Complementary Goods Explained

Workers returning to the office and socialising after pandemic lockdowns helped lead to a 15% surge in sales of deodorants, according to the maker of Dove, Rexona and Impulse.

A friend is fond of pointing out and celebrating teachable moments, and I’m going to struggle to find better examples of complementary goods!

By the way, I’ll be in Vietnam this entire week, first in Hanoi and then in Hoi An, so food recommendations, and other tips – very much in that order – are very welcome.

This link was shared with me via a WhatsApp group which shares one interesting link a day, and the group is set up in such a way that only the admins can send messages. Social media done right, if you ask me.

Have we become uniquely stupid?

For those of you who have read the essay, the title of today’s blogpost is a dead giveaway: I am referring to Jonathan Haidt’s essay in the Atlantic, titled “Why The Past 10 Years Of American Life Have Been Uniquely Stupid“. The subtitle is equally depressing: It’s Not Just a Phase.

It’s been clear for quite a while now that red America and blue America are becoming like two different countries claiming the same territory, with two different versions of the Constitution, economics, and American history. But Babel is not a story about tribalism; it’s a story about the fragmentation of everything. It’s about the shattering of all that had seemed solid, the scattering of people who had been a community. It’s a metaphor for what is happening not only between red and blue, but within the left and within the right, as well as within universities, companies, professional associations, museums, and even families.
Babel is a metaphor for what some forms of social media have done to nearly all of the groups and institutions most important to the country’s future—and to us as a people. How did this happen? And what does it portend for American life?

The essay is a lengthy read, but a rewarding one. Jonathan Haidt takes us through the evolution of the internet, with the emphasis on the social aspect really beginning to take off post 2010 or so, and gives us a book to read that goes on my to-read list: Nonzero: History, Evolution and Human Cooperation.

The next section is where the story really picks up, for we are introduced to the “villains” of the piece: the Like, Share and Retweet buttons. It’s not the buttons themselves that are to blame, of course, much like the atom not being at fault for the atom bomb. It’s what we have done with the Like, Share and Retweet buttons that is the problem:

By 2013, social media had become a new game, with dynamics unlike those in 2008. If you were skillful or lucky, you might create a post that would “go viral” and make you “internet famous” for a few days. If you blundered, you could find yourself buried in hateful comments. Your posts rode to fame or ignominy based on the clicks of thousands of strangers, and you in turn contributed thousands of clicks to the game.

Goodhart’s Law is massively underrated. Rather than optimizing for the quality of the content of one’s creation, we optimize for it’s virality. The virality ought to be a function of the quality, but we’ve skipped the intermediate step, with consequences that have become manifest and deep-rooted. Or as Jonathan Haidt puts it, “these platforms were almost perfectly designed to bring out our most moralistic and least reflective selves”.

He then goes on to quote from Madison’s Federalist No. 10 on the innate human proclivity towards “faction”.
I have watched “The Last Dance” on Netflix more times than I should have, but this reminds me of Michael Wilbon talking about how everybody in Chicago hated the Pistons (around the 28 minute mark in episode 4, if you’re interested). He repeatedly involves the phrase “this was personal”, and that’s one way to understand what factionalism means. Tribalism in sports, but elsewhere too, is the kind of factionalism you want to think about in this context, and you might also benefit from reading the transcript of Ezra Klein’s conversation with Tyler Cowen:

Factionalism (or tribalism. I’m not sure if the two mean exactly the same thing in an academic sense, but I am using them interchangeably here) hasn’t necessarily gone down, but we seem to have found new things to be “tribal” about.

As I understand it, Haidt is making the point that our tribalism when it comes to politics is now more deep-rooted than ever, but is also more trivial than ever before. Which politician is wearing what kind of clothes for which occasion excites more debate online than substantive issues that warrant more debate. Or as I prefer to put it, our agreement with stated positions and policies is these days a function of who said it, rather than what has been said. Such tribal loyalty when it comes to close friends is one thing, although even that has its limits, but fealty of such an extreme nature when it comes to political discourse ought to worry most of us.

