This book is worth reading. That's unfortunate; it has about 30 pages of interesting material scattered amongst 300 pages of verbiage. It's a book about Globalization--mostly about opening up markets between nations and about international aid. The author, Stiglitz, was on the IMF, but he's dour about how globalization has proceeded so far. What went wrong?

Protectionism and corruption.

This example is vague and hand-wavy and I'm getting the details wrong. I'm too lazy to slog through that book again to pick out the correct details. Nevertheless, here goes: Some treaty comes along "opening up markets" between the USA and some developing nation. There is much fanfare. Someone paying close attention will notice that the USA hasn't agreed to open up all markets, just 97% of markets. Well, that's mostly an open market, right? Except that the 3% that the USA leaves closed is... the small intersection of the USA's industry and the developing nation. Under the treaty, Bangladesh can import anything to the USA except cloth... which is the only thing Bangladesh makes that's also made in the USA. The USA's open-ness towards the fanfared "free trade" is lip-service.

He mentions USA cotton as a protected industry. That's pretty sad--cotton farming has been pretty bad for California, gobbling up the precious fresh water of our desert state. Shutting down California cotton water subsidies sounds like a fine idea to me. Importing cheap textiles from Bangladesh sounds like a fine idea to me. But that won't happen as long as politicians can be bought.

He also pointed out a hole in my don't-worry-about-kleptocracies-privatizing-government-because-kleptocracies-are-screwed-anyhow thinking. It doesn't make much difference if a kleptocracy sells an industry or bleeds it for cash over several years. But what about a short-lived kleptocracy? If they can sell off the national assets for quick short-term gain, they will. After the thieves retire to their dachas on the Black sea, that stuff is gone. If those thieves had just skimmed government funds instead, then when they were chased out, the government wouldn't be hurting so hard.

Anyhow, the gist of the book is to please slaughter all:

• Protectionists;
• People seeking to extend copyright
• People and organizations who loan money to developing nations only if those nations are willing to shut down all services that help nations develop

...only I don't think he used the word "slaughter".

Today, I'm playtesting the Hogwarts Game. This game is going to be kind of unusual in that Game Control is providing transportation. They warned us not to pack our stepladders, copy machines, coolers, or any other heavy things--because we'd need to carry them all, and we wouldn't always have a van to stow them in.

This begged the question: how much can I carry in a backpack while walking around without getting winded? Can I carry a laptop--and other things at the same time? And so I took some walks around San Francisco carrying a laptop and the book I was reading at the time--a big statistics textbook.

Yes, I read a statistics textbook. At work I find myself dealing with big piles of data. I want tools to help me to understand big piles of data. The statistics that I learned back in high school helps, but I could use more.

The main thing I got from reading Introduction to the Practice of Statistics is the Central Limit Theorem:

The sampling distribution of (the mean of x) is normal if the underlying population itself has a normal distribution. But what happens when the population distribution is not normal? It turns out that as the sample size increases, the distribution of (the mean of x) becomes closer to a normal distribution. This is true no matter what the population distribution may be, as long as the population has a finite standard deviation.

Everyone who's studied statistics is probably rolling their eyes that I pointed out such a basic thing. But trust me, if you haven't been allowing yourself to use many tools because they were only good for normal distributions, and you were stuck, then this is a big deal. Go ahead, roll your eyes at the slow-paced self-taught bozo. I'm happy.

Tags: books | discovery | long since discovered by millions of others |

Sometimes prices go up. This has happened before and will happen again. This hurts poor people more than it hurts the rich: poor people already spend most of their money. When prices go up, they can't get everything they need. Things get worse. There is unrest. There is war. There may be famine. There may be plague. Eventually, the thing that was causing the worst price pressure eases off. Things head back to normal. But a lot has gone wrong in the meanwhile.

This book has awesome charts. I almost wanted the guy to shut up about the reasons behind past price-hikes because they were distracting me from all of the excellent data. Prices versus time. Population versus plagues. Prices versus population. In an appendix, there is a chart plotting The Price of Donkeys in Roman Egypt, as measured in Egyptian drachme per head. If I were a publisher I would insist that all books from now on contain an appendix with a chart plotting the Price of Donkeys in Roman Egypt.

