A daily dose of odds and sods, some interesting, some bizarre, some funny, some thought provoking items which I have stumbled across the web. All to be taken with a grain of daily salt!!
I miss
you so much L I want to squish you hugely and cuddle you.
Hope you had a good special day. Sorry wasn’t able to write earlier, the temperature and
pain wasn’t condusive to writing properly. I will be going to the urologist and
internal medicine doctor tomorrow so hopefully he can give me some antibiotics
for whatever infection I have picked up. Also dropped the car off for the
20,000 km service. Its amazing how much I drive here compared to London.
Anyway, they will check everything from spark plugs to the oil, brake pads to
AC. Machines need to be looked after religiously. Serviced, checked, maintained
and looked after at regular intervals. If you don’t, then they break when you
least expect it and then its trouble. I know I am sounding like sheldon with
Penny here: https://www.youtube.com/watch?v=KMhp2ShPVQw.
I also had this great image which I keep on my desktop. It’s
a great little cheatsheet for critical thinking. We have a problem these days
with social media information and pretty much fake news all over the place. So
you have two options, either you refuse to engage (which isnt possible mostly)
or you do engage but at which level? Remember the Athenians who basically put
forward the demos and democratic structures which we are still following in
some shape or form. You may not like politics or public policy but politics and
public policy is interested in you. So I always suggest engaging but you have
to engage at two levels. First recognise that most news or even history is
incomplete, disbalanced and biased (did you read the EH Carr book on “What is History?”
which we have at home?). So that’s the first element and remember that most
debates will be done at that level. People vote on that basis, people respond
on that basis, etc. etc.
But when its you, a smart intelligent and erudite girl like
you, you need to delve deeper into it. You cannot do that to all the stuff,
especially when you have constant barrage of information on twitter, snapchat,
youtube, etc. etc. but for substantive things, you have to have a filter, a
methodology, something that allows you to check major developments. This can
potentially help you, darling. Print it off and stick it on your wall in front
of you. and on your desktop.
Anyway, I am so missing you. please take photos of your 6th
form class/lounge and have a wonderful time. You are going to step over another
huge milestone in your life, going to 6th form. Much will change,
not least your uniform! Ask Dada for his advice, even though he didn’t do his 6th
form at Nower Hill, he knows what worked and what didn’t. Anyway, take selfies
and mamma will give you dahi chini before you leave.
Happy special day, son.
Hope your tummy is good. And that youre additional work gets finished soon
today so that you can get a bit of relaxation done this weekend. It is your
special day! I still remember the day Mamma and I took you to take your photos
when you were maybe 6 months? I think so but mamma will tell you exactly. You
were such a cute baby, with your teethless smile and then the photographer
would say, you are a little cheeky monkey. Adorable! Still are :) lovely.
And want to talk to you about
Thor Heyerdahl. I first came across his book on the Kon Tiki expedition when I was
a bit younger than you in Bhopal. It was a moth eaten book, hugely battered,
paperback with torn pages and faded covers. I picked it up in a second hand
book shop and it was seriously old, I think I paid 2 rupees out of my 5 rupees
allowance. And it was worth it. I devoured it completely in one day, staying
awake at night and doing the torch thing below the blanket. And got scolded by
Didu because I finished the batteries. It was published in 1948. The basic idea
behind the expedition was that people from South America could have reached
Polynesia. Till then, there was a prevalent idea that it was people from Asia
who populated the Polynesian islands of the Pacific.
So he went to Peru, a bit near
where we were in Ecuador and built a balsa wood raft with a little cabin and
sails. It was build based on what the Spanish Conquistadors documented about
the then extant boats, rafts and ships. The knotted twine or codex's literature
of the Incas and Aztecs did not store any information and in any case, the
Spanish totally destroyed the literature anyway (ok, ok, that gets me excited
and angry so best leave it). It was so fascinating to read how they built the
boat out of balsa wood. Balsa wood is a very very light airy wood, son, and it
floats beautifully and doesn’t become waterlogged easily. Building a ship is
tremendously difficult son, without modern tools, and they did that with what
they thought technology existed 6000 years before. So they built a raft. Balsa
wood logs tied together with hemp ropes, and then cross pieces to give lateral
support. Remember that when you are on the sea, you have to make your ship
flexible otherwise it will break apart (lesson to be learnt in your career and
for your companies). There was no metal in the construction at all, and they
build the masts out of mangrove wood, spars out of wood and reeds and bamboo
was used to deck the top.
They took modern provisions but
also used sealed bamboo rods to keep water in. It worked after a fashion although
there was a problem with the water. This is a reason why coastal trade was so
vital for so long. You and Choti have read the Odyssey, there was a good reason
why the old storyteller would pull into a bay every night. That was because of
the difficulty of storing fresh water on board. They carried food like coconuts, potatoes,
fruit and caught loads of fish. They sailed over 6,900 kilometres over 101 days
and then landed on an atoll with a crash.
