Zero Agents and Plastic Men

Can you judge what people believe in based on the tribes they belong to? What if they explicitly tell you? And what does this have to do with the fact that only 2% of blacks support Trump?

[Note: this post is mainly anecdata and speculation, so don’t expect academic citations and regression models. My epistemic status on this is, accordingly, speculative. I’m sure that many people discussed similar themes, but I arrived at these conclusions independently. Also, since the anecdotes are personal, the names and identifying details of all people in this post have been changed. ]

This post is about sociology. I never actually studied sociology.

The closest I got was a sociology book I once received as a birthday gift from Maya, my Israeli ex-girlfriend who majored in sociology. She told me the book was about patience. I read the first three pages: the book turned out to be about gift-giving. Coincidentally, the two words are spelled the same in Hebrew (המתנה). Maya admitted that she never actually read it, but it was recommended by her sociology professor. And besides, she hinted, I could use to learn about patience anyway. I wasn’t sure how to learn patience from a book about gifts, so I never opened it again.

As for Maya, after we broke up I introduced her to a very patient friend of mine. They recently got married after eight years of patient dating.

So what do I know of sociology? All I know comes mainly from three sources. The first is the video of Stanley Milgram’s experiments on authority and obedience. The second is Scott’s post about the outgroup. And the third is Scott’s post about the ingroup.

The ingroup post is titled “The Ideology Is not the Movement”. It explains that extant tribes of people rarely stay concerned for long with the official reason for the tribe’s formation. Whatever else Sunni and Shia Muslims are killing each other over in 2016, the choice of rightful caliph to succeed Muhammad in 632 AD ain’t it. “Gamergate” isn’t the movement of people who think that “Depression Quest” is a crappy game that got unfairly positive reviews. Ali Ibn Abi Talib and Depression Quest were just rallying flags, the nuclei around which people with preexisting similarities coalesced. Once a tribe is established, the ideological rallying flag can be discarded or even controverted. Did you know that the US Democratic Party started as the small-government opposition to federalism, and drew its support from Southern planters?

Sometimes, a movement does have an obvious uniting ideology. For example, the Hasidic Jews who live in the Hasidic Jewish neighborhood of Crown Heights and attend the Hasidic synagogues there would seem, if nothing else, to be united by the ideology of Hasidic Judaism.

An old colleague of mine, Shmuel, lives in Crown Heights around the corner from establishments with names plucked from a shtetl like “Raskin’s Fish Market” and “Getzel’s Shul”. He wears a black coat and black kippa. Shmuel’s four kids go to Jewish schools.

I ran into Shmuel a couple of weeks ago, he told me that he enjoys reading Putanumonit. He particularly enjoyed reading A Conversation With GoD. I asked him what he thought of my 1:1,000,000 credence for the existence of God as described in the Old Testament. He said that number seemed a bit low. When he worked through the numbers himself some years ago, he arrived at 1:10,000.

I remarked that 0.01% is a rather low God-credence for a religious man, perhaps Shmuel took the divine bet with Pascal’s wager? No, Shmuel said, he did some math on Pascal’s Wager too and decided to reject it. He showed me a comprehensive document of arguments and calculation in support of atheism and rejection of Pascal’s wager. The document reads like a Putanumonit post, except less arrogant and better researched.


So why does Shmuel appear outwardly to live a pious Hasidic life? Crown Heights is close to Manhattan but the rent is still cheap, the schools are fine and the streets are safe. His wife is happy with the lifestyle and his parents are happy with their social standing. The price to pay for this comfort is a limited choice of wardrobe and having to show up in synagogue for prayer, 45 minutes during which Shmuel zones out and thinks about math.

“It sound like a great bargain”, I said. “I wonder how many men praying in the seats alongside you zone out as well.”

“Probably a lot of them”, Shmuel replied. “But unlike most of these guys, I don’t have to feel guilty about it.”

According to Scott, the rallying flag of the rationalist community was the belief that Eliezer Yudkowsky is the rightful caliph. As the Muslim caliphs stood against the infidels, so does Eliezer stand against the fidels. It’s not even that LessWrong spends that much time arguing for atheism, atheism is almost assumed as a precursor to studying rationality the same way arithmetics is required for calculus.

With that in mind, it’s a bit of a surprise that over 11% of LessWrongers are theist, up from 8% in 2014. And when these 11% show up at Solstice, or a CFAR workshop, or any rationalist hangout, you mostly wouldn’t be able to tell who it is.

So: forget about the ideology not being the movement. Even when the movement has a clear ideology, a bunch of people will reject that ideology outright while happily hanging out with the movement and broadcasting their movement loyalty for all to see. These aren’t saboteurs looking to undermine the tribe, they love the tribe. They’re not double agents either, they’re zero agents. I would bet that at least 10% of every tribe is made up of zero agents who reject the tribe’s stated beliefs but enjoy the company and the snacks too much to say anything.

The man taking his family to Sunday mass? I’d give a 10% chance that he isn’t Catholic but just thinks it’s a good experience for the kids. The woman in the Cowboys (Barcelona) jersey? I’d give 10% she can’t name a single football player but has friends that do and she thinks the jersey fits her hair color. You really can’t be sure what people believe in until they say it.

And even when they say what they believe, don’t be so quick to believe them.

At first, I thought that Hadia hates the Israelis. I didn’t think so just because she’s Syrian. I thought so because when we met at a mutual friend’s party in North Carolina, she said “I hate the Israelis”. After we bacame Facebook friends (I don’t entirely remember what happened at that party and how much we drank), Hadia shared a “news” story claiming that Bashar Assad was revealed as a Mossad agent sent to kill Syrian children. Hadia’s comment on the link was “Ugh, I hate the Israelis”.

As an Israeli, my curiosty was piqued.

Not everyone can handle a cleanse

Surely, I inquired of Hadia, she didn’t really believe that Assad is literally a Mossad spy. She didn’t, Hadia admitted, she just thought it was a good article detailing all the atrocities commited by Assad against the Syrian people. Why then muddle the issue with Mossad conspiracy theories and comments about Israelis? “Mossad” is more of a literary device, Hadia replied, like saying that something is “from the Devil” but it sounds hip to Arab ears. And mentioning how much she hates Israelis always gets more “likes” on Facebook, so why not? Any more than an American hates some distant bogeymen like North Korea, Hadia doesn’t hate hate Israelis. Mostly, she likes “likes”.

I came to two realizations. First, that I have no idea what Hadia’s social group is like, what signals and codes they share, how loyalty is measured and status is regulated. Perhaps, as a Syrian living in the US, Hadia is facing extra pressure to prove her loyalty to the Syrian people by constantly mentioning the Mossad and her hatred of Israelis in casual conversation. If Hadia had heard my friends and I discussing paperclip-maximizing computers she would likewise conclude that we are insane.

My second realization was that this isn’t a unique case, and that a lot of arguments that I hear that sound crazy can only be understood in the context of signalling within groups that I’m blind to. For any tribe whose “secret language” we don’t speak we can’t presume anything about their actual beliefs with certainty.

In Rationality, to steel man an argument is to come up with the most sensible version of it, the interpretation that could reasonably be held by an intelligent arguer. Steel manning is achieved only rarely, by the wise Bayesian sages in their secret mountain dojo. Steel manning stands in opposition to straw manning, taking a weak and distorted version of your opponent’s argument that is fun to be outraged about. That is achieved by 99% of media and your Facebook wall.

To these two I would add: plastic-manning. A plastic man isn’t genuine. It stands for something, but you’re not sure what. It’s a mannequin, advertising something to someone, but not to everyone. A plastic argument isn’t there to be dealt with on literal terms, strengthened or weakened. It’s signalling, you either get it or shrug and move on.

