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Me in businessweek

More shameless self-promotion. A mention in businessweek.

No quotes from the interview. I haven't learned yet to give good sound bites.

A fundamental misunderstanding about the economy: Stuff

Post recession, the mass media and people more broadly seem somewhat more economically literate, but one big misconception still lingers, that the economy is about producing Stuff. Pundits from both parties are deathly afraid of the loss of manufacturing jobs, because they think that if we're not producing Stuff, we're going to be poor. Pundits in all my science/technology magazines constantly say we need to train more engineers in order to produce the Stuff of the future. People worry that we will soon be spending 1/5 of our income on healthcare, leaving less money for Stuff.

(David Brooks column that inspired this).

My question is why? Do Americans need more stuff? People associate the Wealth of Nations with Stuff, but even today, the vast majority of our GDP is in services; the fraction of Stuff in GDP has been declining, and will continue to decline. Why should we be encouraging the production of more stuff when it is a dying industry.

Of course we will always want Stuff, we still eat food, even though the industry now only accounts for a percent or two of our labor force when it once accounted for nearly all of it. Just most of us shouldn't be making it. Services like healthcare, education, leisure, entertainment, these are the industries of the future. On any given day, I mostly am pretty happy with the Stuff I already have. But where I am stymied is finding a good movie to watch. Or a good TV show. There are a few good movies or tv shows that come out, but there could be more.

And some of the things I call services, are related to Stuff. Like iPhones. Yes, ths is an innovation in stuff, but it was mostly an innovation in design. The technology for the iPhone has long been around (so say people like Kodak, Creative Labs, and Nokia in their patent infringement lawsuits), what made it work was the design of it. Healthcare services require some new gadgets, but it is mostly the service that is valuable (as an aside, yes, wasted healthcare money is bad, but on the whole there seems to be little solid evidence that the US healthcare system is especially wasteful).

I'm not the first to note this of course. I suppose back in the 90's at the MIT Media Lab, they talked this in terms of Bits not Atoms. Apparently there's even a new book out on the subject. But it will take a while for this idea to percolate out there. (Analogously, I'm reading Stephenson's account about the century before Adam Smith, when the Wealth of Nations shifted from how much gold it had to how much trade. A professor of mine in grad school noted, that Adam Smith figured out the Wealth of Trade just when Wealth shifted from Trade to Industry. And then noted that Marx figured out Wealth from industry just when Wealth shifted from industry to human capital, which is building block of Memes, not Stuff)

Book Reviewlet: Logicomix

What is Logicomix about? In 3 words: Godel, Escher, Bach. Of those 3 people, only the first appears in Logicomix, but like the Hofstadtler book by the same name, Logicomix is a comic book about the connections between the fundamental incompleteness of math (Godel), how we use paradox to understand that incompleteness (Escher), and how art reflects how humans can transcend logic (Bach).

On the surface, Logicomix is about the life of Brittish mathematician Bertrand Russell, drawn in a sophisticated and nuanced version of the art seen in Tintin. But really, is is trying to use a comic book story to convey deep ideas about the nature (limits) of logic/reason/mathematics and the nature of humanity.

In much the same way, Hofstadtler's Godel, Escher, Bach used stories about the Tortoise and Achilles to illustrate many of the same ideas for his textbook, and Stephenson uses pulp thriller fiction (using many of the same characters like Leibniz and Turing) to explore the same ideas.

The comic book format doesn't allow Doxiadis and Papadimitriou's Logicomix to explore the topic as deeply, but it may make it much more successful in reaching a larger audience.

In various ways, I have been reading about these ideas for a very long time, in theoretical computer science summer courses in middle school where we learned about the foundations of arithmatic and Cantor diagonolization, reading Marvin Gardner's Aha and Gotcha around the same time, thinking about the limits of utopia reading Huxley's Brave New World in high school, learning set theory freshman year, to learning about the limits of rational choice theory (e.g. reading Scott's Seeing Like a State) in grad school.

Unlike Stephenson's novels which pressuposes a lot of this background, Logicomix tries to address the ideas to someone who perhaps never liked math, and I think ultimately succeeds. For me personally it lacked some of the depth of say Asterios Polyp which used comics to explore the nature of art and humanity. But that may just be because I haven't really thought as much about art before, and thus I am probably the wrong audience for Logicomix.

Mind Bending Art

Been thinking about art again recently. At R-'s hospital holiday party, the S.O. of one of her colleagues, was an art history grad student. Neat, cause I haven't talked art history in a while. I confirmed my personal observation that most art these days has become whimsical and accessible, whereas before, art was high minded and constructed high barriers of entry requiring lots of prior art knowledge to understand it, today to take some examples from the last Venice Bienniale I went to, artists put a video camera on a dog so you can experience what a dog feels like, or another one built a simulated subway station inside a museum, complete with hot air and vibrating floors though no subway; or recently at MOMA, a Chinese artist who put the entire contents of his mother's house in one room, so that you can literally see her life laid out on the floor. The art historian confirmed that one of the main themes of art history seminars these days is what to make of the new populism.

I think it is a good development, though I also like the idea of connoisseurship, that some things are worth the effort. Like I had recent discussions about wine, which does take a lot of effort to make worthwhile, but I thought it was worth it. Similarly, for opera, I think after seeing maybe 10 operas now, and no especially enjoying most of them, the genre is starting to make sense to me. Though I've had a hard time convincing others that the investment is worthwhile.