We haven’t been to Easter
Island but we have been to Galapagos, Thor's idea was that the monumental
statues of Easter Island more resembled the Peruvian art than local designs, and
for that they needed to have population exchange. Galapagos didn’t show any
local art but Easter Island did. Fascinating. And now the study up there
provides further evidence for that. Fascinating. But see if you can read up on
Thor. A truly fascinating character, son. https://en.wikipedia.org/wiki/Thor_Heyerdahl#Books
Two more fascinating
characters. People who jump out of their skins and become larger than life and
literally, by force of their character, make a huge difference in their
surroundings! Yes, they make mistakes. They are flawed heros. They piss off
people. They engender huge loyalty and change people's thinking. Amazing.
Anyway, have a good day son,
happy special day to you again.
Happy special day. Hope you had a wonderful day. What did Dada
and Mamma do for your special day?
Mamma shared your ballet video with me, and you telling her off
twice! Loved the telling off J and of
course you looked so graceful and wonderful. I must have seen the video 100
times. But no haven’t shared it with anybody, so you can rest easy J that was really lovely,
darling. I wish I can see you in your performance. Over the current few days,
your previous history of performance videos and photos are popping up on the time
hop app and its lovely to see you grow up from a tiny little pink butterfly who
would dance so cutely in her tutu in the church to then you became like a
little colt wearing those lovely outfits like the fedora or the tramp and then
now wearing all growup outfits. I was looking forward to seeing you dance on
the proper stage in London so that I can take my friends and praise you and
bring you flowers and bask in reflected glory. Lovely dancing choti J And then your work on the
brownies and icecream! Totally gobsmacking. SO impressed that you did that from
scratch! Ice-cream from scratch and then brownies from scratch! And it was
moisty! Perfect, loved it.
I came across this rather long form essay on how to make a daily
habit of reading more books. It is long but worth reading, darling. Its just
the bestest ever thing for me but then you know it given that everybody around
you loves reading and you do too, but there’s nothing like reading somebody
else’s view on reading as well. Its all about the habit and forming the habit
to sit quietly and disappear into somebody’s words, where you find new dreams,
new emotions, different landscapes, pain, joys and excitement. It’s the quietness,
solitude but inside your mind you are in a different world completely. One
trick I learnt was to haunt bookstores, where you force yourself to walk
through the bookshelves running a finger along the spines and then listening to
that little tug inside your head which says that you have connected with a
book. And then you pull it out and see what it says and reads, flick through
the pages, read the fore and back pages and many times you will put it back
because it didn’t talk to you.
Listen to that little voice inside you, choti. That is a very
rare thing which I don’t think many people have experienced. They rely so much
on external stimuli that they forget that you are the best friend and companion
you may ever have. That voice may come when you touch an old tree, or a book,
or when you are watching a statue or are praying or whilst biking or listening
to a song. You will have to come up with your own answer, darling, but it would
be good to have it, it will really give you a glow and make you happy from
inside.
Anyway, I have banged on enough, I am sure your global crossing
island is calling you! But I wanted to share one more very interesting image
that I came across. We are all trying to be happy and it’s a biochemical
reaction inside anyway, right? So how can you hack yourself to become happy? Here
are some fantastic ways you can do that.
I envy voracious book
readers. They seem worldly and wise. Also, whatever is happening in their
lives, they’re never completely on their own – they always have their books. My
mother is one of these life-long devourers of literature, for whom books are a
constant companion. She recalls contracting tuberculosis as an eight-year-old
girl, before there was a vaccine, and being sent to spend six months at a
convalescent home in Margate, more than 100 miles from her family. ‘Books saved
me from what would have been unbearable, allowing me to escape from that bed to
have adventures in other places and other lives,’ she says.
Avid readers often look back on their
book-reading with fondness. ‘My first memories of reading are of my late mum
taking me to our local library, and both of us taking out as many books as we
could carry,’ says Clare Reynolds, author of the Years of Reading Selfishly blog. ‘We didn’t have a car so had to
make sure we could manage them all on the bus.’
Reynolds’s passion for reading continued through
adolescence and led her to study English literature at the University of Leeds,
but then the demands of work and family caught up with her, and for years she
found herself in what she calls the ‘reading wilderness’. Anecdotally, many of
us recognise this overwhelming sense of competing demands on our time. We
hanker for the space to read more. We buy the books, they pile up, but we never
get round to reading them – the Japanese even have a term for it, tsundoku.
Data back this up: a US survey found
that more than one-third of adults report a desire to read more books, with
book reading second only to exercise as the most wished-for activity.
Similarly, in France, 65 per cent of people aged 15 years and over said they
wished they read more books, rising to 77 per cent among those already reading
at average levels.
If you’re one of these people, opening a book
might have become something to do when you haven’t got anything else going on,
which is almost never. It’s as if you decided at some point, likely without
conscious thought, that even though you love books, book reading is effectively
the least important thing in your life – you’ll squeeze it in, if you can. And
if you are clinging to the remnants of a book reading habit, I’ll bet you save
it for the end of the day, or perhaps only for when you’re on holiday.
