On the Soapbox

How many people ruin themselves by laying out money on trinkets of frivolous utility? [...] They walk about loaded with a multitude of baubles [...] of which the whole utility is certainly not worth the fatigue of bearing the burden. [source]

This excerpt was from Adam Smith's 1759 The Theory of the Moral Sentiments, Part IV, Chapter I. Smith also goes on to discuss what economists today call positional goods, with a description of how people will, in a vain attempt to rise above others, seek material goods, but since everyone seeks to do so, people are trapped on a treadmill of seeking more consumption in pursuit of a happiness that they think that they will attain but never do:

For this purpose he makes his court to all mankind; he serves those whom he hates, and is obsequious to those whom he despises. Through the whole of his life he pursues the idea of a certain artificial and elegant repose which he may never arrive at, for which he sacrifices a real tranquility that is at all times in his power, and which, if in the extremity of old age he should at last attain to it, he will find to be in no respect preferable to that humble security and contentment which he had abandoned for it.

Free market capitalism is just a system of the distribution of limited resources through an organic, decentralized mechanism founded on the principle of individual freedom. It is a pity that today, the noble banner of free market capitalism has been subverted and has become that under which the perversions of hyper-materialism operate.

________________
PS: Materialism has been so strongly associated with free markets and anti-materialism with socialism, that many would be surprised that it is Adam Smith, not Karl Marx, who wrote the passages quoted above.

...but it's still a fascinatingly interesting article, if not for the dirt that it dug up, then for the interesting look at what the world of chocolate looks like... (first saw it on Boing Boing)

A perfect case of asymmetric information gumming up free markets.

At first, I thought that it was a joke that the theme of this week's FoxTrot was about a certain cartoonist going into semi-retirement and doing only Sunday strips. But just to make sure, I checked for press releases. And lo and behold, tomorrow, December 30, will be the last non-Sunday FoxTrot strip. This is really sad, as FoxTrot is by far my favorite comic. :(

Does altruism exist? Or perhaps I should ask, "What exactly is altruism?" The accepted definition of altruism is the state of the holding of someone else's interests above one's own or, when when that state is put in practice, doing something without any reward or expectation of reward. Taken strictly, however, I think that this definition of altruism defines something that may not exist at all.

The problem lies with the concept of reward. While most people will associate reward with some sort of monetary or material gain, a more robust approach would be to associate reward with utility, and monetary and material gain is but a subset of all possible forms of utility.

If the beneficiary is someone with whom there will be future interactions, there could be the reward of reciprocity, either in the form of friendship or the knowledge that the beneficiary may be more inclined to help in the future. In a religious context, believers of a personal deity would be rewarded by the knowledge that the deity in which they believe in approves of their action (and whatever other additional rewards are associated with that approval). Finally, and most importantly, an expression of gratitude from a beneficiary can also be considered as a reward. Even if the beneficiary does not explicitly expresses gratitude, there is still satisfaction that can be derived from implicit gratitude.

I would like to pay special attention to the concept of the reward of implicit gratitude, because I would like to argue that this is a reward that is always expected. By definition, people will perform an "altruistic" act if they believe that the act will somehow benefit the beneficiary (altruism is about intent, so whether or not it really benefits the beneficiary is irrelevant). If this belief did not exist, then the act will be malicious act. However, the belief that the beneficiary will benefit necessitates, by definition, that there be implicit gratitude, as implicit gratitude is simply the beneficiary's internal appreciation of being better off. The beneficiary may not even know who the benefactor is or the beneficiary may refuse to explicitly express that gratitude (and thus earn the label of "ungrateful"), but those sorts of considerations only affect whether or not there is explicit gratitude, not whether or not there is implicit gratitude. I thus maintain that there is always, at the very least, an expectation of implicit gratitude when a benefactor does something for a beneficiary, even if the benefactor expects no material gain, no explicit expressions of gratitude or even if the benefactor remains anonymous and unknown to the beneficiary. Or to put it another way, there is always a reward of the knowledge of doing something good, and this is a product not necessarily of society, but of the naturally-evolved human empathy that everyone is born with.