Example: people involved in Social Justice talk a lot about oppressors and the oppressed, and there’s a case that SJ people and liberals in general see every social issue as a conflict on the oppression axis.

The strawman version of the “oppression axis” is that “oppression” is a vacuous slogan used to attack white men and grasp at political power. The steelman version is that “oppression” means structural imbalances of power that let some groups profit at the expense of others, and that fighting oppression is the best (although not unique) way to achieve equality.

I’ll let my friend, much deeper steeped in SJ discourse than I am, explain the plastic man version of talking about oppression:



Basically, the plastic-man version of most arguments is “I said it for the likes”.

It’s hard to know if an argument is plastic or not, but you can look for hints in how the intended audience react to it. If my SJ friend has posted something contrarian that his SJ friends disagreed with, that could be a true belief. But no one did, they reacted as they would to an applause light, which is itself a narrower category of plastic man arguments.

Why is noticing a plastic argument important? Because it will never make sense to you. There’s no way to logically steelman “Assad is an Israeli spy”. Any engagement with such an argument makes you stupider by the minute, and inoculates you against respecting better arguments from the same people via the cowpox of doubt.

The existence of plastic men doesn’t mean that you should never take people at their word when they say weird shit. It just means that you need to keep the plastic possibility in mind, especially when the argument may involve layers of group signalling you’re unaware of.

A social group whose layers of signalling I’m really unaware of are Trump supporters. But I think I can plastic man one of Trump’s main arguments, namely his argument that immigrants, particulary those from Mexico, are a danger to America.

Mexican immigrants, Trump says, are criminals. And when they’re not commiting crimes, they’re lazily idling on welfare instead of building American business. And when they’re not being lazy, they’re destroying conservative American culture. And when they take breaks from subverting America culturally they go to the polls to vote Democrat, which is why Democrats keep hauling them in by the truckload over the Rio Grande.

Coincidentally, every single part of it is factually wrong.

Immigrants, including Hispanics, are less likely than natives to commit violent crimes or be in jail. Hispanics have 4% higher labor participation rate than non Hispanics. Immigrants are more likely to start a business. Latinos are more religious and socially conservative that the average American. Finally, the rate of net immigration from Mexico has nearly halted under Barack Obama after exploding under George W Bush.

Even without researching statistics, are Trump supporters so clueless that they don’t notice any of the above?

Yes, 71% of Hispanics did vote for Obama over Romney but Asians and blacks voted for Obama at higher rates than that. In places like the Bronx, Obama won by a 92%-8% margin. Speaking of the Bronx, did you know that it suffers from remarkably high crime rates and that a large portion of Bronx residents receive government welfare? It seems quite remarkable that Trump never mentions the Bronx, his contempt is almost exclusively reserved for immigrants and foreigners.


Strawman Trump is a nationalistic bigot who spews malicious slander regarding immigrants. Steelman Trump is a nationalistic bigot who raises legitimate concerns regarding immigrants. Plasticman Trump isn’t talking about immigrants at all: he’s talking about blacks in the Bronx. After all, Trump had undocumented immigrants building his towers, but none of these towers were built north of the Harlem River. His mouth says “immigrants” because in the US media it’s more acceptable to be racist towards immigrants than towards African Americans.

If it’s true that Trump riles against blacks and doesn’t mind immigrants, I suspect that most of his supporters are aware of this while most big city-based liberal media is ignorant. A glance at the New York Times confirms that, although to be fair the New York Times is ignorant of most things.

One group that clearly isn’t fooled are blacks, a mere 2% of whom support Trump compared to 20%-30% of Hispanics. 2% is unprecedented. It’s unfathomable. Trump is polling fourth among blacks, behind not just Hillary but also Johnson and Stein. If someone had added “shape-shifting reptilian people” to the list of candidates, Trump would be polling fifth, behind the lizardmen’s 4%.

You can never be confident when plasticmanning an argument, it requires guessing the secret signals of a group you’re not a part of and that’s hard. But you have to admit, Trump’s talk about immigrants makes much more sense if he isn’t actually talking about immigrants at all.


Welcome to Put A Num On It!

What’s Putanumonit?

People see some things as quantifiable, e.g. tax rates, and unquantifiable, e.g. love, charity, happiness, feminism and Chinese soccer. Personally, I have no idea how the American tax system works, but everything else seems quite easy to put a number on if you try.

For example, a simple mathematical fact can explain why the Chinese soccer team sucks  despite China’s huge population. I write often about other sports as well. Love and dating is also a popular subject, from guides on leveraging or “hacking” OkCupid to musings on feminism and Nice Guys. My best received post is Shopping for Happiness, one of my essays on the best ways to use money to make yourself happier and to improve the worldI call out people who use bullshit numbers, whether by mistake or with intent to mislead. Those include bad scientists, good scientists, and even FiveThirtyEightI fully encourage you to call me out in turn when I get something wrong. I occasionally dive into economics and public policy, I wrote about voting (bad idea), basic income (good idea, maybe) and inequality (complicated idea). My writing, in fact my entire life, is informed by the rationality community and the writings on LessWrong.com. A few of my posts address the study of rationality explicitly.

I also wrote a post about Pokémon. I hope that doesn’t become a category.

Putanumonit is a personal labor of love, free of ads and affiliations. The chronological archive is here, new posts arrive 3-4 times a month on a schedule unknown even to me. Please subscribe on the right sidebar, leave comments on any old or new post and write putanumonit at gmail dot com with personal missives, datasets you want me to analyze and invitations to beer.




Finding common ground on EpiPens, and establishing the Good Drug Administration.

9/2 Epistemic Status Note

Whenever I write about economics and policy proposals I face a particular dilemma. If I present a one-sided case, readers call me a clueless ideologue. If I present all the caveats and counterarguments I can possibly think of, the posts would be 15,000 words each and come out twice a year. I prefer to err in favor of shorter and more concise posts. I try to present original ideas, so whatever I propose will have hundreds of ready-made counterarguments available at a quick Google to readers who want a balanced account.

This means that when I present my case for the GDA below, I want to say “here’s a rough outline of a cool option not many have considered”. I don’t mean “the GDA is the perfect solution and if you disagree you’re an idiot”. Many people do in fact disagree with me, either in the comments or on the SSC Reddit, and I’m very happy to have the conversation there and keep the posts short. From Chinese soccer to tax policy, I almost always get comments from readers who are wiser than me on the subject and I’m very happy to learn from them.

I’ll never write something I don’t believe in “just to start a conversation”, but I almost never imply that what I write is dogma.]

0 – Escaping the mind kill

My political-economic philosophy is best described as Bowmanite-Neoliberalism, but the word “neoliberal” is too loaded. Most people will call me a consequentialist-libertarian instead. Also, it’s no secret that Slate Star Codex is my favorite blog. So of course, when SSC published a sharp consequentialist-libertarian rant about the EpiPen price controversy, I had a lot of fun reading it.

Too much fun, in fact. The kind of fun you have when you’re landing a cracking punch on the enemy, not when you’re mindfully thinking about complex policy.

So much fun that I neglected to actually read the original Vox piece that Scott railed against. It turns out that the original piece (and the follow-up) was penned by Sarah Kliff. She’s no idiot and no socialist, a couple weeks ago I gave high praise to her article on the gender wage gap. So what’s going on?

In particular:

  1. Who’s right, Scott or Sarah?
  2. What’s wrong with the FDA?

1 – Buyer, seller or regulator?

Scott is talking about the US Government making EpiPens expensive by blocking the entry of competitors, thus ensuring that “the pharmaceutical industry is part of a highly-regulated cronyist system that works completely differently from chairs and mugs”. Sarah blames the US Government for not making Mylan charge a lower price for EpiPens. But “the US Government” isn’t really a single actor in this case. It’s a terrifying hydra with many heads, and each head has its own deal with EpiPens.