To read more books, you need to make it a higher
priority, which means changing your daily habits and routines to accommodate
more reading. People who are ‘super readers’ by virtue of their profession –
such as literary editors, agents and book award judges – show us just how much
reading is possible if you are willing and able to give it a high enough
priority. Consider Ed Needham, former editor at magazines such as FHM and Rolling Stone,
who in 2018 launched his own magazine, Strong Words,
which features more than 100 book reviews every month. Needham reads or listens
to every one of the reviewed books. ‘I just have to find the time, there’s no
way around it,’ he says. ‘I produce an issue of Strong Words every
six weeks, and we worked out that for five of those six weeks I read the
equivalent of War and Peace every week.’
When reading books is your livelihood or
essential to fulfil your responsibilities, then it becomes the priority around
which the rest of life must bend. You don’t need to go as far as Needham, of
course, but to read more books you do need to take a hard look at whether,
given the value you place on books, you are providing the activity with the
attention and time it deserves in your life.
‘Sometimes, you just need the slightest
encouragement to displace something that isn’t earning its keep in your routine,’
says Needham. ‘I remember [the US filmmaker and writer] John Waters saying he
found it really easy to read every night because he never watched television.
That made me realise it is really easy to stop watching television, because I
get more from books than I do from the vast majority of television programmes.’
When
there are so many options competing for our time, it’s worth reminding yourself
of the unique rewards of book reading. I read the newspaper every morning and
my day job involves reading countless essays and articles, but when I manage to
find the time to immerse myself in a quality nonfiction book, it’s a wholly
different experience – you can almost feel the presence of the author alongside
you on a personal intellectual journey. By the end, you’re somehow changed, you
see the world differently. And although TV and video games of course offer
escapism, there’s nothing quite like devouring the pages of a beautiful novel,
sitting quietly in one place while letting words transport you to another.
Screens show you what’s happening; novels, by contrast, construct those
fictions within your mind, allowing you to become anyone, and go anywhere.
What to do
It will take significant
effort for you to read more books, at least at first. To succeed long-term, you
need to develop new reading habits, so that reading is something you do without
resorting to conscious effort and willpower. But before getting into details of
how to do this, there are some preliminary steps to ease the way.
The first is to reflect on why you want to read more books. Benjamin
Gardner is a social psychologist at King’s College, London and an expert on the
psychology of habits. His theory of habit formation begins with the need for
sufficient motivation. ‘Think about why is it exactly you want to do it? What
would the benefits be? Answering these kinds of questions can make you more
motivated,’ he says.
There’s little doubt that you will benefit from
reading more books. People who read literary fiction in particular tend to be
better at reading others’ emotions and
have greater moral
sensitivity, possibly due to their simulation of
the lives of complex characters; and reading nonfiction will increase your
knowledge and broaden your mind. In fact, reading books is considered a
cognitive ‘reserve
building’ activity that could help to protect you from Alzheimer’s and
related illnesses. However, also relevant here is the distinction between
intrinsic motivation, which means you find reward in doing something for its
own sake, and extrinsic motivation, which is when you’re motivated by the promise
of some kind of external pay-off. Note that, especially when starting out, you
are more likely to prevail if you choose books to read that are inherently
enjoyable for you, be that because you find them entertaining, calming, moving
or intellectually stimulating and fascinating. This might require some trial
and error until you find a genre and/or author that matches your tastes and
priorities.
James Clear, the author of Atomic
Habits (2018), agrees. He recalls the approach of the
Indian-American entrepreneur and investor Naval Ravikant:
[Ravikant]
says something along the lines of ‘Read whatever the hell you want to read in
the beginning’ because the real thing that you’re focused on is building the
habit of reading, not necessarily the knowledge. Like if you just want to read
romance novels. Awesome. Read that. If you just want to read fantasy, read
that. Read whatever helps you fall in love with the act of being a reader or
the habit of reading. And once you fall in love with the habit, then it’s easy
… Now you’ve got a lot of options because it’s part of your life.
A related point is giving yourself permission to
quit books that you’re not enjoying. ‘I had spent so many years picking up
books that people had told me I “should” read,’ says Reynolds. ‘I diligently
ploughed my way through literature prize longlists and shortlists. I would try
to push on until the end of every one, even when I really didn’t enjoy them.
Then one day, I just put a book down I didn’t love, and picked up another one
which I did. It was then the idea for my Reading Selfishly blog and ethos was
born.’
‘A lot of people feel locked in from the start,’
adds Clear. ‘But the little phrase I try to keep in mind is start more books, quit most of them, read the great ones twice.
I think that a lot of readers would be well-served if they did that.’
