Is Apple Driving Workers to Suicide?

The muckraking media has been buzzing with serious tones about what clearly seems to be horrible working conditions and loads of suicides in the plants in which Apple products are produced. Apple contracts out this work to Foxconn, a Taiwan-based firm who has over 900,000 employees. Most of these employees are in China.

I bet if we inject a bunch of senseless emotion into
this we can obscure the fact that this is a made-up crisis.

Apparently, Foxconn employees are being driven to suicide by their working conditions. The company has put up suicide-prevention nets at its main factory in Shenzhen, giving the place a creepy sort of air. That particular location is gigantic, covering 1.15 square miles and being made up of 15 factories. How many people are employed there isn't clear, but it's probably well over 400,000. That's roughly the number of people who live in Miami proper.

Media reports cite monotonous work, dangerous working conditions, long hours, poor pay and a management team that just generally is not overtly friendly. Of course people are hurling themselves over buildings; look at how terrible things are compared to your job!

This is silly, and you don't need to take my word for it.

Your job is in the United States, where your expectations ("reference point") for a job are much higher. People voluntarily work at Foxconn. They would not do this if it was horrible. The tragic comedy of comfortably fat people in America enforcing their labor philosophy on skinny people in Asia just to watch that factory close and everybody go back to starving to death has been played out before. Luckily, Apple loves profits too much to behave like Kathy Lee Gifford did when it turned out her clothing line was made by the fingers of innocent children. Those kids weren't fortunate enough to have truly evil capitalists running the show.

The best part of it is that we are talking about 17 suicides among 1 million workers. Suicide rates are calculated per 100,000, meaning that Foxconn factories have suicide rates of 1.7 per 100,000. China's suicide rate is 22.23; the United States comes in at 11.8, Canada at 11.3, and France at 16.3.

Working at a Foxconn facility actually drastically cuts your risk for suicide, regardless of what you compare it to. That's because Foxconn represents a huge increase in living standards for its employees and as a result they are happy to be working there.

Barry Schwartz - full of shit?

Barry Schwartz seems like a pretty likable guy. Sort of eccentric, minimal concept of himself, funny. However, this video here is probably the best dumb thing I've ever seen on TED.

Barry Schwartz is essentially conjecturing that all the noise that comes with having a thousand options for things is a problem. We're unhappy because we feel that, no matter how much we think we like the product we decided on, we could have had a better product. If we only lived in a Soviet-style communist state, perhaps. Just throwing it out there.

I'm not sure if this image is an argument for or
against jean choice.

The real take home I get from his TED talk is that he's basically a crotchety old man who has trouble adjusting to changes around him. The idea that anybody else leaves after purchasing jeans actually distraught over the idea that perhaps there was a better pair of jeans in that pile of thousands makes no intuitive sense for me. I doubt it does for anybody else.

I would posit that jean purchasing is largely simplified by a simple set of heuristics we apply, ala the editing stage of Kahneman's prospect theory. When I shop for jeans I have some rules: first off, they need to be reasonably close fitting to my body; second off, they need to not make me look like my dad when he wears jeans; third, they cannot be distressed or faded because that's just stupid. And, of course, they need to be in my size.

I have quickly narrowed the store to about six options. I think two look dumb and one is too pricey, so I try on two pairs and choose the one I like best. I have now found a satisfactorily reasonable approximation for the best pair of jeans in the store, and I leave whistling and looking for a hot pretzel stand.

Search theory also has a few things to say about jean purchasing. There is cost to searching - the time it takes to do so. For some, this is actually a bonus (women like to shop and other stereotypes); for me personally, it's an immense burden that makes my legs feel weak and compels me to resolve this crisis immediately. Under these conditions, Schwartz's precious scarcity of decisions is reintroduced, and is reasonably estimated by the search theory function. If it costs me to look I won't look long, and my options have narrowed.

Interesting thing to think about, but it doesn't seem realistic.

ARPANET: Really the Internet Heroes We Make Them Out to Be?

I found this video of Ward Christensen, who co-created the first BBS system, talking about his time with ARPANET, and how he lent them the ideas he found on his own when they weren't getting anything done.
ARPANET was a Department of Defense project which is credited with the creation of the underpinnings of our modern internet. Libertarians often have to take a hit on this, as it is true that the internet is important and it seems like the government did create it. And to a large part, they did. This serves, in my opinion, as a weak spot in libertarian dogma.
Christensen's interview for the BBS documentary reflects, however, that maybe private innovations helped spur a lumbering, slow-moving project along.

Is Behavioral Economics Going to Teach Itself Out of a Job?

Somewhat related: I always imagine
Richard Thaler as having a sort of
comical, high-pitched voice. Irrational?

Clearly, very few homo economicus live among us. And if one did, he'd probably be murdered for being such an incredibly selfish sociopath.