This book taught me a lot. The next time some free-market fiend tells me "Price controls don't work," now I can cite a time when they did work quite effectively. Must remember. Harry Truman. 1951. Korean War. Also, WWII.

Tags: books | economics | history |

It's a economics book aimed at non-economists. It introduces terms and sets up some interesting thought experiments. E.g., what is a good way to divvy up chores between roommates if those roommates don't have equal chore-ing abilities? I don't know that I learned any facts from this book, but it was a good cranial work-out.

Tags: books | economics | enlightened self-interest |

I was just expecting a pulpy Western. And this book is a pulpy Western. But it's written well, and also has some interesting musings upon the topic of greed.

That quote which is famous for not being in the movie isn't in the book either--but it's pretty crude in the book:

"Badges, to god-damned hell with badges! We have no badges. In fact, we don't need badges. I don't have to show you any stinking badges, you god-damned cabrón and ching' tu madre! Come out there from that shit-hole of yours. I have to speak you."

Many people recommended Naked Economics, but I should have paid attention to the details of their recommendation. This book is an introduction to economics. If you took "Economics 101" back in college, skip this book. I made it through a couple of chapters of this book. They seemed well-written, but they didn't teach me anything.

It's too bad; economics can be interesting. I'm in the middle of reading another economics book. Just a few minutes ago I missed my streetcar stop because that book made me think so hard. Come to think of it, that book might make a pretty good introduction, but it's more interesting than Naked Economics in general, at least so far. I should finish reading it and then review it and stuff.

Tags: book | introduction | economics |

William Poundstone wrote Prisoner's Dilemma, one of my favorite books ever. That book convinced me to look more closely at the prisoner's dilemma, and that in turn changed the way that I think about life.

Fortune's Formula, his latest book, touches on many interesting topics. It's about the Kelly formula. What's the Kelly formula? Suppose you know of a gambling game that pays 100:1. But you think that the game designer made a mistake: you have a 1/50 chance of winning this game. You can play this game once a day. How much of your money should you throw at it? Well, the game is in your favor, so you want to throw a lot of money at it. But you don't want to put in all of your money at once: you would have a 49/50 chance of going bust. You could play $1 per day, and know that you'd make some money in the long run with little risk--but surely if you risked more, you could gain more. The Kelly formula looks at a game's risk and payoff; it tells you what percentage of your stake to gamble on that game.

That doesn't sound so interesting on its own. BUT Poundstone tied this formula into the history of information theory and the economics of markets. He writes about Claude Shannon and his attempts to win at Roulette by tracking ball movements and using an early computer. He writes about Ed Thorp, the guy who wrote Beat the Dealer and later moved away from blackjack and over to hedge funds. He writes about organized crime trying to go legit. He writes about Milken and the investment scandals of the 80s... uhm, maybe he includes too much material about that. There's an academic economics paper (mostly) in words of one syllable.

Ah, this book is so full of great stuff, I just have to share some personal favorites.

Possibly [mobster] Zwillman's most peculiar investment was another wire service [besides the one he used to transmit advance notice of horse race results]. It was a company that ran wires to wealthy subscribers' homes. The wirse carried opera and other soothing music. The firm prospered only when it offered its service for stores, offices, and elevators. In 1954 the Chicago Crime Commission concluded that the Muzak Corporation was controlled by the notorious Longy Zwillman. Zwillman said he was merely a stockholder.

I guess I shouldn't be so mad at stores that keep playing Christmas music all the time; if they stop, I guess the manager gets shot in the kneecaps.

Shannon's "Ultimate Machine" was the size and shape of a cigar box. On the front panel was a toggle switch. The unsuspecting visitor was invited to flip the switch on. When that happened, the top slowly opened. A robot hand emerged, reached down, and flipped the switch off. The hand retreated, the lid snapped shut.

Also on the subject of mobsters and music, this book talks about how mob money took over Warner Brothers.

There is a neat comparison between Maxwell's Demon, which converts information into energy; and the attempts of investors to turn information into money.

All the same, I hope that this book doesn't change my life as much as The Prisoner's Dilemma. People think I'm dull enough as a computer programmer; if I start playing poker professionally, I think they'll give up on me.

Tags: book | arbitrage | compounding |