A next preliminary step is to look at your
surroundings. How easy is it for you to grab a book – paper or digital – and
start reading? ‘The more frictionless [a habit] is, the easier it is to pick it
up,’ says Clear. He recommends making changes to your digital and physical
environments so that reading is easy and effortless – including making reading
apps especially prominent on your phone, and placing books in the physical
places that you most often frequent. ‘Being around books makes it very easy to
pick them up and check them out. If you want something to be a big part of your
life, make it a big part of your environment.’ Of course, if you are prone to tsundoku, this is a lifestyle tip that you have
already mastered – just try to remember to actually pick up those books.
A final preliminary step is to consider your
goals. Clear recommends having modest goals for your new reading habit
initially. If you try to achieve too much, too quickly, you’re more likely to
fail. ‘I would say giving yourself the permission to just read one page per day
or something like that,’ he says. Clear calls this ‘the two-minute rule’. By
getting into the routine of just ‘showing up’, even for just 120 seconds, the
new activity is more likely to become an entrenched part of your daily routine.
‘There is a deep truth about habits in general that people overlook,’ Clear
says, ‘which is a habit must be established before it can be improved.’
Now, having laid the foundations for your new
reading habit, then according to Gardner’s model, the next stage involves
creating new ‘action associations’, which in the context of books means reading
often enough in the same situation enough times until a strong, learned
association is formed between being in that situation (or that time of day) and
reading.
Gardner says that, the more specific you can be,
the more likely you are to succeed. So, think about the specifics of when and
where you are going to do the extra book reading, such as with your breakfast,
on the train to work, with your midmorning coffee, when you’ve finished getting
the kids ready for bed, or after dinner. This cue to read could be a set time,
an event or a particular situation – Gardner says it doesn’t matter which, as
long as this specific opportunity for reading happens consistently in your life.
You might even find it useful to keep a detailed
diary for a week, of what you do and when, to see the patterns that currently
exist in your daily routines. ‘Most of us are creatures of habit already,’ says
Gardner. ‘Many of us commute to work. We’ll catch the same train. Or our
evening and bedtime routines will be the same. So, in that respect, you can
kind of piggyback your new habit onto what you already do habitually. It can be
easy if you know what you’re aiming to do, and when and where you’re going to
do it.’
Once you’ve found the moments in your daily life
when you could conceivably begin a new book-reading habit, then keep reading in
that same context as consistently as you can. ‘Action association is at the
heart of a habit,’ says Gardner. ‘If you keep doing it, you keep reinforcing
that association. And as that association is reinforced, so control over the
behaviour passes from a kind of effortful reflective processing system to a
much more automatic system. It becomes impulse driven. You go into the
situation that triggers the association and you start doing it, without even
thinking about what you’re going to be doing.’
As
you build your new reading habit, be realistic about the challenge ahead, and
try not to fret too much about any lapses. ‘I think people are often put off by
the fact that they think it’s going to be really easy to do and then they can’t
maintain it, so they just disengage,’ says Gardner. ‘But if you say to them,
actually it is going to be difficult, but it will become easier. That can give
some people the motivation to keep going, even if they do experience, you know,
initial barriers on the way.’
Key points
Spend time thinking about why you want to read more
books. The more motivation you have, the more likely you are to succeed.
Start out reading books you enjoy, and don’t be afraid to quit books you
don’t like.
Lay the groundwork for your new reading habit by making
books salient in the physical and digital environments you encounter every
day.
Set modest goals, at least at first. Aim to read just a
little each day.
Look at your daily routines and your existing habits.
Consider where you could build in a new habit of book reading, in effect
piggybacking on your existing habits. The more specific you can be, the
more likely you are to succeed.
Try as hard as you can to always read whenever you are in
that situation, time or place. Eventually, you will form a new effortless
reading habit.
Track your progress by recognising every day that you
managed to read, rather than by ticking off completed books. After two
weeks, you should start to feel that your new habit is deepening.
Consider whether your social world supports book reading.
You could try joining a book group (see the Links and Books section below)
to chat with like-minded readers.
Cultivate your identity as an avid reader of books. Write
a sentence outlining the kind of person you want to be, and think about
how book reading will serve that aim.
Learn more
As you work hard to find the
time and space in your life to read more books, you might be wondering how long
until it gets easier. In his own research, focused on building healthy eating
and exercise habits, Gardner has asked people to begin performing a new
behaviour once each day, and then report how it feels. ‘We find after a couple
of weeks, they tend to say, yeah, this is starting to become part of my routine
… they start to feel like it’s an ingrained part of what they do. So I would
put the figure at around two weeks to start seeing a noticeable difference,’ he
says.
You might also be thinking about what you’re
going to have to give up to make space for more reading in your life. Unless
you currently spend time each day sitting around doing nothing, it’s inevitable
that, as you increase your book reading, other activities will have to fall by
the wayside. You could confront this head-on by revisiting the audit of your
everyday routines and identifying unwanted habits that you could give up. And
just as it’s helpful to establish new cues to associate with reading, you could
look to remove the cues to your unwanted habits, such as keeping the TV remote
out of sight in a drawer, or setting a rule not to take your phone upstairs.
