'nudge' tops short action-verb econ books

I second-guessed my purchase of Richard Thaler and Cass Sunstein's Nudge: Improving Decisions About Health, Wealth, and Happiness, almost the minute I received my Amazon e-mail receipt -- I had already read Malcom Gladwell's Blink, and heard about the literary disaster that is Sway, and yet there I was, reading Nudge's introduction about the arrangement of cafeteria food.

I'm glad I did. While Thaler and Sunstein are happy to revel in the small ways that their insights into "choice architecture" can lead to better or worse choices, they also lay out their political principles and detail their impact on current policy debates (e.g., Social Security, Medicare Part D, Education.) To top it all off, they begin the book with a treatment of our cognitive failings, distinguishing between our automatic and reflective processing systems (what's not to love!), leading right into their arguments for how to help the automatic majority overcome their cognitive frailty without infringing the reflective minority's ability to choose.


So what is choice architecture? Well, are you choosing out of ten choices, or 100? Are you automatically enrolled in one choice or another if you don't make an active decision? How is that default set? How is information presented to you to about the available choices? All of these questions speak to choice architecture -- in other words, the arrangement and organization of choices -- which has a nasty habit of leading individuals to choices that they themselves would not find optimal (see don't be bob bias, the mind and morality).

Furthermore, "choice architecture, both good and bad, is pervasive and unavoidable." This point is essential to Thaler and Sunstein's argument if you are a libertarian. Ignoring choice architecture won't make it go away, it will only make it more likely that the choices favored by choice architecture are more likely to be poor. For instance, you can make the default option for new employees enrolled at 5% in a 401(k) with an option to opt-out, or you can make the default option to not be enrolled (as is often the case). If you stick with the current default, many who would otherwise enjoy being enrolled will not do so because of the choice architecture. Thaler and Sunstein recommend acknowledging the importance of choice architecture and deliberately deciding on its design.

Thaler and Sunstein aren't interested in helping individuals pick out their dry cleaners; as the authors note, if a dry cleaner performs poorly, it is fairly easy for individuals to make a better decision the next team.

Rather, "people are most likely to need nudges for decision that are difficult, complex, and infrequent, and when they have poor feedback and few opportunities for learning."

Individuals are primed to make poor choices for Medicare Part D, Mortgages, and retirement investments. Thaler and Sunstein don't advocate for eliminating choices because of these problems. On the contrary, their final chapter points to the infamous "third way" -- separate from both the command-and-control left and the single-minded 'choice' monkeys of the libertarian right.

There needn't be a war between 'no choice' and 'unlimited choice.' Thaler and Sunstein spend around 250 pages explaining that this is indeed a false choice. Like myself, they side with the libertarians when it comes to the importance of choice, and side with the left when it comes to the failure of 'choice' to solve all problems. Choice is important. Coercion isn't necessary. Focus on the choice architecture.

Oh, and I have to add. As someone who has long supported responding to the gay marriage debate by taking government out of the marriage business (perhaps keeping a civil union or partnership business) and leaving it to independent churches, I was very happy to see Thaler and Sunstein put forth such an argument in Nudge.

Whether you are on the left or right, worth a read! Read more!

the mind and morality

For those that missed the preceding posts on this topic (book to own: happiness hypothesis, the evolution of the elephant and the rider) or haven’t yet committed their content to memory, allow me to reintroduce some of the key terms and concepts. Our brain understands the world by processing the information received by our senses. These processes can be grouped by whether they are automatic/subconscious or controlled/deliberate. This post will focus on my primary interest: how cognitive processes affect moral judgments.

The automatic system has a long history and has evolved to serve elemental needs linked to survival (e.g., fight/flight, don’t eat the green berries, etc.). The controlled system is a relatively new adaptation, which separates us from (most, if not all) animals, and has evolved to allow humans to make better long-term decisions and expanding their ability to cooperate in large-scale communities. Jonathan Haidt equates the dynamic between the controlled and automatic systems as akin to a rider atop an elephant:

"The automatic system [the elephant] was shaped by natural selection to trigger quick and reliable action, and it includes part of the brain that make us feel pleasure and pain (such as the orbitofrontal cortex) and trigger survival-related motivations (such as the hypothalamus) ... The controlled system, in contrast, is better seen as an advisor. It's a rider placed on the elephant's back to help the elephant make better choices. The rider can see farther into the future, and the rider can learn valuable information by talking to other riders or by reading maps, but the rider cannot order the elephant around against its will."

It would be pleasant to believe that the human brain is a modicum of efficiency – seamlessly switching to and from the elephant (automatic system) and the rider (controlled) based on what is most appropriate. A car runs a red light and starts careening toward you as you walk down the sidewalk? The elephant throws you to the ground before the rider even puts together what’s happened. Deciding your position on a political or social issue? The elephant steps aside to let the rider judge the merits on each side.

This last step, the peaceful transfer of power from the elephant to the rider, is the destructive delusion that will be the subject of this post. The elephant will not go quietly into the night. Or rather – to be less poetic and more precise – the elephant is unable to see when his services are productive (decision to respond to runaway car) and unproductive (decision on complex policy issue). The elephant takes the lead no matter what the issue. So what does the rider do?

