TED 2009 Part V - Predicting a Riot

TED is a fully immersive experience - it is on from 8.30 in the morning till dinner at night, and after even then many participants choose to carry on at some revelry or another. My blogging was done in the jetlagged-awake hours from 4am onwards. (ie by Saturday, on about 4 hours sleep a night, yours truly was a bit zonked, hence the lateness of this post and the next).

There was also a charge of what I'd call the Heavy Brigade on Saturday morning, the seriously analytical wonks - a pity as I was at my most fatigued then - but in short we had a succession of:

Nate Silver, a statistician, put up US electoral maps between 2004 and 2008 showing the shift of the entire electoral map towards blue, (liberal) voting . There are a bunch of The Old Confederacy centred on Arkansas which voted more strongly against Obama than they did against Clinton (and he's surprised why exactly? - sorry, but as a non US person who has travelled the US fairly extensively, this was a "no shit, Sherlock" sort of thing). In essence his thesis was that dumb, conservative people are the racists which of course goes down wonderfully in a liberal intelligencia gathering - how tough is that gig? (Though his point about monoracial suburbs being more in favour of mixed marriage had me laughing - don't do as I do, do as I say )

Alex Tabarrok, gave Reasons to be Hopeful Part I about the world economy. The beginning of the last century was a difficult time, there were 2 world wars and a great depression and the rise communist and fascist states (he didn't tie the rise of these political systems to the economic hardships of the time, though, nor did he point out the economic similarities at the turning of the centuries in terms of an empire's Fin d'Siecle, similar income disparities etc). In the second half of the last century, the tradewalls came tumbling down. Tariffs dropped from 40% to 5% over the postwar decades (as they had done in the closing decades of the 19th century by the way) and of course the 'Net totally altered global communications costs.

Alex reckons that the next big growth phase will come from new ideas that have high R&D costs, but low production costs (is that a corporate charterer or what?). “One Idea, One World, One Market” is the solution for the future. We need more idea creators. Less than 0.1% of the world’s population are scientists and engineers. Relentless Globalisation is the answer!

Frankly, I found the above two disappointing in that I could not argue with them in a Q&A session, so I'm doing it here . Also, in my view they showed a lack of awareness of history - but perhaps time limited the ability to put these things in context. If I may be so bold, I'd say these talks highlighted the risk of using statistics without understanding the march of history. Relentless PanGlossian "It will all be allright" Globalisation is not an option anymore, the history of the last century showed that if you carry on down this path there will be riots and the installation of protectionist, totalitarian regimes (we call the Fundamentalist today......)

I did also thoroughly enjoy the next two talks though:

Bruce Bueno De Mesquita uses game theory to predict likely future paths. He noted that the method works better for politics and business negotiations, not to markets. Everyone, he told us, is rational, with the exception of two year-olds and schizophrenics (I disagree - even they are rational once you understand their "game"board, as a psychiatrist in teh audience told me later.) As readers of this blog will know we use game theory in our consulting work (you may not know yours truly did a lot of this sort of maths in his MSc), so it was validation of our approach to strategy in a sense.

Dan Ariely did a fascinating talk, but my laptop had conked out so I had no power - here's Ethan Zuckerman's summary of the Good Stuff:

Psychological factors matter a great deal. When Ariely tried an experiment asking people to recall the ten commandments or ten books from childhood, he discovered no cheating in the ten commandments set… despite the fact that no one remembered the ten commandments.

We cheat differently with different commodities. In an unscientific experiment, Ariely filled fridges at MIT with coke cans and tracked their disappearance… and also put in plates containing six dollar bills. The half-life of the coke was very short, and very long for the bills.

On the other hand, introducing tokens into the equation - instead of actual currency - even for just a second - increases cheating.

In a set of experiments designed to test peer effects, Ariely used a confederate who announced, after a few seconds, that he’d solved twenty math problems. This person was obviously cheating - would this encourage or discourage cheating from the others? It turns out that it mattered what sweatshirt he was wearing - if Carnegie Mellon students thought the confederate was a fellow student, they’d cheat more. If they thought he was from the University of Pittsburgh, they’d cheat less.

It’s possible the Enron situation happened through a combination of peer effects and abstraction, where derivates acted like tokens, distancing people from actual currency.

There as also a good talk by Barry Schwartz, essentially calling for the re-application of wisdom (aka common sense), Ethan covered it over here: