I was listening to Marketplace the other day and Kevin Hassett delivered a commentary combining economics with a revisionist evaluation of the American Revolution. Hassett's argument seems to be that the Revolution, which was notionally predicated on taxation without representation, will in the long run be a historical blip of no consequence as the United States converges upon the same tax and spend structure as the United Kingdom. From this convergence of tax and expenditure structures Hassett infers an eventual closing of the $10,000 GDP per capita gap between the United States and the United Kingdom. What therefore was the point of breaking away if 200 years later the USA is going to be so similar to the United Kingdom?

There are many ways to critique this sort of analysis, but there are two major issues that I jumped out for me. First, 200 years is not a trivial interval of time, especially when taking into account the large numbers of Americans who lived between then and now. To view economic history as convergence toward equilibria as a few parameters are modulated at some point in the future seems worthless, just as pointing out that the Sun will go nova, or that the universe may be doomed to heat death. There is a big difference between asserting that the GDP per capita gap will close within 10 years, and within 100 years. Tractable and elegant macroeconomic models may be mostly junk over the short term, but I'm pretty sure that they're total junk over the long term. Inferences from stylized facts may provoke, but spare me the assumption that that the error bars of projections aren't so huge as to make them useless even for government work. Second, it isn't as if the only things that separate the United States and the United Kingdom are institutional frameworks. Even within the United States there is quite a bit of regional variation in culture. Perhaps Hassett would say that specific variation in the instantiation of human capital is totally irrelevant, but most people wouldn't assume that as a given. Secondarily there is a sense here that historical contingency doesn't exist, that there is no path dependence in economic development. So the 200 year interval whereby the American Revolution served as an exogenous shock which tore the thirteen colonies out of the British Empire had no significant effect by shifting initial parameters in a manner which might "lock in" a bias toward some developmental paths as opposed to others. But evaluated over a long enough interval all historical events can be marginalized as futile acts against the trendline, whatever it is.

Instead of using an abstract framework riddled with assumptions that many people would find laughable, why not go the route of pointing to the nature of the British settler colonies which did not revolt, but eventually became independent? Obviously Australia, Canada and New Zealand are different in myriad ways from the United States, but are the comparisons more strained than the model that Hassett posits?

Labels: Economics, History

In the new issue of The New Yorker, Malcolm Gladwell reviews some book about using the appeal of FREE to grow your business. This is supposed to apply most strongly to information, so that as more and more of a firm's product / service consists of information, the more it can use the appeal of FREE to earn money.

What both Gladwell and the reviewed book's author, Chris Anderson, don't seem to realize is that the appeal of FREE creates pathological behavior.

Gladwell even cites a revealing behavioral economics experiment by Dan Ariely:

Ariely offered a group of subjects a choice between two kinds of chocolate -- Hershey's Kisses, for one cent, and Lindt truffles, for fifteen cents. Three-quarters of the subjects chose the truffles. Then he redid the experiment, reducing the price of both chocolates by one cent. The Kisses were now free. What happened? The order of preference was reversed. Sixty-nine per cent of the subjects chose the Kisses. The price difference between the two chocolates was exactly the same, but that magic word "free" has the power to create a consumer stampede.

In other words, FREE caused people to choose an inferior product more than they would have if the prices were both positive. Thus, in a world where there is more FREE stuff, the quality of stuff will decline. It's hard to believe that this needs to be pointed out. And again, this is not the same as prices declining because technology has become more efficient -- prices are still above 0 in that case. FREE lives in a world of its own.

If you're only trying to get people to buy your target product by packaging it with a FREE trinket, then that's fine. You're still selling something, but just drawing the customer in with FREE stuff. This jibes with another behavioral economics finding -- that when two items A and B are similar to each other but very different from item C, all lying on the same utility curve, people ignore C because it's hard to compare it to the altneratives. They end up hyper-comparing A and B since their features are so similar, and whichever one is marginally better wins.

So if you have three more or less equally useful products, A B and C, where B is essentially what A is, just with something FREE thrown in, people find it a no-brainer to choose B.

An exception to the rule of "FREE leads to lower quality" might be the products that result from dick-swinging competitions, where the producer will churn out lots of FREE stuff just to show how great they are at what they do. They're concerned more with reputation than getting by. Academic work could be an example -- lots of nerds post and critique scientific work at arXiv, PLoS, as well as the more quantitatively oriented blogs.

