Friday, June 23, 2006

The Myth Of Creativity

This is Robin Hanson going at it again, this time in Business Week:

The Myth Of Creativity: "Make no mistake: Innovation matters. Nothing is more essential for long-term economic growth. But to get more innovation we may want less, not more, creativity.

The sobering truth is that the dramatic artistic creations or intellectual insights we most admire for their striking 'creativity' matter little for economic growth. Creative new clothes or music may change fashion, but are soon eclipsed by newer fashions. Large and lasting economic innovations, like steam engines or cell phones, are rare and tend to be independently 'invented' by many people. One less visionary would matter little.

Instead, the innovations that matter most are the millions of small changes we constantly make to our billions of daily procedures and arrangements. Such changes do not require free-spirited self-expression. Instead, people quite naturally think of changes as they go about their routine business and social lives.
"To succeed in academia, my graduate students and I had to learn to be less creative than we were initially inclined to be. Critics complain that schools squelch creativity, but most people are inclined to be more creative on the job than would be truly productive. So schooling is mostly about selecting the smarter and more diligent, and learning to show up day after day to somewhat boring jobs with ambiguous instructions.

What society needs is not more creativity or suggestions for change but better ways to encourage people to focus on important issues, identify the most promising ideas, and tell the right people about them. But our deification of creativity gets in the way."

Friday, June 16, 2006

Welfare States, Unemployment, and Growth

'Real (_____) jobless rate: 15%':

Guess wich country they are talking about (in the blank)...

_______'s unemployment rate is 15 per cent, three times the figure being used by the government, according to new research from McKinsey Global Institute, the think tank.
The consultancy's calculations indicate unemployment is set to rise further, with between 100,000 and 200,000 jobs outsourced to cheaper countries over the next 10 years if no corrective action is taken.
The numbers cast a pall over ______'s international reputation as a thriving welfare state with low unemployment and will help focus attention on jobs ahead of _______ national elections.
McKinsey reached its conclusions by including those who want to work and those who could do so, meaning people on government programmes as well as those on prolonged sick leave.
In its first assessment of the country's economy since 1995, it said: '_______'s economy has reached a critical juncture. If nothing is done, the problems will become much more serious.'
It praised _______ for achieving average GDP growth of 2.7 per cent a year since 1995, which it attibuted to deregulation and improvements in private sector productivity. But it said the country could not rely on future improvements in private-sector productivity, as the catch-up effect that had driven these developments would decline over time.
The ageing population would put the public sector under 'intolerable pressure' unless productivity improved, it added.
'If nothing else changes, the resulting increase in welfare costs would become too large to finance through the current tax system in only 10 to 20 years,' McKinsey said.
(...) income tax rates would have to rise from about 30 per cent to about 50 per cent, arguing that these rises would not be accepted by the public as welfare and health services would decline.
Last, it said that the real unemployment rate of 15 per cent could increase as the production of goods and services moved to lower-cost countries - such as _________.
"______ needs to move quickly to introduce reforms that would create favourable conditions for sustained productivity growth in the private sector, better performance in the public sector and the creation of jobs in the private services sector".
It expressed confidence the country would be able to respond to these challenges, praising its productive industries, macroeconomic stability and good relations between politicians, companies and unions.
But McKinsey said that _______ had a lot of lost ground to regain. According to the Organisation for Economic Co-operation and Development, _______ had dropped from fifth position in its welfare ranking to 12th in 2004.

They are talking about Sweden, a rich country with a supposedly thriving welfare state... Do you get the hint? Thriving welfare states do not produce sustained growth. Sustained growth, in Sweden as well as everywhere else, comes from productivity growth... and welfarist policies do not correlate well with productivity. Think about that the next time you see a candidate promising you a welfarist wonderland.

Wednesday, June 14, 2006

Life changing readings

"Lisa Jardine and Annie Watkins, from the University of London's Queen Mary College, interviewed 500 men - many of whom had a professional connection with literature - about the novels that had changed their lives. (...)
The novel that means most to men is about indifference, alienation and lack of emotional response. The novel that means most to women is about deeply held feelings and a struggle to overcome circumstances and passion."

Here are the top 10 books for men and women:

1 Albert Camus The Outsider
2 J.D. Salinger The Catcher in the Rye
3 Kurt Vonnegut Slaughterhouse-Five
4 Gabriel Garcia Marquez One Hundred Years of Solitude
5 J.R.R. Tolkien The Hobbit
6 Joseph Heller Catch-22
7 George Orwell 1984
8 F. Scott Fitzgerald The Great Gatsby
9 Milan Kundera The Book of Laughter and Forgetting
10 Harper Lee To Kill a Mockingbird

1 Charlotte Bronte Jane Eyre
2 Emily Bronte Wuthering Heights
3 Margaret Atwood The Handmaid's Tale
4 George Eliot Middlemarch
5 Jane Austen Pride and Prejudice
6 Toni Morrison Beloved
7 Doris Lessing The Golden Notebook
8 Joseph Heller Catch-22
9 Marcel Proust Remembrance of Things Past
10 Jane Austen Persuasion

A related question:
Why We Read Fiction: Theory of Mind and the Novel, by Lisa Zunshine, who teaches English at the University of Kentucky. (...) We have an "evolved cognitive predisposition to attribute states of mind to ourselves and others" that is also known as "mind-reading." "These cognitive mechanisms," writes Zunshine, "evolved to process information about thoughts and feelings of human beings, seem to be constantly on the alert, checking out their environment for cues that fit their input conditions. On some level, works of fiction manage to cheat these mechanisms into believing that they are in the presence of material that they were 'designed' to process, i.e., that they are in the presence of agents endowed with a potential for a rich array of intentional stances."

Friday, June 09, 2006

The next revolution--not a bohemian one

The next industrial revolution will occur within the next hundred years... no, wait, it will happen within the next five years.  Sounds incredible?  Well, you have to look at the big picture and think accordingly big.  This is exactly how Robin Hanson looks at it (and by the way, it has nothing to do with bohemian free-spirits)
Economic growth is terribly important. Small differences in growth rates eventually overwhelm most other considerations, so the clustering and innovation externalities that create growth differences deserve far more public attention. Unfortunately most people yawn at growth theory; they prefer stories about conflict, status, moral fiber, heroes, and epic changes.
A postcard summary of life, the universe, and everything could go as follows.

In a universe that was doubling in size about every ten billion years, life and animals appeared on Earth. The largest animal brains then doubled in size every thirty million years. About two million years ago humans achieved important brain innovations, and the number of humans then doubled every quarter million years. About ten thousand years ago we learned to farm instead of hunt, and the human sphere then doubled every thousand years. Finally the industrial revolution occurred, and the world economy has since been doubling every fifteen years.

Our history has thus been a sequence of steady exponential growth modes, with sudden transitions between them. Could yet another new mode appear soon, growing even faster?

Looking at the number of doublings each previous mode experienced before the next mode showed up suggests that a new mode should appear sometime in the twenty-first century. Since each mode grew over one hundred times faster than the previous mode, the next economic mode should double every week or two. And since each transition has taken less time than the previous doubling time, the next transition would take less than fifteen years.

You should read the whole thing here.