When confronted with a moral issue or really any issue that elicits a strong feeling, the rider is relegated to the role of the lawyer for the elephant: "It is the elephant holding the reins, guiding the rider. It is the elephant who decides what is good or bad, beautiful or ugly. Gut feelings, intuitions, and snap judgments happen constantly, and automatically."

Haidt compares moral judgment to aesthetic judgment: “When you see a painting, you usually know instantly and automatically whether you like it. If someone asks you to explain your judgment, you confabulate. You don't really know why you think something is beautiful."

I think some would disagree that they don’t know why something is beautiful, but I don’t think they would deny the chronology of events:

1. See a Painting
2. Instantly like/dislike the painting
3. Begin to think about why you like/dislike the painting
4. Decide on a reason why you like/dislike the painting

This understanding of moral and aesthetic decision-making is humbling. No one wants to think they are simply confabulating post-hoc explanations for a gut reaction to complex issues like trade agreements or environmental issues. No one really wants to believe that their rider is reduced to "[stringing] sentences together and [creating] arguments to give to other people … fighting in the court of public opinion to persuade others of the elephant's point of view."

Haidt brings up a situation we’re all accustomed to: “When you refute a person's argument, does she generally change her mind and agree with you? Of course not, because the argument you defeated was not the cause of her position; it was made up after the judgment was already made."

It’s quite common to hear people decry “strawmen” arguments. Haidt argues that all of our arguments are (to some degree) strawmen. They are all post-hoc justifications. When "two people feel strongly about an issue, their feelings come first, and their reasons are invented on the fly, to throw at each other.”

To set aside the elephant/rider metaphor, different parts of the brain correspond to different mental activities – the frontal insula is active during “unpleasant emotional states, particularly anger and disgust,” while the “dorsolateral prefrontal cortext, just behind the sides of the forehead, [is] known to be active during reasoning and calculation.” Haidt’s argument merries with my perception that judgments are made in the parts of brain associated with emotion and the subconscious, while the arguments defending the judgments are constructed after the fact in the parts of the brain associated with reasoning and calculation.

The more emotionally detached you are, the more likely the rider can take the reins from the elephant and steer it on a rational, calculated path.

Oomph. I don’t want to dilute this crucial point about how our brains take moral positions and make moral arguments with any additional content. In the next post, I’ll look at how the elephant further muddles our moral judgments by filtering the information that gets to the rider. For now, are there doubts about this theory of making and supporting judgments? If so, I could dig back and supply some of the studies that have looked at brain activity and behavior, which support this understanding, but I don’t want to lose the theory amidst the details if it’s not necessary.

The final post in the series has arrived: man's misuse of morality.

Links:

• the evolution of the elephant and the rider
  
• book to own: happiness hypothesis
  
• to blink or think is not the question
• the self's compromising of moral aims
• don't be bob bias
• passenger or policy-maker?
• one point for social cripples
• living with cognitive bias
• health care as a moral issue

Read more!

the evolution of the elephant and rider

This post is the second in a series responding to Jonathan Haidt's excellent book, "Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom." You can my initial brief review of the book here. This post will set the stage for a more substantive discussion about how and why our brains will sometimes lead us down paths we wouldn't deliberately choose for ourselves, and what can be done to guard against this tendency. First, we need to understand our mind's evolution.

Mankind is one of the few species able to live in large, relatively peaceful societies. So what do we have in common with ants, termites, and naked mole rats? We've all been able to overcome "the laws of evolution (such as competition and survival of the fittest)" through kin altruism.

Kin altruism is short-hand for the expansion of an organism's genetic self-interest to family members beyond his own young. Bees, for instance, are all siblings, and its in their genetic self-interest to sacrifice themselves for the hive - "selfishness becomes genetic suicide." This kin altruism, however, only takes a species so far; it breaks down quickly, especially for species that aren't all brothers and sisters. For humans, "gratitude and vengeance are big steps on the road that led to human ultrasociality."

Robin Dunbar has demonstrated that animal brain size correlates with social group size. Evolutionary success depends on playing the social game well. Brain power allows the animal to do just that, improving the animal's odds of surviving and reproducing. Mix in some natural selection, and you explain the evolution of larger, increasingly sophisticated brains in humans.

The evolutionary backstory is essential to understanding why the brain functions as it does. Haidt identifies three cognitive developments that allowed humans to live in large, cooperative societies: language, reciprocity and vengeance.

Reciprocity and vengeance are two sides of the same coin to Haidt. He notes, "Reciprocity is a deep instinct; it is the basic currency of social life." Social cohesion and cooperation depends on the promise of reciprocity and fear of vengeance. Haidt restates Jane Jacobs’ observation that a neighborhood has a lot of problems when a parent doesn’t feel comfortable castigating someone else’s unruly child.

While language has evolved to serve a variety of purposes, Haidt infers that one of its principle uses to early man was gossip, which serves as a “policeman and a teacher.” What hit home for me was Haidt’s insight that “many species reciprocate, but only humans gossip, and much of what we gossip about is the value of other people as partners for reciprocal relationships."

Language, reciprocity, and vengeance all work together to a socially productive end; “Gossip paired with reciprocity allows karma to work here on earth, not in the next life. As long as everyone plays tit-for-tat augmented by gratitude, vengeance, and gossip, the whole system should work beautifully."

