Economic Chart Du Jour

Nearly spit out my vermicelli today when I saw this chart:

What on earth is that about German house prices? Surely that’s an error. They cite Deutschebank, where I found this chart, which isn’t quite as dramatic, though the scales are different and perhaps even the variable being measured is different:

It does show a housing crash (of sorts) in 2005, though, which puts Germany completely at odds with English-speaking developed countries. Fascinating.

Starchitecture

from a top comment on HN (funnily enough about a building right in the heart of the insurance world in London):

A developer hires an international ‘starchitect’ like Viñoly to design them an office block because the architects reputation for design helps them to get away with a larger building on the site and therefore get more net lettable area for their investment in land.

I don’t know anyone who works for Vinoly, I’ve no idea what it’s like to work for him, but I know other people who have worked in similar ‘gesture architecture’ practices and this is how it usually plays out:

The big boss will do a nice sketch of how he thinks a walkie talkie shaped skyscraper (or whatever shape is in fashion in the office) will fit on the site and then hand it off to a more junior member of staff to solve all the real problems. Meanwhile, he will have to go back to the international lecture/meet/greet circuit that pulls in the jobs and maintains their reputation for world class architecture.

The project team will then usually have a very tight deadline to produce the initial design, probably mostly drawn up by a team of recent architecture graduates who would be pretty low paid[1], and who will almost always end up working very long hours and weekends unpaid overtime to meet the deadline. Where the lead architectural practice is not based in the UK there will also be a local architect who will advise on local regulations, prepare the submissions for planning permission and generally deal with other regulatory authorities.

There will also be a large consultant team on a project of this scale. Probably consisting of two teams of civil engineers; one for superstructure and one for substructure. A geotechnical expert for the foundation design. A whole spread of HVAC engineers, probably separate mechanical, electrical, drainage and ventilation specialists. A facade engineer who specialises in problems specifically to do with the design of the glass cladding system. A fire engineer to design the fire escape strategy and help negotiate the fire fighting strategy with the local fire brigade. A vertical circulation engineer to design the lift and escalator strategy. A bomb blast engineer to model the effects of various bomb attack scenarios on the cladding and structure. A security consultant to advise on how defendable the building is and to design the cctv, active tramp deterrent systems 😦 etc. Finally a quantity surveyor will advise on how much this will all cost.

All of these people will have been consulted briefly, probably mostly by video conference, across a couple of time zones, before the planning permission submission[2]. All their requirements have to be juggled between the different disciplines by the architect. As an architect who has done services coordination on skyscrapers and international airports, I can tell you it’s not easy. One of the most frustrating things is that engineers from different disciplines don’t talk to each other, even if they are working for the same firm. On top of this, the time allowed to prepare the planning submission will be a few months at most, and a lot of the effort will be spent on optimising the design and more importantly the presentation strategy to get through the planning permission process.

Who Gives Asylum?

Interesting discussion here on HN:

Guys, I am in Syria (specifically in Damascus). Seems war is rolling out. Most of the people are moving to border regions but I cant and I am a programmer worked as a remote dev for an Australian startup. But I am not sure how long I will be able to work living in Syria. I want move to Europe specially in Germany as the startup scene is booming in Berlin. 

Commenters are strongly discouraging the poster from going to Germany. Here is an excerpt:

As a war refugee my self, I urge you strongly to leave Syria now, for the love of god no matter the price, buy those tickets and get the hell out of there and far away as possible, Sweden, Canada, Australia. (Not Germany, France, Italy, USA, Turkey they all suck.)

Where would you go if you had to leave? It’s a question I’ve never considered but having (lightly) tangled with immigration authorities in a few different countries I can say the problem is a scary one.

One’s immediate instinct is to go for the biggest western country available. That’s where the economic upside is, after all, and one can nearly be guaranteed a community of distant friends/relatives that speak your native language. 

Of course, these communities drive native denizens nuts and strain various norms and institutions in the target country. The political backlash can be unpleasant to watch for liberally-minded folks. 