And as an aside, the last question that Tyler Cowen asks in that extract above is a question to which I don’t have a great answer. I agree with the point in his question, but like him, wonder about the underlying cause.

An extract twice removed now:

The digital revolution has shattered that mirror, and now the public inhabits those broken pieces of glass. So the public isn’t one thing; it’s highly fragmented, and it’s basically mutually hostile. It’s mostly people yelling at each other and living in bubbles of one sort or another.

Amit Varma made a very similar point in a recent podcast with Shruti Kapila recently, in which he pointed out that social media has, in effect, decentralized the news (I’m quoting from memory here, so please forgive me if I’ve got the exact wording wrong). Amit Varma says that this is on balance a good thing, but with some negative consequences. Jonathan Haidt disagrees:

Mark Zuckerberg may not have wished for any of that. But by rewiring everything in a headlong rush for growth—with a naïve conception of human psychology, little understanding of the intricacy of institutions, and no concern for external costs imposed on society—Facebook, Twitter, YouTube, and a few other large platforms unwittingly dissolved the mortar of trust, belief in institutions, and shared stories that had held a large and diverse secular democracy together.

Where do I fall on this Haidt-Verma spectrum? Closer towards the Haidt end, I’d say, but I do have to remind myself that I have written this and you are reading it, so maybe decentralization isn’t all that bad? But that’s as far as I’m willing to go – on balance, I find myself closer to Haidt’s position, at least for the moment.

But the enhanced virality of social media thereafter made it more hazardous to be seen fraternizing with the enemy or even failing to attack the enemy with sufficient vigor. On the right, the term RINO (Republican in Name Only) was superseded in 2015 by the more contemptuous term cuckservative, popularized on Twitter by Trump supporters. On the left, social media launched callout culture in the years after 2012, with transformative effects on university life and later on politics and culture throughout the English-speaking world.

Haidt is writing this from an American perspective, for an American audience. But we in India have our own share of names for The Other, don’t we? It’s not just the fact that we have relatively trivial tribalism in areas as important as political discourse, but the fact that the discourse itself is not just trivial, but downright nasty. And the nastier it gets, the higher the support from your own side!

I’ll skip talking about a couple of sections from Haidt’s essay, not because they’re not important, but because they aren’t directly relevant to us here in India. But the subtitle of his essay gets an entire section, where he speaks about how things are likely to get much worse in the years (months) to come:

in a 2018 interview, Steve Bannon, the former adviser to Donald Trump, said that the way to deal with the media is “to flood the zone with shit.” He was describing the “firehose of falsehood” tactic pioneered by Russian disinformation programs to keep Americans confused, disoriented, and angry. But back then, in 2018, there was an upper limit to the amount of shit available, because all of it had to be created by a person (other than some low-quality stuff produced by bots).
Now, however, artificial intelligence is close to enabling the limitless spread of highly believable disinformation. The AI program GPT-3 is already so good that you can give it a topic and a tone and it will spit out as many essays as you like, typically with perfect grammar and a surprising level of coherence. In a year or two, when the program is upgraded to GPT-4, it will become far more capable. In a 2020 essay titled “The Supply of Disinformation Will Soon Be Infinite,” Renée DiResta, the research manager at the Stanford Internet Observatory, explained that spreading falsehoods—whether through text, images, or deep-fake videos—will quickly become inconceivably easy. (She co-wrote the essay with GPT-3.)

Speaking of the amount of shit that had to be created by a person, read this article written by Samanth Subramanian in February 2017.

So what might be done? Jonathan Haidt has a three-pronged solution:

What changes are needed? Redesigning democracy for the digital age is far beyond my abilities, but I can suggest three categories of reforms––three goals that must be achieved if democracy is to remain viable in the post-Babel era. We must harden democratic institutions so that they can withstand chronic anger and mistrust, reform social media so that it becomes less socially corrosive, and better prepare the next generation for democratic citizenship in this new age.

He outlines the steps involved in each of these, and if you haven’t already, I would encourage you to go read the entire essay, and these outlines in particular. I find myself to be in broad agreement with both the suggestions as well as how they might be implemented, but also worry about whether we have the political and social will to actually do so.

