rationality and ergodicity

classical economics postulates a human being strongly rational and developed the Expecte Utility Theory for decisions in regime of uncertainty.

I got out of my economics study last century with the rather faith conviction that the basis of rationality in economic behaviours makes imposible any cooperation

And really it was not just me, some people had to build ad hoc theories to justify cooperation in terms of social capital, while some other simply took to show how the rationality hypothesis of human behaviour is really not grounded in reality, so behavioral economics is born and “people are “dumber and nicer” and more human compared to “econs”
described in graduate economics texts”

Then lately I discover something funnily named ergodicity economics, got confused and took me a while to understand that it really describes a non-ergodic economics, models where the the ergodic hypothesis which is implicitely made in the Expected Utility Theory is abandoned.

A non-ergodic model better describes the economics and financial world and such model can retaina stronger definition of individual rational and has better chances to rebuild economics than chipping it away with the nudges criticism.

Utility Theory was built in the 18th century based on this “mistake” to think probability additive, made of independent events, while in reality, wealth accumulates over time and therefore when you consider probability of betting it becomes multiplicative, you have the St.Petersburg Paradox and maybe a cascade of consequences that brigns to my “rational man cannot cooperate” belief in university carried over to last here. Then I met the Farmers Fable and I got to love ergodicity economics (which is, a new foiundation of economics on non-ergodic pillars)

shaky foundation of economics

still on the issue of the cancelled singularity

a dinner chat between a physicist and an economist on the physical limits to infinite growth , the infinite grwoth postulated by economists in their models

I got there from this tweet on erogicity economics https://twitter.com/DrCirillo/status/1201782869712146432

and gave another read to Ole Peter’s Nature paper which sinks deeper in my reasoning on economics

It all started because some economist on Facebook complained that some other economist had opposing views, but this is not the point, he started with an “in science, no economic theory …” science and economics so close in one sentence got me thinking about epistemics

a comprehensive article on “is economics a science?” lots of quotes so probably it isn’t you would not need so many instead

efficient markets, or not

on askblog I read of Fama efficient market hypothesis and monetary policy https://www.arnoldkling.com/blog/finance-theory-and-the-fed/

he says that “Actually, the central banks don’t do anything real. They are issuing one form of debt to buy another form of debt. If you are an old Modigliani–Miller person the way I am, you think that’s a neutral activity: You’re issuing short-term debt to buy long-term debt or vice-versa. That’s not something that should have any real effects

I should study the Efficient Market hing. It also prompted me to punt on reading list Mandelbrot The (Mis)Behavior of Markets https://www.goodreads.com/book/show/665134.The_Mis_Behavior_of_Markets

things to grow

Greek (myths and) technology

greek myths speak of robot, prostetic, drugs and body augmenting technologies https://www.noemamag.com/gods-and-robots/

she is the author of the book https://www.goodreads.com/book/show/40740411-gods-and-robots?ac=1&from_search=true&qid=3jje3xQUa2&rank=1

La rivoluzione dimenticata di Lucio Russo https://www.goodreads.com/book/show/4146890-la-rivoluzione-dimenticata?from_search=true&from_srp=true&qid=6KCdkBtzuY&rank=1

Chad

nel 2000, durante le lezioni che videro l’elezione di Bush, stavo ad Atlanta, avevo un amico di nome Chad e mi faceva ridere il fatto che la contesa sulle elezioni USA fosse sui chad delle schede elettorali in Florida.

Quando Gore concesse lo sentii come una presidenza scippata, ero imbevuto dell’ottimismo degli anni 90 e anche avere il figlio di Bush alla presidenza americana mi dava la netta sensazione di una china pericolosa, la fine di un’epoca. E infatti

Ero ad Atlanta e cercavo di vendere alla CNN la mia idea di internet newsgathering. Non riuscii mai ad incontrare nessuno di CNN, non riuscii ad andare oltre Cartoon Network e a ripensrci, dovevo considerarlo un segno sulla mia prima startup. L’ho fatta lo stesso tornando in Italia, dove ho poco dopo visutto il malanimo politico del g( di genova, poi sono arrivate le torri gemelle e, visto che le impressioni di Atalanta erano giuste.

Nel 2003 fornimmo a FreespeechTV la copertura via web di tutte le manifestazioni europee contro la guerra in Iraq, internet newsgathering era una realtà.

Remdesivir (Veklury)

NYtimes writes of this questionable blockbuster Gilead’s Covid-19 Drug Is Mediocre. It Will Be a Blockbuster Anyway.

EU made a deal for 30,000 tretaments paying 63 mio € or €2100 per patient treated, this was back in July https://www.europarl.europa.eu/doceo/document/E-9-2020-004458_EN.html

Apparently the EU made another deal with Gilead in October just one week before the Solidarity trial results came out, speaking of bricks in the box, the agreement lock a bricks price of about $2400 per patient treated (up to 500,000 pat, but no EU country is under obligation to buy https://www.sciencemag.org/news/2020/10/very-very-bad-look-remdesivir-first-fda-approved-covid-19-drug

Other price points I found on Google:

In US after FDA authorisation the government will buy at prices between 2340 and 3200 USdollars https://www.biopharmadive.com/news/gilead-remdesivir-veklury-supply-us-distribution/586266/

