning he said to Joe Scarborough:

Wall Street has betrayed us. They’ve broken the social contract between capitalism and the average citizen and the worker. … This is a result of excess and greed and corruption. And that’s exactly what is plaguing Americans today.

I imagine that a lot of people would call me a leftist and a socialist, but from these two comments it seems to me that John McCain must have a pretty contorted idea of what exactly capitalism is underneath the rhetorical hood.

What’s happening on Wall Street isn’t a corruption of capitalism. It’s not that people are angles and in capitalism we’ve finally found an economic system equal to ourselves. The genius of capitalism is that people are greedy, self-interested wretches and capitalism is a system that channels their greed into social good. What’s wrong with what’s going on with the financial system in recent weeks is not that financiers are greedy, or even excessively greedy, but that the system is rigged wrong.

When Democrats call for a new regulatory regime, this is what they are calling for: a different arrangement of the system. Different prohibitions, different incentives, different inducements. It’s the Nudge approach. Align the incentives right and then laissez faire.

The alternative to systematic change is the reengineering of the human heart. And proposals to change the hearts of men are not very conservative. This is why capitalism and liberalism are so closely conjoined. Capitalism is indifferent to the characteristics of the corpuscles that comprise the system. It is the economic system most compatible with self-determination because it doesn’t require people of any particular character to function. It’s even sufficiently robust as to be compatible with extremes of behavior. Other systems less fault-tolerant and rely for their sustainability on the virtue of their participants. As such other systems maintain an interest in the condition of the souls of their members. Some see this as a virtue of these alternate systems.

Recent weeks don’t argue my case very well. It would seem that capitalism is in fact not very robust and in need of quite a bit of extra-systematic shoring up. But that’s owing to fifteen years of willful neglect. Professed admiration for capitalism on the right is not so compatible with the sustainability of capitalism. If you get the system right, you don’t have to worry about the character of the people.

But this is one of the things that’s distinct about Senator McCain. He isn’t that into leaving people alone. He’s a proponent of a particular type of civic virtue and is interested in cajoling people, even cajoling them rather convulsively, into demonstrating his brand thereof. And on the right more generally opposition to business regulation is so inflexible that social engineering is the acceptable alternative.

Not So Fast on the Moral Hazard

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Last week American International Group requested assistance in the amount of $40 billion from the Federal Reserve. This was rejected only to have A.I.G. come back with a second request, this time for $75 billion. Over the weekend the Federal Reserve and the Treasury decided to let Lehman Brothers fail. On Monday and today the editorial pages were full of adulation about the reinstantiation of the rule of moral hazard. “If Lehman is able to liquidate without a panic … the benefits would include the reassertion of ‘moral hazard’ on Wall Street.” (“Wall Street Reckoning,” The Wall Street Journal, 15 September 2008, p. A22) “It was a brave decision. By abandoning Lehman Brothers, a 158-year-old piece of Wall Street furniture, and refusing to remove their hands from their pockets when Merrill Lynch came calling, Hank Paulson, US Treasury secretary, and Tim Geithner, governor of the Federal Reserve Bank of New York, had one of the busiest weekends of dispassion on record.” (Persaud, Avinash, “Lehman Had to Fall to Save the Financial System,” Financial Times, 16 September 2008, p. 13).

But then on midday Monday, New York state started waiving insurance regulations to allow A.I.G. to make a complex set of financial transfers to try to gather up enough collateral to cover it’s debts at a downgraded credit rating. At midday today when it started to look like a private bailout package being negotiated between J.P. Morgan and Goldman Sachs was faltering, the Federal Reserve stepped in to assist in the negotiations. Then it appeared that the Federal Reserve would be playing a key role in the package, but Fed spokesman was declining comment. Now, late this evening the Federal Reserve is announcing that it’s not going to be facilitating a private loan to, but outright buying a controlling interest in A.I.G. (de la Merced, Michael J. and Eric Dash, “Fed Readies A.I.G. Loan of $85 Billion for an 80% Stake,” The New York Times, 16 September 2008):

In an extraordinary turn, the Federal Reserve was close to a deal Tuesday night to take a nearly 80 percent stake in the troubled giant insurance company, the American International Group, in exchange for an $85 billion loan, according to people briefed on the negotiations.