But in general, you can imagine the quality level you'd enjoy from a free car or an all-volunteer police force. Even sticking with just information, per Chris Anderson, look at what movies you can download without cost on a peer-to-peer site or whatever -- they mostly all suck, being limited to the library of DVDs that geeks own. Sign up for NetFlix or a similar service, and you have access to a superior library of movies, and it hardly costs you anything -- it's just not FREE. Ditto for music files you can download cost-free from a P2P site vs. iTunes, or even buying the actual CD used from Amazon or eBay.

Admittedly I don't know much about computer security, but just by extending the analogy of a voluntary police force, I'd wager that security software that costs anything is better than FREE or open source security software.

To summarize, though, Gladwell's discussion about FREE misses the most important part -- it tends to lower quality. I don't want to live in a word of lower quality of items that aren't of major consequence, and (hopefully) the people in charge of high-consequence items like the police and my workplace's computer security will never be persuaded to go for FREE crap in the first place. This aspect alone answers the question he poses in the sub-headline, "Is free the future?" However, wrapping your brain around the idea that FREE tends to lower quality is discordant with a Progressive worldview, which explains why Gladwell just doesn't get it.

Labels: Behavioral Economics, Economics, Media, Technology

Catfish plan risks trade war:

It looks like catfish, it tastes like catfish, and it acts like catfish.
But to U.S. catfish farmers, the whiskered, bottom-feeding fish from Vietnam is something else: a cheap variety that's usurping the humble catfish's place on Americans' tables and threatening their livelihoods.

So after years of arguing that the Vietnamese fish isn't catfish - and winning a federal law saying as much - the U.S. farmers are now trying to have it both ways. Under their latest lobbying strategy, they want the Vietnamese imports considered catfish so that they will be covered by a new inspections regime that they pushed through Congress last year.

The move - an example of how influential industries work their will in Congress - could block Vietnamese imports for years and risks a broader trade war.

It doesn't taste like catfish.

Labels: basa, Food

Matt Yglesias points out that in terms of suicide rates Finland is a Scandinavian outlier, and clusters with Japan and Korea. But interestingly, there's another European nation which is even more suicidal than Finland. Hungary. Below the fold are the data for the OECD nations....

Labels: Finn baiting

I'm still working on a post about Darwin's theories of heredity, but I need to re-read the 900 pages of Variation of Animals and Plants Under Domestication first, so it may take me some time.

Meanwhile, and irrelevant to anything, I see that one of my favourite artists, Imogen Heap, has a new album coming out soon(ish). Here is a video trailer. Also check out Imogen's delightful video blogs, all available on YouTube.

A few weeks ago I noticed that the Wikipedia entry for Cape Coloureds has little fleshed out information on their genetics. As a mixed population it seems that people would be interested, but has always been hard to find anything from Google Scholar on this topic. But the recent Tishkoff paper, The Genetic Structure and History of Africans and African Americans, has some data. You can find a full post at my other weblog, but it seems that not only are the Cape Coloureds substantially European, Khoisan and Bantu, but likely they're also substantially Indian, and there is a definite East Asian element, no doubt from slaves brought from Maritime Southeast Asia by the VOC. There's also a lot of variance in this particular sample of Cape Coloureds. Assuming this is representative I would offer that the main reason is that the Coloured population has historically had many people entering it from other groups, and, many leaving to other groups.

Labels: Genetics, History

Some readers here may already follow the food-related stuff I write about at my personal blog. Well, to allow myself to write more about diet, nutrition, and food in general, I've started a new blog called Low Carb Art and Science. Lord knows there are already lots of blogs that deal with the topic, but this one will have lots more data and a stronger emphasis on evolution. But there will be plenty of less serious stuff and easy recipes too. Plus I'll take an occasional interdisciplinary approach, as with an earlier post I wrote about the late Medieval shift away from carbs and toward meat.

The first post up is about the changing American diet and poorer health -- except that the graphs show that the changing American diet has been one that's rigidly adhered to what the health experts tell us to eat. The data weren't hard to find, analyze, and present, but I've never seen them before, let alone in a clear-to-see visual format. If you doubted whether the anti-meat, pro-grain message was being followed or not, and if so, whether it was making us healthier -- this will be a real eye-opener. Take-home lesson: eat more saturated fat and cholesterol, and less carbohydrates.

Comments closed here; comment over at Low Carb Art and Science.

Labels: Food, Health

One of the rationales advanced for the identification of common alleles that confer modest risk to a disease via genome-wide association studies is that these associations will lead to biological insight into the disease. Two papers published today represent an important first step towards this goal for a variant associated with colorectal cancer.