In a normal world, there are two types of actors in each market. There are sellers, who set the prices. There are buyers, who decide whether to take the price or not. When left to themselves, buyers and sellers have a remarkable tendency to converge on a price that makes everyone happy. That tendency is the main reason why we get to have good stuff.

Occasionally, there’s a third type of actor: regulators. They sometimes do useful things, like protecting third parties harmed by buyers and sellers. They sometimes do appalling things, like arbitrarily constraining prices and causing terrible tragedies.

It’s important not to confuse sellers (who make the prices), buyers (who take the prices) and regulators (who fuck with the prices).

Back to Sarah and Scott. Scott says that in the case of EpiPens, regulation is causing massive harm. Here’s the quote from Sarah that makes it seems like she’s saying regulation is good and we need more of it:

The story of Mylan’s giant EpiPen price increase is, more fundamentally, a story about America’s unique drug pricing policies. We are the only developed nation that lets drugmakers set their own prices, maximizing profits the same way sellers of chairs, mugs, shoes, or any other manufactured goods would.

This paragraph is so maddening (oh no, God save us from profits!) that I wonder if Scott just threw something heavy at his monitor before he had the chance to read past it. The most unfortunate thing about this paragraph is that it has nothing to do with the rest of Sarah’s article, which doesn’t actually talk about drug pricing but about drug buying, and the harms caused by the regulation thereof.

America doesn’t have a problem with drug pricing policies because America doesn’t price EpiPens, Mylan does. America runs Medicare, which is a buyer of EpiPens. And if it were a buyer free like all buyers to take prices or leave them, it would tell Mylan that at any price above $100 it would switch to Adrenaclicks and that’s that. The next day EpiPens would cost $99.99.

In countries like the UK, there is just one allowed buyer of medicine (aka “single payer”) so the sole buyer is de facto the regulator. But the US Government has been clever enough to create a regulator (FDA), a separate buyer (Medicare) and, astoundingly, a separate federal regulation of Medicare itself. From Sarah again:

In the United States, there’s no such negotiation process to speak of. Federal law bars Medicare, the country’s largest insurance plan, from even trying to negotiate bulk discounts with drugmakers. Once a pharmaceutical company sets its price, the government-run plan that insures 49 million seniors is required to accept it.

Negotiating discounts isn’t “regulation”, and it’s not “pricing policy”. It’s what consumers do. The problem is with the ludicrous law that prevents Medicare from being a free buyer and drags all other smaller consumers along with it. If Mylan can charge $500 to Medicare and they have to charge everyone the same price, they’ll charge $500 even if they lose some other customers to cheaper alternatives.

I’m honestly dumbfounded how that law could even exist. It’s opposed by 83% of Americans, including both Trump and Hillary. Even that 83% surprisingly low: I didn’t know that a whole 17% of Americans were employed by pharmaceutical lobbying companies, and I can’t think of any other reason to think it’s a good idea.


The Medicare non-negotiation policy is like if I walked into the only bar in town and announced that I will buy all their whiskey at whatever price they charge. The bartender quickly raises the price of Jack from $20 per glass to $20,000, and the other customers in the bar are forced to leave in disgust, cursing my name. I spend half a million dollars getting drunk on overpriced whiskey and fall under the table, shitfaced and broke. Just before I pass out, I call the cops to complain angrily about the evil, price gauging, bartender.

2 – The Good Drug Administration

Q: You didn’t really talk about the FDA in the previous section, is Scott wrong to blame them?

A: No. If anything, Scott is underselling the harm done by the FDA.

Q: But the FDA saves people from bad drugs!

A: It does, on occasion. Compared to other developed countries, the FDA saves about 1,000 people per year by preventing them from getting bad drugs. In the two centuries of US history before the FDA got expanded powers in 1962, the worst drug-related disaster killed a mere 107 people. Every death is a tragedy, but 107 people is a small enough number to be on the same scale as casualties due to under-regulation of chairs.

In contrast to the 1,000 saved, the FDA kills 10,000 people each year by delaying their access to good drugs. These numbers are from a large scale collaborative academic report, and the 1:10 estimate is from 1985. It has gotten much worse since 1985. Today it takes a new generic drug four years just to get to the review stage due to back-log.

Q: That’s horrible! So everyone in the FDA is an evil murderous villain?

A: NO! I’m pretty sure that not a single one of the FDA’s 14,824 employees is there trying to kill people. The reason why the FDA is a tragedy is simply: bad incentives plus the power to coerce. In fact, I think that “bad incentives plus the power to coerce” explain the majority of historical tragedies, from the slave trade to Stalin. The FDA is punished when they approve a bad drug, but not when they delay a life saving one, so their incentives are screwed. And since they have the coercive power to prohibit the sale of any drug in the country, their bad incentives kill people.

Q: I get it, we need to reform the FDA! We’ll align their policies with Europe, give them enough budget to clear the back-blog…

A: The problem with the FDA isn’t the back-log or the policies, these are mere symptoms. The only problem with the FDA is that it has the power to coerce the market and block people from buying and selling drugs. All the other problems stem from that.

Q: So what should we do with the FDA?

A: Burn it to the ground.


Q: But you just said that the FDA’s employees aren’t bad people!

A: That’s right, they’re excellent people. I’ll make sure they stand at a safe distance while the FDA burns and I’ll give them marshmallow to roast on the embers. Then, I’ll hire them to work for my new start up: the Good Drug Administration, or GDA.

Q: So you’re saying that if the FDA didn’t exist, we would need to invent it? How Voltairean!

A: The GDA will not have the power to coerce, that’s the difference. And be thankful that I didn’t name it Good Overseer of Drugs.

Here’s how the GDA will work:

I’ll go to all the pharma companies and tell them that I charge 2% of the price of each drug to put the GDA stamp of approval on the package. I employ the experts who know how to test drugs, so consumers will prefer to buy drugs with the GDA seal of approval. Pharma companies want to sell more drugs, so they’ll happily pay the 2% if they know their drug is safe and effective enough to pass my test.  If even half of them agree, the 2% charge will earn the FDA’s old budget of $4 billion in revenue.

Some manufacturers will sell drugs without the GDA stamp, but consumers will be wary of those and the manufacturers will have to lower their prices. The only people buying non-GDA drugs will be the poor (those who can’t afford alternatives) and the desperate (those who don’t have alternatives). But these people weren’t buying FDA drugs anyway since there weren’t FDA drugs that could help them at a price they could afford!

Everybody who was buying FDA approved drugs before will now be buying GDA approved drugs. Pharma innovation will skyrocket, since manufacturers know that even if their new drug doesn’t get GDA approval right away (or at all) they can still make some money of it. And since the GDA only makes money when the drugs are sold, it has every incentive to test the drugs quickly. Can you imagine a private company with a four year back-log on innovation review?

The GDA’s main asset is its reputation among consumers. Its reputation will suffer both if it approves a bad drug, and if people buy non-GDA drugs that turn out to be safe and helpful. Without the power of coercion, the GDA would have to find the perfect balance between scrutiny and approval just to maximize its profits, its only incentive is to do what the FDA is supposed to do today, but better. If it doesn’t, someone will create the Better Drug Administration and will eat my lunch.

That’s literally what we do for every great product we have, from chairs to mugs to t-shirts. Usually it’s retailers who are the approving intermediary. Bloomingdales checks the clothes they sell for quality, because the reputation hit to Bloomingdales from selling a single bad shirt is much bigger than their profit from a shirt. Clothing chains that have lower standards of quality control sell to people who want cheaper stuff that isn’t tested as rigorously.

Somebody can create the Strict Drug Administration that will adhere to the FDA’s old standard and only sell and high-end retailers, and the Loose DA that will do minimal testing on cheap drugs. Customers will decide.

