Nine Lives, Cat’s Eyes: Newsletter #9

Jeff’s Newsletter, Volume 9

Welcome to week 9. Most of this week’s items are only obliquely related to the election. Life goes on, and that’s part of the problem: normalize nothing, remain vigilant.

1. The game of life
Those looking to learn some game theory will be disappointed by Finite and Infinite Games by James Carse. It turns out that Finite and Infinite Games is, without ever announcing itself as such, a guide on how to live. And against all its competitors in this oldest of nonfiction genres, this might just be the book I’d pick to build a religion around. Some people will hate this book because of its aggressively zen style. Sentences come in pairs, chin-stroking aphorisms contrasting two concepts, like, “To be prepared against surprise is to be trained. To be prepared for surprise is to be educated.” But the substance is deep enough to justify this approach, and in my view very wise. Each dichotomous pair builds on the original one: finite games are activities oriented toward an end goal; infinite games are activities motivated by the joy of playing for its own sake (I’ll spoil the ending: there is only one infinite game). Carse applies this framework to, among other things: property, power, parenting, technology, and sex. He writes with a steady moral vision–one that values freedom above order, thinking above knowledge, and the future above the past. I’m not ready to accept his vision wholesale–the implications of abandoning goal-oriented action are troublingly nihilistic. The trick, as I see it, is to play the minimum number of finite games necessary to allow us all unfettered access to the infinite game. But be careful: “Evil always originates in the desire to eliminate evil.”

2. Against solutionism
Geek Heresy argues that technology is (mostly) not the answer to problems of social change. Kentaro Toyama, a computer scientist, spent over a decade at Microsoft Research studying NGOs working on education, agriculture, and microlending in the United States and India. Again and again, he watched clever digital interventions go unused–this should be familiar for anyone who has worked in education or international development. Toyama sees technology as an “amplifier:” it can add massive scale to human behavior, but it can’t change the behavior itself. I’ve found this simple framework very useful in the past few weeks. For example, there has been a lot of thoughtful discussion on changing Facebook’s filters to prevent the formation of ideologically sheltered echo chambers. I value this goal, but as Tyler Cowen points out, the tendency to share biased information does not begin or end with Facebook (consider email threads forwarded by your conspiracy theorist uncle). The “solution” to homophily will probably not be an algorithm.
For Toyama, progress is mostly about encouraging intrinsic growth in people and societies rather than providing packaged, technocratic interventions. If this sounds trite, consider how at odds this idea is with most contemporary social science. Toyama especially criticizes behavioral economics, the ascendant discipline in development, for its focus on short-lived nudges rather than long-lasting intrinsic motivation. But if economics is committed to incentives, sociology is even more structuralist, wedded to a vision of social change based on shaping people’s external circumstances. Toyama espouses consequentialist virtue ethics; i.e., foster values and tendencies in people that will probably lead to a better world. He argues that “heart, mind, and will” or intention, discernment, and self-control are the necessary and sufficient building blocks for all virtuous behavior. Only after identifying pent-up virtuous ambitions does it make sense to build a technological amplifier. A good example is M-Pesa, the famous Kenyan phone-based money transfer service. The original idea for M-Pesa was based on an observation that people were already swapping cell-phone minutes as a proxy for money. Last week I was happy to see an excellent tweetstorm from Dave Guarino, an engineer at Code for America, making some of these exact points: “Tech is a tool for leverage, for scale, against problems. You can create impact 100 x (problem value), but problem value dominates.”

3. How to lose friends and influence no one: give an opinion on charter schools
David Leonhardt recently summarized some important new research on charter schools. A team of researchers led by Josh Angrist used the randomized school lottery in Boston to compare charter school students with their peers who applied, but were not able to attend. Boston is an important setting for this research because most charter schools in the city fit the “high expectations, high support” model familiar to most of us with friends in the charter world. The results were striking: the charter students do better on state tests, AP exams, SAT, and 4-year college attendance than their non-charter peers. The gap between black and white students’ math scores closes over the middle school years. The charter school applicants include the same share of special education students as the city at large, and subgroup analysis finds that special education students also do better at charter schools than traditional schools (original paper here).

On election day, Massachusetts voters overwhelmingly rejected a proposition to allow the state to approve up to 12 new charter schools per year. The argument against may be familiar: that charters siphon money from the traditional public school system. I always find this phrasing misleading. Yes, money leaves traditional public schools–because they are serving fewer children. This is a legitimate problem because school districts have lots of fixed spending commitments–especially buildings, multiyear contracts, and preexisting pension obligations–that can’t be reduced year-to-year when enrollment fluctuates. Figuring out how to share resources (e.g. through physical co-location, hiring district teachers, sharing the bus system) seems like an important step to make charter expansion financially viable.