So the basic tenets of behavioral economics - that we need to adjust our axioms when modeling human behavior - make sense. They even have some really great adjustments to make to microeconomic models, with the weird kinks in indifference curves and the inevitable incorporation of reference points. However, one of the favorite topics of behavioral economists is irrationality, and on that front I think they will make a massive contribution to humanity and a withering, temporary one to economics.

Basically, if you explain to a bunch of people that they are stupid and why they are stupid and how they are stupid and examples of how it is hurting them, they are going to stop being stupid.

It's sort of (I guess?) a Campbell's Law problem, and it separates the wheat from the chaff in economic theory, in my opinion. The wheat is concepts like Nash Equilibrium, which are self-prophetic - once you know about Nash Equilibrium, you obey Nash Equilibrium, because you have a huge incentive to do so. Then the chaff is behavioral concepts such as confirmation bias or misapplied probability heuristics - once humans become aware of their tendency to do these stupid things, they stop doing them.

This means that behavioral economics could make a really big, positive impact on our planet. And there are definitely issues that come out of these experiments that may need to be built into our models (and really, if you've taken a decent micro course, already have been).

However, the knowledge of some of this stuff is going to make it untrue going forward.

Stupid forever?

Sans-furniture is actually kind of foolish. Also, click on the image.

Does youthful stupidity and aggression and non-conformity have any value? Do we all have to stop being foolish eventually and accept that the old ways of doing things are the ways we've always done them for a very good reason? Does what happened before even have any bearing on the value of your stupid idea?

Probably, actually. Values are relative, after all.

Overrating Steve Jobs' impact on society is one of my favorite hobbies, and I'm totally glad we're calling him the Edison of our time. Woz did all the hard work and Bill did all the useful application, so it's bizarre that Jobs wins our historical perspective just because he died first.

I think I will gain the ability to be foolish the older I get. The only thing that holds me back now is not wanting to be a stupid kid.

The Continuing Intrade Mistake

If you're not familiar, Intrade is an online predictions market. The market makers create a market in derivative contracts for, say, Rick Perry winning the Republican presidential nomination, and idiots like me buy and sell them. The contracts are worth $10, and payout comes when the real life event happens.

It's shameless gambling.

I have a problem?

I made the incredible mistake of going short on Romney winning Florida. In my defense, one can observe a decent amount of volatility in these markets, and Florida is just so far off from when I made the bet that it seemed like 86.9% chance of winning was too high at that point. Certainly I could cash out when some new attack ads run or it turns out he's been wearing a rug.

Romney is bulletproof, though, and now his odds are up to 96% (contract valued by the market at $9.60). My 15 share short has reaped me a loss of $13.50, and when you're only starting out with $40 that means something. 

The shame is I've done this before in the stock market. I was able to convince myself that the overbearing regulatory environment somehow diluted the effects of my "get attached to a random company and then make it the world series of confirmation bias" strategy, but it's becoming more clear to me now that I simply should not do this kind of stuff.

Also, there's lots of cold and not a lot of hot today.

Could Austrians Be Biased?

It's a day in my maturity: the Mises Institute is no longer on my bookmarks toolbar.

Those voracious Austrians have long been making the case for free markets and small government to wandering undergraduates such as myself, interrupting those lessons only to make lessons on why no government would probably be even better. They will certainly go on with the show, serving as the naive capitalist's confirmation bias for decades to come.

I'll be okay only hearing about it second hand.

The straw that fatally injured the camel was global warming. Now, I wouldn't claim to be an expert on geophysics or meteorology. I have never taken a class in climate science, and frankly I don't really care about the topic at all. There are a ton of guys with white lab coats and some of them even wear glasses, and they have apparently made a case that humans are causing global warming and it's going to be a bad, bad thing. I've never heard one of them comment on the median voter model or diminishing utility, and I'm willing to keep up the contract and be blissfully ignorant about, um... greenhouse gasses and stuff. I like studying how people interact more than how water molecules interact, so I find climate change discussion kind of boring.

The good people at Mises, however, have uniformly fallen into line as global warming deniers. The lock-step consensus astounds me, as you would think nothing about believing in a certain methodology for researching economic phenomena would give you a certain tendency to oppose mainstream scientific research. After all, none of these guys have Ph.D.'s in anything remotely useful - it's all just social sciences and a few law degrees. What about this group would give them a unique scientific perspective?

Of course, it's the ramifications of the existence of man-made global warming that Mises followers do not like. Any individual can reasonably have a differing opinion from mainstream scientists, but when nearly every individual in a certain group has that opinion, it's clear they have found a conclusion which does not fit their worldview and therefor have rejected that conclusion.

Anything you hear from a libertarian as scientific arguments against anthropological global warming probably doesn't come from a deep-seated passion for climate science which led that individual to a unique conclusion. It comes from an undying need to be right, paired with a drunken disinterest in actually finding the truth.

I'm focusing more on micro now. Macro is a religion, and those kinds of wars are played out.