Like many polymorphisms associated with complex diseases, the one investigated in these studies does not fall within a gene--this particular variant falls hundreds of thousands of bases away from the nearest gene. It does, however, fall within a non-coding element that is conserved across millions of years of evolution, suggesting that it is functional. These studies show that, indeed, the SNP falls in a binding site for a transcription factor, and that the two alleles have different binding affinities for that factor. Additionally, one of the studies shows that the genomic region containing the SNP loops over and makes physical contact with the nearest gene (MYC, a known oncogene), supporting the hypothesis that the SNP affects its regulation.

These studies raise more questions than they answer, of course. None of the studies find an association between the SNP itself and steady-state MYC expression in cell lines. My guess is that, like many transcriptional enhancers, developmental-time-point-specific manner. An important direction now is to determine when that important time point is.

Labels: Genetics

Long article in Scientific American, The Science of Economic Bubbles and Busts. H/T Calculated Risk.

In False Economy: A Surprising Economic History of the World* there's a chapter which covers "The Catfish War" between Vietnam and the United States in the early 2000s. Basically Vietnamese catfish were cheaper than American catfish, so American farmers got the government to force the Vietnamese to not label the fish catfish (it's a different species from the American variant). So Vietnamese catfish are now termed "basa" in the United States. Interestingly this might have backfired, the author of False Economy claims that many American consumers ended up thinking basa were an exotic premium import. But here's another reality: in blind taste tests people prefer Vietnamese catfish to American catfish.

I only mention this because I've been getting basa for a few weeks now. Today the supermarket was out of basa, but did have American catfish (where there used to be basa). So I got American catfish because I figured catfish is catfish. Well...American catfish kind of sucks compared to basa. I don't find catfish meat repellent or anything, but basa has a much nicer flavor and smell than American catfish. It's also easier to cook. And I don't have a subtle palette; I use a lot of hot sauce, so I can tolerate a large range in flavor. There just isn't any comparison. Perhaps it was a bad batch of catfish, but I've actually had catfish sandwiches and the like in New Orleans and Houston, and I think this was typical American catfish thinking back to that. Wikipedia said that people prefer basa to American catfish 3:1, but I would have expected 10:1.

* It's a well written work which illustrates general economic principles with concrete contemporary examples, but is far inferior to Rondo Cameron's A Concise Economic History of the World in terms of factual density.

Labels: Food

In my recent post on Darwin's mechanisms of evolution I was rather dismissive about the Inheritance of Acquired Characteristics (IAC), commonly known as 'Lamarckism'. Darwin himself believed in the existence of IAC but gave it a relatively minor role in evolution. In comments on my post it was pointed out that there has recently been some revival of interest in IAC in the form of 'transgenerational epigenetics'. For a recent review see here. [Note added: as originally posted I somehow inserted the wrong link. Hope this one is now correct.]

Even if all of these reports are true, they don't (yet) amount to more than a small tweaking of evolutionary theory. The main examples seem more like congenital syphilis than 'Lamarckism' in the traditional sense: an animal is exposed to a substance that happens to affect the germ cells as well as the rest of the body. No big deal. But I think biologists should be cautious about accepting such reports without clear independent replication, for two reasons. First, because 'extraordinary claims need extraordinary evidence'. Second, because there is a long and dreary history of unsubstantiated, unreliable, and downright fraudulent claims about IAC. As much of this history is now generally forgotten, it may be useful to recall some of the 'highlights'.



CHARLES-EDOUARD BROWN-SEQUARD

Brown-Sequard was a distinguished if eccentric French physiologist. He achieved scientific fame for the discovery of what are now known as hormones, and notoriety when he claimed that life could be rejuvenated by the injection of crushed animals' testicles. At least he was willing to try it on himself. But the present point of interest is in his neurological experiments. For many years he experimented on thousands of guinea pigs, mainly by severing various nerves. He claimed that the untreated offspring of the experimental subjects showed certain symptoms, such as a liability to epileptic fits, which resembled those of the parents. Charles Darwin accepted the evidence as proving that IAC was at least possible. Darwin's younger friend George Romanes, a supporter of IAC, spent years trying to replicate the experiments, and claimed some slight success, but admitted that on the whole the results were negative. Brown-Sequard's results have never been conclusively explained, but unexplained results are not unusual in science. The Germans have the useful term 'Dreckeffekt' for this kind of thing.

W. L. TOWER

[Apology: I first gave the name as 'William Edward Tower', but on checking my source again I find the initials are 'W. L.'. Apologies if anyone has wasted time following up the incorrect name.]

Tower was an American entomologist who claimed in the early 1900s to have produced inheritable mutations in beetles by changes in temperature and humidity. The pioneer geneticist William Bateson questioned Tower's results and became increasingly critical, hinting at fraud. Tower admitted that there were errors in his reports, and claimed that his original records had been destroyed by a fire in his greenhouse. Hmm.