‘Recognising that [acquiring a new habit] it is a substitution process is quite
useful,’ says Gardner. ‘But then you have to come up with your own strategies
based on what the old behaviour is and what the cues are to think about how you
can disrupt that old habit.’
Clear recommends a less direct approach to habit
substitution. ‘I don’t know that it’s that productive to focus on what you’re
giving up or what you’re sacrificing,’ he says. Build your new book-reading
habit, he says, and other unimportant things will naturally fall away. ‘The act
of building good habits is like a plant. One plant crowding out another. If you
just focus on cultivating this new plant, a lot of bad habits kind of fall by
the wayside anyway.’
If you’ve been putting the advice in this Guide
into practice but you’re finding it difficult to keep going, an effective tool
you could use to sustain your motivation is to monitor your progress. At least
at first, Clear advises against ticking off each book you read or aiming for an
overly ambitious goal, such as reading a certain number of books per month or
per year. Far better, he says, is to apply his ‘two-minute rule’ and track a
more modest attainment, such as recording each day that you manage to read just
a page or just for five minutes. You can adjust according to your own levels
(such as each time you finish a chapter or read for half an hour), the
important thing is to choose a realistic, easily obtainable target in the early
stages and track your success reaching that.
‘Visualising your progress is a powerful and
fruitful thing to do,’ says Clear. ‘The feeling of progress is very motivating
to the human brain. You want to feel like you’re moving forward, if possible,
in that moment. That’s why tracking your daily reading is more productive than
tracking when the book is finished, because the book might take you three
weeks, but by tracking your reading every day, you get a little signal [of
progress and success] along the way.’
A further idea to help you grow your reading
habit is to think about your social world. Just as making books prominent in
your physical and digital environments will help to lay the foundations for
more reading, your social environment is also important, especially for
deepening and sustaining the habit. Sharing a pleasure multiplies it. If none
of your close family or friends reads books, then reading will only ever be a
private activity, separate from your personal relationships and to be squeezed
in around them. If this is your situation, I’m not suggesting you ditch all
your buddies, but I’d recommend seeking out one or more friends who read, for
instance by joining a book group – physical or virtual (see Links and Books
below). ‘Reading was, and still is, a way for me to connect with people,’ says
Reynolds.
Related to the notion of connecting with other
readers is to think about cultivating your own sense of self and identity as a
reader. For avid readers, their love of books is often central to who they are,
and this shapes their attitude to reading and the priority they give it in
life. ‘I say this a lot with habits and identity in general,’ says Clear. ‘Like
the real goal is not to run a marathon. The goal is to become a runner. Right?
The goal is not to do a silent meditation retreat, but to become a meditator.
And that’s definitely true here. The real goal is not to read 30 books, it’s to
become a reader.’
Clear
recommends spending some time thinking about the kind of person you want to be
and how reading more books will help you fulfil that aim. It might not be for
everyone to make this too explicit, but if you think it might help, you could
try writing out a sentence like ‘I am the type of person who loves reading
books’ or ‘I am the type of person who loves reading about other cultures’ and
reminding yourself of that identity frequently. This then provides a frame for
the actions that you choose to take each day. Is switching on the TV straight
after work something a book-lover does? No. Is picking up a book and reading
for a few minutes? Yes. ‘What it does, like every action you take, is a vote
for the type of person you want to become,’ says Clear. ‘And now suddenly you
see reading in this more powerful light. It’s like every time I pick up a book
and read a page, it becomes a vote for this, a new identity that I’m trying to
build.’
Links & books
The online reading community Goodreads features hundreds
of book groups and clubs. You’ll need to register (it’s free) and then
click the ‘community’ tab.
The
Rebel Book Club is one of the most popular non-fiction book clubs
in the world, and features live physical and virtual events for members.
Many newspapers and other organisations also offer virtual book clubs,
such as The
Guardian’s reading group (the writer Sam Jordison
hosts online discussions on Tuesdays). There are also numerous celebrity
book clubs you could try, if that’s to your taste. Popular ones include Oprah
Winfrey’s book club and Reese
Witherspoon’s book group, which is hosted on Instagram.
Five
Books invites experts to recommend five books in their specialist
area. To get a meta-take on your growing reading habit, you could check
out their selection of
five books on the history of reading.
In this article,
Goodreads ‘super readers’, who read hundreds of books a year, share their
top tips for reading more books.
If you’re constantly on the go, consider trying Amazon’s Whispersync
for Voice – the company offers more than 30,000 titles that you
can read as ebooks in parallel as you listen to them as audio books, with
your progress tracked seamlessly between the two formats.
Finally, if you want to read more about reading, Reader
Come Home: The Reading Brain in a Digital World (2018)
by Maryanne Wolf takes a look at the psychology and neuroscience of deep
reading in the age of so much digital distraction.