Yet Haidt notes that the system doesn’t work perfectly. Evolutionary quirks leave us biased and hypocritical, sabotaging our collective efforts for social cooperation. My primary interest is identifying these destructive quirks, figuring out why they exist, and developing a plan of action to minimize their destructive impact.

The reason for our cognitive hiccups is simple – “evolution never looks ahead” (terrific insight). For instance, “linguistic ability spread to the extent that it helped the elephant do something important in a better way.” Vocalization didn’t evolve so that we could reproduce every sound perfectly. Language itself didn’t evolve so that we could communicate with perfect efficiency and clarity. Natural selection finds better ways to do things, not the best ways.

Haidt compares the human mind to a rider on top of an elephant. The elephant is our ancestral, subconscious system of automatically processing that drives our most elemental impulses. Buddha offers further insight: "In days gone by this mind of mine used to stray wherever selfish desire or lust or pleasure would lead it. Today this mind does not stray and is under the harmony of control, even as a wild elephant is controlled by the trainer." Buddha’s elephant trainer, the rider, is a relatively new addition to the cognitive space, as "language, reasoning, and conscious planning arrived in the most recent eye-blink of evolution.”

In sum:
"The automatic system [the elephant] was shaped by natural selection to trigger quick and reliable action, and it includes part of the brain that make us feel pleasure and pain (such as the orbitofrontal cortex) and trigger survival-related motivations (such as the hypothalamus) ... The controlled system, in contrast, is better seen as an advisor. It's a rider placed on the elephant's back to help the elephant make better choices. The rider can see farther into the future, and the rider can learn valuable information by talking to other riders or by reading maps, but the rider cannot order the elephant around against its will."

If the rider and the elephant sounds like the basis for a Disney buddy film, you’re right on track. Haidt describes the rider/elephant dynamic: “I was a rider on the back of an elephant. I'm holding the reins in my hands, and by pulling one way or the other I can tell the elephant to turn, to stop, or to go. I can direct things, but only when the elephant doesn't have desires of his own. When the elephant really wants to do something, I'm no match for him.”

The rider couldn’t do without the elephant, because “the mind performs hundreds of operations each second, all but one of them must be handled automatically," but, likewise, the elephant depends on the rider for its chance for evolutionary success. For it’s the rider that "allows people to think about long-term goals and thereby escape the tyranny of the her-and-now, the automatic triggering of temptation by the sight of tempting objects."

As Haidt notes in the block quote above, the elephant and rider (or automatic and controlled processing systems) correspond to different areas of the brain. The distinction does have basis in the way different parts of our brain are active when we are emotional and rushed versus detached and deliberate.

The next posts in this series (the mind and morality, man's misuse of morality) look at where and why these dual systems of processing information go awry.

Links:

• book to own: happiness hypothesis
  
• to blink or think is not the question
• the self's compromising of moral aims
• don't be bob bias
• passenger or policy-maker?
• one point for social cripples
• living with cognitive bias
• health care as a moral issue

Read more!

book to own: happiness hypothesis

When pitching Jonathan Haidt's "Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom" to friends, I often find myself explaining away the title -- no, it's not another self-help book and yes, it's about more than just plastering a silly smile on your face. With that said, the title is appropriate; Haidt is chiefly concerned with what's responsible for making humans happy.

The title fails, however, to convey the breadth and depth of Haidt's search, which touches on philosophy, psychology, economics, evolution, and cognitive science, and skips effortlessly across the centuries, from the Stoics' philosophical minimalism to Ben Franklin's pragmatism to Robert Cialdini's work on Influence.

Haidt documents the evolution of the human mind, producing an overarching narrative that explains everything from the use of gossip and prozac to mental tendencies that steer men away from their stated values and towards self-destruction.

Along with "Kluge," this book has profoundly shaped the way I view my brain. Before Haidt, I was aware that our brains appeared to systematically work against our best interest, and that these tendencies manifested in more general cognitive biases. Haidt, however, takes you behind the curtain, and provides a look at what exactly is going on in your brain and the evolutionary logic behind it. This book provided a more systematic take on cognition than the discrete observational work I had previously encountered.

My interest in correcting my cognitive failings largely emanates from my concern with my ability to grasp the truth. Haidt rightly adds that it's profoundly important to happiness in general. Cognitive therapy has allowed many to escape depression by directly attacking distortions in thought. These depressive distortions are direct relatives to those that scare up trouble in all of our lives, and Haidt provides an excellent primer on how to exorcise your cognitive demons through a few different means, thereby improving the way you think and possibly making you happier.

This isn't the end of my cognitive kick, I'm working on a series of posts that explore Haidt's ideas in greater detail, which will dovetail nicely with Kluge, which I'm currently finishing up.

Links:

• to blink or think is not the question
• the self's compromising of moral aims
• don't be bob bias
• passenger or policy-maker?
• one point for social cripples
• living with cognitive bias
• health care as a moral issue

Read more!

to blink or think is not the question

Malcom Gladwell wrote the book Blink to celebrate the mind's ability to make very adept judgments in the blink of an eye. These judgments are based on our intuition (the "gut" or "heart") and allow the human mind to make millions of calculations and decisions very quickly.