PAUL KAMMERER

Kammerer's experiments on the Midwife Toad, made famous in a sympathetic book by Arthur Koestler, led to tragedy when it was discovered that the specimens had been artificially tampered with, and Kammerer committed suicide. There was certainly skullduggery by someone, though whether by Kammerer himself remains controversial.

JOHN HESLOP-HARRISON

Heslop-Harrison was an English botanist and entomologist who claimed to have induced heritable melanism in insects by chemical treatments. His claims were questioned by Haldane, Fisher and others. There must be suspicion of fraud, as Heslop-Harrison later became notorious for the unconnected allegation that he (literally) planted evidence on the Scottish island of Rhum to support his botanical theories. [NB Heslop-Harrison must not be confused with his still living son of the same name, also a botanist. ]

WILLIAM McDOUGALL

McDougall was a leading psychologist in the first half of the 20th century. He carried out a long series of experiments on rats which seemed to show that successive generations became better and better at learning mazes. I don't think anyone has suggested fraud, but subsequent attempts at replication pointed out a major defect in his methodology: the absence of a control group. When a control group was used, whose ancestors had not been trained, they showed much the same patterns of improvement - or non-improvement - as the experimental subjects themselves (see here.) The improvement therefore seems to have been due to some other factor or factors, such as better laboratory or cage conditions, and not to IAC.

TROFIM LYSENKO

No need to comment.

EDWARD STEELE

Edward Steele is an Australian immunologist who claimed in the 1970s to have produced inheritable immunological responses in mice. This led to a predictable spate of 'Darwin was wrong' and 'Back to Lamarck' news reports. Less publicity was given to at least three independent replication attempts with negative results.

The moral is - oh, draw your own.

Updated

This may be old hat for some readers, but it's worth reviewing and providing some good new data for. The motivation is the idea that monopoly-haters have that when some company comes to dominate the market, they will have no incentive to change things -- after all, they've already captured most of the audience. The response is that industries where invention is part of the companies' raison d'etre attract dynamic people, including the executives.

And such people do not rest on their laurels once they're free from competition -- on the contrary, they exclaim, "FINALLY, we can breathe free and get around to all those weird projects we'd thought of, and not have to pander to the lowest common denominator just to stay afloat!" Of course, only some of those high-risk projects will become the next big thing, but a large number of trials is required to find highly improbable things. When companies are fighting each other tooth-and-nail, a single bad decision could sink them for good, which makes companies in highly competitive situations much more risk-averse. Conversely, when you control the market, you can make all sorts of investments that go nowhere and still survive -- and it is this large number of attempts that boosts the expected number of successes.

With that said, let's review just a little bit of history impressionistically, and then turn to a new dataset that confirms the qualitative picture.

Taking only a whirlwind tour through the pre-Information Age time period, we'll just note that most major inventions could not have been born if the inventor had not been protected from competitive market forces -- usually from protection by a monopolistic and rich political entity. Royal patronage is one example. And before the education bubble, there weren't very many large research universitities in your country where you could carry out research -- for example, Oxford, Cambridge, and... well, that's about it, stretching back 900 years. They don't call it "the Ivory Tower" for nothing.

Looking a bit more at recent history, which is most relevant to any present debate we may have about the pros and cons of monopolies, just check out the Wikipedia article on Bell Labs, the research giant of AT&T that many considered the true Ivory Tower during its hey-day from roughly the 1940s through the early 1980s. From theoretical milestones such as the invention of information theory and cryptography, to concrete things like transistors, lasers, and cell phones, they invented the bulk of all the really cool shit since WWII. They were sued for antitrust violations in 1974, lost in 1982, and were broken up by 1984 or '85. Notice that since then, not much has come out -- not just from Bell Labs, but at all.

The same holds true for the Department of Defense, which invented the modern airliner and the internet, although they made large theoretical contributions too. For instance, the groundwork for information criteria -- one of the biggest ideas to arise in modern statistics, which tries to measure the discrepancy between our scientific models and reality -- was laid by two mathematicians working for the National Security Agency (Kullback and Leibler). And despite all the crowing you hear about the Military-Industrial Complex, only a pathetic amount actually goes to defense (which includes R&D) -- most goes to human resources, AKA bureaucracy. Moreover, this trend goes back at least to the late 1960s. Here is a graph of how much of the defense outlays go to defense vs. human resources (from here, Table 3.1; 2008 and beyond are estimates):


There are artificial peaks during WWII and the Korean War, although it doesn't decay very much during the 1950s and '60s, the height of the Cold War and Vietnam War. Since roughly 1968, though, the chunk going to actual defense has plummeted pretty steadily. This downsizing of the state began long before Thatcher and Reagan were elected -- apparently, they were jumping on a bandwagon that had already gained plenty of momentum. The key point is that the state began to give up its quasi-monopolistic role in doling out R&D dollars.