Here’s a similar proposal to my GDA idea, with some more detail.

Q: But if the GDA makes money on every drug sold, they have the incentive to sell Americans too many drugs!

A: Well, it is called the good drug administration, administering drugs is what it’s about.

Jokes aside, the job of the GDA (or FDA) isn’t to control the quantity of medicine Americans use, it’s to control the quality. Asking someone to do both is as silly as asking your central bank to manage both inflation and employment at the same time.

Look, Apple puts its stamp on approval on every app in its App Store. They control the quality. Of course, they also want you to buy a lot of iPhone apps, but you’re not forced to buy them. You know that Apple’s incentives are selling apps, so even when they advertise to you, you don’t spend all your money on iPhone apps. The GDA’s job is providing Americans with a way to acquire great, safe medicine at a mere 2% price increase. The job of preventing Americans from using all this medicine to live long and healthy lives falls to the homeopaths.

Q: Who is against your system?

A: All people who suck at their jobs.

The good FDA employees will be happy to get a pay raise to work for the GDA, and the GDA will have to pay them because it competes with all the other DAs. The employees who suck at their job (of testing drugs) will not be. The good pharmaceutical companies who know they can invent profitable drugs will be happy with the GDA, but the ones who suck at their job (of making new drugs) will lose the existing profits from their FDA-protected market capture. Seriously, the only ones benefitting under the current system are the incompetent.

Q: So why are we stuck with the FDA instead of switching to the much better GDA?

A: Because unfortunately, the set of people who suck at their jobs includes 99% of American politicians.


A Conversation with GoD

Can Putanumonit put a number on the divine itself?

The following is an inexact transcript of a conversation that happened exactly like this. The scene: a wine bar in Manhattan, on my second (and final) date with a Jewish girl. We’ll call her “Jewish Girl on Date”, or J-GoD for short.

J-GoD: You’ve changed your OKCupid religion status from “Jewish” to “atheist” since last week. What happened this weekend that proved to you that God doesn’t exist?

Jacob’s inner voice: Actually, I switched it to optimize my dating profile and avoid Jewish girls that give me grief about not being as Jewish as their moms expect me to be.

Jacob’s mouth: I don’t think that anything can really prove that God doesn’t exist. That’s partly because the definition of God will usually shift to accommodate any evidence.

J-GoD: So why do you call yourself an atheist if you can’t prove that God doesn’t exist?

Jacob: I give the existence of any specific god a low enough probability that I functionally behave as if I was sure no god existed.

J-GoD: Probability?!

Jacob: I give about a 1 in 10 chance for the existence of any popularly conceived supernatural beings, including humanity’s descendants simulating our reality. For some specific religion’s god, like the Old Testament Jewish God (we’ll call him J-God for short), something like 1 in 1,000,000.

J-GoD: How can you put a number on the existence of J-God?

Jacob: Umm, I have this blog about how you can put a number on almost anything… Anyway, probability numbers are how I represent how confident I am that something is true or not.

J-GoD: How the hell can you be exactly one in a million confident that God exists?

Jacob: I wish I could say that I calculated the prior of the Kolmogorov complexity implied by the description of J-God and updated on all available evidence. In reality, I just picked a really low number that matches how confident I allow myself to be on complex metaphysical questions.

J-GoD: So you’re just making up a number to say that you think that God doesn’t exist?

Jacob: No, no, the exact number is important. For example, if I was walking down the street and suddenly saw a bush burst in flames, and the bush burned but wasn’t consumed, and I heard a voice from the sky saying: “I am the God of your father, God of Abraham of Isaac and of Jacob“, I would definitely update my belief.

It’s possible that I could see a divine bush in a godless world as the result of hallucinogenic drugs or a convoluted prank involving VR, but I’m much more likely to see it in a universe in which J-God exists. In J-God’s universe pranksters and drugs still exist, but so does a divinity that is known for using burning bushes to impress people. Let’s say that a burning bush is one hundred times more likely in a J-God universe. So, I would update my belief in J-God by a factor of one hundred, from 1 in 1,000,000 to 1 in 10,000. That’s a high enough probability of J-God watching over me that I would at least make sure to never again boil a goat in its mother’s milk.

A second miracle would bring my posterior belief in J-God from 1/10,000 to 1/100, far above any other single supernatural being and high enough to give some real bite to Pascal’s wager. At three independently observed miracles, I will switch to living a life of humble devotion to J-God.

J-GoD: You think that people should only believe in a God after they see him perform exactly three miracles? That’s a perverse notion of belief! Belief in God has nothing to do with seeing miracles!

Jacob: Actually, the great medieval rationalist rabbi Moses Maimonides discusses in great detail the question of miracle-based belief in God. In Guide for the Perplexed, chapter LXIII he says:

You know how widespread were in those days the opinions of the Sabeans: all men, except a few individuals, were idolaters, that is to say, they believed in spirits, in man’s power to direct the influences of the heavenly bodies, and in the effect of talismans. Any one who in those days laid claim to authority, based it either [on reasoning and proof] or that some spiritual power was conferred upon him by a star, by an angel, or by a similar agency.

He basically says that for people who see magic in every charlatan and miracles every other Tuesday, a miracle should not constitute strong evidence. This is sound Bayesian reasoning. However, we are no longer “in those days”. As an educated rationalist in 2016, I don’t believe that supernatural wonders are common at all. Seeing a true miracle with my own eyes would provide solid grounds for changing my belief.

In Mishne Torah, Maimonides agrees that the performance of miracles should at least make you consider that you’re dealing with a genuine, Twitter-verified, message from the divine, i.e. a prophet:

Just as we are commanded to render a [legal] judgment based on the testimony of two witnesses, even though we do not know if they are testifying truthfully or falsely, similarly, it is a mitzvah to listen to this prophet even though we do not know whether the wonder is true or performed by magic or sorcery.

By “magic and sorcery” Maimonides means illusions and tricks, as opposed to true divine intervention. For example, hallucinogenic drugs and VR count as “magic and sorcery”. Now of course, Maimonides knows that 0 and 1 aren’t probabilities, so Bayesian updating on evidence cannot bring a man to absolute and total belief. As long as drugs or VR are a possibility, they cannot be completely discounted as the source of the observed miracle.

From Mishne Torah again:

The Jews did not believe in Moses, our teacher, because of the wonders that he performed. Whenever anyone’s belief is based on wonders, the commitment of his heart has shortcomings, because it is possible to perform a wonder through magic or sorcery.

Here’s a great (atheist) Jew explaining how a great (deeply religious) Jew proved that two smart Jews shouldn’t disagree on their picture of reality. Maimonides and I don’t have the shared knowledge required to reach consensus, but we are in complete agreement regarding the proper epistemology of miracle-based belief in J-God.

We differ in our moral value judgment on less-than-absolute belief: I believe that it is a virtue, Maimonides that it is a shortcoming. However, I am a moral anti-realist: I believe that moral value judgments are a fact about (my and Maimonides’) minds, not about external reality. Thus, our moral disagreement isn’t cause for concern for me that I am irrational on the subject.

J-GoD: What kind of atheist are you that you analyze in minute detail the biblical commentary of medieval rabbis?

Jacob: What kind of Jew would I be if I didn’t?

What this overpaid man has to say about the gender wage gap is shocking!

How come women make 79 cents on the dollar? Here are two prominent explanations that are clearly wrong, and two uncommon explanations that are possibly true.

A couple months ago, Vox tried to explain economic inequality using cartoons. That article was so deficient and misleading that it inspired me to write a whole rant on how reporting about inequality is often deficient and misleading. The income gap between the rich and the poor struck me as a subject that is actually amenable to an intelligent and balanced analysis. That’s in contrast, just to throw a random example, to the income gap between men and women.

