Externalities

Free markets, I believe, optimize human welfare, but only in the absence of externalities. Is it reasonable to expect that all externalities can eventually be controlled?

Property rights can handle most of the big externalities today, such as land and water usage, though we have great strides yet to make with regards to pricing in air quality. Optimists like myself will contend that any externality can be priced in eventually, given advanced technology. However, consider time: present-me and future-me share the same timeline, but future-me has no power over my present actions, even though he still suffers the consequences. In essence, future-me did not agree to my present actions; there was no dialogue, no transaction. In this way, to future-me, the consequences of present-me’s actions are externalities.

We see the cost of this externality in, among other things, nutrition. Those in the developed world, despite knowing that processed foods are worse for them than the natural alternative, continue to consume it by the ton. Those in the developing world, even when they have the resources to improve their diets, often choose to buy TVs and phones over better meals. In both cases, costs are unduly foisted onto future-selves.

This is a problem with human hardcoding. We are biologically predisposed to value the near-term over the long-term, because back in the days of caves and leopards, unless the near-term was secure, you starved or froze to death. Let your children deal with tomorrow; focus today on food, shelter, and progeny. As a result, we’re built with this externality. So long as we are human, it will exist.

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Reviewing New Year’s Resolutions

STAY ORGANIZED

This has gone fairly well. I didn’t notify work about a day I was taking off, which wasn’t the smoothest move, but luckily I have the best job ever, so with time, diligence, and good attendance, my sins are being forgiven. I have a few emails on my to-do list, but I’m using my time much more efficiently than I was this time last year. I still have a long ways to go, but I’m getting there.

BE ON TIME

I show up to work on time every day. I stay longer than I need to because I seriously love this job. I find myself still late to some meetings, but I never expected to fix this issue in a month. For example, I’m reviewing my resolutions a full half-month late.

READ MORE BOOKS

In January, I read I, Lucifer, Storm of Swords, and I’m now in the process of devouring A Friend of the Earth. The biggest thing about the Kindle that I notice isn’t that it makes reading any easier; it makes finding and purchasing new books easier, which means I am never stuck with a bad read.

PROTOTYPE RESUMOID

This has become a considerably bigger project than I realized, after writing out what exactly Resumoid is and what it does and how it does it. Simply put, my skills aren’t up to the task — yet. That’s why I’m focusing my off-hours on building a quality website for my church, St. James Episcopal. Our current site is hand-coded HTML; my rebuild is Django on the backend, Twitter Bootstrap up front.

GIVE MONEY

I’m pledging money to my church for the moment (which is in turn disseminated around the city and abroad). Later this month, I’ll start giving through Kiva. I like giving to my church because it goes directly to the people in my community. I like giving to Kiva because, in the same way, it goes directly to the people who need it; no middle men siphoning their cut without my say-so.

START SAVING FOR RETIREMENT

30% of my post-tax income now goes into savings. I have yet to open up a retirement account, though. That will probably come after some other big changes in my living situation (like moving into a room with insulation, and switching banks.)

SWITCH BANKS

I found a bank that, following a trio of absurdly simple stipulations, promises 2% interest. That’s only slightly lower than inflation, and hundreds of times better than what you’ll get from most banks. The kicker is that it has a big minimum balance requirement to avoid a monthly maintenance fee, so I’m saving up to beat the requirement. I’ll be switching over later this month.

Incentives: User Interfaces

The software / web community tries to put a lot of effort into good user interface design. In theory, it’s because we want our programs to be easy to use, which increases traffic, usage, etc. We write interfaces mostly for non-programmers. Consider what would happen if our user interfaces sucked: you’d find it more worthwhile to do it yourself. This would plump the industry with more designers (and programmers, and product managers…), reducing demand for our skills. Laborers within the tech industry, thus, have a perverse incentive to keep its users tech-illiterate.

This hardly applies only to programmers: within any industry, if those in the industry suck, new entrants will find it easier to compete and make a living, so it’s within every actor’s best interest to deliver the best products and services possible so as to dissuade new entrants from competing.

Innovation as Protest

I’ve walked with the Occupy marches in both Portland and Boston, but couldn’t help but feel as though the only people who could meet our demands were not us. If those people, namely politicians and politically-connected businesspeople, didn’t submit to the movement’s demands, we had no recourse. We were like infants complaining about what was for dinner. How can we take our futures into our own hands, so no bureaucrats, whether from big corporate or big government, can hope to control us?

Bitcoin, a digital fiat currency, represents a tremendous and innovative step towards that freedom. Bitcoin uses a peer-to-peer system that accomplishes two important ends:

  • The currency’s rate of growth is hard-coded, so all users can always know how much currency is in existence, helping price signals to be more accurate. This replaces the need for a central bank.
  • The currency is mostly anonymous. (I say mostly because accounts can be tracked with some sleuthing if users are careless.)

Because transactions are anonymous, state agents cannot currently track them, whether for regulation, taxation, or prohibition. Consider what that means for the drug market: by enabling the development of a market where individuals can trade goods without fear of being shot or jailed (because the state will never know it was them), Bitcoin has effectively legalized drugs for anyone willing to use Bitcoin. Folks like me want to decriminalize, even entirely legalize drug use because:

  • It would stabilize nations like Mexico and Colombia where cartels use violence to resist prohibition efforts. Without prohibition efforts, violence becomes unnecessary.
  • It would improve the market for such goods, making them cheaper, better, and more understood (which would help folks avoid overdosing and otherwise harming themselves unknowingly).

Bitcoin has made this possible without legal action.

Places for similar innovations abound. Consider education: higher education is widely overpriced, and the return on investment diminishes every year. My friends in the state argue that this means we should further subsidize education to curb price growth, but this ignores or even exacerbates the systemic issues with education, like institutional incentives to land alumni with jobs. If post-secondary education is so problematic, why not just find a way around it?