In return, the Fed will receive warrants, which give it an ownership stake. All of A.I.G.’s assets will be pledged to secure the loan, these people said.

The Fed’s action was disclosed after Treasury Secretary Henry M. Paulson and Ben S. Bernanke, president of the Federal Reserve, went to Capitol Hill on Tuesday evening to meet with House and Senate leaders. Mr. Paulson called the Senate majority leader, Harry Reid, Democrat of Nevada, about 5 p.m. and asked for a meeting in the Senate leader’s office, which began about 6:30 p.m.

The Federal Reserve and Goldman Sachs and JPMorgan Chase had been trying to arrange a $75 billion loan for A.I.G. to stave off the financial crisis caused by complex debt securities and credit default swaps. The Federal Reserve stepped in after it became clear Tuesday afternoon that the banking consortium would not be able to complete the deal.

Extraordinary indeed! It would seem that the Federal Reserve and the Treasury aren’t so bullish on moral hazard after all.

The Other D-Word: Default

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How bad is the current spate of financial upheavals (the federally backed buyout of Bear Stearns, the federal takeover of Fannie Mae and Freddie Mac, the hasty buyout of Merrill Lynch, the bankruptcy of Lehman Brothers, the impending joint federal-private bailout of American International Group)? In trying to explain the seeming double standard in the actions taken by the federal government in response to Bear Stearns back in March and Lehman Brothers this past weekend, today’s Financial Times Comment & Analysis section includes the following tidbit as one of a number of explanations (Persaud, Avinash, “Lehman Had to Fall to Save the Financial System,” 16 September 2008):

Third, there was an alarming factor not present at the time of Bear Stearns’ collapse that argued strongly against new government guarantees. Since the August rescue of Freddie Mac and Fannie Mae, credit markets have begun to price in the possibility of a default by the US government. The implied probability remains a fraction of 1 per cent but it is an unprecedented development.

It’s hard to know what to make of this. It could be just an investors’ parlor game, like the market on Hollywood has-been career comebacks. Or it could just go to show that unhinged paranoiacs aren’t confined to remote cabins. Some work in the bowels of high finance as well. After the past few months it would hardly be the first sign of a less than steady hand on the till. But there it is. The possibility of a default by the U.S. government has gone from beyond the pale to remote.

The End of the Era of Orphanage

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I am prone to say that there is a bigger issue at stake in something like life logging. As Carl Sagan pointed out in Shadows of Forgotten Ancestors, we’re all orphans abandoned at the doorstep of time. Ten thousand generations of humans have inhabited this planet and the most tenacious genealogist can perhaps recount seven of those generations. Indeed, your great grandchildren won’t even know your name. I recall one of Andy Rooney’s commentaries on 60 Minutes where he wandered through a number of old cemeteries, grown over, fences falling, headstones cracked and weathered to illegibility. It was obviously a very elegiac piece. He ended it by saying that we ought to make an indelible record of every person who’s ever lived. And we ought to. There was a time when we had to be pragmatic and pragmatism necessitated a massive forgetting. The realm of what’s pragmatic has grown. Time to stop forgetting.

I watch all the animals that scamper about the city and it is horrible that they lead such anonymous lives. They live beautifully without making an impression, they fall ill and there is no aid, they die without a thought from their fellows and their corpses are left where they fall. Once I saw a documentary in which a paleoanthropologist pulled a hominid skull out of a drawer and held it next to the skull of a saber-toothed tiger so that the two fangs of the tiger skull straddled the occipital bun of the human and lined up perfectly with two small holes in the back of the little human’s skull. Of those ten thousand generations, perhaps the majority were the lives of humans led as animals: noble, but uncelebrated lives of struggle leading to unmourned graves. Every one of those lives were ones of immense drama, and every one necessary to carry us down to the place we find ourselves today, and yet nearly to a one, utterly gone. And despite all our advancements, the lives of almost everyone alive today are not one iota less anonymous. In life, a titan; in death, dust.