Finally, a coda of sorts:

The most pervasive obstacle to good thinking is confirmation bias, which refers to the human tendency to search only for evidence that confirms our preferred beliefs. Even before the advent of social media, search engines were supercharging confirmation bias, making it far easier for people to find evidence for absurd beliefs and conspiracy theories, such as that the Earth is flat and that the U.S. government staged the 9/11 attacks. But social media made things much worse.

And I would feel very bad if you, the reader, were to read either my post or Haidt’s essay in order to confirm your already existing fears about the ill-effects of social media. And so I urge you to read this column by Tyler Cowen next:

Calling something “extremist” is not an effective critique. It’s a sign that the speaker or writer either doesn’t want to take the trouble to make a real argument, or is hoping to win the debate through rhetoric or Twitter pressure rather than logic. It’s also a bad sign when critics stress how social media have fed and encouraged “extremism.”

What the U.S. needs is more consideration of more extreme ideas. If you see someone inveighing against “extremism” or “extremist ideas,” beware: That is itself an extreme position. True moderation lies in calm and reasoned debate.

My take on this essay? I think Tyler is saying that we shouldn’t be throwing the baby out with the bathwater. Social media has done two things: made it easier to spread “extreme” ideas, and made it much more likely that we will react with extreme prejudice and nastiness to these ideas.

The first of these is A Very Good Thing and the second of these is a Very Bad Thing. But we would do well to hold on to the first, rather than abandon both.

How? Ah, now if only we had some extreme ideas about that.

Should social media ban political parties?

I came to this interesting article via Mostly Economics:

In many countries, Facebook is one of the few alternatives to the government-aligned outlets that dominate national media ecosystems. That is why authorities have devoted so many resources to manipulating it, and why the company must take responsibility for stopping them.

Which led me to ask myself this question: what are the long term costs and benefits of having political parties on social media, and whether it makes sense to ban them from being on it?

  1. In these politically charged times, disclaimers might be a good way to start. This is not about Trump and Facebook, which is what the article I excerpted from is about. Nor is it about Twitter and the Indian government. It is about, more broadly speaking, the separation of societal discourse from discourse led by, shaped by and manipulated by, political parties. All political parties from all nations across all social media platforms.
  2. What is the aim of political parties on social media? Are they playing the non-zero game of asking what is best for their country (and preferably the world)? Or are they playing the zero-sum game of showing how the other side is wrong?
  3. Do they lead by example in terms of what societal discourse ought to be like? I know what my answer is to this question. If yours is yes, and you are willing to engage in a conversation, I would love to learn why my answer is wrong.
  4. My utopian societal discourse is one in which I take the help of others to learn what is best. And I hope to do this by improving my own knowledge and thinking, by conversing with others.
  5. Perhaps I’m too cynical when I say this, but this is not the aim of any political party on any social media platform. The aim of any political party on any social media platform is to prove “The Other” wrong. More, to insist that glory for your tribe/state/nation is all that matters. Still more, to insist that this glorious destination can only be reached via supporting “Us”, not “The Other”.
  6. Political parties play the zero sum game on social media. And we get sucked into playing that game ourselves.
  7. They’re not the root cause of the state of societal discourse, to be clear. But have they made the problem worse? Maybe I’m blinkered in my view, but I fail to see how this is not the case.
  8. The devil, as always, lies in the details. Are representatives of political parties to be allowed? If yes, are they free to make political statements? Who decides? This is not, I’m very aware, a very practical solution to the problem I’m highlighting. But I’ll make two final points.
  9. I’d much rather have this conversation than a debate on whether America should rein in Facebook, and whether India should ban Twitter, or any other match the following of your choice.
  10. If the two alternatives given to me are a country without social media of my choice, OR social media of my choice without political parties’ handles on it, I’m going with the latter.
  11. The truth lies somewhere in the middle. But maybe there’s merit in approaching the middle from this side of the spectrum rather than that one? (Yes, I know, third point. But this is my platform, and therefore my choice.)