Gladwell is critical of those who ‘overthink’ things and don’t respect the value of the ‘blink’ decision simply because we don’t know how to articulate what makes the hairs on our neck stand up. Gladwell’s first example sees an art gallery acquire an ancient statue despite many experts believing the statue was fake based just on their visceral first impression (it was indeed fake.) Gladwell hammers home that the experts didn’t know how they knew the statue was fake, they_just_did.

The author of The Tipping Point does admit later in his book that there are some problems with the ‘blink’ judgment. It’s highly sensitive to a person’s experiences. Gladwell mentions a race experiment, which measured his ‘blink’ reactions to questions of race and achievement, and he learned that his ‘blink’ judgments discriminated much more than he did when making conscious, deliberate decisions.

Since Gladwell is black, it appears safe to say that his ‘blink’ associations are unequivocally bad (and/or damaging, etc.) in this case, while his deliberate associations are significantly better (if not ‘good’). Furthermore, Gladwell explained that the race experiment results could be easily manipulated by showing the respondent negative or positive images of black people beforehand. 1 point for thinking, 0 for blinking, in this case.

This example underscores a tangential point made by Gladwell that I think is VERY important: our "unconscious attitudes may be utterly incompatible with our stated conscious values."

I think Gladwell is correct that ‘blink’ reactions are not necessarily wrong simply because we can’t articulate the reasoning behind them. I do think that even framing a discussion of the matter with the title “Blink” is giving deliberate decision-making short-shrift, and I don’t think the world really needed another anti-contemplation lobbyist.

Blink decisions are decision-making shortcuts that are undoubtedly necessary (who wants to carefully weigh the pros and cons of every decision with which they are presented?), but the focus should be on overcoming the cognitive failings that sabotage our stated conscious values both subconsciously and consciously.

The question isn't blink or think, but how can we ensure our blinking and thinking isn't sabotaged by "unconscious attitudes ... utterly incompatible with our stated conscious values."
Read more!

amazon buying binge

It's rare that I buy more than one or two books at once, but once in a while I've accumulated such a long list of books that I want to read at that very moment that I end up buying a boatload. In case you were interested, here's what I'll be reading over the next while -- you'll likely some of these names on this site again...

• "Power, Sex, Suicide: Mitochondria and the Meaning of Life" Nick Lane; Paperback; $12.21
• "Network Power: The Social Dynamics of Globalization" David Singh Grewal; Hardcover; $19.80
• "Nudge: Improving Decisions About Health, Wealth, and Happiness" Richard H. Thaler; Hardcover; $17.16
• "Mirroring People: The New Science of How We Connect with Others" Marco Iacoboni; Hardcover; $16.50
• "A Dash of Style: The Art and Mastery of Punctuation" Noah Lukeman; Paperback; $11.16
• "The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom" Jonathan Haidt; Paperback; $10.85
• "Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond" Deepak Malhotra; Hardcover; $17.16
• "Kluge: The Haphazard Construction of the Human Mind" Gary Marcus; Hardcover; $14.40

I'd be happy to provide info on why I chose a particular book if you have a request... Read more!

learning from jane jacobs: the poverty trap

Paul Collier, author of The Bottom Billion, and Jane Jacobs, author of The Death and Life of Great American Cities, are both careful to differentiate between slums and low-income areas. While Collier and Jacobs' focuses of study differ (far-away nation-states vs. local ghettos) , they both arrive at the same conclusion -- certain geographic areas are caught in poverty traps that prevent the people therein from enjoying any improvement in well-being or opportunity without moving out. Unfortunately, I have only sparse, disjointed notes from the Collier book at the moment (a mistake I must rectify...), so this post will focus on Jacobs. And while I probably should ignore the easy Thomas Friedman diss, I can't help myself -- once again, the world is not flat, geography is still very important to billions of people.

Jacobs describes the American slum as "a human catch-pool ... that breeds social ills and requires endless outside assistance." Slums are notable by their "stagnation and dullness" and "[failure] to draw newcomers by choice."

Jacobs defines a slum as "an area which 'because of the nature of its social environment can be proved to create problems and pathologies,'" which is different than "'a stable, low-rent area.'" The difference is that citizens are able to "make and carry out their own plans right there" in low-rent areas, but not slums. Low-rent areas help their denizens improve their lot in life, and generally eventually become higher-rent areas, not so in slums.

In slums, high-achieving families are driven out (perhaps because of the unsafe streets, lack of available financing for low-income areas, etc.), acting to reverse natural selection for slums. Herein lies the poverty trap at work -- a negative feedback loop that prevents the area from enjoying the positive externalities of economic development.

I'm reminded of a shallow pool of standing water, breeding disease and poisoning those who drink from it. Except most pools evaporate or are washed away; in the slum, the forces that would purify the water source through dilution or some other manner simply leave -- the pool persists.

Part of this negative feedback loop is the lack of social fabric, which only gets worse over time as more and more people act without accountability. Normal state policing can never reproduce the social control a community needs, the community itself must (and indeed the non-slum does) provide a check on illicit behavior, generally without anyone noticing they are a part of this self-policing effort. No such internal check exists in slums. In fact, the opposite occurs; the city continues to act as a conduit for its denizens to cooperate, but to destructive, rather than productive ends. The narc, rather than the drug dealer, gets ratted out.