Remdevisir was licensed if I well remeber in Bangladesh and maybe also India so there is another price point, this time the name is Cipremi and prices about €65 per vial (that would make 300 per course) https://health.economictimes.indiatimes.com/news/pharma/cipla-to-price-remdesivir-version-for-covid-19-under-5000-rupees/76531644

links on industrial policies

the feeling of not having any updated idea on industrial policies, other than the memory of being bad from uni times, is really nagging me. So here s some links

great Noah Smith 3d following Nobel Prizes starting on grwoth https://twitter.com/Noahpinion/status/1316777689697587201

here is a seminal paper “The return of the policy that should not be named” IMF free download https://www.imf.org/en/Publications/WP/Issues/2019/03/26/The-Return-of-the-Policy-That-Shall-Not-Be-Named-Principles-of-Industrial-Policy-46710

Facebook break-up would be hard? Think again

Facebook break-up would be hard

but really it would be soft, a software problem and in the world of clouds and API’s what can’t be done with software ?

Pun intended, Facebook breakup isn’t hard, it is soft, it’s a matter of designing it and can be done. This is Dave Winer proposal, perfectly doable and sensitive. http://scripting.com/2020/10/07/001200.html?title=breakingUpTechCompanies

I quote in full:

“Find the component of the company that really is open tech. Something that was open before they came along, that they foreclosed on, and used their monopoly to put everyone else out of business.#That’s where you draw the line of separation. The core should be spun off into a new company that’s well funded, with a charter to commercialize the tech while maintaining zero lock-in. Totally replaceable. Defined APIs that don’t break.#If the company is viable with these constraints, great. If not, they have enough money to plan their own demise. The key thing is they cannot use their dominance to launch new products. Just the open tech.#You would find people willing to staff such a company, there are lots of idealistic developers, still, who believe in the open internet.#In Microsoft’s case, in the 90s this would have meant spinning out the browser. #Today with Facebook it would mean spinning out the open graph.#With Google, it would have to be at least the core search engine. If Alphabet wanted to run ads on search, they’d have to get in line and compete with others who did. This is the price they pay for trying to use their dominance in search to control everything.#Google would also have to spin out Chrome, same way Microsoft would have spun out MSIE in the 90s.#That’s the basic idea. Look for the old open tech buried in the company, that is the source of their monopolistic control, and extract it. Hopefully it’s very painful, to keep successors from tying to do it in the future.#

other ideas: by law hardware and software in different hands, cloud companies that host service companies. Google and Facebook give up datacenter and related competencies. They only own whatever service they can build on software, government can ask to recombine

Ben Evans https://www.ben-evans.com/benedictevans/2020/8/10/would-breaking-up-big-tech-work

(he plays down the effect of Standard Oil and At&T sorto I am smarter you do magical thinking, but comes out at times justificationist and argue with things: since copper network don t get replicated, what let you think that splitting MS will have more OS created, physical natural monopoly mixed up with digital network effect. In the end lots of cues, he says don’t break up, unbundle services like for example Telecom DSL at the local loop. He’s on poimnt showing we will be dealing with local regulations on global networks)

Stratechery here https://stratechery.com/2020/anti-monopoly-vs-antitrust/ and here https://stratechery.com/2019/tech-and-antitrust/

Recombine services why: deliver more values to the customer (free me from crappy Linkedin algo for example)

but also delivering more innovation in tech and services, a Facebook not just obsessedn with spamming advertising with 90% gross revenue, what could do of new and wonderful with the 90% cumulated in their coffers once it is told to unbundle and become more companies

the strange feeling of these days: everybody talking about the new wave of bundling and unbundling on the web, and in absence on any hard science explaining the come and go of the bundle fashion, we are left to quote somebody saying “companies bundle, and then unbundle”. Management science explained.

What if we frame the break-up issue as unbundling, give it the same timeframe companies usually takes to do it, of course we have to come up with a design for the facebook group of companies. How many things are bundled there together?

Start from the privacy stratigraphy offered by Alex Stamos https://galley.cjr.org/public/conversations/-LsHiyaqX4DpgKDqf9Mj

Another issue, too big to break-up, stock market will suffer, wealth will be destroyed, poor microsoft missed things during it antitrust trial

Surely this argument will be used, so it is necessary to develop and prove a counterargument showing that innovation will deliver more benefits in the longer run. Antitrust will have to deal with innovation not just the customer

not hack? Kludge

I just now realized hack has an opposite in kludge, both originating in programming (but surely hack has a story before modern programming, in hard world)

there’s also called Kludgenomics that, once you realize kludge is contrary to hack, you also undestrand what is the problem of government messed up by too many rules badly designed, or designed with the purpose of being quick, badly designed fix. For exampe see this https://www.nationalaffairs.com/publications/detail/kludgeocracy-in-america

it all comes from reading Robin Hanson on Paternalism as a way to force rules on masses that were norms of elites. https://www.overcomingbias.com/2020/09/rulesy-folks-push-paternalism.html

this is the first time I get to the bootm of an Hanson post and this is what captured me as the best way to explain why paternalism: “The key idea is that there are many “rulesy” people in the world. (Think of Sheldon from Big Bang Theory and Dwight from The Office.) These people specialize in learning of and even creating rules, so that they can then find and reveal violations of these rules around them. This allows them to beat on their rivals, and also to raise their own status. It obviously raises their dominance via the power they wield, but they prefer to be instead seen as prestigious, enforcing rules whose purpose is more clearly altruistic. And what could be more altruistic than keeping people from hurting themselves? “