Links for 21st May, 2019

  1. “The latest edition of the World Cup will soon be upon us. Just ten teams this time, playing out their matches (including the warm-up games) in mainstream venues. No chance for an unheralded ground to get on the cricketing map – as Amstelveen and Edinburgh did in 1999. No chance for history to unfold in a far-off venue like Tunbridge Wells – which to this day has Indian tourists visiting every year, to hear about Kapil’s unbeaten 175.This time too, there will be much Geography to savour. Grounds, ends, winds and soils. Maybe even clouds on some days. Balls soaring towards the River Tone in Taunton. There will be schoolkids watching it all. Perhaps some among them will jot down names and trivia in the margins of their notebooks. Like this one schoolboy did close to three decades ago.”
    A useful example of how learning about one thing can have entirely unexpected (but very pleasant) consequences. In this case, cricket as a geography teacher.
  2. “Tech leaders across the industry are rethinking the role of their platforms’ incentives, in response to mounting criticism that technology platforms do more harm than good. Instagram is running a test where like counts are hidden to followers, but are viewable by the post’s account holder. Head of Instagram Adam Mosseri told BuzzFeed News that the test wasn’t about incentivizing specific behavior but “about creating a less pressurized environment where people feel comfortable expressing themselves” and focus less on like counts.”
    This article is mostly about Twitter, but the excerpt is about how tech companies are responding to the huge backlash they are currently facing. Is the response enough? You be the judge!
  3. “The Muslim world can easily find martyrs but what it urgently and desperately needs are statesmen, negotiators, advisors, scholars, and intellectuals who understand their times and peoples.”
    This is a part of the world (Afghanistan) I know very, very little about – and in particular, the 1970’s, 1980’s and 1990’s – which is what most of this book seems to be about. I plan to read it, for this reason.
  4. “And that’s when I realized that they believe they will lose very little by associating themselves with Nath. They don’t expect anyone to boycott the film just because an actor accused of serial sexual predation is in it. The issue is not that the cost of the reshoot was too high, but that the costs imposed by society for not removing Nath from the film were too low.”
    This article is worth reading for many, many reasons – some of which are too complicated to go into here. But here are the main reasons: Shruti Rajagopalan is always worth reading, this is an economic analysis of an ostensibly non-economic issue (is there such a thing?), and well – more people in India (and elsewhere) need to read this!
  5. “You get your Raspberry Pi and hook it up to a monitor and a keyboard and a mouse, then you log on to it and … it’s just a Linux system, like the machine, and ready for work. A new computer is the blankest of canvases. You can fill it with files. You can make it into a web server. You can send and receive email, design a building, draw a picture, write 1,000 novels. You could have hundreds of users or one. It used to cost tens of thousands of dollars, and now it costs as much as a fancy bottle of wine.”
    A very long, but (to me at any rate) extremely readable article that is essentially an ode to technology.