What are the constraints that trap slums? The most glaring is safety. Just as commerce across the seas has depended on safe seas, so does city commerce depend on safe streets. The analogy extends even further; just as sea trade amounts to a competition between productive forces of exchange and destructive forces of extortion for dominance, so does street life.

The productive forces (often taking the form of bodega owners or other local shops) must make the streets "lively enough to be able to enjoy city public life and sidewalk safety." Jacobs argues the key is to generate productive activity through the stimulation of commerce and cross-use to tip the balance of local power in favor of those who desire peace and commerce. The competition is complex, and the failure of good men and women in slums is a reflection less of their intention or ability than it is of the greater failure to comprehend the specific constraints that are preventing a community from concentrating productive individuals (e.g., is it isolated from the productive outsiders needed for development, does low-income housing push individuals out of the community who reach a certain level of success, is the entry barrier so high that it precludes entrepreneurial citizens or outsiders from establishing themselves?)

Tangentially, I've come to think that 'trap,' while a useful term, may be less so than 'constraint' for economic development discussion. Collier's book categorizes constraints under: conflict trap, natural resource trap, the trap of being landlocked with bad neighbors, and the bad governance trap. While these terms are proper descriptors, they are not as actionable as, say, the market access constraint. We can't do much about a nation-state being landlocked, but we can enhance market access. Or take the natural resource trap; sure it exists, but wouldn't it be more worthwhile to deal more explicitly with the specific constraints produced by these natural resources? Read more!

what jane jacobs can teach us: borders

Jane Jacobs wrote the book on city planning for the latter half of the 21st century, and it's yours for a little more than $10 at Amazon -- The Death and Life of Great American Cities. Need more convincing?

Jacobs has a little something for everyone, whether you're interested in learning about why a neighborhood is hip or dull, slums improve or decline, your university's neighborhood was so boring, border towns are wastelands, automobiles are so problematic yet important, visual perception affects city life, city planning and public spending failed miserably, different processes of scientific thought shape city policy, the role of economic development in city formation, and/or the role of city formation on economic development. (Exhale)

I'll have a series of posts bringing out some of her broader points that I think are applicable to not only cities, but economic development at home and abroad. First up, is Jacobs' treatment of borders, which for the most part refers to borders between towns, but I find quite applicable to most borders.

Dead End or Hub?

Border areas suffer from a lack of land use and circulation of people, which stimulate local growth and safety. Intensity is low because border areas are the last stops on the line, dead ends that inhibit individuals from traversing across the border area. These border areas suffer from "fewer users, with fewer different purposes and destinations at hand," creating vacuums that are typically unproductive and unsafe. Some borders allow traffic one-way (Arizona/Mexico), others see traffic, but only at certain times, but the effect is the same. Border areas are best served by making the border a "seam rather than a barrier, a line of exchange along which two areas are sewn together." It's not that border areas, or frontiers, are prone to blight and disuse. To the contrary, frontier areas are positioned to be uniquely original and creative thanks to cross-border exchange and ability to escape potentially crippling central oversight. Jacobs' insight is that the border areas have their fate in their own hands, at least to some degree. They can fade into disuse and disrepair as the last building in the dead end, or they can serve as a hub for interaction between both sides of the border. The potential for these areas cannot be overstated -- frontier cities are often the centers of the next empires. Historically, commerce, exchange, and the free flow of ideas and goods have been the keys.

Claustrophobic borders

Some areas are large enough and diverse enough to be productive and vibrant despite being cutoff by a border (though the smaller area specifically near the border won't be vibrant), but it becomes increasingly problematic when the neighborhood is too small to support itself as a district. This merries well with the literature I've seen with regards to small nation-states -- too small to support the diverse commerce needed -- damned to exist as fragments by borders which inhibit the pooling of human and financial resources needed to grow. What if Rhode Island had its own currency, tariffs and regulated employment visas for other states in 1960? Well, if you add in a bunch of poor, violent neighbors and make our little state a land-locked country with no history of effective governance and scarce resources you'd have Burundi, with a GNP per capita of about $90. Would the dissolution of borders make Burundi the center of an African superpower? Likely not, but it does serve as a barrier to the the accumulation of capital -- financial and human -- needed to escape the poverty trap.

Minor internal borders as wasteful barriers

Jacobs has additional insights into man-made barriers that lead to dullness and blight, which I think are worth noting. She focuses on single elements with low intensity land use, such as civic centers, large medical centers, large parks, and universities. She reserves special criticism for universities, which orient inwards, completely disengaged from their surroundings, producing a deadness to all that borders them. She looks at Central Park and notes that the area goes nearly unused at night; it features many attractions like carousels buried deep inside, which should be pushed to the border with the city, to allow for greater utility. The challenge is to minimize these large single-use areas, or at least pack them near multi-use, high-concentration areas that can overcome the single-use area's deadening externalities. City planning misconceptions have even taken some positive city features, like waterfronts and parks, and made them dull, by insisting on single uses that serve only small segments of the populations at specific times -- making the areas dull and even unsafe at other times.

