27th Selected Links

Happy weekend! For the benefit of my Sydney friends who are now under lockdown with the rest of the city, this weekend's email is longer and more visual than usual. If you prefer this format, let me know: I might stick with it. If it's "too much info", let me know that, too.

1. 'Where Did the Coronavirus Come From? What We Already Know Is Troubling.' This recentNew York Timesopinion article by Zeynep Tufekci is likely the best piece the putative paper of record has published on the origins of the coronavirus.

2. 'Statement in support of the scientists, public health professionals, and medical professionals of China combatting COVID-19', this was the February 2020 open letter published by prominent scientists inThe Lancet, railing against “conspiracy theories suggesting that Covid-19 does not have a natural origin.” The letter is a reminder, if one was still needed, that institutional or mainstream "consensus" is often wrong. In this instance it was strangely, vociferously wrong — that is, wrong to categorically exclude the possibility of a lab leak.

3. If a picture says a thousand words, few have said so complicated a set of (roughly) one thousand words as the drawing below. It comes from the hand of Sir Roger Penrose and distils the proof in his succinct, 3-page paper 'Gravitational Collapse and Space-Time Singularities'. The paper, published in 1965, won him the Nobel Prize in Physics last year. Defying prevailing skepticism, Penrose proved that if a star implodes beyond a certain point, nothing can prevent the gravitational field getting so strong that the star collapses into a singularity. In other words, he threw open the gates to the possibility of black holes in the universe.

Given our inability to visualise four dimensions, in the diagram there are only three: two of space and one of time. Time moves from the bottom of the diagram to the top. At the bottom, a star begins to collapse. At a certain time, the star has shrivelled and a "trapped surface" (or event horizon) forms. At this point, the star must continue to collapse. To the outside observer, represented by the eyes on the left, time appears to stop on the horizon since no more light reaches them.

Penrose’s result is acclaimed as the first post-Einsteinian result in general relativity and started a new epoch in physics and astronomy.

4. 'The Micro-Foundations of the Early London Capital Market: Bank of England Shareholders During and after the South Sea Bubble, 1720-25', a paper by Ann Carlos and Lary Neal that exploits transfer ledgers to examine the individuals who participated in the South Sea Bubble. Among other things, they show that women made more profitable trades than men.

5. 'Bitcoin, Currencies, and Bubbles', Nassim Taleb's new bitcoin "blackpaper" which makes a similar argument to one I made in a 2018 podcast as to why bitcoin's intrinsic value is precisely zero.

6. 'Cultural Evolution of Genetic Heritability', a recent and important article by Ryutaro Uchiyama, Rachel Spicer and Michael Muthukrishna. (Here is the preprint if you can't access the BBS version.) In summary, they reconcile behavioural genetics and cultural evolution under a dual inheritance framework. They argue their approach cuts through the nature–nurture debate and helps resolve controversies such as IQ. The image below, from Muthukrishna's website, captures the basic idea.

7. Brace yourself for an increase in scary headlines about vaccinated people getting infected by the coronavirus (such as this recent contribution byThe Wall Street Journal: 'Delta Variant Outbreak in Israel Infects Some Vaccinated Adults'). These articles will be pounced on by anti-vaxxers. At such a time, it's good to refresh on the base-rate fallacy. Maya Bar-Hillel's study 'The base-rate fallacy in probability judgments' is a good place to start, as is Kahneman and Tversky's 'On the Psychology of Prediction'. For now, just imagine a toy example in which 100 people attend a superspreader party hosted in a cramped basement. Ninety-nine of them are vaccinated and 1 is not. If 1 vaccinated person and 1 unvaccinated person catch the virus, the headline becomes: 'Half of Partygoers Infected By Virus Were Vaccinated'. Sounds scary. Butremember the base rate, Kahneman and Tversky whisper in your ear. In this example, the vaccine is ~99% efficacious.

8. 'The Psychology and Economics Conference Handbook: Comments on Simon, on Einhorn and Hogarth, and on Tversky and Kahneman', Richard Thaler's write-up of the famous 1985 behavioural economics conference held at the University of Chicago which brought together titans from economics and psychology. Thaler finishes with this: "I will end my remarks with the following two false statements. 1. Rational models are useless. 2. All behavior is rational." (I think Thaler's claim misses the deeper point made by critics of both neoclassical and behavioural economics: what does "rational" really mean?)

9. Daniel Kahneman has responded to criticism of the claim made in his new book Noise that causation implies correlation, on Andrew Gelman's blog. And below is a picture from Scott Cunningham's book Causal Inference: The Mixtapeillustrating why causation need not imply correlation.

10.It's rare for a central bank to publicly decry a housing bubble forming under its watch, but that's just what the Bank of Korea did last week in its latest semi-annual Financial Stability Report. It argued that real estate is “significantly overpriced”, that Seoul home prices are excessive relative to people’s incomes, and that "If macroeconomic policies at home and abroad make a shift after the pandemic crisis recedes, or investment sentiment turns bearish, most of the asset price gains, fuelled by speculative demand, will likely be wiped out." As yet, the English version of the report is unavailable, buthereis the Korean version andhereis an article in English byThe Korea Times.

11.The unclassified version of the Pentagon's UFO report, which was submitted to Congress last week.

12.'Why is life expectancy in the US lower than in other rich countries?', an important article by Max Roser at Our World in Data. The below chart, taken from the article, depicts a travesty. American healthcare is the most expensive in the world, yet American health is the worst among rich countries, and this has been true for a long time. American healthcare is also a significant cause of the deaths of despair phenomenon, though not for the direct reason you might think, but because the enormous cost of healthcare needlessly eats away at wages and reduces the number of good jobs. The cost of healthcare is like a tribute, or reparations, that Americans have to pay a foreign power every year, yet in this case the vast sums of money flow into the coffers of pharmaceutical, health insurance, hospital and healthcare rent-seekers and monopolists. As Anne Case and Angus Deaton write in their recent bookDeaths of Despair and The Future of Capitalism (about which I interviewed Deaton in January): "Warren Buffett likened the effects of healthcare costs on American business to those of a tapeworm; we think of them as a cancer that has metastasised throughout the economy".

13. 'Bad Apple', a blog article by Antonio García Martínez about his recent cancellation.

14. Two excellent interviews with Marc Andreessen were published during the week, one by Antonio García Martínez and the other by Noah Smith.

15. I collect old books about the future. I love reading about what people in the past thought the future might look like. My favourite in this genre is The Year 2000, by Herman Kahn and Anthony Wiener (most of its predictions turned out to be wrong). In 1961, Motorola hired Illinois illustrator Charles Schridde to illustrate "The House of the Future", a series of ads (all featuring Motorola's electronic gadgets, of course). Below is one of the ads, but they're all visually stunning. I think they capture the optimism of post-War America. You can see more of them here.

Have a great weekend,