Speed up: the time-price-elasticity of demand

At the June 2009 Velocity Conference, a common theme was: speed matters for websites (see also the summary by O’Reilly Radar). People from Google, Bing, WordPress, AOL, Facebook, Shopzilla, and many other organizations gave presentations highlighting the importance of making their websites load and perform functions faster. Among the findings: differences of a few hundred milliseconds in the time taken to display search results yielding in a decrease in the total number of searches performed, the decrease being both significant and statistically significant.

While Matt Mullenweg of WordPress says:

That’s why [performance] is important and why we should be obsessed and not be discouraged when it doesn’t change the funnel. My theory here is when an interface is faster, you feel good. And ultimately what that comes down to is you feel in control. The web app isn’t controlling me, I’m controlling it. Ultimately that feeling of control translates to happiness in everyone. In order to increase the happiness in the world, we all have to keep working on this.

some might argue that the fact that the fact that website owners, by shaving off a few milliseconds of performance time, can make us visit their sites more indicates that users somehow have less conscious control. After all, many people don’t think that they’ll search more if Google’s page loads faster. What does this say about conscious consumption in the context of web usage?

On a related note, Tyler Cowen, in his book Create Your Own Economy, muses about the mental costs of visiting blogs:

Usually a blog will fail if the blogger doesn’t post every day or at least every weekday. People don’t like the idea of visiting the blog and coming away empty-handed, so to speak. It only seems like a visit to the blog is costless; in reality we get a brief pang of pain from “coming up empty.” And once a blog disappoints I classify the site as a “NO.” The site is still only a click away, but for most practical purposes the cost of revisiting the site is now virtually infinite. In my emotional universe that site no longer exists for me and it holds a status lower than the proverbial needle in the haystack.

Mumbai terror attacks

It’s now about a year since the terror attacks on Mumbai, which happened between 26 November and 29 November 2008. There is a very long piece titled Sixty Hours of Terror by Jason Motlagh in the web edition of the Virginia Quarterly Review. If the piece feels too long to digest all at once, you can read the four blog posts in the form of which it was originally posted (1, 2, 3, and 4).

Also of potential interest: Bruce Schneier’s blog post on lessons from Mumbai (December 2008).

For those who are interested in getting a larger picture of suicide terrorist attacks, the nature of the perpetrators and their goals, the best book I know of is Dying to Win: The Strategic Logic of Suicide Terrorism by Robert Pape. Pape is the head of a research group at the University of Chicago that has done extensive tabulation and analysis of suicide terror attacks over the last few decades. Some of the key findings in Pape’s work, as I interpret them, are: (i) most suicide terror attacks have, or at least claim to have, clear political motives, usually against what they perceive as an “unjust” occupation (ii) Religion is not the primary cause but it is often an important tool in uniting people from a larger pool than just the people who are directly affected by the occupation, i.e., it is an important source of identity (iii) Suicide terror, like most tricky jobs in modern times, is a high-skill job, and most people who do it are richer, smarter, and better educated than the average of the populations they hail from, (iv) Suicide terrorists are, for the most part, not mentally unhinged. They get into those kinds of jobs for the same reasons that people donate time and money to charities or become soldiers or doctors — they consider it a “contribution” to their “community”. (v) Suicide terror attacks are almost disproportionately against “democracies”, perhaps because the terrorists believe that democratic governments, because they are answerable to the people, are less likely to be indifferent to terror attacks and more likely to cave in to pressure (though Pape points to recent studies that show that democracies aren’t as weak-kneed as the terrorists may believe). If you don’t have access to Pape’s book, you might want to check out this Berkeley interview of him and this Cato policy analysis by him.

(The book deals with suicide terror attacks. More run-of-the-mill terrorism, local hooliganism, etc. are not included. Many of these points may not be applicable to these smaller situations).

So, if you want to donate to building schools in Afghanistan (as Greg Mortenson is doing, as described in his Three Cups of Tea), or improving the quality of life for people in other areas that have been ravaged by terror and are considered places for terrorists to recruit, do so. But don’t expect a reduction in the number of sophisticated suicide terror attacks against other nations, at least in the short term.