Sometimes I am prone to a great man theory of history: that we masses are indebted for all of our modern day prosperity on an incredibly small number of geniuses without whom none of it would be possible. We common folk are parasites upon their achievements. But then I consider this world into which we are born. We just found it as it was, fully build. Massive buildings, sprawling cities whose assessed value runs to the trillions of dollars, public works projects the scale of which is baffling. I am dependent for my protection from the elements upon a building. Where this building came from, I have no idea. I have no idea who built it. I have no idea who first wanted it and commissioned its construction. I have no idea when the presumably original utility basement was remodeled into a living space. I have no idea how it was handed down and eventually would up with it’s present owner. As Graham Robb points out in The Discovery of France, even what we take to be untrammeled nature has already been drained, logged and contoured by generations so forgotten that we can no longer detect their impact. Countless trillions of person-hours have gone into making the world what it is, almost all of them completely forgotten. We just found the world as it is and don’t even consider it. It is Newton’s old, “If I have seen so far, it is because I have stood on the shoulders of giants.” There is a grandeur in the accumulated accomplishment of all the forgotten people who have carried the species down through the ages to deposit us were we have found ourselves. They should get their names etched in the base of their great accomplishment. Perhaps life logging will result in a certain solipsism, but in other sectors, perhaps it will chip away at a solipsism from which we already suffer.

But then, but then …

Atheism is more than just one belief about the nonexistence of the gods. It is a habit of mind. Once one has ceased to believe in god, one has only started to be an atheist. One must then purge one’s self of the thoughts that grow out of god. The need for eternity, the sole valuation of the eternal, the denigration of all things transient — in other words, the denigration of all things — is the most pernicious of such habits. There is obviously something to secularization thesis. Sometimes I think that this rage for permanence is just a bastion of my former Christianity. The insistence on the illusion of eternity is part of the myth of humanity as standing somehow opposed to and outside of nature. But we are as much animals and artifacts of nature now as ever. Perhaps we should live our lives like Buddhist sand mandala: exercises in the transient, in the timely. Coming to terms with becoming, evolution, development, decay and passing is how one is to be in harmony with the world, is it not?

Life Logging: It’s All About the Metadata

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Yes, yes, I agree with John that much of what you presently see that might fall under the rubric of life logging is either boring or pretentious or pornography. I really can’t even make it through the cream of such stuff, say, BloggingHeads. As for solipsism, there’s no sense in complaining: that’s our inevitable future. Suburbanization, materialism, the cultural conditions of capitalism et al. are merely the low tech predecessors to the coming introversion. But look past what it is today to the potential that it holds.

Don’t just imagine me sitting at home eating deli potato salad watching on a screen as Frank sits at home web browsing eating a microwave burrito. One person’s life log 24/7: not so interesting. But let’s cut it up and remix it. Imagine if everyone’s life stream was well marked up with metadata. It’s all timestamped and geotagged. Face recognition software tags all the people, perhaps place recognition software adds even more specific location data (H.M.S. Victory instead of just 50° 48′ North Latitude, 1° 06′ West Longitude). All conversations are parsed through speech to text and indexed. Stats on SIPs are tallied. User tags are attached to add to the raw machine indexes. Viewer rating and hit counts are recorded so we have some measures of quality or import. Now we’re ready for some serious use. And what will that consist of? Probably more than I can conceive, but just to toss off a few ideas:

  1. Hindsight is 20/20. There’s really little problem determining in retrospect what was important and what not. The problem is having the foresight to know what’s important before the fact and be at the ready to capture it. If the technology is there (practically limitless storage) then dispense with the hard part of being clairvoyant about impending events and just record everything. We can edit it down later. And with no pressing limit, why not make it much, much later? Or why bother editing at all? In an earlier incarnation along this path, my thought was that what I wanted was complete sense data capture with, say, a ten minute buffer so that I could go back and edit down. But when the trend in data storage struck me, I thought why trade precious time for picayune space?

    But actually hindsight is not 20/20. It only seems so under the sway of dogma. Really the past is inscrutable. There’s almost no telling what revaluation the endless mulling of the past might produce. In the perennial purges to which the raging simplifiers are want, the data trails of alternate narratives are eliminated. What seems inconsequential from one perspective is everything from another. The meager holdings of a peasant’s hovel, junk according to the great man theory of history, become the stuff of grand narrative at the hands of the archeologist. Who is to say what trend, indiscernible to us in the present, will grow to word-historical proportions in the future, or for that matter, what minutia will obsess future generations.

