Ascription is an Anathema to any Enthusiasm

I recall my father’s bemused comment on dirty money: “We can clean it!”

I have a friend who won’t use a very useful piece of open source software because he feels it’s author is a pompous jerk with a short fuse.  You can clean money, it is much harder to clean your reputation.  Relationships relationships, complex transactions, can not be reduced to simple market commerce.

Today’s debacle around WordPress (they were running a link farm on the reputation credit created by all the Wordpress blogs “thank you links”), bleck. I use WordPress here and in a few other venues. I’ve made some very minor contributions. So yea!  I’m in that core of the community, if you define that as the top 5 thousand people in the community :-).  Today’s mess ripples thru the entire complex relationship network that holds a community like this together, and it is more likely to shake off people at the periphery than those closer to the core.

For example one of the things that the WordPress community does is Pingomatic.com. One of the hubs in the ping market. Trust?

Ugo does a good job of covering many of the bases of my opinion about this. He ends with this…

Since Matt is almost exactly half my age, I don’t want to be too harsh. Who’s not done something terribly stupid in his youth? I’m sure he’ll regret this and reform his ways. Unfortunately for him, the web, and Google in particular, have very good memory, so this episode won’t be forgotten so easily.

Open source projects are very long games with many many rounds and very ambiguous end states. If a player doesn’t play nice it taints his reputation for a long time. In the end sooner or later every participant in these games makes a fool of him self. In all robust collaborative games forgiveness is an extremely necessary and critical move.

<   <li><a href="http://wordpress.org/" title="Thanks! WordPress">WordPress</a>,
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>   <li><a rel="nofollow" href="http://wordpress.org/" title="Thanks! WordPress">WordPress</a>,

Via Gideon Rosenblatt a cool visual of where user’s eyes fall over google search results. This also answers a question I had. On a pull down menu the sweet spot is the second, not the first, item on the list. I’d wondered if that might be the case on a google search listing. This suggests not; though eye and click aren’t necessarily the same.

One of the ways to get a El Curve is to take a population and iteratively reward the winners slightly in each round. This appears to be the model that gives rise to power law distributions in things like oil reserves. So I’m always interested in research that looks at the details of the iterative process in the vicinity of a system that exhibits an El Curve. Income for example.

From Brad DeLong

Very nicely done: very much worth reading:

Sam Bowles and Herb Gintis (2002), “The Inheritance of Inequality,” Journal of Economic Perspectives.

That really is a marvelous paper beautifully and carefully written. Fascinating.

I did not know that back in the 1960s there was a consensus that the data showed America to be the land of opportunity, i.e. that your parents’ caste did not tend to dictate your own. I gather from this paper that this was wrong due to an assortment of errors in the design of the studies.

Today we know that if you’re born poor your chance of rising is small; the poverty trap. if you’re born rich your chance of dying poor is small. The authors think it’s unlikely that this second syndrome will come to be called the affluence trap.

Under some definitions of fair the maximally fair society would give each child an equal chance at various levels of income. In American society if your parents had high incomes chances are your income will be high. A child born of parents in the top 10% has a 40% chance of ending up in the top 20%. If your parents were dirt poor then it’s very unlikely you will have a high income. Children born into the bottom tenth have a 3.7% chance of getting into the top 20%.

The paper includes this great peice of eye candy. This shows the chance a child will fall into a given 10% of the income range given his parents’ position in that range. The two peaks are the poverty/affluence traps.

The fun thing about the paper is the very careful attempt they make to tease out of the data some information about the causality of the intergenerational income status trap. The extent of the trap is really amazing. If you average income over 15 years then the correlation is .65. That means there is a 65% chance that the next generation’s income will be within 1 standard deviation of the previous ones.

Of course what one wants to know is what’s the causal chain from one generation to another. For example maybe the key driver of wealth is a sense of humor (though i doubt it) and parents tend to pass that on to their children a bit by nature and a bit by nurture. The nice thing about the paper is that they make a really substantial effort to draw out of the data as much causality as possible. This is almost impossible since there are plenty of causal chains for which the data is very very thin.

Of course all this stuff is very tangled. Wealthy parents tend to buy more schooling, for example. The trick is to condition the results so you’re getting a reasonably pure contribution from each stage. I.e. so if you doubled the schooling without changing the parent’s wealth your model would predict accurately what the change in outcome would be. That’s really hard. For example it’s common to use data about twins or brothers to try and tease out the differences between nature and nurture. But even that’s very subtle. For example we know the height is very tightly tied to genetics but we also know it varies tremendously depending on how well people are eating. We know that brothers tend to have very similar incomes, unless you partition the data by race at which point you discover that black brothers are extremely highly correlated and non-blacks much less so. They do a beautiful job of stepping thru this mine field.

Here are the numbers they manage to pull out of the data:

• 4% IQ
• 7% Schooling
• 12% Wealth
• 2% Personality
• 7% Race

The key result of the paper is that 32% of the trap remains unexplained. It’s something else. Humor say.

I still have an affection for my five ways to get rich model (pick the rich parents, spouse, pocket, card, or trade).

Gold occurs in sea water at 0.1 to 2 mg/1000 kg (0.1 - 2 ppb) depending on sample location.

Go get it!

This article from the WSJ is interesting, it’s about using systems like pubsub to create persistent search as part of trying to get as far in front of the rumor mill around your investments as possible.

“It’s like a giant electronic driftnet,” …
Such technology may have been at work recently, when the results of a government study of a cancer drug developed by Genentech was mistakenly posted on the Web site of the National Institutes of Health. An hour after the results went live, the stock had soared nearly 20%. David Miller, president of Biotech Stock Research, based in Seattle, said a few investors using the new technology may have seen the change on the NIH site, which put the release on its RSS feed about five minutes after it appeared on its news page — and acted on it.

I really like that driftnet metaphor. Very synergistic with my talent scrapping metaphor; or that some business models are like whales.

But what I found my fun to puzzle about is the way it plays off the idea that friction is always part of the market/business design. As King Content continues to be dethroned by the distribution channels the net present value of content falls. Like money in a depression it’s interest rate is going negative. When the interest rate goes negative the incentives get pretty strong to pull the money out from under the mattress and convert it into some other capital good. Presumably that’s what’s happening to content.

So maybe I’m wrong.

I’ve been assuming that open content and owned content are in a death match. That open content will win. That the displaced culture around owned content will go dark. I call this the new dark ages - that all the content copyrighted during the 20th century will just go dark. Locked up in the vaults of the mega-content owners.

But, just maybe, like those who horde capital in a recession they can be convinced to pull it out of the vault. No wonder these guys are doing everything they can to increase the friction in the information distribution networks!