Links for 5th April, 2019

  1. “And almost invariably, I see the same colleague in our communal kitchen, who asks with delight, “Joe, what are you having for lunch today?” The types of bean and cheese rotate, as does the fruit—which depends on the season—but I do not inform my co-worker of these variations when I laugh off her very clever and funny question.”
    In an article about the comforts of routine and habit when it comes to food, I found this excerpt to be pleasingly meta. You know who should especially read this article? Statisticians – especially aspiring statisticians.
  2. “Take his celebrated work with David Card on the minimum wage. They looked at how relative hiring patterns changed when one state raised its minimum wage and one right on its border did not. Not much except the minimum wage differed between the two situations, so it was about as close to a controlled experiment as economists will ever get. Alan was a pioneer in the exploitation of such natural experiments. After Alan showed what kind of evidence can be marshaled to study a labor-market intervention, economists have raised their standard of what constitutes convincing evidence. What followed has been called a “credibility revolution” in empirical economics.”
    Unless you are a student of economics, it is unlikely that you will have heard of Alan Krueger. More’s the pity – for as the title of this article will tell you, his work likely has already affected you, no matter where in the world you are reading this.
  3. “The issue, Statistical Inference in the 21st Century: A World Beyond P<0.05, calls for an end to the practice of using a probability value (p-value) of less than 0.05 as strong evidence against a null hypothesis or a value greater than 0.05 as strong evidence favoring a null hypothesis. Instead, p-values should be reported as continuous quantities and described in language stating what the value means in the scientific context.”
    Statistics is harder, and more confusing than you think. Yet another example is this article – each of the quotes in the article make for thoughtful reading.
  4. “…Section 230 has proved an “awesome benefit” for the tech platforms. It has encouraged astonishing innovation and accelerated the growth of some of the richest companies on the planet. But it has also allowed billions of people to post anything they like online with almost no constraint. Some of that content is inspirational, much of it trivial, and a small sliver grotesque and harmful. Social networks do not discriminate.”
    The FT on whether Facebook and its ilk are publishers or postmen. The import of section 230 is quite staggering, and I’d like to read the book mentioned in the article for that reason.
  5. “We ran similar regressions controlling for industry and found that — even after controlling for industry — elite MBAs did not produce positive statistically significant alpha. Elite MBAs did perform relatively well as CEOs in healthcare and consumer staples, but relatively poorly in energy and materials businesses, though those results were not statistically significant. Our study is not the only one to come to this conclusion. A study by economists at the University of Hawaii asked similar questions and found that firm performance is not predicted by the educational background of the CEOs.”
    A regression based exercise (which of course comes with its own set of problems) on whether education (type and quality) and experience matters for CEO performance. Short answer: it doesn’t. I was tempted to excerpt the concluding paragraph, but I’ll leave it to the reader to discover.

Links for 14th February, 2019

  1. “The best guess is that the next downturn will similarly involve a mix of troubles, rather than one big thing. And over the past few months we’ve started to see how it could happen. It’s by no means certain that a recession is looming, but some of our fears are beginning to come true.”
    Looking into the future is pointless, but this blog post is a useful summary of the answer to the question “If a recession were to arrive, what might be the likely causes?”. Paul Krugman lays out the usual suspects: China, America, Europe, and the trade war.
  2. “The purchasing managers’ index for the single currency area — watched closely by European Central Bank policymakers as an early indication of what will happen to GDP — hit 50.7, down from 51.1 in December, according to a flash reading from data firm IHS Markit.The reading was the lowest for 66 months — though it remains above the crucial 50 mark which suggests activity is still expanding and the region is not yet in recession.”
    It’s not bad, but it’s not looking good for Europe is the best way to read this. By the way, if you aren’t already familiar with the PMI, you may want to start keeping a tab on it for various countries. The first link today contains this link, but I found it important enough to mention separately.
  3. “…it’s important to remember that these days the social media tail wags the mainstream media dog. If you want your story to be well placed and if you want to be professionally rewarded, you have to generate page views — you have to incite social media. The way to do that is to reinforce the prejudices of your readers.”
    This is much easier said than done, and I don’t claim to be good at it at all – but I think it is important to train yourself to not have an opinion be formed, or reinforced, by reading anything in the newsA classic example of how things can go awry.
  4. “Most reports now don’t even mention the tweet as an instrumental element in obtaining and confirming the news. And that’s the fundamentally new and interesting thing to me: Twitter has blended in with all of the other infrastructure of the web that we take for granted. It’s the Google search, Google Reader (RIP), and sometimes Wikipedia for journalists and other news addicts. We use tweets as jumping-off points just as we use URLs, following them as conduits en route to the story.”
    Given a choice, I’d consume most of my information (what you might call news) from RSS even today – Google Reader is something I miss dearly. But the role of Twitter is underrated as a place to acquire consistently interesting information. Culling people you no longer want to listen to is much easier on Twitter than anywhere else – and that, to me, is Twitter’s biggest strength.
  5. “Hummingbird behavior is also of interest because they have been shown to be excellent learners. Dr. Clark said there is speculation that because they live on the edge in terms of their energy budget, they may require a great memory for where the food sources are.”
    Being forced to be good at something because of constraints imposed on you ( by others and yourself) is something that could be quite useful for all of us.  There’s other interesting snippets of information throughout this article.