So of course, this week Vox decided to explain the gender wage gap using cartoons. And guess what? It’s excellent. It’s well researched (by Claudia Goldin, a woman economist), well written (by Sarah Kliff, a woman editor), and describes an interesting explanation of the gender wage gap – the differing value of specific work hours.

Actually, I should say “factor that plays into” instead of “explanation of” the wage gap – it’s a complex effect that is driven by many causes that also interact with each other. The best we can do is identify several such factors and see if they fit data to build a better understanding of what’s going on. So, emboldened by Vox, I will offer two more possible developments contributing to the wage gap that neither invoke nor employ sexism. Also, unlike Mesdames Goldin and Kliff, I will not make a single penny from writing this. Thus I will be counteracting the gender wage gap through personal effort and example.

What’s wrong with arguments from sexism?

The two “arguments from sexism” regarding the gender wage come from the two ends of the gender-politics horseshoe,  and are thus pleasingly symmetrical and equally wrong. The argument from the RadFem-left side of the horseshoe is that women are paid less because oppressive men conspire to pay them less. The argument from the MRA-right is that women are just naturally less talented then men, with some allusion to evolutionary psychology accounting for the talent gap. Prior to collecting any data, we should notice the first argument contradicts basic economic math and the second argument contradicts… evolutionary psychology.

Economics tells us that if a wage gap existed, smart companies would profit by hiring women, driving the sexist companies out of business. People often dismiss this argument because of its simplicity, but it’s much more powerful than they realize. The average profit margins for businesses in the US are a mere 9%, while wages and benefits make up more than 60% of employer costs. If the wage gap of 79 cents on the dollar was for equal labor, employers hiring women would save 21% on labor costs, or more than 12% on total costs. This would more than double their profits ,while employers hiring men would go bankrupt. Overpaying for equal labor even by 5% increases your costs by 3%, that’s one third of an average company’s profits. In a competitive economy with high costs of labor, any sexist discrimination in wages large enough to be noticeable is also too costly to survive.

60 Playmate Bunnies Celebrate Playboy's 60th Anniversary
Hugh only hires women for the labor savings. (Photo by Rachel Murray/Getty Images for Playboy)

The evo psych talent argument seems to me like a classic fake explanation: it fails to predict the very effect it purports to explain. Consider this story:

Lacking the ability to resolve conflicts in their favor using brute strength, women have evolved to manage conflicts through interpersonal skills. Thus, women are less aggressive but better at persuasion, empathy and cooperation. These talents lead women to dominate occupations that require talking people over to your side, such as: politics, education, sales, entertainment, humanities academia, marketing, law, and all managerial positions in large corporations. This list of occupations covers every single highly paid career except for STEM and medicine. As a result, we see few women wasting their time trying to become doctors but otherwise most women earning higher incomes than men.

– Falkovich et al. Why men make 79 cents on a woman’s dollar (2016)

Now compare that, backed by the fact that women outpace men in educational attainment, to whichever just-so evo-psych story you heard about how women make less because evolved to be less assertive/analytical/hardworking. Which story sounds more reasonable?. Of course,  the plausibility of explanations should matter little if we have data. So what does the data say? It says that apparently you can find bias against women, bias against men or no bias at all depending on chance, researcher attitudes and whether Mercury is in retrograde.

If these arguments are supported by neither theory nor practice, why do so many people tout them passionately? (Just trust me, you don’t want to see links for this claim, they’re all horrible). I think that these are “beliefs as attire“, they are used mainly to signal loyalty to the RadFem/MRA political group that unifies around blaming the patriarchy/feminism for all its problems.

It’s important to remember that reversed stupidity isn’t intelligence: the explanations from sexism aren’t wrong because people believe them for dumb political reasons, they’re independently wrong. 5,000 years ago in Egypt someone proclaimed the crazy idea that the sun is larger than the earth just to curry political favor with the priests of Ra, and was correct by accident.

So, here are my two stories, and the data that backs them up:

It’s not all about the money

Jobs offer many different things besides compensation, Vox mentions only the obvious one that women trade-off for money: flexible hours needed to raise children. But a job isn’t just the hours and the wages.

Plumbers make almost 50% more than teachers, because the latter job is rewarding, high status and lets you work with children, while the former is boring, low status, and lets you work with sewage. This is also true at the higher end of the pay scale: MBA graduate women are likelier to work for non-profits, men likelier to work in corporate finance. Corporate finance isn’t cool, but it pays.

Also among MBAs, women are much likelier to work in marketing for big corporations like Coca Cola or Kraft: a very stable job but one with lower wage growth. Men are much likelier to work for hedge funds, where the salary is higher on average but also very volatile, as is the survival of entire company. Remember, when a hedge fund blows up and its male employees find themselves on the street, they immediately drop out of the wage-gap calculation which only includes the fully employed.

In happy-nomics terms, women are making the much smarter trade off. The effects on happiness of job security and finding purpose and meaning at work far outweigh the effects of salary increases beyond a certain point. So why do men value money more than flexibility, fun, coolness and stability?

There are likely many reasons, one of them is that 72% of women think that men should pay for the first date, and 82% of men agree. More broadly, men’s income correlates very strongly with being married, while women’s income barely does (raw data here). The fact is, both men and women care much more about a man’s salary than a woman’s, and that can be both a cause and an effect of men trading off other benefits for money.

It’s hard for men to earn little

Let’s imagine a simple economy consisting of three kinds of jobs. Half the men in our fantasy economy are fighters and make $20,000 a year. Half the women are rogues and also make $20,000. Finally, half of all men and women are wizards, and wizards make $100,000. The average wages for full time employees are $60,000, the same for men and women.

Art credit: tensen01, awesomeness credit: OOTS

Now let’s imagine that the economy outsources all the fighter jobs to orcs/skeletons/China and the fighter men are fired. These men drop out of the employment statistics, and the average wage for employed men shoots to $100,000 since only male wizards have jobs. “Fie the gender wage gap, women make 60 cents on the dollar!” cry the newspapers, even as men face a much worse economic employment situation than the women.

There’s some evidence that this is actually happening in our world (the male employment shift, not the orcs).

Here’s a gender-composition breakdown of various job categories, and here are the occupations with the largest employment changes. The occupations doing the worst are carpenters, laborers, freight movers and construction workers. These sectors are losing hundreds of thousands of (mostly male) jobs a year. It’s becoming harder and harder for men to find year round, low-paying jobs that would count against the average male wage in the statistics. Some of the men who are laid off from low paying jobs count as unemployed, but many give up on working full-time again and drop out of the labor force entirely. From 1994 to 2014, women’s labor force participation fell by 1.8%, while men’s dropped by a whopping 5.9%.

The fastest growing occupations are nurses and personal care aides (and also nursing aides and medical assistants, which is apparently a completely different occupation). These latter jobs also have a constant year-round demand. If you’re a “personal aide to a home nursing assistant” you definitely count in the fully employed statistics.

Basically, if you’re doing any sort of assisting or aiding in a medical or home setting, you have no trouble finding stable employment and your wages are slowly rising but still low. Also, you’re probably a woman, which means that you’re contributing to the gender wage gap. Shame on you.

So, is there sexist discrimination or not?

If that’s the question you’re still asking, you haven’t paid attention. Asking “is there discrimination or not?” is only important for recruiting soldier-arguments in support of your political position. The useful question is: “what should we do to allow men and women thrive in their jobs?” and the answer is: “it’s hard”.

My two proposals, that women choose different trade-offs and that the stats are skewed by there being less low-paying jobs for men, are just two of the myriad ways in which the desires, opportunities and paths to employment are different for each gender. The policy takeaway isn’t that there’s no discrimination so we shouldn’t do anything. The takeaway is that we should be careful about proposing solutions to issues that result from a dozen complex developments happening in parallel, until we really understand what’s going on.