The costs and benefits of cost-benefit analysis

There is often a conflict between tow broad schools of thought: the “libertarian” school of thought, that focuses on individual freedom, liberty, and property (meta-)rights, and then lets them use these freedoms in any manner whatsoever as long as they do not infringe upon the freedoms of others; and the “utilitarian” school of thought, where the goal is to maximize social utility/welfare, which is obtained by somehow measuring individual welfare and then aggregating it in a suitable way across individuals.

“Cost-benefit analysis” is a tool that is typically used in the utilitarian school of thought, in the sense that, when deciding what course of action to take, we measure the costs and benefits of each course of action, thus obtaining the net utilities of these, and then decide which course of action to take.

Meta-utilitarianism points to libertarianism

Utilitarianism in the narrow sense of trying to maximize utility in each specific circumstance could be decidedly anti-libertarian. However, meta-utilitarianism, which involves trying to figure out broad sets of rules in society that tend to, by and large, maximize utility across a wide range of unanticipated and unpredictable circumstances, often points in the libertarian direction. This provides at least one justification of libertarian ideas from a utilitarian perspective. Die-hard libertarians may reject such justifications arguing that liberty is “natural” and should not need to be justified on utilitarian grounds, but for those who are not convinced of the “natural” benefits of libertarianism, this justification does carry weight.

Does the paradox of choice exist? Your choice!

Barry Schwarz of Swarthmore University wrote a fascinating book a few years ago titled The Paradox of Choice: Why More Is Less subtitled How the culture of abundance is ruining us of satisfaction. The book’s main point is that too much choice can be counterproductive as it can confuse people, make them feel they need to search for the very best deal, and thus divert their attention from other things that matter more to them. Schwarz drew a distinction between “satisficers” — people who seek to make good choices, but don’t spend an inordinate amount of time and resources seeking the very best choices, and “optimizers” — people who seek the very best options. Schwarz argues that we should consider being satisficers for most things and optimizers for only the very few that we care most about.

This is good advice, but what does the broader critique of a choice-rich society stand on? In addition to appealing to the day-to-day experience of his book readers and his own attempts to purchase a pair of shorts, Schwarz refers to some studies. One of these is the famous Lepper-Iyengar jam study which shows that offering people too many choices of jams makes them less likely to eat it. (Iyengar has co-authored many papers with similar themes, such as this on on choice in retirement options).

If you don’t want to go all the way of Schwarz and argue that choices are bad, you may want to take the more middle-of-the-road position that Cass Sunstein and Richard Thaler take in their book Nudge, where they argue that more choice can be good, if it is accompanied by helpful guidance and good default options for people who don’t want too much of the burden of decision-making.

But what if you want to think that choice is unambiguously a good thing? In a recent article in the Financial Times, Tim Harford comes to your rescue. He describes recent work by Benjamin Scheibehenne’s team at the University of Basel, as discussed in more detail, for instance, in this paper. This research tries to identify what aspects of choice enhance consumer experience and what conditions overwhelm consumers to their detriment. This thus attempts to reconcile “choice feels good” and “choice overwhelms”.

Is this plethora of explanations about choice a good thing or a bad thing?

Culture and/of liberty: Howley and Hayek

A fascinating piece titled Are Property Rights Enough? appeared in the November 2009 issue (and online on October 20) of Reason Magazine, a libertarian U.S.-based magazine. The lead essay, by Kerry Howley, argues for a “thick” conception of libertarianism, which includes not just freedom from state coercion, but also cultural freedom and freedom from social coercion, as a part of what libertarians should care about. Todd Seavey and Daniel McCarthy provide response essays. Seavey’s essay argues, among other things, that expanding the scope of libertarian thought to include cultural norms complicates matters and alienates potential recruits. McCarthy delves on the difficulty of settling on what is right, and why it is better to let people choose cultures, even if such cultures reduce certain aspects of personal freedom. Howley replies to both pointing out that people aren’t born in a vacuum, and some cultural constraints may be ingrained into them from childhood.

Other response essays include:

• Ilya Somin: Libertarianism and Culture (October 24) where he agrees with some of Howley’s key points but argues that a culture that restricts freedom need not be a problem in so far as people have other options and exit rights.

• Will Wilkinson responds to Ilya Somin (October 25) (NOTE: Wilkinson is Howley’s domestic partner).

• The oldest libertarian debate (October 24) by Abhishek. He says that the difference between Howley and Seavey isn’t as wide as one might suppose, and in fact, he agrees with both.