I subscribed to this blog and have been finding
absolute gems of insights in here. Spend today reading the blog in and out and
figured I should share this one with you, which you may find of interest. These
made me blink as many of these were also misconceptions I held and hold. The
one thing which I keep on making a mistake about is to discount knowledge and specialisation.
For example, I keep on going on thinking constantly that investing in IPO’s is a
good idea. I should know better frankly. I have been beset with this
misconception since I was in India and about 20 years old. One would have
figured out something like this in 30 years but no. This surfaced frequently. Most
recently when I saw the primary bid app. So was poking and worrying at it now
for 2 months, remember I told you about it?
And then last week spent some time on investigating
the firms which are being listed and offered for sale on the App. Over the last
2 months, I didn’t see a single investment which was close to being considered
good. And most were flat over months. The issuance discount wasn’t good and the
longer term behaviour was rubbish. Not worthy at all. And then when you look at
some of the sectors, they are in real estate, consumables, etc. which will
struggle over the next few weeks and months. I am not sure if this will be good
at all. So, to avoid creating stress in my life, I have deleted the app and
will continue with my strategy of long term investments via proper advisors in
proper diversified funds. Better that way. J
We did speak about your flat, son, I think you should
spend some time looking at flats. You will need to do that at some point.
Paying rent for so long wouldn’t be good. Remember the mistake I made by
insisting to rent for 3 years till Mamma did the right thing and purchased our
house? Yes you will have an issue with spending time, money and energy but you
should start thinking about getting a good asset. You don’t have to live in it,
you can always rent it off and stay in your current flat, but at least your
rental is offset by your received rent and the mortgage is covered. House
prices are going up and down but you will need a place anyway, so do look at
it, son.
Anyway, this was a good read, son, forced me to
rethink my own conceptions and review. Good to check.
Hope your project is calming down a bit, let me
know when we can speak to today, I am missing you L
Here are six cases where I was
pretty confident in my understanding of the microeconomics of something,
but then later found out I was missing an important consideration. Thanks to Richard Ngo and
Tristan Hume for helpful comments. Here’s the list of mistakes:
I thought divesting from a company had no effect on
the company.
I thought that the prices on a prediction market
converged to the probabilities of the underlying event.
I thought that I shouldn’t expect to be able to
make better investment decisions than buying index funds.
I had a bad understanding of externalities, which
was improved by learning about Coase’s theorem.
I didn’t realize that regulations like minimum wages
are analogous to taxes in that they disincentivize work.
I misunderstood the economics of price controls.
In each, I’m not talking about
empirical situations at all—I’m just saying that I had a theoretical
analysis which I think turned out to be wrong. It’s possible that in many
real situations, the additional considerations I’ve learned about don’t
actually affect the outcome very much. But it was still an error to not
know that those considerations were potentially relevant.
1. Divestment
I used to believe that
personally divesting in a company didn’t affect its share price, and
therefore had no impact on the company. I guess my reasoning here was
something like “If the share is worth $10 and you sell it, someone else
will just buy it for $10, so the price won’t change”. I was treating shares
as if they were worth some fixed amount of money. The simplest explanation for
why you can’t just model shares as being worth fixed amounts of money is
that people are risk averse, and so the tenth Google share you buy is worth
less to you than the first; and so as the price decreases, it becomes more
worthwhile to take a bigger risk on the company. As a result, divestment reduces
the price of shares, in the same way that selling anything else reduces its
price. In the specific case of
divestment, this means that when I sell some stocks, the price ends up
lower than it was. I first learned I was wrong
about this from this
Sideways View post, published May 2019.
2. Index funds
I used to think that it wasn’t
possible for individuals like me to get higher returns than I’d get from
just buying an index fund, because in an efficient market, every share is
equally valuable. This is wrong for a few
reasons. One is that the prices of shares are determined by the risk
aversion of other market participants; if your risk aversion is different
from the average, some shares (specifically, risky ones) will be much
better investments than others. Secondly, because I’m risk
averse, I prefer buying shares which are going to do relatively well in
worlds where I’m relatively poorer. For example, if I’m a software engineer
at a tech company, compared to a random shareholder I should invest more in
companies which are as anticorrelated with software engineer salaries as
possible. Or if I live in the US, I should consider investing in the
markets of other countries. I didn’t understand this fully
until around April this year.
3. Prediction markets
Relatedly, I thought that the
fair market price of a contract which pays out $1 if Trump gets elected is
just the probability of Trump getting elected. This is wrong because Trump
getting elected is correlated with how valuable other assets are. Suppose I
thought that Trump has a 50% chance of getting reelected, and that if he
gets re-elected, the stock market will crash. If I have a bunch of my money
in the stock market, the contract is worth more than 50 cents, because it
hedges against Trump winning. (Here’s a maybe more intuitive
way of seeing this: Suppose I could pick between getting $10 in the world
where Trump won (in which we’re assuming the market would crash) and the
world where Trump lost. Clearly the $10 would be more valuable to me in the
world where he wins and my stocks are decimated. So the value of the “Trump
wins” contract is higher than the value of the “Trump loses” contract, even
though they correspond to events of equal probability.) And there is a
potentially very high number of correlative outcomes that betters might be
thinking about and hedging against, and the market computes these and
reflects them in the price. This is a more general version
of the point that it’s hard to have a prediction market on whether the
world will end. Paul Christiano has an old blog
post on this topic which I first saw years ago but which I
didn't understand properly at the time. I first understood this fully
around March this year. All of these first three
mistakes were the result of me not really understanding basic portfolio
theory; thanks to spending a bunch of time talking to traders over the last
few years, I now understand it better.