For people who object that these sorts of non-tangible rewards are not really rewards, I remind them that what people ultimately seek is utility, and as such, money and material goods are not an ends, but a means. Money is a means to goods and services, and goods and services are a means to utility. As a result, there is no good reason to preclude other sources of utility.

As a result, I think that altruism in its strictest definition does not exist in the same way that Euclidean lines and massless pulleys do not exist. At this point, you are probably thinking that this entire post has so far been nothing more than a frivolous exercise of semantic quibbling. After all, what matters to most people is what the vernacular definition is, which is doing something without material or monetary reward or in some uses of the word, without the reward of explicit gratitude. So what does it matter what altruism means in this strict context of considering all possible rewards?

There are some cases where imprecision and muddling of definitions can lead to confusion and even to elaborate arguments and belief systems built upon a mistake of semantics. I speak of Ayn Rand's objectivism and its vitriolic attack against altruism. Rand believes that acting in a way that is entirely devoid of reward is immoral. If altruism is defined in the strictest sense, then this is a point that I would have to agree with by default since this is a form of altruism that is a priori impossible. However, objectivists, in a logical impropriety, then apply this argument to a looser, more vernacular definition of altruism. If it were not for this semantic muddle, objectivists would be forced to defend their attack against vernacular altruism by somehow invalidating the utility derived from non-explicit means, and I suspect that they would have had a much harder time at that.

________________
PS: There are many other cases where semantic imprecision can be exploited in rhetoric. For example, some theists argue that atheists are hypocritical about faith because in order to say conclusively that there is no God requires an atheist to make a blind leap of faith. This is true, and this is also why pure atheists in the strictest definition are probably very few in number, if they even exist at all. Even the most radical "atheists" are technically agnostics; they do not know for sure that there is no God, but they think that the probability of such is so low that they effectively behave as though none exists, and they call themselves "atheists" only because the vernacular definition includes atheist-leaning agnostics. I suppose the message that I would like to get across is that semantic precision is a lot more important than most people think it is.

From The Economist:

But not everyone agrees that organic farming is better for the environment. Perhaps the most eminent critic of organic farming is Norman Borlaug, the father of the "green revolution", winner of the Nobel peace prize and an outspoken advocate of the use of synthetic fertilisers to increase crop yields. [...] Thanks to synthetic fertilisers, Mr. Borlaug points out, global cereal production tripled between 1950 and 2000, but the amount of land used increased by only 10%. Using traditional techniques such as crop rotation, compost and manure to supply the soil with nitrogen and other minerals would have required a tripling of the area under cultivation. The more intensively you farm, Mr. Borlaug contends, the more room you have left for rainforest. [source]

Save the rain forest, prove Malthus wrong, and save some money while you're at it: buy artificial!

This article in the Washington Post makes me very angry. Especially the last line:

"I still think this is a great country," Hettinga said. "In Mexico, they would have just shot me."

Gee. What consolation that is. But why couldn't this country be even better?

This sort of thing is the main reason why I hate Democrats (and this new breed of equally corrupt big-government Republicans). I am certainly not opposed to government playing a role to correct natural market failures, but why do people always insist that government play a regulatory, rule-making role? If there is a market failure that needs to be fixed (externalities or insufficiently informed consumers), then fix the market failure. Why is there always this itch to go one step further and to start making rules to regulate and control? Want something to happen? Fine, go and incentivize it, don't force it. Even if people don't accept the moral argument against governments forcing behavior, why not the practical argument that regulatory policies--no matter how good-intentioned they may be at the outset--represent "security holes" (to use a software engineering analogy) that almost invariably invite "exploits"--corruption and abuse at some point in time; to those who say that libertarian policy is built upon idealistic wishing, I say that expecting government to always do good is even more unrealistically idealistic.