And yes, as many critics have stated, it would theoretically be better to import the effective practices of Boston’s high-performing charters into the traditional public schools. I have become a major skeptic that this is possible. Few organizations are slower to change than public schools, in part because classrooms–where the action is–enjoy several layers of bureaucratic buffer from decisionmakers (here’s a good book on that). That’s not to say charter expansion would be a panacea; I am also skeptical that successful charter models like Boston’s Match, which rely on heroic efforts from poorly paid 20-somethings, can scale beyond their niche. In any case, a perusal of the top NYT reader comments on Leonhardt’s article reminds me how far I am from most liberals on this issue.

4. Radical markets
Economist Glen Weyl writes on Facebook about the coalitions that elect dangerous governments, citing Richard Evans’s history of the Third Reich and the fact that no more than 9% of German voters were committed anti-Semites. More interesting (and more hopeful), though, are Weyl’s remarks in the comments section about his current research agenda on ‘Radical Markets,’ or proposals to “address the crisis of the liberal order.” His five big ideas, to be discussed in a book with Eric Posner, are: quadratic voting, a voting system that gives extra weight to passionate minorities; increased immigration as a lever against global inequality; a new property tax system; ending the “conspiracy of capital” by which institutional investors encourage their holdings to engage in price fixing; and paying people for using their data, as Jaron Lanier has argued. I am sure I will end up opposing at least one of these ideas, but I am very pleased to see this kind of radical social innovation inside economics and can’t wait to read the book.

5. Debt: the next five thousand years
I’ve been enjoying Sinica, a podcast about Chinese politics, business, and culture. In a recent interview with Andy Rothman, an investment strategist focusing on Asian markets, I learned how to interpret a murky topic you sometimes see in the news: Chinese debt. Chinese debt is two and half times the size of the Chinese economy (which is about the same proportion as U.S. debt), and I occasionally see articles worrying about a Chinese financial crisis. The thing to understand, though, is that where America has had household debt problems in the recent past, almost all of China’s debt is corporate. To make matters more confusing, Chinese corporate debt isn’t even very similar to U.S. corporate debt, which is also a topic of some panic these days. Chinese corporate debt is perhaps better thought of as government stimulus. After the ’08 crisis, China conducted its own infrastructure stimulus program in the form of generous loans from state banks to state-owned companies. This is a more targeted form of stimulus than lowering interest rates, because you can just give money to the neediest companies, which in this case were mostly state-owned heavy manufacturing firms. Now, the state banks are either (a) writing off the bad debt or (b) transferring it to the balance sheets of government money managers. The bottom line, Rothman argues, is that while all this bad debt will certainly constrain the government’s resources in the future, there’s little risk of sudden default of the American homeowner variety.

6. Why can’t we be friends
The Washington Post did two great interviews with Kathy Cramer, a political scientist who wrote The Politics of Resentment about rural Republicans in Wisconsin. I highly recommend these interviews to those of you who struggle to get inside the heads of Trump voters. What I take from this is a picture of people who think politicians don’t care about them, don’t particularly like Trump personally, don’t know or think much about racial minorities or racial injustice, get information from Fox News and chain emails, are mostly unaware of Breitbart, care deeply about an ethic of deservingness, and resent being called stupid. In the past week, I’ve seen a lot of people conflate the terrifying rise in hate crimes emboldened by Trump’s victory with the motivations and preferences of the majority of his supporters. Although these issues share some overlap, I think they mostly call for two very different sets of responses. I was inspired by Cramer’s commonsense wisdom on bridging distrust:

So what happened to me is that, within three minutes, people knew I was a professor at UW-Madison, and they gave me an earful about the many ways in which that riled them up — and then we kept talking.

And then I would go back for a second visit, a third visit, a fourth, fifth and sixth. And we liked each other. Even at the end of my first visit, they would say, “You know, you’re the first professor from Madison I’ve ever met, and you’re actually kind of normal.” And we’d laugh. We got to know each other as human beings.

That’s partly about listening, and that’s partly about spending time with people from a different walk of life, from a different perspective. There’s nothing like it. You can’t achieve it through online communication. You can’t achieve it through having good intentions. It’s the act of being with other people that establishes the sense we actually are all in this together.

I would add that online communication seems to make this kind of divide much worse. In the past week, several of you have heard me muse about the need for more formalized national service–jobs programs for young people that, like the military of yesteryear, bring together people from different backgrounds to work together on common goals. Service Year, created by Stanley McChrystal, Alan Khazei, and others, looks to be the best effort in this direction. I’m curious about the demographics of the participants; I can imagine it being strong where military recruitment is weak, and vice versa. I’d like to think more about what would make this kind of program appealing for everyone.

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