Next to you are walking around a city, pay attention to the buildings around you and how they are used; do they serve multiple uses, populations? Do the buildings use throughout the day, or only at specific times? Are there large single-use facilities? Are the blocks small or large (I'll have to return to this later)? By what visual cues do you segment the city? Jacobs packs a lot of insight to both shape how you understand the world around you and how the city around you is shaping your perception, habits, and opportunities.

Read more!

Book to Own: Who's Your City?

A few weeks back, I posted a note on Richard Florida's new book, Who's Your City?, on how the creative economy is making where to live the most important decision of your life. Well, thanks to a Ms. B, I got a hold of a copy. Here are some brief comments from the Amazon reviews before getting to the ideas I found interesting.

The Good and the Bad:

• The spirit of Jane Jacobs lives on.
• The book's tone wanders from broad, Friedmanesque discussion of the world economy to home-buying advice as well as statistic-and-theory-heavy text as though unsure of its intended audience. Yet the author opens up a complex, underexamined subject along the way.

Florida wants to help. He wants to explain America's economic divide abd the composition of cities, while also helping you pick out the perfect location for you at each life stage. The book could have used better editing/organization, and lacked a strong concluding chapter to bring it all together, but still packed a great deal of insight in a very readable text.


Florida breaks his ideas down into four parts: why place matters, the wealth of place, the geography of happiness, and where we live now. The first two, which comprise 127 pages, contain the meat of Florida's analysis.

Spatial Sorting and its Consequences

Florida begins by deftly dismissing Thomas Friedman's claim that The World is Flat. as he argues for a "spiky world." An important nuisance is that while place matters, it is possible for port cities like NYC and London to integrate considerably; in fact, Florida refers to the pair as NyLon.

He proceeds to explore theories of economic growth before concluding that mega-regions (The Rise of the Mega-Region PDF) are the true economic unit and that they will only continue to grow as creative people and their firms continue to cluster together.

This clustering powers economic growth, but it also has potentially negative byproducts. Florida raises this issue in his discussion of how peoples of greater income and/or ability are more mobile, while those of lesser income and/or ability are more rooted. This phenomena, coupled with gentrification, is leading to a "means migration ... dividing the world into two kinds of regions with very different economic prospects (p. 99)."

He quotes Wharton economist Joseph Gyourko, "This spatial sorting will affect the nature of America as much as the rural-urban migration of the late nineteenth century did," before asking what will happen to American society when city-regions become entirely gentrified, and the poor are relegated to the fringe and beyond.

Finding the right shiny, happy place

The final two parts of the book (170 pages) look at what people look for in a city, where they find it, where specific industries concentrate, and what this means for you in choosing where to live in each of your life stages.

This section of the book is pleasant, but not incredibly thought-provoking, especially as Florida moves away from the city data and toward "make a list of what's important to you!"

Still, I enjoyed finding out about American cities that were getting it right (Fayetteville, Arkansas, really???), and every once in a while Florida would sneak in some insightful commentary that made me glad I didn't skip any chapters.

How Education leads to Sorting...

On p. 247, Florida returns to the idea of spatial sorting. The rich and the creative are clustering in certain mega-regions, and they are also being sorted into mega-regions that specialize in certain industries (finance in NY, music in Nashville, entertainment in LA, biotech in Boston, etc.) The creative power in each of these regions is being amplified by the concentration of talent, but at the expense of diversity (not just racial, but economic, industry, intellectual, etc.)

On the next page, Florida turns to Publius favorite Tyler Cowen to explain society's growing economic divide. The culprit isn't "outsourcing, immigration, or even wage gaps ... the real culprit is the divide in human capital and education."

Cowen: "The return for a college education, in percentage terms, is now about what it was in America's Gilded Age in the late nineteenth century. This drives the current scramble to get into top colleges and universities. In contrast, from 1914 to 1950, the relative return for education fell, mostly because more new college graduates competed for a relatively few top jobs, and that kept top wages from rising too high."

The return on education has "skyrocketed" since 1980, and part of that return is the mobility low-income individuals (like Florida himself) needed to engage the economic opportunities that are not in one's backyard.

Florida jumps back to the subject of education a bit later, as he argues that current schooling was designed for the "old mass-production economy, which no longer reflects the realities of our creative age." Schooling is designed to transmit discipline, not knowledge, and while Florida is careful not to blame the teachers, he argues that schools are squeezing the creativity out of kids.

How Mating leads to Sorting...

People usually marry someone like them in economic/social class. This isn't new, but what is new is the earning power of the women in these relations. As you may have noticed, women are thriving in the workplace like never before.

So, not only is the return on education greatly increased, but now college-educated households are enjoying two times the economic benefits.

All this spells even greater economic inequality. Click here for a wiki chart showing how different percentiles have seen their income rise since 1967. Before I wrap up this beast of a post, I'll add a disclaimer that while Florida has some great insights on economic inequality, it's an incomplete analysis of the American economy and I don't think policy decisions should be based on penalizing top earners for experiencing more income growth than lower percentiles.

A clear lesson from Florida's book, however, is the role of education and its significance in empowering individuals to succeed.

Read more!

Where do you want to live?

Richard Florida has written a promising new treatise entitled "Who's your City? How the Creative Economy Is Making Where to Live the Most Important Decision of Your Life," wherein he argues that different cities have personalities and characters that not only shape the lifestyle enjoyed therein, but also the long-term economic growth and prosperity of the city.