  2. If you build it they will come. One of the interesting phenomena of the budding age is the growing degree of unintended consequences. If you’ve got something, even something unrefined, then put it out there and a bunch of content scavengers will come along with a mash-up of some sort and put it to a heretofore unanticipated good use. One person’s trash is another person’s treasure. What do we do with all that stuff? I don’t know, but my not knowing is not sufficient. Someone else knows. And that right there is a solid gold law of the Internet age. In a system of synergy, where the whole is greater than the sum of its parts, even inert garbage is a contribution to the potential of the system.

  3. Rashomon. Human recall is notoriously unreliable. If you have five witnesses, you have five different versions of events. Life logging may bring some element of objectivity to things. And once you’ve set aside trying to figure out when to turn the recorder on and when to leave it off, catching the unexpected is less of a problem. Just think how much better When Animals Attack or Destroyed in Seconds television programming we’ll have.

  4. Audience. There is, of course, the blatant issue of audience. Who do we log our lives for? As S. e-mailed me,

    To the right audience, there is value. I would give a lot for the ability to look at a few moments (any moments) of the world from my eyes as a second grader. Or a few moments from the eyes of my great-great-grandmother.

    Maybe my two year old self is not of any interest to strangers, but to my parents, to myself, to my children, my great grand children, it would be more valuable than the Zapruder film, the Omaha beach photographs, anything. As a man with a first baby on the way, I anticipate a wholesale reevaluation of your opinion as to what’s dull and forgettable and what important and in need of preservation.

    And per observation number one, the audience is subject to change over time. If that second grader grows up to be an insurance salesman, than maybe interest remains confined to family. If he grows up to be the next Einstein or the next Hitler, than the audience becomes much larger and how valuable all those things are changes vastly.

  5. The human sciences. Imagine just a few of the questions that the sociologist, the historian, the linguist, the political scientist, the antiquarian might be able to address with such a wealth of information at their disposal. The study of linguistic and meme evolution, presently confined to source material consisting of that most contrived medium, writing, would have a plethora of data. If nothing else, the study of nonce words would be revolutionized. Or think what it would do for the preservation of the dying languages and cultures. They could be preserved as they were lived, not as a graduate anthropology student’s field notes. As linguistic analysis tools become more sophisticated the empirical study of the structure of belief, moral practice and reasoning would become possible without the taint of self-consciousness interfering. Perhaps rhetoric would become a hard science. Historians have shifted their interest from great man and political history to people’s or cultural history, but prior to the fairly recent past, there’s almost nothing for them to go on. For developments in culinary practice, foods, cooking and eating tools, historians have to turn to paintings of banquets and study what’s on the table. What furnishings could you expect to find in a peasant’s house in the thirteenth century? Almost a complete mystery. There is worth in the preservation of the quotidian.

  6. Searching and Sorting. Increasingly we will search and sort by ostension. And the join between me and what I’m looking for is other people. It’s Petabyte Age analytics applied to the issue of human interest. People are too complicated for a theory that delves into the internals, so just engage in atheoretic pattern matching, one person to another. This was damn near the first thing that I wrote about as a blogger (see the “theoretical discussion” of my “Inaugural Post,” 21 June 2004).

    Information isn’t just produced and distributed (as if distribution was unproblematic). It’s vouched for, it’s filtered, it’s branded, it’s packaged with other information, it’s marketed and it’s mapped into a network. As the traditional means of these functions — newspapers, magazines, books, television stations — break down, they are being replaced by newer, more individualized methods. It used to be that a person would turn to their established sources — The New York Times, CNN, Cambridge University Press, et cetera. The editors at these institutions served the role of guaranteeing the veracity of information, of assembling a package of information desirable to a certain market segment, of providing the correct admixture of variability. But these were rather dumb packages aimed at gigantic demographics: the readership of The New York Times or the listeners of NPR. With the tools that the information age is making available, people are able to cut out the editor and design their own customized, unique information agglomerations.