• Ordinary Gentlemen: Libertarians and diversity argues that libertarians have difficulty grasping Howley’s point because libertarians are largely drawn from a white and male background and often face fewer cultural constraints of the kind that worry Howley.

• Timothy B. Lee: Libertarianism as a liberal project (October 21), wherein he argues that people who care about liberty ouht to be interested in the things Howley advocates for.

If you don’t want to go to each blog individually, check out this round-up by Around The Sphere.

I find myself agreeing with everybody, though my take is closest to that of Ilya Somin. My view is that the “state” has no monopoly on liberty-violating coercion, and that society can also induce liberty-violating coercion. So, the source of the coercion — whether state or society, is not relevant. The more relevant question is the particular form that the coercion takes.

If the coercion is physical coercion, or backed by a largely enforced threat of physical coercion, then it is liberty-violating. This puts a lot of social coercion in the same boat as state coercion, but leaves a lot out. If a person living in a society knows that violation of certain cultural norms (beyond the basic respect for the liberty and freedom of others) will lead to physical punishment or literal physical coercion, then, even if that person experiences no violence, that threat of violence is liberty-reducing.

Resurgence of Ayn Rand?

Ayn Rand, author of Atlas Shrugged and Fountainhead, seems to be popping up everywhere I see her. Here are a few samples of the rekindled interest in Ayn Rand.

• Two recent books on Ayn Rand: Ayn Rand and the world she made by Anne C. Heller and Goddess of America: Ayn Rand and the American Right by Jennifer Burns. Burns looks at Rand’s interactions with and influence on the American “right”, a term she uses broadly for all forms of free-market and small-government political philosophies, including libertarianism and conservatism. Heller is more interested in the personal influences on Ayn Rand and how these influences shaped the characters in her novels. For those who want to know more from the authors themselves, check out this Cato Institute Book Forum on the two books.

• An article by Jennifer Burns in Foreign Policy (November 2009) on the surprising popularity of Ayn Rand in India.

• Coverage of Ayn Rand by Reason magazine and the Reason Foundation: An article by Brian Doherty and a special event on November 2 dedicated to Ayn Rand (this has many further links).

• Other reviews of Ayn Rand: New York Magazine, New York Times, Time magazine, The New Republic, and The New Yorker (a blog post). The New Yorker has also dug out two old pieces from its archive.

A conversation about race

I recently came across this interesting video (transcript here), which is a segment from the Jim Lehrer new hour on PBS, a television channel in the United States.

The conversation participants are Matt Welch of Rason magazine (who, along with Nick Gillespie, covered a protest march in Washington D.C. on September 12, 2009), Melissa Harris-Lacewell (associate professor of politics and African-American studies at Princeton University), John McWhorter of the Manhattan Institute, and Cornell Belcher, a pollster for the Democratic party. The moderator was Gwenn Ifill. As best as I could tell, Matt Welch was the only white person and all the others were black.

What I find interesting about the conversation, as I’ve found about a lot of such conversations, is how it shows the great diversity of viewpoints within the so-called “black community”, and how one’s job and affiliation often reveal more about one’s views than the color of one’s skin. McWhorter’s views are reasonably predicted by the fact that he works for the Manhattan Institute (though, of course, each person has different specific beliefs) — see for instance this very insightful article by him about Harvard or this one about Joe Wilson and opposition to Obama. Harris-Lacewell’s views (as for instance in this article) seem reasonably typical of a person in an African American studies department — a la Henry Louis Gates (who recently acquired fame/notoriety due to a misconception). And Cornell Belcher’s views seem reasonably in line with a pollster for a party who is trying to paint opposition to that party’s agenda as something racist. Finally, Matt Welch’s views seem in line with those of Reason magazine.

Unfortunately, many people try to get away with claiming that the particular political ideology, perspective or viewpoint they hold “represents” their community. It is currently considered taboo in the United States to openly say that something hurts the “white community”, but other equally dubious spokespersons persist — for instance, people who claim to speak for the “black community”, “middle America”, “undocumented workers”, “women”, “the working class”, “Christians”, “Jews”, “ordinary Americans” and so on. The United States is hardly unique in this respect — dubious spokespersonship for religious groups, genders, age groups, racial, ethnic and regional groups exist in plenty. In some cases, conflicting “spokespersons” cancel one another out, leading to the pleasant cacophony of diversity, but in other cases, certain kinds of viewpoints get the upper hand, even though they do not necessarily represent the majority viewpoint within their “minority” community. At times, there may be active ostracism of the minorities within minorities — people within the minority community who fail to toe the line of some self-declared leaders may be considered traitors or sell-outs.

