Stealing Music?

My friend Greg Pye is worried that people-like-us who are "stealing" music are not ashamed.

http://gregpye.wordpress.com/2007/10/05/stealing-music/

Shame is a good word for the feelings that should be involved here. I don't think shame is clicking-in right now, because social norms on what constitutes reasonable music-buying behaviour have not yet evolved. The real problem is that there is no sign of a mechanism emerging to define or shape these new norms.

When I was leaving college my entire gang made and swapped swapped copies of each other's favourite audio tapes. I resent (and reject) the insinuation that that was either illegal or immoral. Most reasonable people agree that ordinary listeners like you or me should be people should be able to share our music with our friends and family.

Almost everyone also agrees that people who make music should be able to make a decent living. Nobody is really fussed about whether that decent living is paid for by CD sales, concerts or royalties from on-line radio stations.

The hard part is finding a set of social norms on what constitutes a "reasonable" level of copying. For instance, I think there is something shady about borrowing a DVD from Blockbuster, burning a few dozen copies and selling the copies on eBay. I don't have any qualms about copying a ~80 GB of music from a high-school buddy's hard drive for my own listening pleasure.

Calibrating personal judgments like this socializing them would help all of us evolve to a new set of norms. This is similar in spirit to calibrating performance ratings or credit decisions at a company like Capital One. The courts could have been the credible authority forcing the calibration to happen. They could have forced results of the calibration to be socialized through the media. Instead, by coming down squarely on the side of the fat-cat media bosses, the courts have simply polarized the situation.

It's been a bit of a needless tragedy. The only silver lining is that enough reasonable and powerful people hate the court's one-sided view passionately enough to hope that something will shake loose.

Starting Training

Training for the London marathon started last week. The score:

Nov 1. 40 min @ 10 kmph = 6.66 km
Nov 3: 45 min @ 10 kmph = 7.5 km
Nov 4: 45 min @ 10 kmph = 7.5 km

Total for the week = 21.6 km

Nov 6: 5 games of squash.

Some other random observations.

- Mindless TV while on the treadmill. Star Wars beats MTV

- It's hard to concentrate running alone along the river bank. Most people are there to relax. People walking dogs, couples desperately making out, kids playing frizbee, a couple of fishermen, a couple of homeless boozers...its really hard to stay focused on my breathing and just clock in the distance. A training partner will really help.

Duncan Fletcher. How could he?

Duncan Fletcher is violating one of the sacred codes in cricket. He has published a mean spirited kiss-and-tell memoir about his time as the England coach. With nasty digs about Flintoff's drinking. And about how the England dressing room hates Ian Botham.

He can't do this. What goes in the dressing room must stay the dressing room. For the coach to do this is appalling. That too, the same coach who made a huge deal of the team sticking up for each other in public.

The tragedy is that this sort of thing can be done nicely and constructively. My best insight into the England dressing room is from Ed Smith's On and Off the Field. Ed wrote respectfully and with rare insight about his colleagues. I doubt if any of his team mates minded the way they were shown in Ed's book. And he brought a hard-core fan like me even closer to the game.

Fletcher is spoiling the game for everybody by not exercising enough judgment on what not to say. Ever team meeting now has to be held in the shadow of a potential media sell-out. And the game will be poorer for it.

Homo Sapiens evolved to be fair? Part 2

We know that people tend to reject deals which they see as grossly unfair. This is most apparent in the classic economic experiment of the ultimatum game.

In this game, two players are given a pot of money to share. One player is randomly chosen. She can propose any a split for herself and for the other player. The second player can then reject the deal outright, in which case both players get nothing, or can accept the deal, in which case both players get what the first player proposed. Critically, there is no second deal. There is no Shadow of the Future notion of reciprocity of retribution. This game has been played thousands of times, across cultures. The consistent finding is that deals where the second player gets less than 20% of the pot are consistently rejected...although the second player is worse off in rejecting the deal outright.

The common interpretation of this game is that this dents the neo-classical notion of homo economicus. This is just wrong. The Economist article makes this error, quite surprising because the Economist is usually sympathetic to neo-classical notions. Neo-classical utility maximization theory easily accommodates this behaviour. The theory is framed in terms of maximizing utility rather than income for a very good reason. All you need to believe is that utility is a function of relative income as well as absolute income. The second player in the ultimatum game is maximizing utility, not income. He is happier saying no to a deal which feels wrong.