The recent Murakami exhibit at the Brookyln museum merged both high and low well while commenting on itself (which I suppose is so typical of modern art it is almost trite these days). Most of the art itself was fanciful, playing with anime characters, easily accessible. Though the underlying theme is a critique of commercialism, with the novelty of including a louis vuitton store selling murakami merchansise within the exhibit instead of after. A subtle shift that speaks much, building on Andy Warhol who built upon Marcel Duchamp.

Last weekend, I wound up seeing both the Tim Burton show at MOMA and Tino Seghal at Guggenheim. The Burton show I feel takes it a step too far... showing sketches and clips from his movies. It certainly generated a lot of money for MOMA (so good for them) the place was packed full, tickets sold out early, and there was barely room to move. I'm all for populism but this may have been a step too far. I'm not sure it really should be considered "Art" with the capital A and double quotes, except in the grandest most meta- sense, that the MOMA was making a statement about commercialism by wholeheartedly adopting it without irony or commentary. Still, I left dissatisfied.

Fortunately, the next day, the Guggenheim made me feel much better. It still had up an excellent piece by Anish Kapoor, which puts all previous square black canvases to shame. An exhibit years ago at MOMA did make me appreciative of monochrome paintings, by showing many different white square canvases in one exhibit (ranging from one made of fresh milk, one ripped down the middle, evoking a vagina, one made of white nails, etc. But this took the genre to a new level. It was the first "painting" where I really understood the idea of gazing into infinity, and really felt not really despair, but perhaps an echo of it.

The main exhibit was a piece by Tino Seghal, which I won't describe since it would ruin it for you. If you don't care, you can read about it at the nytimes. Self-referentially, it is called, Is this Progress, and I think it is. It echoes my favorite piece of all time, a MFA thesis at the Stanford gallery, a giant wooden ball maybe 15 feet tall, with an inviting hole just big enough to crawl into, that was unmarked, but might as well have had a sign "climb me" a la Alice in Wonderland. Crawling in brought you into a strange world of twisty wooden passages and ladders, dimly lit by lamps, and the key element is that you felt like you were transgressing. Nothing said you were allowed to climb inside, and normally this kind of behavior would break all norms and rules of museum etiquette, and it was precisely this subversiveness that brought me back to being a kid again that made it so amazing. The point of art is communicate something (and as Kirk Varnedoe said, a great artist invents a new language), and this piece did communicate something that no other medium could. I wondered how many people actually got to experience that, and how many people just walked by. The timing was perfect for me, I was in the gallery alone, and was prompted just enough by the ticket taker to look at the piece carefully, without being told it was actually the point. At the Guggenheim, we saw many people missing out too. Still, I suppose lots of people walk past the Mona Lisa without getting it (me included). A risk all art takes for the sake of Progress.

Avatar: Micro-reviewlet (warning spoilers)

Not only was the plot ridiculously cliched (e.g. Pocohantas and Dances w/ Wolves), it was obnoxious. David Brooks captures the condescension of the movie perfectly. What I would add is that it annoyingly perpetuates Rousseau's myth of the noble savage. That civilization (things like literacy, and representative rule, and division of labor) are all corrupting, and instead we were better off running around naked, bowing before unelected rulers. Another reviewer made Brooks' point a bit crassly. The movie is telling us is that the alien’s need Americans (not the dumb militaristic kind, but the real Americans, the scientists and the Sully types) which represents American can-do spirit who comes in, f***s (the reviewer's word not mine) their princess, learns their battle tactics better than they do in just a few months, mounts that flying thing that none of the natives have been smart enough to do in generations, and united all the tribes as their new dictator.

Still the visuals were breathtaking, and after I started ignoring the plot, was blown away by his achievements in technology, and it had robot suits that fought with giant knives.

Maybe irrationality's a good thing

Even before I was an economist I was a big fan of rationality. My friend from Singapore spoke with pride about how another economist friend of hers noted "it's like they've given my people (economists) a country, and they did good! I didn't hear an irrational comment all week," something I noted myself when I was there 8 years ago (wow time flies).

But now, my reaction was, well maybe a little irrationality is good.

To explain, let me just cite Wachowski (2003)

"The first matrix I designed was quite naturally perfect. It was a work of art. Flawless. Sublime. A triumph only equaled by its monumental failure. "

"As I was saying, she stumbled upon a solution whereby nearly ninety-nine percent of the test subjects accepted the program provided they were given a choice - even if they were only aware of it at a near-unconscious level. While this solution worked, it was fundamentally flawed, creating the otherwise contradictory systemic anomaly, that, if left unchecked, might threaten the system itself. Ergo, those who refused the program, while a minority, would constitute an escalating probability of disaster."

"Your life is the sum of a remainder of an unbalanced equation inherent to the programming of the matrix. You are the eventuality of an anomaly, which despite my sincerest efforts I have been unable to eliminate from what is otherwise a harmony of mathematical precision. While it remains a burden assiduously avoided, it is not unexpected, and thus not beyond a measure of control. Which has led you, inexorably, here. "

Or consider Huxley's Brave New World for a more literary citation.

Rationality is all fine and good and probably great for 99 percent of the people. But maybe you need irrationality for beauty, or for innovation, for disruptive change, for paradigm shifts, for freedom (whatever that means; I took a class on defining freedom and still don't know what it means), and all that. For magic too.

(And I bet you thought watching that movie was a waste of your time...)