Update: I forgot! There is a finer-grained category called "General science, space, and technology," which is probably the R&D that we care most about for the present purposes. Here is a graph of the percent of all Defense outlays that went to this category:


This picture is even clearer than that of overall defense spending. There's a surge from the late 1950s up to 1966, a sharp drop until 1975, and a fairly steady level from then until now. This doesn't alter the picture much, but removes some of the non-science-related noise from the signal. [End of update]

Putting together these two major sources of innovation -- Bell Labs and the U.S. Defense Department -- if our hypothesis is right, we should expect lots of major inventions during the 1950s and '60s, even a decent amount during the 1940s and the 1970s, but virtually squat from the mid-1980s to the present. This reflects the time periods when they were more monopolistic vs. heavily downsized. What data can we use to test this?

Popular Mechanics just released a neat little book called Big Ideas: 100 Modern Inventions That Have Changed Our World. They include roughly 10 items in each of 10 categories: computers, leisure, communication, biology, convenience, medicine, transportation, building / manufacturing, household, and scientific research. They were arrived at by a group of around 20 people working at museums and universities. You can always quibble with these lists, but the really obvious entries are unlikely to get left out. There is no larger commentary in the book -- just a narrow description of how each invention came to be -- so it was not conceived with any particular hypothesis about invention in mind. They begin with the transistor in 1947 and go up to the present.

Pooling inventions across all categories, here is a graph of when these 100 big ideas were invented (using 5-year intervals):


What do you know? It's exactly what we'd expected. The only outliers are the late-1990s data-points. But most of these seemed to be to reflect the authors' grasping at straws to find anything in the past quarter-century worth mentioning. For example, they already included Sony's Walkman (1979), but they also included the MP3 player (late 1990s) -- leaving out Sony's Discman (1984), an earlier portable player of digitally stored music. And remember, each category only gets about 10 entries to cover 60 years. Also, portable e-mail gets an entry, even though they already include "regular" e-mail. And I don't know what Prozac (1995) is doing in the list of breakthroughs in medicine. Plus they included the hybrid electric car (1997) -- it's not even fully electric!

Still, some of the recent ones are deserved, such as cloning a sheep and sequencing the human genome. Overall, though, the pattern is pretty clear -- we haven't invented jackshit for the past 30 years. With the two main monopolistic Ivory Towers torn down -- one private and one public -- it's no surprise to see innovation at a historic low. Indeed, the last entries in the building / manufacturing and household categories date back to 1969 and 1974, respectively.

On the plus side, Microsoft and Google are pretty monopolistic, and they've been delivering cool new stuff at low cost (often for free -- and good free, not "home brew" free). But they're nowhere near as large as Bell Labs or the DoD was back in the good ol' days. I'm sure that once our elected leaders reflect on the reality of invention, they'll do the right thing and pump more funds into ballooning the state, as well as encouraging Microsoft, Google, and Verizon to merge into the next incarnation of monopoly-era AT&T.

Maybe then we'll get those fly-to-the-moon cars that we've been expecting for so long. I mean goddamn, it's almost 2015 and we still don't have a hoverboard.

Labels: Economics, History, politics, Technology

So after my wingeing about the quality of genetic associations found through candidate gene studies, it's only appropriate that I point to a fun candidate gene association study published this week in Nature.

The interesting point here is that the organism isn't humans, but rather baboons, and the phenotype is susceptibility to malaria. Briefly, the authors find that a SNP in the promoter of the Duffy locus (recall that a mutation that abolishes the expression of Duffy in humans leads to protection from Plasmodium vivax and is one of the best characterized instances of recent positive selection in our species) appears to lead to protection from a malaria-like disease in baboons. The authors seem to really, really want this polymorphism to also be under selection in baboons (to complete the parallel story to humans), but they can't bring themselves to say the evidence is anything more that "suggestive" (and to be honest, even that may be wishful thinking).

So is the association true? The study suffers from the same problem of candidate gene studies mentioned before, in that it's small and the evidence for an association is fairly weak. If I had to bet, I'd guess no, the association isn't real. But collecting and genotyping a large sample of baboons is simply not feasible at this point (if it ever will be), so this is what's possible, and it's a kind of fun, suggestive study that would be really cool if it ends up being true.

Labels: Genetics