4. Coase’s arguments about externalities
I used to have an overly
simplistic picture of externalities—I believed the Econ 101 story: normally
markets are efficient, but when a good has an externality the wrong amount
will be produced, and this is resolved by putting a tax or subsidy on the
good to internalize the externality. I changed my mind about this
after reading David
Friedman’s essay. I’ll just quote a few paragraphs:
The first step is to
realize that an external cost is not simply a cost produced by the pollutor
and born by the victim. In almost all cases, the cost is a result of
decisions by both parties. I would not be coughing if your steel mill were
not pouring out sulfur dioxide. But your steel mill would do no damage to
me if I did not happen to live down wind from it. It is the joint
decision—yours to pollute and mine to live where you are polluting—that
produces the cost.
Suppose that, in a
particular case, the pollution does $100,000 a year worth of damage and can
be eliminated at a cost of only $80,000 a year (from here on, all costs are
per year). Further assume that the cost of shifting all of the land down
wind to a new use unaffected by the pollution—growing timber instead of
renting out summer resorts, say—is only $50,000. If we impose an emission
fee of a hundred thousand dollars a year, the steel mill stops polluting
and the damage is eliminated—at a cost of $80,000. If we impose no emission
fee the mill keeps polluting, the owners of the land stop advertising for
tenants and plant trees instead, and the problem is again solved—at a cost
of $50,000. In this case the result without Pigouvian taxes is
efficient—the problem is eliminated at the lowest possible cost—and the
result with Pigouvian taxes in inefficient.
Moving the victims may
not be a very plausible solution in the case of air pollution; it seems
fairly certain that even the most draconian limitations on emissions in
southern California would be less expensive than evacuating that end of the
state. But the problem of externalities applies to a wide range of
different situations, in many of which it is far from obvious which party
can avoid the problem at lower cost and in some of which it is not even
obvious which one we should call the victim.
My previous position was
missing this nuance. I first read that David Friedman essay midway through
last year.
5. Non-tax regulations that increase equality have
disincentive effects on work
I used to think that the way to
decide whether a minimum wage was good was to look at the effect on
unemployment and the effect on total income for minimum wage workers, and
then figure out whether I thought that the increase in unemployment was
worth the increase in income. I think this was wrong in two pretty
different ways. The first mistake is that I was
neglecting the fact that policies aimed at transferring wealth from rich
people to poor people disincentivize making money. Taxes are just a special
case of this, and can be seen as part of a category of wealth-transferal
policies that includes minimum wage. So when you’re arguing that a minimum
wage would be part of the optimal policy portfolio, you have to argue that
it would be better than a tax. I did not understand that this was part of
the calculation. I first learned this from a
post by Paul Christiano which I think he incorporated into Objection 2 here; that blog post was published March 2019.
6. Price and quality controls
The second of the ways I was wrong
about the minimum wage comes from a misunderstanding of the economics of
price controls; in hindsight I think that my high school economics
curriculum was just wrong about this. I think that I realized my
misconception after reading The Dark
Lord’s Answer, published in 2016. In high school economics, I was
taught that when the government imposes a price floor (e.g., a minimum
wage), you’ll end up with more supply than demand for the good. This is
beneficial to suppliers who still succeed at selling the good, it’s harmful
to suppliers who can no longer sell the good, and it’s harmful to buyers. I now think that that
understanding was overly simplistic. Here’s my current understanding. In a market, the supply and
demand of a good must equilibrate somehow—for every loaf of bread that
someone buys, someone had to sell a loaf of bread. One way that the market
can equilibrate is that the price can change—if the price is higher,
selling is more attractive and buying is less attractive. So if more people
want to buy than sell at the current price, we might expect the price to
rise until things are in equilibrium. But there are other variables
than price which can change in a way that allow the market to equilibrate.