I've yet to pick up the book, but I have been reading Florida's "The Rise of the Creative Class," where he documents the rise of this new "no-collar" class that mixes the bohemian and bourgeoisie ethos while powering economic growth -- the overlap in the two books is clear.

Soon I'll post some snippets and thoughts on Florida's creative class, as it is useful in examining the societal friction underlying many of the current policy debates.

For the moment, here is a map that seems to confirm (nearly) all biases.

Read more!

Sling and the Stone: Composition of Forces (Pt. III)

This is Part III of a three-part series on The Sling and the Stone: On War in the 21st Century, by Col. Thomas X. Hammes.
Read Part I here. Read Part II here.

This final installment deals with the makeup of the United States’ Armed Forces, which echoes the days of large-scale conventional warfare. Hammes spends the majority of his time discussing the US Army, but I'll begin this summary with a few brief notes on those other guys...

In the sea, while our enemies are focused on developing anti-access weapons (e.g., mines, submarines), the Navy is largely ignoring these developments. In addition, the recent war game in the Persian Gulf shows the potential for huge losses were a US fleet attacked by a swarm of small speedboats.

Meanwhile, the Air Force has too many air superiority fighters, and too few transports, tankers, intel aircrafts, bombers, and other special mission tasks. In both cases, the onus has been on delivering a heavy punch, when it should be on flexible response.

For the US Army, six heavy reserve divisions (out of ten divisions total) are too many. Hammes argues that the Army needs less heavy forces, and more “flexible, multi-mission capable, medium-weight forces … for forward presence, quick response, nation building, and peacekeeping or peace enforcement missions.” There is a critical shortage of this type of unit in the Middle East.

Hammes’ ideal unit is able to operate in any terrain (so no large flock of tanks), is prepositioned for rapid deployment to likely conflict areas, and has a staff educated in conducting joint and interagency operations.

Large Infantry and Military Police units are needed for post-battle security, along with good human intelligence and a significant number of Civil Affairs, Engineers and logistic elements saturating the streets. MPs will need to be capable of both community policing and combat operations. Civil Affairs will need to provide basic civil functions, network with agencies and organizations, and help the locals establish governance. Infantry will need to operate as small units to patrol, live with, and advise the local population. Everyone needs to take a lesson from Special Forces.

Intel also needs an overhaul. Operationally, intel needs to worry less about tracking big conventional forces, and more about “recognizing, analyzing, and understanding networks.” The impetus must be on locating the nodes in these networks to either exploit or destroy. Given the sophistication of the enemy, human intel (old-school intelligence gathering) is essential for locating the node. In addition, because the enemy does not need to communicate before attacking, human intel is far more important signal intel (which intercepts electronic communication). To summarize, intel must mirror the enemy, create a similar network of small forces, saturate the population, and track the enemy as police track gang activity.

The Army National Guard is changing many heavy Infantry units to more appropriate Military Police units. For Hammes, the transformation has not been enough. For instance, with the National Guard’s dual roles in conflict abroad and disaster at home, the Guard is particularly well-suited for consequence management. Therefore, the Guard should expand its Chemical Biological Radiological Nuclear Explosive (CBRNE) units to provide downrange assistance to hazmat squads in case of disaster at home, and civil support in foreign theaters.

There are major changes being made to the US Army. I haven't found a good summary article on this transformation, but here's a wiki entry on the Transformation of the United States Army and a brief article on the "Biggest Change Since 1939." Read more!

Sling and the Stone: Personnel (Pt. II)

This is Part II of an N part series on The Sling and the Stone: On War in the 21st Century, by Col. Thomas X. Hammes.
Read Part I here.

The problems of communication, coordination, and cooperation in the American intelligence community are well-documented, and they are shared by the US Armed Forces. For information to be move across channels, it must travel vertically all the way up the chain-of-command, gaining “approval” at each step, and then passed down once again. Hammes advocates freeing personnel to share information laterally, from Marine Colonels to Army privates to State Department employees.

Hammes wants to free soldiers from bureaucratic constraints, reward soldiers for creativity, leading amidst chaos, empowering subordinates and peers, and developing relevant skills. For this to occur, not only the vertical, approval-based hierarchy needs to change, but the personnel system needs an overhaul.

The personnel system mirrors the vertical nature of the organization as a whole (it was last updated at the turn of the 20th century by Secretary of War Elihu Root … a Roosevelt boy). Top-down evaluation hurts risk-takers, and should be altered to incorporate a 360-degree assessment of the individual, taking into account the perceptions of not only superiors, but peers and subordinates.

This is a bit of a tricky issue. I’ve talked with a lot of people with a great deal of military experience who hate being assessed by their peers (I can only imagine their subordinates.)

Their argument is that the only thing that matters at the end of the day is you doing your job to your superior’s satisfaction. There is something to be said for that. What this perspective misses, however, is that both peers and subordinates offer useful nuggets of information on a leader, even if they are buried under pissy pettiness. An example I quite like is professor evaluation, which works quite well and suggests that subordinate assessment actually can work quite well. 360-degree assessment makes it clear to a soldier that his job is not only performing all the tasks his superior can measure, but getting the most out of subordinates and working with peers to maximize development and performance.