While I'm on the topic, the recent ban on trans fats in New York City is an excellent example of a gross regulatory overstep. Why is the city imposing a blanket ban on this stuff? Yes, most restaurants can do without it for most foods, but there may be some dishes that require odd ingredients that may contain some amounts of this stuff. Even if that were not the case, why go as far as ban it? Why not just inform the customers by requiring that restaurants post information about the trans fats in their foods, and let the consumers decide if they want to patronize someone using harmful ingredients (given the amount of money that is made hawking heart health products in this country, I think consumers do care very much about their mortality). Or if the city is concerned about the rising health care costs that result from these fats (since health care is taxpayer-subsidized), they could even tax trans fats to offset the costs to the taxpayers and also to give businesses a cost incentive to switch away from them. Any of those methods would've been just as effective and much less blunt (and immoral!) than just tossing in an outright ban.

This is an interesting article from the New York Times about the recent escalation in spam. Volume has increased, and now with the pervasiveness of image spam, filtering is starting to break down. The end of the article was the most interesting:

Some antispam veterans are not optimistic about the future of the spam battle. "As an industry I think we are losing," Mr. Peterson of Ironport said. "The bad guys are simply outrunning most of the technology out there today."

It's about time people have realized this. Filtering as a way to combat spam was necessarily doomed to failure. This is because to expect filtering to eliminate spam is much like expecting cold relief medicine to forever eliminate the common cold. Antispam filtering addresses only the symptoms of spam. Furthermore, filtering works by telling the difference between spam and non-spam, which is ultimately an artificial intelligence problem. Since artificial intelligence does not exist (and even if it did exist, it would be costly to implement on a scale large enough to handle spam), filtering relies on a hodgepodge of heuristics that works only because spammers have not done a very good job of disguising spam from non-spam. It is only a matter of time before spammers put enough effort into blending spam with non-spam that these heuristics will break down completely.

The Times article also fails to recognize that spam is not limited to just e-mail. This blog, for example, is bombarded with thousands of comment spams each month. Forums, hosting providers, instant messaging networks, etc. are all targets of spams as well. Even server logs have become the target of referer spam (I get thousands of those each month, too). Even if there was a way to implement effective filtering for e-mail, spammers will just move to another medium. And what will be the cost--in terms of bandwidth, computing resources, and false positives--of continuing this endless arms race in pursuit of a solution?

It is easy for people who look at statistics saying that 90% of all e-mail is spam to despair and to proclaim that spam will destroy the Internet, but such a point of view is missing a critical point: spammers are very few in number, and they are empowered to hog the stage only because of their ability to commandeer vast resources for themselves.

Dismantling botnets is the key to dealing with spam, and from my perspective, it is the only way to "win" and to "save" the Internet. Yet, there was no mention of dealing with the botnet problem in the Times article and recent articles about combating botnets all deal with superficial solutions like tracking botnets and shutting down the command and control for botnets. However, such solutions are themselves doomed to failure because they too deal with botnets only on a superficial level. The reason why botnets get so little attention is because dismantling them ultimately requires tighter security at the level of individual computers, and it is difficult to get Joe Sixpack to properly secure his computer against botnet hijacking, so instead, the publicity and attention is put on mitigating the problems post hijacking. Why are there so sensational articles written about spam and botnets but so few about how easily it is for the average computer user to get his/her computer hacked and taken over by a botnet? So how do we solve the botnet problem?

1. User education: This is difficult and most likely will be limited in its effect, but it won't hurt to try. For starters, ISPs and major computer makers could include a prominent flyer in the products that sell of things not to do (instead of burying this information deep inside a manual that most people will never read). A national awareness advertising campaign would help a lot, too (given how much money is already being spent combating the damages caused by botnets, this will be relatively cheap).
2. Better OS security: Hopefully, Vista will alleviate this problem. However, for the large existing base of XP users, not too much more could be done. Microsoft's WGA encourages people to avoid updates from Microsoft, thus causing many computers in poorer regions like Eastern Europe and China where many computers fail WGA to be unprotected, but the damage from that has already been done, and loosening up on WGA now will only help the future Vista user base (though a loosening up now could help in the future if Vista proves to be just as vulnerable as XP). Speaking of WGA, why not implement something similar, but for security? A WGA-like system that checks to see if the OS has all the latest security patches and then nags the user when that isn't the case?
3. Network monitoring: There are some networks that monitor traffic coming out of a computer on the network for signs of infection and scan computers on the network for known vulnerabilities. If an infected computer is found to be sending botnet-like traffic or if a computer is found to have an unpatched security hole, then the computer is blocked from the network and the owner notified. This is probably the single most promising solution because, by notifying the owner of the problem, it raises the awareness of the botnet problem for the average users who are otherwise oblivious to it, and if a quarantine is used, then it will also ensure that particular computer will remain disconnected from the botnet. Such a system would be automated and could be implemented without action by the end user (unless, of course, the end user is found to be infected and is blocked). Unfortunately, very few networks of importance (i.e., the major ISPs) implement such a solution even though most of the botnet computers in the US are located one of the major consumer ISPs.