Understanding this complexity and working to untangle it one piece of data at a time is the fox approach. Unfortunately, the more politically polarizing a subject is, the less patience people have for complexity, and the foxes (and Voxes) are rarely heard over the din. But we can’t make progress on a fox issue with hedgehog answers, we have to keep untangling. But it’s worth it: just look how cute these foxes are!

Pokemonumber On It

It’s time to turn my data modeling skills to the one question that matters: how long will you need to play to catch every Pokémon?

Rob Wiblin is the research director of 80000 Hours. His writings about philanthropy, economics, and life advice are read by thousands of people. Last week, Rob tweeted:
wiblin tweet

This tweet was read by 4 million people.

Let it not be said that I can’t take a hint. I’ve written extensively about philanthropy, economics and life advice, so it’s time I switched to writing about what really matters: Pokémon. Specifically, let’s answer the main question on the nation’s mind these days: how long will it take to, in fact, catch ’em all.

This isn’t a trifling matter to be addressed by guesstimating a few numbers and tossing them in an equation. In my quest for the ultimate pokemonumber I observed the best hunters, counted every single pokemon in my own deck, sourced the wisdom of the internet, estimated a Bayesian parametric model, programmed a simulation, and braved the stormy seas of GitHub for the first time so you can play with the program yourself. And of course, it all took twice as long as it should have because I frequently had to stop writing and go on a pokewalk in my neighborhood. All in the name of research.

The first thing we know about catching ’em all is that one guy out of the 20 million Americans with Pokemon Go on their phones has indeed done so, and that 19,999,999 still haven’t. It took Nick Johnson about 100-120 hours over two weeks to complete the American pokedex. That’s high but not uniquely so, there were probably several thousand people who played as many hours and Nick turned out to be the luckiest among them.

There’s a limit to how much we can extrapolate from a single data point, but it gives us a useful edge case: our simulation should catch ’em all in as little as 100 hours about once every several thousand tries. The average result should be in the order of magnitude of several hundred hours.

To get better detail, I looked at my own play two weeks after installing the app. IGN’s wiki informs us that Pokemon Go uses 4-8 MB of cellular data per hour. I’m using LTE so my own usage is probably on the high end, let’s say 7 MB/hr. I think I play for about an hour a day so my Pokemon data usage should be around 100 MB for 14 hours of play.

pokemon data usage

Holy crap this  game is hard to put down! Ok, so that makes it 30 hours of play. During these 30 hours I have captured 502 pokemon, but I ignore about every third pokemon I see so that means that I’ve seen around 753, or 25 pokemon sightings per hour of play.

The next thing to figure out is the rarity of each specific pokemon. Here’s the best chart the internet currently has to offer:

This is a really useful chart, but there are three things missing from it:

  1. It only has one pokemon from each of the 69 evolutionary lines (66 that are available on each continent). I couldn’t find information on the chances of seeing an evolved pokemon, so we’ll start by estimating how long it will take to catch one pokemon in each genus and extrapolate from there.
  2. As people have commented on Reddit, the rarity of pokemon is very location-dependent. Drowzees overrun Toronto at night, but there are hardly any in Queens in daytime. The chart has zubats outside the most common category, this sounds crazy to anyone in Pittsburgh where every other pokemon is a zubat. This means that  the general structure of this chart is useful, but we won’t rely on the specific types of pokemon in each category.
  3. The main thing missing from this chart is numbers. That’s where I come in.

What we need is a numerical rarity table for each pokemon. What we have is the chart above and the 753 pokemon I have meticulously recorded like Darwin on The Beagle. Our challenge lies in creating a general and broadly applicable model from very limited and specific data. The art and science of model selection consists in finding the right balance between applicability and precision, or equivalently between variance and bias, or parsimony and fit to the data.

Out of the 753 pokemon that I have seen, 37 have been pidgeys, 31 weedles and 4 ponytas. An overly specific model would say that the probability of seeing a pidgey is thus exactly 37/753 = 4.9%, for weedles it’s 4.1% and 0.53% for ponytas. This fits my observations perfectly, but it’s unlikely to generalize. A priori, it’s much likelier that I have simply lucked into more pidgeys than that Niantic programming pidgeys to show up exactly 4.9137% of the time for every player. This approach would use the data too much, and overfit the model. In model selection language, we estimate too many parameters: 66 of them if we’re picking a unique probability for each pokemon type.

On the other hand, saying that every pokemon has the same 1/66 chance of appearing is too general a model. It may be a reasonable guess ahead of time, but it doesn’t fit the data at all. The chance of seeing 10 times as many pidgeys as ponytas if they were equally likely is one in 20 million.

model selection
Model selection is an important challenge in many fields.

A balanced model tries to get close enough to the observed data, while using the least number of parameters, in accordance with Occam’s Razor. For example, we can assume that pidgeys and weedles fall in some category with other types that all have a roughly 4-5% chance of appearing, while ponyta is in another category that has a different, lower probability.

The reddit chart has 9 rarity categories plus “special”, but I’m not sure what’s special about the latter except that some of them are available as starter pokemon. We’ll stick with 9 groups. Each category has a different number of pokemon in it, and that strikes me as an unnecessary complication. I haven’t seen any of the 3 mythical pokemon yet so I’ll take the chart’s word on 6 and 3 pokemon in epic and mythical. On the everywhere side, there are 4 pokemon that show up much more often for me than any others: zubats, rattatas, drowzees and doduos. I will assume that the remaining 53 pokemon are evenly spread among the 6 categories in the middle: 9 in each (one group will have 8). That’s because there’s no reasonable amount of data the chart maker could have gathered that will show that there are exactly 7 pokemon in common and 9 in uncommon and not 8 and 8 or 9 and 7. In the absence of evidence, we should assume that the groups are equally sized to be parsimonious.

Now the tricky part: how to assign a probability to each pokemon type without “using up” too many parameters? Here, the edge cases are useful. The four everywhere pokemon account for about on third of all the ones I see, so I’ll give every pokemon in that category around 8% (1/4 of 33%). I have seen 3 of the 6 epic pokemon, so the chance that a single pokemon I come across is epic is roughly 3/753, or 0.4%, and each of the 6 epic pokemon has around .06%. Epic is 7 categories away from everywhere, and .06% * 27 ≈ 8%. Hmm. Could the per-pokemon probability in each successive category differ by a factor of 2? That would certainly be elegant, let’s see if it fits.

If each category has half the probability per pokemon as the one above it, each pokemon the virtually everywhere category will have 4% of showing up. 4% * 753 = 30, so if that’s the case I’ll expect that the 8 or 9 most common pokemon after the first 4 will show up around 30 times each. Here’s what I’ve actually seen:

Spearow 40
Pidgey 37
Weedle 31
Caterpie 26
Voltorb 25
Krabby 20
Magnemite 18
Tentacool 15

Not perfect, but not unreasonable as an approximation. The fit gets better as I look at the other categories. For example, the common pokemon are ranked 31-39 based on rarity and I expect to see each of the common pokemon 4 times out of 753 (0.5%). Looking at my records, I have in fact seen each pokemon in places 31-39 between 3-5 times. If my model is correct, one of the three mystical pokemon will show up once every 1000 tries or so, since 3 (mystical types) * 8% * 2-8 ≈ 1/1000. The fact that I haven’t seen any in 753 tries yet fits the data. It also means that I’m frickin’ due to find one soon.