Fortunately, in a free society, such labels cannot be used to suppress such speech. Thus, we see black economists such as Thomas Sowell who works for the Hoover Institution, who describes himself as a libertarian (though he doesn’t toe the libertarian line on torture), is highly critical of the welfare state. Or, Walter Williams of George Mason University, who wrote a book titled The State Against Blacks where he blamed licensing laws, minimum wage legislation, and the welfare state (as opposed to, or much more important than, racism by individuals) for the poverty and crime among blacks (he also made a three-part video series about themes from the book back in the 1980s). This isn’t to say that the views of people like Sowell or Williams are shared by a majority of blacks or whites or any other community, but the existence of such views shouldn’t be viewed as being a “sellout”.

Bonus: Here’s a nice video put together by Reason about a fight for school choice in Los Angeles. Affiliation, rather than skin color, seem to be the determinant of the stand a person takes. Unsurprisingly, teachers and representatives of teacher association are against it, while parents are for it.

Consumerism

In a comment to an earlier post of mine, my friend Anirbit wrote: “… your over-the-board praise of consumerism and people working for self-interest somehow magically resulting in global development”.

This struck me as somewhat strange because that particular post wasn’t intended as a strident defense of consumerism and its virtues or the glory of self-interest. Rather, it was intended as a criticism of the twisting and at times mis-stating of facts in the story of stuff video. In the cases where I was only guessing, or expressing an opinion that was ideologically tinted as opposed to plain facts, I tried to make clear that these were guesses. My hope was that the critique would make sense to people regardless of their specific views about the environment, consumerism, and society. Nonetheless, since there seems to have been a creeping bias in my post, I thought I’ll make my own views on the matter more explicit.

There are some aspects of consumerism, notably “conspicuous consumption”, that I discussed in an earlier blog post, so for brevity I will not repeat those points. But those who think of “conspicuous consumption” when they talk of consumerism are encouraged to read that blog post.

An array of choices

Since “consumerism” comes under lots of criticism, I want to emphasize here what kind of consumerism I really am for. Basically, I am a strong supporter of freedom, choice, and options in how people choose to live. Some of this freedom come through the protection of individual liberties and property rights, where governments play a role. Within that framework of freedom, further choices usually come through a combination of personal wealth and the availability of options in one’s surroundings. Both personal wealth and the diversity of the market are functions of economic prosperity.

Glenn Beck

Glenn Beck, who runs a show on Fox News, a talk radio show, publishes a magazine (sort of) on his website and has been publishing top-selling books with provocative titles such as Common Sense and Arguing with Idiots. He appeared on the cover of TIME magazine, was interviewed by Katie Couric of CBS, and answed questions at the Washington Post.

You know who this guy reminds me of? Barack Obama.

Superficially, there are hardly any similarities. Beck is a Christan Mormon libertarian while Obama is a socialist, left-of-center progressive (in the twisted jargon of American politics). Beck has little trust in politicians and the power of government — Obama has had quite a bit, specially since January 2009.

So what are the similarities? Well, what I really have in mind is not the Obama of 2009, but the Obama of the campaign trail of 2008. Obama 08 thinks it is important to take “our” government back. Glenn Beck agrees that “we” need to take “our” country back. Obama believes that “community organizing” and “national service” can “fundamentally transform” America, while Glenn Beck has started the 9-12 project, which was one of the responsible factors in encouraging the massive 9/12 rally in Washington D.C. in 2009. Obama and Beck both believe that with honest people in office, corruption will go away.

I find Beck fascinating and mesmerizing even when I don’t agree with him, much the same way as I found Obama fascinating and mesmerizing even when I knew he was spouting nonsense. [DISCLOSURE: My political ideology aligns me more closely with Beck than with Obama, though I am not really close to either of them.]

ALSO OF INTEREST:

I know a lot of people are put off by Beck’s style that appears over-the-top, exaggerated, and to some, filled with racist overtones. This is quite understandable — however, there seem to be a lot of people who’ve never watched or listened to Glenn Beck but still hate him. See this video by Penn Jillette with an interesting take on the matter.