Consider Skillshare, which connects folks wanting to teach a one-time class on anything (really, anything) with students. By making the accumulation of skills and knowledge easier, Skillshare helps people build their own education so they can vouch for themselves, rather than needing to rely on some institution to vouch for them. Other companies, such as CodeSchool, offer a similar if more industry-specific model.

But who’s going to respect your education if you don’t have a degree? This is easier to do in technology because you can let your accomplishments (code you’ve written, projects you’ve worked on, etc.) speak for themselves, but folks in other trades aren’t so lucky. This is where my Resumoid concept comes in: companies post jobs in the form of tasks, users apply to the job by submitting a solution to the task, and once the job has been resolved (whether you get it or not), your solution to the problem goes on your profile. Over time, this builds a sort of portfolio, so people can see what you can do, based on your own abilities. It will take decades for degrees to diminish in importance, but through entrepreneurship and technology we can provide individuals ways around traditional barriers.

Plenty of things about the world could be better, but I’m not taking my protest to the streets. We can change the world ourselves, no bureaucrats necessary. Innovation is my protest.

New Year’s Resolutions

Devyn asked me last night, "What are your resolutions for the new year?" I had none, as it turned out, so I spent the night — inbetween glasses of champagne and rum-infused fruit smoothies — composing a few.

Stay Organized
Historically, I’ve had a really hard time staying organized. I forget when things are planned, I lose documents, etc. I’ve made huge strides in the last year towards this goal by putting my events and obligations on Google Calendar, or by maintaining a to-do list on my phone, or by checking for directions the day before an event, rather than the day of. But I can still do better: I can reply to emails sooner, I can spend less time on Reddit and Facebook, I can put more of my events on my calendar, and I can organize paper materials into folders (or otherwise tag and store them better).

Be On Time
I am frequently late, and it frustrates the hell out of me. I can check directions to places the day before I’m supposed to be somewhere (or earlier), and I can leave earlier than Google tells me to. I can set alarms for not just when I need to wake up, but when I need to leave or sleep.

Read More Books
Most of what I read in 2011 came out of The Economist, Reason, or David Friedman’s The Machinery of Freedom, which pushed me over the hump from social capitalism into full-blown anarcho-capitalism. This is not enough reading. I got a Kindle, which I intend to use to realize this goal more easily. My friend Chris remarked about e-readers something to the effect of, "You will be helpless in your efforts to not read."

Prototype Resumoid
I’ve talked up a storm about Resumoid in person, and yet it remains without a prototype. I intend to fix this. I started from scratch on the plane back to Boston, given all the changes the project has gone through over the past few months, so I’ve got fertile soil both intellectually and in my code going into 2012.

Give Money
I gave money on a monthly basis to a foreign aid foundation until recently, when my financial situation was tight enough that I couldn’t. Now that I’m employed, I should find a charity (or charities) whose work I believe is good, and donate to them regularly.

Start Saving for Retirement
The concept of retirement weirds me out. Why would I ever want to not work? I don’t know why, but I’ll give Future Me the benefit of the doubt and begin saving, in case he thinks it’s a better idea than I do.

Switch Banks
I’ve used Bank of America since I got my debit card at 16, but increasingly I disagree with BoA’s ethics and structure. Moreover, I disagree with the regulatory structure surrounding the financial industry, so I’d rather keep my money away from institutions that not only benefit from it, but who have a large hand in shaping it. I’ve done some research into other banks, but not enough yet to make a decision.

I’ve put a note on my calendar a month from now to check in on how I’m doing with these goals. I don’t expect to suddenly turn over a new leaf, but as long as I keep at it, I’ll keep progressing.

Happy 2012, Internet!

Devyn and I’s GOP Debate Drinking Game

Every time Rick Perry sucks at debate
Every time Ron Paul appeals to the Ron Paul vote at the expense of making his ideas broadly accessible
Every time Romney gives you a reason not to vote for him
Every time Gingrich rambles
Every time someone talks shit about the media
Every time someone pitches a flat tax
Every time Herman Cain pitches the nein nein nein plan
Every time someone mentions "working Americans"
Every time you agree with a candidate
Every time you hear "It’s a Moral Issue"
Every time someone suggests we end the Federal Reserve

Willful Ignorance (draft)

“Ah, Lovecraft,” the suit sitting next to me on the bus remarked, pointing at my book. “I love his stuff.”

“Oh, me too. It’s a thrilling exploration of the terror of insignificance.”

“Really?” he perked up, “I enjoyed it more for its use as a survival guide.”

I paused. “How do you mean?”

“He perfectly captured the essence of a…” An ambulance passed by, its siren drowning his words. “I didn’t realize such a thing was possible in your language.”

I closed my book and looked at him. He had a comb-over, a grey suit, a simple tie, a common face… An utterly forgettable set of features. I might have seen him in a thousand places before without ever remembering him twice. He looked at me, perfectly serious. “What? Did you not realize it’s all true?”

“No. No, I mean, it’s not true. It…”

“Oh yes! Don’t you remember how he described…” I could see his lips moving, but in my mind I could not decipher his words. They were familiar, as if I should have known them, but I drew all blanks trying to consider them. “But it doesn’t compare to the real thing, of course. Seeing is believing, as they say.”

The man was clearly crazy. Shoggoths, the Old Ones, the Sunken City, all real? Please.

“You don’t believe me? Have a look for yourself.” He reached his hands up to his chin and pulled up, as if taking off a mask. For a second, I thought I saw…

But no. There was no one there. There never had been. I was just daydreaming.

I continued reading.