Note that government legislation is missing from my list of solutions. Contrary to its favorable description in the Times article, the CAN-SPAM Act was, quite frankly, a useless piece of legislation that did nothing except increase regulatory bureaucracy and gave the illusion that something was being done about spam. Almost all of the things hawked in spams are already covered by various anti-fraud and other criminal laws, and similarly, hacking into and commandeering someone's computer with neither their knowledge nor their permission is already illegal, so any additional botnet legislation would be superfluous. If government were to get involved, the role that it would play would be one of addressing the externality problems of botnets. ISPs currently have little incentive to implement the sort of network health monitoring I suggested above because they would bear the cost while everyone else will reap the benefits. Similarly, a user education campaign that reduces the size of botnets will help everyone who is connected to the Internet and is thus a positive externality. A government subsidy would thus be appropriate here to deal with these sorts of externalities.

This is a follow-up to this post...

Got an e-mail today about my Northwest Airlines miles. The problem? The e-mail came from worldperks.miles@mpmvp.com. WTF is the mpmvp.com domain name?! I visit the domain in the browser, and I get a SSL certificate warning because the certificate was signed for nwa.mpmvp.com and not for mpmvp.com or www.mpmvp.com (the correct solution would have been to redirect mpmvp.com and www.mpmvp.com to nwa.mpmvp.com; this is the first sign that the IT "professionals" who set this up are utterly incompetent). The site looks just like the NWA website. Okay, I understand that these companies like NWA often enter into various affiliate programs with places like points.com and it may be temping to set up the joint website on a separate domain to avoid the hassles of dealing with the NWA DNS hostmaster. But this is BS because it is trivially easy to set up a points.nwa.com zone and then delegate it (NS records) in DNS to the people at points.com so that it can be administered entirely independently of NWA's DNS. It is these utterly incompetent and appallingly stupid setups that make user education about security that much harder. Oh, and there was no SPF record either. Where do they find these idiots?!

WTF?! This is the latest addition to Microsoft's Windows Live line of products. It's Clippy reborn... except much more obnoxious... and much more useless.

Saw this hilarious post in my RSS reader this morning. What makes all this even funnier is that this so-called "obfuscation" was just encoding the script into hex, so that ridiculous table could've been done away with by just using parseInt(str,16). If someone's gonna do something dumb, at least make it an elegant 1-liner. :P

Alice: At least it shows some thought.
Dilbert: It shows defective thought. [source]

Treating Christmas (or Solstice) any gift-giving as a potential source of deadweight loss (DWL) is nothing new for economists (in fact, it was one of the topics discussed in the very first formal economics course that I took). For the uninitiated, here is a good column that appeared in the Financial Times in 2003 that discusses the DWL of Christmas. Note, however, that these calculations of DWL do not take into account sentimental value, so taking an economic view of gift-giving does not necessarily destroy the "magic" of it, but one could call into question why it is necessary in the first place to use consumerist instruments of gifts and cards to send sentimental signals of friendship or love; are there no other, more efficient means? Also note that it is possible for the gift-giver to correctly estimate the utility curve of the recipient (or at least do an equal or better job of it than the recipient, since people do not always know what they themselves want), thus allowing for individual cases without a DWL; however, when aggregated over all of the gift-giving in society, this is not the case.