And how about that he works for an Australian startup? The economic magnet of a USA pulls somewhat less strongly in a world where a Syrian can boast of such a job. So pick a rich country with good telecoms infrastructure, lots of English and a political mood favoring a marginal increase in immigration. And hope that none of those things change.

This Is Your Brain On GPS

With the option to use GPS to do our wayfinding for us, it might seem like we don’t have much need for mental maps anymore. But according to Veronique Bohbot, a neuroscientist affiliated with McGill University and the Douglas Institute who studies spatial memory and navigation, the process of generating mental maps also plays a role in activities that have nothing to do with getting to work. Becoming overly reliant on GPS and letting that skill atrophy, she and others suggest, might actually be bad for us. “It’s important for people to take responsibility for their health — including their cognitive health,” said Bohbot. “We can’t just take the back seat.”

more here.

$5 Challenge – Are We Allowed To Break Rules In School?

What would you do with $5? Via Quora.

The best performing teams actually ignored the $5 and just went out and made money. And at least one Quora commenter takes exception to this ‘rule breaking’:

While it may be a clever story to tell at parties, I think the whole thing had a lot of ethical/ procedural holes. I may be being nitpicky and missing the entire picture, but here goes:

My main gripe is that the students were told to make the $5 grow, not just make the most money they can in 2 hours. Yes the real world has no rules, but then you can’t impose rules and then go around and say, wait, if you followed the rules you’ll be last.

1. The bicycle repair story is the only story that I feel truly won in the spirit of the test. I’m assuming they bought the pump for the $5 and proceeded to use that to make their profits. Fair enough.

2. The ‘winner’ felt like cheating because they probably spent more than the $5 to contact and make the deal with the company before they even had the deal. Whether they were remunerated for their costs of making the commercial and selling the time at a later date is assuming they were allowed to take credit, in which case the $5 is irrelevant.

3. The restaurant idea, while within the confines of the problem is an ethical grey to black area. This may also be a culture-specific notion though. In India, this is called selling things ‘in black’. You can’t hoard a resource and sell it to the highest bidder – oh wait a minute… you CAN, but it is generally frowned upon and not congratulated. 😉

Finally, while the post did incite some creative processes in my head, it still left a sour taste in my mouth by seeing the parameters of the problem and ethics bent and shaped to suit the most glitzy ‘story’.

I agree that this is rule breaking behavior. I sympathize with the students who showed up Monday morning having diligently invested their $5 yet found the winning team simply sold their presentation time to an advertiser. Probably took them 10 minutes. Rule broken? Contest won.

And here’s psyblog:

Those who turned out to be the best entrepreneurs often had a history of being rule breakers in their teenage years. They were more likely to have smoked marijuana, to have bunked off school and even to have assaulted others.

But these aren’t your run-of-the-mill deviants. These are high status rule breaker/benders.

But this illicit aspect was also coupled with a very stable family background. Successful entrepreneur’s were disproportionately likely to come from families that were:

  • high-income,
  • well-educated,
  •  and stable.

So we’re not exactly talking about disadvantaged youths here.

But is it Ok to ‘break the rules’ to make money? How about to get good grades? Should means to these ends be evaluated differently? Deep stuff. I first heard from Robin Hanson that the entire purpose of school may be to promote rule-following behavior (here’s a version of this argument) and so keep order in society.

Breaking certain rules is of course punishable under criminal law, yet remember this quote attributed to Balzac: “Behind every great fortune there is a great crime”; interestingly, the real quote (translation) is probably even more appropriate: “The secret of great fortunes without apparent cause is a crime forgotten, for it was properly done”. 

One possible definition of creativity (or leadership for that matter) is the selective breaking of rules (implicit or otherwise) which nobody realized could be broken without consequence. Under this framework, creativity is a garbage collection process for out-of-date rules in our society. 

So we value rule-following behavior even while we reward creativity. Crucially, creativity is hard and fails most of the time. Either a rule isn’t broken and the discovery is useless/boring or a rule is broken that we collectively judge should not have been and the creator is punished.