Under this interpretation the great neo-classical results, like Ronald Coase's insight into free agents negotiating their way to a Pareto-optimal outcomes, are totally valid. The ultimatum game does not create a case for governmental/ authoritarian meddling in people lives or in the economy generally.

What the ultimatum game does offer a really useful insight into is not economics, but politics. Why does income distribution so dominate political discourse? Why is unequal income distribution even though of as "unfair"? It seems to be a pattern of thought that is hard-wired into us as a species.

This is not a normative point; more equal outcomes in a society is not better or worse in a moral sense. My own take is that equality is simply irrelevant from a moral or normative viewpoint. This is just a positivist point. Privilege is naturally resented in every social group: cricket team, company or nation state. More so if it is seen as unearned, inaccessible or both. Finding ways to address or harness that resentment in a creative way is a necessary part of any polity. This is a managerial task...not a moral task.

There are some interesting puzzles that this view might help answer.

For instance, why to the janitors employed by Goldman Sachs earn more than the janitors employed by the municipal government? Both sets of janitors are equally skilled and productive. This is a commonly observed phenomenon. Most companies that pay well do so across job families or skill levels. Are companies trying to address that political problem thrown into sharp relief by the ultimatum game? I can just hear the Goldman janitor cribbing to his mates at the pub "I work for Goldman. The guy with a funny nose also works for Goldman. Why does he make 100 times what I make? How is that fair?". The guy with the funny nose might have a Ph.D. or an ivy league degree...but that sense of grievance is going to be out there anyway.

This may be the reason outsourcing often reduces costs even when working within the same labour pool. Changing the badge on the janitor's uniform breaks that limbic sense of connection between the janitor and the Ph.D. guy with the funny nose. Breaking that limbic connection makes the inequality easier to swallow.

A much more speculative and flaky line of argument...but what the hell...I've been drinking some Chardonnay from Burgundy...

This view might also talk to why third world countries find it hard to trade with the first world. As an Indian, I find it weirdly easy to understand the emotional heft of this argument.

India has done spectacularly well since opening up to the world economy in 1991. Yet, despite this success, political commitment to trade or free-market principles is really thin. Why? Because an Indian negotiating with an American is still talking to someone about 25 times richer than him. He is likely to come away from that negotiation feeling screwed, regardless of the objective outcome of the negotiation. I grew up in Indira Gandhi's India when we were trying to promote South-South co-operation. Meaning...we liked dealing with other poor countries more than we liked dealing with rich countries. This is self-destructive. India still badly needs the income that trade brings and the gains from trade are greater between dissimilar countries or agents. But at some visceral level, this all makes sense.

Homo Sapiens evolved to be fair?

Another fraught moral question. Does distribution matter? Is it really OK if the winners win really big if the losers are also a little bit better off.

Both evolotionart biology and behavioural experiments suggest that this does matter. People consistently refuse deals which feels unfair, even if they are obviously better off taking the unfair deal. This is a very well established result in behavioural economics. It's called the ultimatum game.

The surprising new learning is that chimps will accept unfair deals. This notion of fairness seems to be unique to our species. We probably evolved with this sense. It probably plays a key role in our success as a species, in making possible more complex social organization.

http://www.economist.com/science/displaystory.cfm?story_id=9898270

When is gossip good? When is gossip bad?

Lovely piece from the NYT on a moral dilemma I face all the time.

Is gossip good? Gossip it makes cooperation easier. Gossip makes the gossipers feel emotionally closer. And gossip gives people a game-theoretic reason to be nice to each other. People who are not very nice tend to be the wrong end of negative gossip.

Or is gossip bad? People find it easier to believe the gossip rather than the hard facts, even when hard facts are easily accessible. People get hurt for no fault of their's because of gossip. That feels terribly unfair.

There seems to be truth on both sides of the argument. One thing both sides agree on is that gossip is something evolution hard-wired us to do. We're human. We can't live with gossip, can't live without gossip.

This article reports on some really elegant behavioural experimentation about gossip.

http://www.nytimes.com/2007/10/16/science/16tier.html?ex=1350878400&en=51649aec31cb2ecc&ei=5124&partner=permalink&exprod=permalink

True terror lies in the futility of human existence

Conceptual Terrorists Encase Sears Tower In Jell-O