This then is my best guess at the probability distribution of pokemon of each type:

Group name N in Group Examples

(where the chart and I agree)

Everywhere 4 Zubat, drowzee, pidgey 8%
Virt. Everywhere 8 Oddish, weedle 4%
Very Common 9 Magikarp, krabby 2%
Common 9 Nidoran, clefairy 1%
Uncommon 9 Geodude, jigglypuff 0.5%
Rare 9 Tangela, koffing 0.25%
Very Rare 9 Rhyhorn, scyther 0.125%
Epic 6 Electabuzz, hitmonlee 0.063%
Mystical 3 Snorlax, porygon 0.031%

I like this model: it matches both the chart and my own pokecounts, and instead of sixty six parameters we described the data using only nine: 9 categories; equal probability within each category; 4, 8, 6, 3 pokemon in some categories, 9 in the rest; 8% for the probability of each everywhere pokemon and 1/2 probability drop for each consecutive category. And wouldn’t you know it, when you add the probabilities of each pokemon appearing it all adds up to 100%.

Who’s the boss of Bayesian data analysis? I’m the boss.

(Just kidding, Andrew Gelman is the boss.)

OK, one more step to go: given the probabilities of coming across each pokemon type, how many pokemon will you see before seeing one of each? This question is too difficult for my puny brain to calculate using algebra, but it’s not too difficult for my laptop to calculate using brute force. Ladies and gentlemen, welcome to the Putanumonit simulations Github repository.

pokemon.py is a small Python program simulating Pokémon Go games. Each game consists of turns in which you see a single pokemon based on a given probability distribution. The function counts the turn on which you saw each pokemon for the first time. The sim function allows you to simulate many games and calculate aggregate statistics. Here’s what I got from running the simulation 10,000 times with the probability distribution I estimated above:

  • The median number of turns before seeing each of the 66 pokemon types is 5,800, or 232 hours of play (at 25 pokemon/hour).
  • The mean is higher, at 6,600 turns. That’s because the “unlucky” simulations do much worse (~20,000 turns) than the “lucky” ones do well (~2,000). The “unluckies” skew the mean upwards, but not the median.
  • The quickest any of my 10,000 sims did was 1,150 turns, or 46 hours. We can assume that Nick Johnson is about 1-in-10,000 lucky himself, and it took him 100-120 hours. This means that catching all 142 distinct pokemon takes 2-3 times as long as catching just the 66 evolutionary types. This is a very rough estimate based on a single data point, but it doesn’t sound utterly unreasonable. Whatever the real ratio is, it’s probably closer to 2 or 3 than to 1.01 or to 30.
  • So, my best estimate is that catching all 142 pokemon, if you aren’t as lucky as Nick, will take at least 500-700 hours, or about a year of your life if you play for 2 hours a day.
  • Yes, that sounds like a lot, but what else were you really going to do with the rest of 2016-2017?
  • In 65% of simulations the last pokemon caught was one of the three mysticals, and these simulations took 7,460 turns on average. In 30% the last pokemon caught was epic, these took 5,310 turns. In only 5% of the simulations the last pokemon caught was one of the 57 types that aren’t in the rarest two groups; these were the quickest games of all at 3,740 turns on average. This means that the length of the game is mostly determined by how long it takes you to catch the 3-6 pokemon that are rarest in your area. The amount of time to complete the other 60 common types in the pokedex is relatively fixed.

You can play around with the program and see how the games play out under different assumptions. You’re also welcome to comment with the data you gathered on your own hunts and other questions you want answered. From now on, this blog will forego any economical, philanthropic, political, or scientific distractions and focus exclusively on Pokémon until the madness subsides. Or until we catch ’em all.






The Price is Always Right

In the 17th century, John Locke described an immutable law of nature regarding the prices of goods. So why do we keep raging against it in vain to this day?

Last night I dreamt that I lived in a world parallel to ours, in Old Cork City in the Stated Unions of Columbia. The Columbians are an affluent and enlightened lot, but they suffer from a very peculiar madness: they consider Newton’s laws of motion and gravity to be ethically unjust and refuse to abide by them. It is clear to every Columbian that light objects soar while heavy objects must crash to the ground. Yes, scientists at Old Cork College have repeatedly shown that feathers and a bowling ball fall at the same speed in the absence of air resistance, but Columbians figure that gravity works differently in a perfect academic setting than it does in real life.

feathers bowling.gif
Source: Gizmodo

Since it is unfair for heavy things to fly while lighter objects are earthbound, heavier than air flight is banned in the SUC. Airlines are allowed to increase the weight of their zeppelins by no more than 5% from year to year, an arbitrary number arrived at after consultation with astrologers.

There are physicists in the Stated Unions, and their journals are full of lift equations and orbit calculations. Columbians have learned to ignore their physicist’s incessant calls for airplane and rocketry development, and their admonitions that starvation will not help man to soar. It’s quite obvious that a physicist’s job is to argue over string theory and quantum interpretations, flight is a simple, common sense issue, one that the public can handle quite well without the aid of experts. A few Columbians each year diet to near starvation and then jump off cliffs hoping to fly, but their numbers are small enough not to put any politician’s career in jeopardy.

In 1903, two Columbian bicycle repairmen named Orville and Wilbur Rong built an illegal airplane in secret. From a field outside the town of Puppy Eagle the brothers soared into the cold December air. For three seconds the only sound heard was the whine of the propeller and the rush of wind on the wings. Then, the sound of gunfire filled the air as state police promptly shot the Rong Flyer from the sky. The gathered public erupted in applause at the resolute reaction of law enforcement.

In my dream, I wondered at my countrymen’s reluctance to acquiesce to the simple laws of nature. Perhaps people rebel against the idea of a system beyond any person’s design, one that doesn’t follow any person’s wishes but imposes its implacable rules on all men. Perhaps the Columbians just need more time to come to grips with Newton’s formulas. After all, they were only published as late as 1687, barely three centuries prior.

In 1695, eight years after Newton’s Principia, English philosopher John Locke published a very short essay called Venditio, concerning pricing and the ethics thereof. Wasting no time, Locke kicks off by explaining the Law of One Price in an open market (emphasis mine):

Upon demand what is the measure that ought to regulate the price for which anyone sells so as to keep it within the bounds of equity and justice, I suppose it in short to be this: the market price at the place where he sells. Whosoever keeps to that in whatever he sells I think is free from cheat, extortion and oppression, or any guilt in whatever he sells, supposing no fallacy in his wares.

To explain this a little: A man will not sell the same wheat this year under 10 Shillings per bushel which the last year he sold for 5S. This is no extortion by the above said rule, because it is this year the market price, and if he should sell under that rate he would not do a beneficial thing to the consumers, because others then would buy up his corn at this low rate and sell it again to others at the market rate, and so they make profit off his weakness and share a part of his money. […]

But if it be said ’tis unlawful to sell the same corn for 10S this week which I sold the last year for week for 5s because it is worth no more now than it was then, having no new qualities put into it to make it better, I answer it is worth no more, ’tis true, in its natural value, because it will not feed more men nor better feed them than it did last year, but yet it is worth more in its political or marchand value, as I may so call it which lies in the proportion of the quantity of wheat to the proportion of money in that place and the need of one and the other.

Locke understood that when you come to a city with many buyers and sellers, and they all sell and buy wheat from each other at 10S, the only price you can sell (or buy) wheat at is 10S. Moved by some intuition of fairness you may want to sell it at last year’s price of 5S, but you can’t. Whoever buys it for 5S will immediately resell it for 10S to those who will actually consume it, you have simply given your profit away to an unproductive third party. You may want to sell your wheat for 20S because you’re greedy, but you can’t. No one will buy for 20S what they can get next door for 10S.