    There is so much going on out there in the world that I could never keep up on it all, so I rely on intermediaries. And really I don’t want to keep up on everything. I want intermediaries who are like me and so filter in things similar to the ones that I would select myself. But I don’t want people too much like me. I want some variety and I want to be exposed to new and unanticipated things. But not too much variety. There are some things that I’m absolutely not interested in. I want people who are different enough to introduce variety, but still sufficiently similar to introduce the right kind of variety. Specifying this in an abstract way is extremely difficult. What if you had to make up a list of tags or SIPs that you wanted to see? Could you think of them all? Do you have the time to pursue the Library of Congress subject catalog? And the problem of variety is that of an unknown unknown: most of the variety that I want is stuff in which I don’t yet know that I’m interested. To define this explicitly would be a chore and one that I probably couldn’t do very well through traditional means, so I do so by ostension.

    And the way to do this is with a personally determined network of trust relationships. I subscribe to RSS feeds, I follow certain bloggers, I read my FaceBook News Feed, I add people to my “interesting library” list on LibraryThing, I trust people in recommendation systems like Amazon.com. Their purview becomes an extension of my own. Each node in my network of associations becomes like a radar picket, seeing out from one horizon to the next. They become my agents, recommending back to me the things in which I might be interested, in exchange for others doing the same for them.

    It’s an extension of what’s always gone on. People have always got together and swapped information. They’ve relayed news and gossip, passed on leads on cheap produce, swapped how-to tips. In the past it was rather easy to find people who were into what you were into because there simply wasn’t that much to be into. There weren’t many games, there wasn’t much by way of entertainment, there were fewer hobbies, there weren’t as many job opportunities because the scope of economic activity was narrower, the publishing industry was small. But just as our culture fractures into ever more narrow segments, so our ability to reach out broadens. Our capability to establish similar such relationships is no longer confined to our immediate surroundings and our geographic neighbors. It now extends over the globe and to our ideologically proximate neighbors.

    But if we are to apply Petabyte Age analytics to people, first what we require are the petabytes. In order for other people to serve an ostensive role, they have to make their information available: what they are doing, what events they are attending, what they are reading, what they are watching, what they are purchasing, what they think about all these things. Only then can one start to make determinations about whose life signature to include as part of one’s search criteria and only then do they produce the information to draw into the vortex that is you. Life logging-like behavior is a critical component of search by ostension.

  7. Environmental awareness. Generalized sights like outside.in and EveryBlock try to provide people with information specific to their locality. Sights like Menu Pix or Indie Coffee Shops do the same with respect to particular categories of interest. This is an extension of searching by ostension, only instead of like-minde people, I am interested in like-located people.

    Imagine what life logging would mean for augmented reality. What happens to a cityscape when standing in front of a building, I have the design discussions of the architect and the client, the experience of the laborers who built it, reactions of architecture critics, views of what preceded it on the lot all at my disposal. Imagine being in a new city and having the whisperings of previous visitors or longtime residents in your ear. People often say, “imagine if these walls could talk.” In the future, they will.

  8. The long tail of entertainment. To apply a straightforward materialist analysis to it, life logging is essentially a long tail phenomenon. Production and distribution of content — news, entertainment, educational, documentary — used to entail significant costs, both opportunity and financial. There was only a little bit of bandwidth and fully equipped and staffed studios and broadcast stations were extremely expensive so producers stuck to the safe side of the 80/20 rule. They went with the lowest common denominator of programming to maximize return on bandwidth expended. As the price of production, storage and distribution fall and the learning curve flattens out, what makes the cut will move comparably further down the long tail. Do you think that a thousand television channels are too many? How about one for every man, woman and child in the world? How narrow will a niche become? It’s the other side of the question of how low will production and distribution costs go. Will it go so low that the niche audience shrinks to a single person? I don’t think that even that is the limit. Probably the remote possibility of a single view or incorporation of a minute fragment of one’s output into a larger work is the limit.

    Of course people’s level of interest in participation will be a limit, but as it becomes ever easier — so easy that participation is almost indistinguishable from nonparticipation — it will eventually require active rejection to not participate. And then society might develop positive inducements to overcome even that. There’s always the dreaded network effects, but one can imagine much more stringent inducements. Not having a life log might make a person a social pariah or a life log might serve in place of a curriculum vitae or a portfolio.

