Hoover Institution Policy Review

Peter Thiel writes the coolest apocalypse story that I have read in a while. It draws the opposite conclusion from Paul Seabright's The Company of Strangers, but from pretty much the same observations. The observation common to both - globalisation has provided amazing boosts in human wealth, but the resulting complexity has also made holistic understanding impossible, leaving blind optimism as the only motivating factor. That lack of understanding, according to Seabright, lends a certain robustness to the dynamics, whereas Thiel claims that it perches the world on a cusp dividing utopia from apocalypse, an unstable point from which the smallest deviation would bring either eternal paradise or the terminal abyss.

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I imagine the suspicion that international macro finance is an elaborate fraud to be a natural response from those aspiring to take charge, but who reach the bridge and find no controls available. Those with responsibility act regardless of ignorance, and the great power exerted by central banks is often done with little certainty as to the consequences. Steve Waldman on Interfluidity writes

Each central bank, while trying to stabilize its own bit of the world, found itself with little choice but to support and expand unsustainable financial flows on a scale so massive they have reshaped the composition of every major economy on the planet.

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Corporate entities and government agencies are agents too, but more rational and with less risk adversity. That is one thing that doesn't percolate up too well, I guess.

HT: Marginal Revolution

Econtalk Podcast

Fascinating podcast about the incentives of leaders. Main thesis: institutional constraints select for and strongly define leadership behavior.

Each leader is faced with the same problem - that of staying in power, usually accomplished by gifting the "selectorate" with resources gained from taxation. When this group is small, dictatorship results, and when this group is large, societies are more democratic. There is an interesting mention of several leaders - King Leopold in Belgium and the Congo, and Chiang Kai-Shek in China and Taiwan, where different institutional constraints led to really different leadership styles by the same leader, sometimes simultaneously. Also mentioned are Lee Kuan Yew and Mao Zedong.

At the end of the podcast, he advances an argument against term limits, which seems to approve of the way governance in Singapore works - the argument states that term limits cause lame duck terms, when leaders are no longer incentivized by re-election and are then free to give out political favors.

Ever since sitting in on Sussman's classes two years ago, I've had "Semantics vs Syntax" on my list of things to understand. It still floats near the top of that list because of its relevance to many of the other problems I am interested in, namely the principal-agent problem, the question of what differentiates computation from other types of thinking and also the true nature of web2.0 technologies.

This last idea, that there are many ways of thinking and that "computation" is but one of them, is close to the original context in which the sematics / syntax comparison was brought up in Sussman's class. The thesis is that the field of computer science has spent a lot of effort tackling syntactical challenges and not enough time understanding semantic shortcomings.

The way I understand it, it was the desire for proof which led to this bias - computer scientists in the mathematicians' deductive tradition required closed worlds for mechanisms of inductive proof to hold up, so they closed those worlds in pursuit of proof. Dijkstra is an arch typical thinker in that tradition, and the innovations resulting include typed languages and automatic theorem provers.

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To the extent math refers to reality, we are not certain; to the extent we are certain, math does not refer to reality. - Albert Einstein

One can never escape the need for interpretation when communicating with abstract symbols. This need gives rise to uncertainty, be it uncertainty about correctness or uncertainty about the optimality of the chosen representation.