One obvious example is product quality—if you decrease the quality of a
product, consumers are less enthusiastic about buying but suppliers are
more enthusiastic about selling (because they can presumably make it for
cheaper). Often, fluctuations in quality
rather than price are what cause markets to equilibrate. For example,
restaurants often don’t have price hikes at busy times, they just have long
waits. Customers like it less when they have to wait more, and restaurants
like having customers waiting (because it helps them ensure that their
restaurant is constantly full). So when we talk about the
equilibrium state of a market, we can’t just talk about price, we also need
to talk about all the other variables which can change. In the case where we only
consider price and quantity, there’s always only one equilibrium, because
as price increases, supply rises and demand falls. (Actually, supply and
demand could be constant over some range of prices, in which case there is
an interval of equilibrium prices. I’m going to ignore this.) But if we’re allowed to vary
quality too, there are now many possible settings of price and quality
where supply equals demand. E.g., for any fixed quality level, there’s
going to be one equilibrium price, for the same reason as before. In a competitive market, the
equilibrium will be the point on the supply-equals-demand curve which
maximizes efficiency. E.g., if there’s a way that producers could increase
quality that would make production cost $1 more, producers will only do
that if it makes the product worth more than $1 more valuable to consumers.
This is optimal. (In real life, you usually have
producers selling a variety of different similar goods at different
price/quality points; I’m talking about this restricted case because it’s
simpler.) Now, suppose that the
government imposes a restriction on price or quality. For example, they
might set a maximum or minimum price, or they might make safety
restrictions which restrict quality in certain ways. The market will
reequilibriate by using whatever degrees of freedom it has left.
Specifically, it will reequilibriate to the optimal point within the newly
restricted space of points at which supply equals demand. In general, this
will lead to a less efficient outcome. For example, if the price of
bread is $2 at equilibrium, and the government sets a maximum price of
$1.50, then the equilibrium will move along the quality curve until it gets
to the point where the equilibrium price is $1.50. This analysis gets more
realistic if you allow there to be more dimensions than price and quantity
along which bread can vary. For example, I’d expect to see the following
phenomena:
Producers trying to figure out ways to get paid
under the table, e.g., by demanding favors in return for selling to
people. This reduces efficiency inasmuch as producers weren’t already
being compensated by miscellaneous favors.
Sellers changing in ways that are mildly more
convenient for them but much more inconvenient for consumers. For
example, having long lines outside stores, or treating customers
worse.
Producers indulging weak preferences of theirs in
who they sell to (e.g., nepotism).
In the case of minimum wages,
I’d expect to see employers do things like engaging in wage theft which the
employees tolerate (which is inefficient because it increases variance for
employees) or being inflexible and unpleasant. This analysis would predict
that wage theft is much more common among minimum wage employees than
employees at higher wages. One way of thinking about the
efficiency of this is to think from the perspective of the producers. They
have to pick some change that makes the price of the bread $1.50. There are
many ways they could reduce the price to $1.50. They’re going to pick the
way that is best for them. In some cases, this leads to
almost no value being destroyed at all. For example, in the bread case,
sellers might sell smaller loaves, which might be almost as efficient if
you dubiously assume that the main cost of bread is flour. The worst case
is that there’s no way for the seller to change the product to keep it
profitable which benefits them, and so they end up changing it in a way
which makes them very little better off. The welfare impact of this kind
of regulation is also affected by redistributive effects. For example, if
bakers decide to only sell bread to their friends and family, this has a
positive redistributive effect if the friends and family of bakers are
poorer than average. An example where the
redistributive effect might make the world much better: Suppose that
there’s demand for 100 loaves of bread, where half of that comes from poor
people who want to feed their children and the other half comes from a tech
billionaire who wants to make a giant bread sculpture. If the baker ends up
selling to people who are most willing to stand in lines, then this might
lead to a better outcome. (Getting this result requires making some pretty
strong assumptions about the shape of the relevant curves.) Another example is that you
might expect that in a world where the minimum wage causes low-paid jobs to
be more unpleasant, teenagers will be less inclined to take the jobs and
poor adults will end up having relatively more of the jobs. It’s possible
to set things up such that this ends up increasing total welfare.
Conclusion
It’s embarrassing that I was
confidently wrong about my understanding of so many things in the same
domain. I’ve updated towards thinking that microeconomics is trickier than
most other similarly straightforward-seeming subjects like physics, math,
or computer science. I think that the above misconceptions are more serious
than any misconceptions about other technical fields which I’ve discovered
over the last few years (except maybe the aestivation
hypothesis thing). In three of these cases (4, 5,
and 6), I had incorrect beliefs that came from my high school economics
class. In those three cases, the correct understanding makes government
intervention look worse. I think that this is not a coincidence—I think
that the people who wrote the IB economics curriculum are probably leftist
and this colored their perception. On the other hand, in the other
cases, I assumed that the equilibria of markets had a variety of intuitive
properties that they turn out not to have. One obvious question is: how
many more of these am I going to discover over the next year or two? I think my median guess is that
over the next year I will learn two more items that I think deserve to go
on this list. Of course, I’m now a lot more cautious about being confident
about microeconomics arguments, so I don’t expect to be as confidently
wrong as I was about some of these. In most of these cases, there
was a phase where I no longer believed the false thing but didn’t properly
understand the true thing. During this phase, I wouldn’t have made bets.
Currently I’m in the “not making bets” phase with regard to a few other
topics in economics; hopefully in a year I’ll understand them.