Some have also argued that Glenn Beck is inciting fringe groups into violence. See an interesting take on this by Reihan Salam.

Norman Borlaug

Norman Borlaug, commonly known as the father of the Green Revolution, died on September 12, 2009.

For those who haven’t heard of him, a quick summary of Norman Borlaug’s main achievement: he pioneered the introduction of High Yielding Varieties (HYV)s of wheat and rice into India, Pakistan and Mexico, doubling food production and dramatically increasing food security in these countries. Some say he has saved more human lives than any other living person. For more, read:

• Borlaug’s Wikipedia entry says “Borlaug’s discoveries have been estimated to have saved over one billion lives worldwide.”

• World Food Prize on Borlaug

• New York Times article on Borlaug, after his death: Excerpt: “Dr. Borlaug’s later years were partly occupied by arguments over the social and environmental consequences of the Green Revolution. Many critics on the left attacked it, saying it displaced smaller farmers, encouraged overreliance on chemicals and paved the way for greater corporate control of agriculture. In a characteristic complaint, Vandana Shiva, an Indian critic, wrote in 1991 that “in perceiving nature’s limits as constraints on productivity that had to be removed, American experts spread ecologically destructive and unsustainable practices worldwide.” Dr. Borlaug declared that such arguments often came from “elitists” who were rich enough not to worry about where their next meal was coming from. But over time, he acknowledged the validity of some environmental concerns, and embraced more judicious use of fertilizers and pesticides.”

• The Wall Street Journal (Opinion Journal) on Borlaug: Excerpt: “Who won the Nobel Peace Prize in 1970? You may be forgiven for not remembering, given some of the prize’s dubious recipients over the years (e.g., Yasser Arafat). Well, then: Who has saved perhaps more lives than anyone else in history? The answer to both questions is, of course, Norman Borlaug. Who? Norman Borlaug, 92, is the father of the “Green Revolution,” the dramatic improvement in agricultural productivity that swept the globe in the 1960s. He is now the subject of an admiring biography by Leon Hesser, a former State Department official who first met Mr. Borlaug 40 years ago in Pakistan, where they worked together to boost that country’s grain production. “The Man Who Fed the World” describes, in a workmanlike way, how a poor Iowa farm boy trained in forestry and plant pathology came to be one of humanity’s greatest benefactors.”

• Ron Bailey of Reason Magazine on Borlaug, after his death.

• An interview Borlaug gave to Reason Magazine in 2000: Excerpt: “Reason: Would you say the Green Revolution was a success? Borlaug: Yes, but it’s a never-ending job. When I was born in 1914, the world population was approximately 1.6 billion people. It has just turned 6 billion. We’ve had no major famines any place in the world since the Green Revolution began. We’ve had local famines where these African wars have been going on and are still going on. However, if we could get the infrastructure straightened out in African countries south of the Sahara, you could end hunger there pretty fast….And if you look at the data that’s put out by the World Health Organization and [the U.N.'s Food and Agriculture Organization], there are probably 800 million people who are undernourished in the world. So there’s still a lot of work to do.”

• DNA India on Borlaug after his death: Excerpt: “Nearly 40 years later, the situation is not too different. Hunger still stalks many parts of the world. We are particularly grateful in India that his successful methods of pest- and drought-resistant wheat seeds have changed the face of Punjab and of the country, and it is this green revolution that made famine a distant memory. It is interesting to remember that Borlaug’s methods were adopted with the same success and around the same time in Pakistan as well. He believed that hunger and poverty caused much strife among nations, and he reached out to many countries in Asia and Latin America.”

• David Boaz of the Cato Institute on Borlaug, after his death: Excerpt: “But that’s not the way journalists and historians see it. Just think of the people who have gone down in history as “the Great“: Alexander the Great, Catherine the Great, Charles the Great (Charlemagne), Frederick the Great, Peter the Great — despots and warmongers. Just once it would be nice to see the actual benefactors of humanity designated as “the Great”: Galileo the Great, Gutenberg the Great, Samuel Morse the Great, Alan Turing the Great. So just for tonight, drink a toast to one of the great benefactors of the poorest people in the world, Borlaug the Great.”