A single market will have the same price across it for a single good or service. What defines a single market is a group of buyers and sellers that are easily replaced by one another. That’s why the price of wheat in a shop down the street matters: the buyer can easily go there and get that price. That also why last year’s, or even yesterday’s, price in the same shop doesn’t matter: neither the buyer nor the seller can travel to yesterday and buy yesterday’s tomatoes at yesterday’s price. The price of tomatoes on Mars is more relevant to the tomato market in London than the price of tomatoes a week before; Mars is at least in principle available to trade tomatoes with.

Farming on Mars: NASA Ponders Food Supply for 2030s Mission
Credit: Pat Rawlings / NASA

Like Newton’s first law, which states that an object will not change its motion unless acted upon by a force, the Law of One Price is counterintuitive for the first 10 minutes of pondering it. At that point, it becomes so deeply obvious that one is shocked at how humans have lived for millennia without grasping it. Unfortunately, 10 minutes of thought are beyond the abilities of journalists and politicians to this very day.

The Guardian:

Burning Man tickets will be even more expensive this year thanks to a new Nevada entertainment tax that the state is requiring the festival to impose.

The price for the majority of tickets to the massive summer event in the Black Rock Desert, three hours north of Reno, has climbed from $390 to $424 for an individual ticket due to a 9% state tax that organizers have unsuccessfully tried to fight over the past month.

Quick, children, what’s the real price for Burning Man 2016 tickets, $390 or $424? The answer, of course, is that the only price of Burning Man tickets is exactly $840, that’s the price at which they are resold to the actual festival attendees. Burning Man organizers can keep a larger or smaller chunk of the $840 to themselves by raising or lowering the price, the state of Nevada can keep more or less of the $840 by changing the tax, but neither of them sets the price of $840.

Without nitpicking, let’s say that there are 70,000 tradable tickets available for Burning Man. The price of $840 is the only one at which exactly 70,000 people want to buy a ticket. Without changing the capacity or desirability of the festival, the only thing Burning Man organizers do by moving the price is deciding how much money to donate to Stub Hub and the resellers. They could have donated that money to poor attendees by giving some of them non-transferrable free admission (they do a little of it). They could have donated that money to charity. Instead, they simply donate 70,000 * $400 = $28,000,000 to ticket resellers for no good reason whatsoever. Hamilton on Broadway is donating $12,500,000 a year.

Jumping off a cliff and hoping to fly.

Of course, you may say, there are free markets and then there are hurricanes. When hurricane Sandy hit the tri-state area in 2012, many gas stations lost power and people at first were willing to pay $20 for a gallon of gas that cost $4 the week prior. This is such a novel and unusual situation… that John Locke described it with perfect precision 317 years prior:

To have a fuller view of this matter, let us suppose a merchant of Danzig sends two ships laden with corn, whereof the one puts into Dunkirk, where there is almost a famine for want of corn, and there he sells his wheat for 20S a bushel, whilst the other ship sells his at Ostend just by for 5s. Here it will be demanded whether it be not oppression and injustice to make such an advantage of their necessity at Dunkirk as to sell to them the same commodity at 20s per bushel which he sells for a quarter the price but twenty miles off? I answer no, because he sells at the market rate at the place where he is, but sells there no dearer to Thomas than he would to Richard. And if there he should sell for less than his corn would yield, he would only throw his profit into other men’s hands, who buying of him under the market rate would sell it again to others at the full rate it would yield. […]

Dunkirk is the market which the English merchant has carried his corn, and by reason of their necessity it proves a good one, and there he may sell his corn as it will yield at the market rate, for 20s per bushel.

Locke is correct that on a first order analysis, selling the corn (grain) at 5S in Ostend or 20S in Dunkirk are morally equivalent. If we also consider the effects of supply and demand, we can see that the ethical obligation is for the merchant to take his grain to Dunkirk, as his arrival there will help the neediest and immediately reduce wheat prices. The price of 20S is driven by the tiny supply of wheat available, even a single ship will increase that amount enough for the price to drop.

If New Jersey gas stations were allowed to sell gas at $20, the price would have stayed at that level for at most 3 or 4 hours. That’s how long it takes to fill up a tanker in Pennsylvania or Maryland and drive to Jersey. Who would be the suckers buying at $20 in the first few hours? Perhaps a doctor who must commute to a hospital where a single hour of her work is worth hundreds of dollars and the lives of patients.

New Jersey law prohibits “unreasonably excessive” raising of prices. In a state where fashion boutiques change the prices of jackets by 80% day to day on a whim, “unreasonably excessive” increases in the price of gas in a once-a-decade storm turned out to be 5%-10%. That number was arrived by lawyers setting precedents in courts, no one bothered to consult economists. Everyone knows that the job economists is to debate the impact of monetary policy on labor productivity in obscure journals. Prices are obviously a common sense issue that the public can handle quite well without the aid of experts.

Professor Locke, can you predict what happens when price “gouging” is capped at 5 or 10 percent:

Besides, as there can be no other measure set to a merchant’s gain but the market price where he comes, so if there were any other measure, as 5 or 10 per cent as the utmost justifiable profit, there would be no commerce in the world, and mankind would be deprived of the supply of foreign mutual conveniences of life. For the buyer, not knowing what the commodity cost the merchant to purchase and bring thither, could be under no tie of giving him the profit of 5 or 10 per cent, and so can have no other rule but of buying as cheap as he can, which turning often to the merchant’s downright loss when he comes to a bad market, if he has not the liberty on his side to sell as dear as he can when he comes to a good market. This obligation to certain loss often, without any certainty of reparation, will quickly put an end to merchandising.

What does it look it like when the “obligation to certain loss puts an end to merchandising”? It looks like a state where gas stations have gas in the ground, but no power in the grid to run the pumps. Many gas stations had generators that would power the pumps, but running the generators costs more than electricity from the grid does, and without raising prices by more than 10% that gas stations couldn’t break even while running generators. In case this isn’t clear: there is gas in the ground, there are pumps to pump the gas, there are generators to power the pumps, there are people desperate to buy the gas, there is a law that prevents them from doing so, there is someone dying in a hospital because their doctor can’t get there to help them.

Credit: Lucas Jackson / Reuters

But, it turns out that there weren’t enough people dying in hospitals to put governor Christie’s career in jeopardy.

A lot of people when they read The Rationality Sequences are rankled by Eliezer’s insistence that irrationality isn’t an inconsequential issue, but that almost everybody in the world is insane almost all of the time. A counterargument to Eliezer is that people have crazy beliefs when they don’t actually pay for having them. A person who disbelieves the multiple world interpretation of quantum mechanics suffers no worse harm than Eliezer’s stern disapproval. Holding crazy political views doesn’t cost a single person on the margin, since one person’s vote never counts.

The counterexample to that argument is this: they clapped.

Hurricane Fran hit North Carolina in September 1996, leaving part of the state without power in 92 degree heat. Food, baby formula and insulin were spoiling in idle refrigerators, and there was no ice to be found within 30 miles of Raleigh, NC. Fortunately, there was ice to be found 50 miles away from Raleigh in the city of Goldsboro, where four young entrepreneurs loaded two trucks with $1.75 bags of ice and drove to Raleigh. On the way, they used chainsaws to clear the road of fallen trees for themselves and for other grateful drivers.

The trucks parked in downtown Raleigh and began selling the bags of ice at $8 a pop, which almost no one refused to pay. As the line of Raleighites yearning for ice lengthened, the local police arrived at the scene to arrest the ice sellers and take the ice away, at gunpoint, from the people who desperately needed it, who had food and baby formula and insulin spoiling in the fridge. And many of these same people erupted in applause at the resolute reaction of law enforcement.

Credit: XT_Hisashi

This morning, I woke up from my dream, and for the few seconds before I remembered I lived in New York and not Old Cork, I was smiling. Zeppelins aren’t so bad: the drinks on board are better and there’s more legroom. But when people fight the law of prices, there are no winners, only losers.