There’s also a hint of unfairness about rule breaking and fairness is a strong social norm, particularly with children. Schools can’t really both teach rule following behavior and reward rule-breaking behavior. We don’t want to be unfair to our children.

To me, then, teaching creativity in school is paradoxical. We still benefit from creativity, of course, so we should find ways of promoting it, but putting creative training in school will neuter its (necessarily) subversive side and confuse kids about what creativity really is.

Leaded Gasoline Makes Murderers?

Here’s a claim I hadn’t heard before but seems to be fairly well established: lead poisoning increases rates of violent crime and when you take lead out of gasoline, violent crime drops. Here’s Yglesias:

When I read the New York Times writing about a 40 percent fall in Jamaica’s murder rate (it’s still very high) I naturally wondered about Kevin Drum’s lead angle. And he says it fits the pattern: From 1990 to 2000, Jamaica started phasing out leaded gasoline. From 2009 to 2013, the crime rate has fallen forty percent. In other words, Jamaica is likely starting to see the beneficial impact of a youth cohort with lower levels of lead poisoning. And just based on the lead channel alone you’d expect to see meaningful further improvements over the next 5-10 years as the kids who were born after the complete eradication of leaded gasoline grow up.

 

What Mathematicians Do (hint: it’s an art)

Here is a great piece (pdf):

Why don’t we want our children to learn to do mathematics? Is it that we don’t trust them, that we think it’s too hard? We seem to feel that they are capable of making arguments and coming to their own conclusions about Napoleon, why not about triangles? I think it’s simply that we as a culture don’t know what mathematics is. The impression we are given is of something very cold and highly technical, that no one could possibly understand— a self fulfilling prophesy if there ever was one.

I never took a math course in college, which is extremely uncommon for people in my line of work. I had to forget how math was taught to me (and how stupid it made me feel) before I had the confidence to take actuarial exams.

The trouble is that math, like painting or poetry, is hard creative work. That makes it very difficult to teach. Mathematics is a slow, contemplative process. It takes time to produce a work of art, and it takes a skilled teacher to recognize one.

I say I never took a math course, but I did take a statistics course for business majors. I don’t think of this as a math course because, though I feel like I learned some formulas and some concepts, I never really understood them. The best I can say is that the course got me familiar enough with some jargon that when I had to later learn it for real (quite recently, in fact), it took a bit less time. Somewhat valuable, but not math.

The curriculum is obsessed with jargon and nomenclature, seemingly for no other purpose than to provide teachers with something to test the students on. No mathematician in the world would bother making these senseless distinctions: 2 1/2 is a “mixed number,” while 5/2 is an “improper fraction.” They’re equal for crying out loud. They are the same exact numbers, and have the same exact properties. Who uses such words outside of fourth grade?

You start learning math concepts for real when you feel, deep in your mind, the frustration of the problem you can’t solve without them. When I started working full-time on reinsurance problems that required some serious math I picked up much of what I needed on Wikipedia (etc). When I finally started taking the exams I had a framework in my mind for how to use these very abstract tools. Without that, I’d never have passed anything.

In place of discovery and exploration, we have rules and regulations. We never hear a student saying, “I wanted to see if it could make any sense to raise a number to a negative power, and I found that you get a really neat pattern if you choose it to mean the reciprocal.” Instead we have teachers and textbooks presenting the “negative exponent rule” as a fait d’accompli with no mention of the aesthetics behind this choice, or even that it is a choice.

Here the author and I part ways a bit. Math to me is more a tool than a pure art. My art is finding a way of expressing economic/social phenomena (eg. insurance) in mathematical models. I am constantly faced with situations like: this thing happened once before and these other circumstances were present. How are the variables related and how do I think about the risk of this thing happening again?

I get the beauty of math, of course. I get that it’s pretty cool that the normal distribution is a generalization of simple coin-flipping. But in my world any useful application of the normal distribution (or any other in its family) has nothing to do with truth, in the mathematical sense. Business math steals a hodgepodge of tricks from real math when the properties of those tricks are (for no reason anyone understands) convenient. The business mathematician needs to understand the difference between convenience and truth. Many who forget this lose lots and lots and lots of money.

