Risk and Opportunity

Monday, November 26th 2012

When comparing opportunity to risk, risk is nearly always emphasised over opportunity.

I'll put it in crude monetary terms. You could risk $10,000 for the possibility of getting $20,000. Or keep the $10,000. Most people go for just the $10,000. What about $20,000? $30,000? There is a multiple at which people start thinking about taking the risk. The balance between risk and opportunity is uneven.

Or, you're being interviewed for two jobs. One is a sure thing, but you have to take the job now. The other involves a final round of interviews. The second job is better, but you're not sure if you'll get it. Most people will opt for the sure thing.

There is an essential conservatism is business, too. You have a set of existing revenues. They are what you know. Potential revenues are unknowns. Will they materialise or are they fanciful projections? It's hard to know for sure. If potential revenues come at the expense of existing revenues then existing revenues are usually preferred.

More metaphysically, people will often opt for what they know over the unknown. They will opt for the certain over the uncertain. The predictable trumps the unpredictable. Repeating previous experienced is preferable to new experience.

Indeed, most people will seek immediate gratification over delayed gratification, even if it the delayed gratification would be more gratifying. Because, with any future projection, there is a risk that it may not happen.

People will opt for the habitual and routine over novel.

They will opt for existing ideology over uncomfortable new ideas or new syntheses of ideas.

Apps, the Unix Philosophy and Observational Computing

Saturday, November 24th 2012

Doug McIlroy, former head of the Bell Labs CSRC on the Unix philosophy:

"This is the Unix philosophy: Write programs that do one thing and do it well. Write programs to work together. Write programs to handle text streams, because that is a universal interface."

The laypeople are just catching up.

People buy lots of little "apps". Some are classic, big name ones. Some are small, eccentric ones. Each "app" represents a decision to do add a particular function to a phone or tablet - filter a photo, post to G+, or whatever it is. The apps come in little, bite-sized chunks you "compose" into a (fairly) unique set of software that suits you.

Apps are popular. It's partly the form factor of phones and tablets (complex software is inconvenient without a mouse and keyboard), partly the advent of widely available mobile internet (allowing downloads), and partly the app stores (making finding things to download easier). Result: people who never bought software buy apps.

It's also just a better way for people to use technology. If you gather what you need as you need it, it means you can start off small. You can work your way up to more complicated "workflows". It means you can learn as you go. You pick up stuff gradually, discard the bits you stop using, adopt new things, and so on at the pace that suits you.

It's a change from the (bloated) monolithic software "suites" such as Office or Photoshop of the 80s and 90s. Each of those came in one, giant blob. The blob promised much - but you had to tame its complex, slimy miasma before you could do anything useful.

Using pipe commands and little programs, it's how nerds use Linux. It's how everyday people adopt software - in a defacto, I-don't-need-no-stinkin'-manual kinda way. Now it's official. The world of "consumer" tech has adopted the unix approach:

  • Programs that do one thing and do it well.

Yes, many apps do many things and do them badly. Some even do a few things and do them well.

Yes, there are unsolved problems. Passing data from app to app can be hard - McIlroy's universal interface for the layman is missing. (Android has intents, of course, which is an attempt at a form of function composition for punters, but it's a primitive form).

The next phase for software will be removing the idea of "apps" and programs altogether. It will be about making them disappear into the realm of observational computing; where software watches us to gather data, we don't have to enter that data.

As software is broken into small pieces being piped together via the net and more intelligent software "agents", some of those pieces will stop being things you interact with, they will observe you. As the software improves, more and more software will be observational.

Moreover, downloading software to devices is too slow to update, too slow to change, and inflexible in comparison to downloading it to your devices every time you use it (the browser model). As bandwidth improves, it seems inevitable the latter model will win out as a distribution system.

The Rocker Bandit from Decatur

Saturday, November 24th 2012

ACDC, Rocker, Paris 1979:

Going to Decatur, Breezkings:

Rubber bandits:

The Different Types of Contempt

Friday, November 23rd 2012

Nerd contempt: when people are contemptuous of people who do not understand something technical or precise or attempt to garnish their thoughts with unthinking pseudo-technical buzzwords.

Academic contempt: see above. But with a special emphasis on Performance Intelligence - where a person can convert a certain type of academic intelligence into peer recognition and reputation.

Manager contempt: when a person is contemptuous of people who don't understand the business implications of certain social cues, norms and so on. People who lack "the bigger picture", as the manager would say.

Alpha male contempt: when a person feels contempt for those who lack strength and don't know how to participate in a dominant fashion in the breeding process.

Alpha female contempt: the same as alpha male contempt.

Artistic contempt: when a person feels visceral disgust for an artistic work or a person who is making that art.

Religious contempt: when a person feels contempt for people who don't share their religious views. And argue against them in a naive rational way.

Scientific contempt: a variety of nerd contempt with special reference to people who don't understand the subtleties of the scientific method.

New Age contempt: when a person has nerd contempt for people who don't understand the nuances of getting the right vibe, have crude attachments to vulgar displays of wealth and power.