Beyond assessment, the Armed Forces must change the way it educates and trains soldiers. In education, a greater premium must be placed on history and sciences, as well as chaos/complexity and network theories. The latter especially lends itself to Hammes’ fourth-generation framework, as soldiers must not seek certainty, but understand the underlying patterns of chaos, while also understanding the enemy not as individual elements, but as complex networks.

With regards to training, the Armed Forces must move away from set-pieces with clear objectives, clear friends and foes. In my training I participated in OPFOR training, which Hammes critiques in particular. The OPFOR training amounted to one group of soldiers playing the role of enemy (OPFOR), defending a bunker, performing an ambush, etc., while the other soldiers are given an assignment, such as search-and-destroy enemies in this sector. In Officer Candidate School (OCS), candidates are assessed based on their ability to make decisions and effectively communicate as leaders in these scenarios.

While these scenarios were fine for weeding out the brutally incompetent at OCS, I agree with Hammes that OPFOR training fails to reproduce the dynamic, chaotic environment of fourth-generation warfare. Hammes advocates “free-play exercises,” such as providing security in a real town, in an attempt to mirror the chaos of the reality of fourth-generation warfare. Some of these exercises would be more resource-intensive (e.g., the above example), but not all; in fact, Hammes raises the idea of using online role-playing games, possibly opening it up to the public to test soldiers’ abilities to respond to the chaos.

I find this idea fascinating. Simulators have transformed training in other areas, such as flight, but have yet to be utilized to their full effect. I believe there are steps being taken in this direction, and I am anxious to see how we can make the Playstation generation pay off.

I’ll conclude this installment by raising an important point. Given Hammes’ emphasis on the evolution of warfare – and his criticism of states insistent on fighting the last war (e.g., the French in World War II) – it would be prudent to question whether Hammes’ reforms would only set the US up for failure when confronted by fifth-generation warfare.

Hammes insists though that whether the next generation of warfare is cyberwar, nuclear-powered individuals or small-groups, or something else, a more decentralized, flat organization would be better prepared to not only engage enemies in fourth-generation warfare, but also to respond changes in warfare itself, just as Google is better able to recognize and take advantage of changing market dynamics than its more hierarchical competition. Read more!

Book to Own: The Sling and the Stone (Pt. 1)

(Part 1 of an N Part series)

The Sling and the Stone: On War in the 21st Century, Col. Thomas X. Hammes (Link to Amazon)

Col. Thomas Hammes (retired) is a former Marine who you may (or may not) recall was one of the officers who called for Donald Rumsfeld to resign in 2006. He is also one of the US’ foremost experts on counterinsurgency, arguing that we must “study our enemies as they have studied us and build a networked, flexible, and, here's the kicker, less hierarchical military structure that employs humans to fight the humans fighting us.”

In The Sling and the Stone, Hammes details the evolution of warfare from the Battle at Agincourt through present-day Iraq. According to Hammes, we are now experiencing fourth-generation warfare, evident in the wars in Iraq and Afghanistan, but having its root in Mao’s unconventional rise to power in China. The book is worth a read for the history alone, but I spent most of my time pondering Hammes’ treatment of the US armed forces as an organization.

Hammes disparages the organization as a remnant of early 20th century industrialism, built for churning out massive forces for conventional warfare just as Ford build it’s empire on cranking out Model T’s. Just like the Model T, time has passed by the conventional army.

The US’ quick and total conventional victories in Iraq (both times) and elsewhere have proven the futility of challenging the US in the realm of conventional warfare.

The enemy has responded to our technological dominance with unconventional tactics, retreating from direct conflict, decentralizing decision-making and responsibility, gaining flexibility, limiting their visibility, and thereby minimizing the impact of our technological dominance. With these new challenges of fourth-generation warfare, the US Armed Forces must transform itself – it must be less Ford, more Google.

This brief series of blog posts will explore the specific recommendations on how the military should change everything from the makeup of it’s forces to it’s personnel evaluation system. Read more!

Book to Own: The Bottom Billion

"The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It, " Paul Collier (Link to Amazon)

For the first post I thought I would cement in the cyberworld a recommendation for one of the most important books in the fix-the-po'-all-over-the-world genre. I have yet to fully digest this short and very readable book, which teams with both impressive (and useful) factoids (e.g., 38% of private wealth in Africa is held outside the country) and "big picture" insights on how global actors like the IMF need to change their framework for assessing and positively impacting the diverse group of states that find themselves stuck in the poverty cycle.

He begins by isolating his study on the states who are not only among the worst off in the world, but have also not seen any meaningful growth in the past 50 or so years. He then details the different traps (e.g., natural resources trap, conflict trap) that are keeping these states in the poverty cycle, while also explaining the role of geography, history, etc. Very enlightening.

Excellent piece by the Economist on the book entitled "Springing the Traps," which concludes: In the past two years, two famously opposing clarion calls, one from the aid-loving left, the other from the aid-is-always-wasted sceptical right, have been trumpeted. The one, Jeffrey Sachs's “The End of Poverty”, exaggerates the value of aid, especially in the massive dollops he proposes. The other, William Easterly's “The White Man's Burden”, rightly mocks the delusions of the aid lobby but exaggerates the negative aspect. Mr Collier, though tending towards the second view, steers a masterly course between the two.
Read more!