So pure mathematical exploration for its own sake doesn’t turn me on. That’s why I’m not a math geek. I’m a business geek. Those are the problems that fascinate me.

So it falls on the teacher to find problems that students care enough about to get them to learn the material. Sometimes this is hard, particularly for more advanced topics. Here I feel like most math instruction would do well to illustrate the history and historical context of the concept or formula or idea. When was it first discovered? By whom? What motivated the investigation? What was considered the state of the art in other, related, areas of math? What refinements came later? Usually each of these questions is answered in a way that will help a student learn the math.

It takes longer to teach it this way, of course. But for god’s sake let math be slow without making kids feel stupid.

MOOCs Can Be Hard, Too

So a bunch of people failed a MOOC:

The problem: More than half the students in the first batch of online courses failed their final exams.

Udacity founder Sebastian Thrun, a machine-learning legend at Stanford and Google, told the AP that the failure rates in the five classes ranged from 56 to 76 percent. Nor was the course material exactly rocket science—the five classes were in elementary statistics, college algebra, entry-level math, introduction to programming, and introduction to psychology.

Pretend you’re hiring a college grad who passed these courses: is this a feature or a bug?

Link via Mathbabe who notes one of the disadvantages these courses have over traditional education: they strip away the networking inherent in much of higher education in the US today.

Of course colleges are a bundle of services. The great experiment, I think, is to see what kind of success you might be able to get a la carte. College isn’t the only place to make connections and friends who do you good turns in life.

But to get the things colleges are the only places to go for, you have to pick those up as part of the package.

The Animal Kingdom Fattens and So Does the Shiller P/E

Animals are getting fat:

Cats and dogs, for example, both increased in weight.  Female cats increased in body weight at a rate of 13.6% per decade and males at 5.7% per decade. Female dogs increased in body weight at a rate of 3% per decade and males at a rate of 2.2% per decade.

Interestingly, this trend is broad enough to include control mice used in scientific experiments.

Control mice are typically allowed to feed at will from a controlled diet that has not varied much over the decades, making obvious explanations less plausible.

It’s still a mystery. From the abstract to the original paper here:

The consistency of these findings among animals living in varying environments, suggests the intriguing possibility that the aetiology of increasing body weight may involve several
as-of-yet unidentified and/or poorly understood factors (e.g. viral pathogens, epigenetic factors).

Next, stock and bond markets might be overvalued again.

The Shiller P/E is now 24.4, about the same level as August 1929, higher than December 1972, higher than August 1987, but less extreme than the level of 43 that was reached in March 2000

I know, already?! I have no idea how it all fits together but I have to think this is involved (extra points if you can figure out which way correlation runs):

Professors Thomas Piketty and Gabriel Zucman of the Paris School of Economics have performed the heroic task of measuring wealth for eight leading economies: the United States, Canada, Britain, France, Italy, Germany, Japan and Australia.

Their estimates reveal some striking trends. For instance, wealth accumulation in these eight countries has risen relative to yearly production. Wealth-to-income ratios in these nations climbed from a range of 200 to 300 percent in 1970 to a range of 400 to 600 percent in 2010. Behind the changing ratios is some bad news, namely that slow productivity growth and slow population growth have depressed income growth, but also some good news — that relative peace and capital gains have preserved wealth.

This Is Your Brain On Computers

A team of Japanese and German researchers have carried out the largest-ever simulation of neural activity in the human brain, and the numbers are both amazing and humbling.

The hardware necessary to simulate the activity of 1.73 billion nerve cells connected by 10.4 trillion synapses (just 1 percent of a brain’s total neural network) for 1 biological second: 82,944 processors on the K supercomputer and 1 petabyte of memory (24 bytes per synapse). That 1 second of biological time took 40 minutes, on one of the world’s most-powerful systems, to compute.

If computing time scales linearly with the size of the network (a big if; I have no idea if this would be the case), it would take nearly two and half days to simulate 1 second of activity for an entire brain.

More here.