  9. Personality as entertainment. Already I think in programs like No Reservations with Anthony Bourdain, Man vs. Wild, MythBusters, The Rachael Ray Show, fill in your favorite example — and I know you have one — we are seeing the maturation of reality television into personality-based programming and hence a limited form of life logging. Already the focus of these shows isn’t a premise or a regular subject, so much as the featured personality. Yeah, sure, each theme-based channel — the Food Network, HGTV, Discovery — picks someone relevant to their brand and that’s cute and all, but at this point I suspect unnecessary. For all your boredom at the medium, a person with a well developed shtick is a person with entertainment potential. And already that’s widely the case with many a medium. Whether it’s Christiane Amanpour, Rick Steves, David Brooks, Matt Drudge, Ann Coulter or the Crocodile Hunter, people tune in for the personae as much as any of the other content.

    And regarding the expansion of personality-based programming into a more generalized life logging, is our meritocracy already so frictionlessly efficient that there are no overlooked talents, eccentrics, geniuses, subversives, whatnot left to be discovered? There’s a word for it already: micro-celebrity. It was the second thing I ever blogged about (“William Gibson’s Idoru and Blogging,” smarties, 21 June 2004). Yeah, sure, some of this is boring, but some shows get cancelled too.

  10. The Zeitgeist becomes tangible. Imagine being able to request a twenty minute medley of the top 100 conversations conducted at my comprehension level on a topic, say consciousness or string theory, over the last six months. You could scan the thoughts of humanity like you presently do radio stations on your car stereo. We’re stitching together the universal consciousness here. For that to happen our thoughts have to stop happening in isolation or small factions and occur in a unified intellectual space.

Was that what you had in mind, John, when you wrote that you were taking a risk dissenting against me?

The Palin Speech

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After the pounding that McCain-Palin have taken over the last week I think that a lot of people tuned in to Sarah Palin’s speech for a spectacle. And she got off to a start that suggested a neophyte out of her league, but she rapidly adjusted and delivered a real stemwinder. As many have commented, she is a mastermind of the caustic aside.

I think that just about everyone in the country saw what was going on all at the same time. All week long the analysis of the Republican VP choice is that it was an attempt to drive a wedge between the Hillary Clinton and the Barack Obama supporters. About a quarter the way through her introduction of her family it dawned on S. and I the true case for her selection by the McCain campaign. When her speech was over and MSNBC cut to Chris Matthews, his opening point was that analysts have been misreading the Palin pick all week long, that it was a culture war move; it’s aim was the elitism narrative. I feel like the knife has been held just outside my field of vision and only in the midst of the speech last night did I catch the first glint of whetted steal.

The whole clan is too much. The candidate herself is unmistakably an aging beauty queen. Her husband, a fisherman, a union member, an Alaskan Men cover model, a “snow machine racer” is right out of central casting. The son solemn and stern in anticipation of shipping out for Iraq. The daughter, starting to show, is too fast on the heals of Jamie Lynn Spears and Juno (the damn film and its namesake are even named for and Alaskan city). Contrary to the Republican mythos, the “heartland” is plagued by degeneracy and altogether too many of these people will be able to identify. The down syndrome child is clearly dog whistle politics. It’s a lesser-known subject of discussion that almost no down syndrome children are born anymore and on the right it dovetails into the strawman connection between reproductive freedom and eugenics. To flout one is a clear symbol to the illuminati about Ms. Palin’s position on abortion. As Peggy Noonan inadvertently said, Governor Palin is narrative, not policy or capability.

From this speech it’s clear that the coming election will be the culture war all over again. It’s going to be a rerun of the 2004 election and it’s going to be nasty. It’s really amazing that the Republicans have only one script.

It’s completely dismaying the degree to which the future of the country is in the hands of a fairly unsophisticated media. If on Monday Time, Newsweek and U.S. News all have glowing cover stories on her then the Democrats are fucked. If the litany of lurid, tabloid-esque stories don’t abate, then everything will be okay.