Right wing contempt: the other people are naive children with no understanding of the real world.

Left Wing Contempt: the other people are naive parents who are keeping us down.

Aesthetic Contempt: everybody has this, but some develop it into a personality. A visceral hatred for things that deviate from a person's taste.

Tradie contempt: contempt for those that are impractical about, say, plumbing or engines.

Philosophical contempt: contempt for those who lack the ability to think metaphysically.

And so it goes on.

Whatever the contempt is directed at is usually something the person is quite confused by and afraid to investigate. It is simply to categorise and dismiss it.

Contempt of this kind is nearly all its guises is actually lack of empathy: a heuristic that allows a person to brush off things that might lead them out of their chosen psychological speciality - being a nerd, an alpha male, or whatever is. The realm of comfort. It is the triumph of the known over the unknown, the safe over the risky.

See also: Risk and Opportunity

Capital Dissipation

Thursday, November 22nd 2012

The accumulation of capital is what capitalism is all about. Investment to make a profit. Amassing royalties, profits, rents, interest, and so on.

Whenever something that was previously valued in non-monetary terms is given monetary value it is part of the process of capital accumulation. The logic of capitalism is that all things are given a monetary value eventually - "commodification".

Market transactions confer monetary value on things. The systems works, after a fashion, because each transaction is fairly simple - thanks to a simple price system - and goes some way to decentralise decision making.

As things are turned into objects with monetary value they are turned into things that provide cash that can be used to purchase things unrelated to the original thing that generated the cash.

But more complex electronic systems of trust and exchange are appearing. A classic one is "reputation". That is, celebrity X has X million "followers". These are one step removed from actual tokens, but can quickly be converted into cash via advertising, and so on.

These new electronic measurements of value are less fungible than money. Some depend on the system they are generated on (Facebook likes, for instance). Some depends on local knowledge. If you have a reputation in the world of physics, for example, it does not - necessarily - translate one-for-one into a reputation in the realm of, say, rare Triumph Motorcycle collecting. And a reputation can only really belong to one person or a group of people.

Although many of these new organisational systems are centralised, they also allow for more decentralised behaviour by participants. For instance, it is possible to have many small communities with their own emergent systems for valuing things all running on a central set of code and servers.

Capital accumulation attempts to convert real things into into cash over time, these new systems try to convert things into different types of domain-specific value over time.

Domain-specific values are unwieldy in a traditional society. They are used informally, but - at scale - mostly excluded from the pricing system. The information-poor nature of traditional money means that it is inherently unstable and inaccurate. It also means many things are not taken into account in transactions - pollution externalities being the classic example. The accumulation of information-poor decision making means stupid allocations of effort and resources over time.

Once you allow for more powerful computation, however, the benefits of simple money (simplicity, calculable by humans on a per-transaction basis) decline. Because machines can do much of the calculation around domain-specific values on behalf of people by observing what they do.

Each type of domain-specific measurement can be related to another type of measurement, and through a series of complex automated transactions, a certain type of multi-dimensional fungibility can be derived; you can step through the domains through a directed graph of a kind. That would be far too computationally complex for a human to calculate, but possible to compute at scale with sufficient processing power. It is a strange form of automated techno-barter!

The monetary system only exists because organisation around domain-specific values is much more computationally intensive and requires machines to operate semi-autonomously - human working memory is not powerful enough to compute the transactions required. So the technology required is several orders of magnitude more complex and powerful than the technology required to maintain a simpler, low resolution financial system.

The technology is appearing now, however. At current Portable, mass market computers plugged into a network changes things greatly. The next phase of observational computing will be important.

A thing can have a monetary value and and various domain-specific values, of course. But, if the domain values are inherently more complex than the monetary values, they will have a higher level of information density. They will be more accurate. When it comes to competition between monetary valuing and domain-specific valuing the more information-dense system will prove more efficient over time. Because information-rich decision making is superior to information-poor decision making in the long run. Over time, more and more thing operate in the non-monetary realm. Simply because that realm produces better use of time and resources. This process is capital dissipation.

And so we have the tension between capital accumulation (the old system represented by traditional institutions) and capital dissipation (represented by peer to peer technology and domain-specific values, often organised in a semi-anarchic, stigmergic fashion)

But, in the same way centralised USSR-style decision making collapsed, the traditional monetary system will collapse as well.

See also:

Old Fashion Versus Young Fashion

Wednesday, November 21st 2012

It's no great insight that young, rebellious people often get jobs, have kids and turn into their parents. Then they grumble:

"Ah, kids these days!"

To older people, new ideas are impractical. Experience tells the older person that most new ideas are just old ideas wrapped up in new jargon. So they are distrustful of fashion.

It is unhip to be hip.

A young person will adopt something if it's fashionable. An old person will avoid it if its fashionable.

But it really is the same thing!

Moreover, it simply reflects the relative skills of the old and young. The old understand context due to experience, the young have the capacity to create new things. Both are useless without the other.

See also: Hipster Hatred Paradox.

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