In the NY Times, Paul Krugman makes the case that too much choice (particularly about retirement investment) can be bad
Ani Guerdjikova and I demonstrate this with lots of algebra
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John Quiggin 
Scott Addams called this a confusopoly a long time ago, and the term has stuck in my mind. A market with a deliberately confusing array of choices where providers don’t compete to have the best deal, they instead cloak more profitable deals in confusing language. He was talking about cellphone plans, but then Australia started privatising retail electricity and I noticed that that was exactly what happened.
At the extreme is the phone app that lets customers/victims buy energy in chunks at varying prices at different times – it rewards people who are both smart enough to understand the price-generating system *and* have time to monitor the app. And obviously have money to pay up front for power. But mostly, the customers time is worth so little that spending 5-10 hours a month is worth the possible $10 saving in electricity bills.
Which reminds me of my personal objection to the theory of perfect information: it assumes that people’s time has no value, and learning has no cost. “anyone” can get a PhD in economics to understand how markets work, then another degree that gains them entry to the industry in question, then work their way up to the point where they understand the products on offer and how best to use them. Multiply that by the number of products that a person needs to live a modern life… and you have an “informed consumer”, one of the prerequisites for an “efficient market”. Sadly I’m unable to participate in that market, because I don’t have the time even if I had the inclination to work in the shampoo-manufacturing industry for a few years. Did I say shampoo? I meant health insurance. Or perhaps small passenger cars. Maybe driving instruction. Or residential stand-alone dwelling roofs. So many choices… and I don’t even know if I’m looking at the right thing, perhaps I should look at apartment construction instead?
(from the guy in the back row of the class who’s not been paying attention)
I get the impression that restricting diversity on the supply side doesn’t get enough love either. Armies were quick to discover the merits of standardising weapons and ammunition; this was big advance in the Colt revolver, standard parts for repair. NATO armies carry different rifles, but only a few calibres of ammo. The rapid spread of mobile phones has depended on a duopoly of operating systems and a monopoly (ARM’s) in processor architecture. Awkwardly, the benefits of standardisation tend to come packaged with the disadvantages of monopoly, so free-market ideologues brush the former under the carpet.
Two anecdotes. I visited Russia several times for work in the the 1990s. They still only had one type of bread, but it was very good: a coarse rye/wheat flour mix, flavourful and chewy, a far cry from the plastic foam white sliced “bread” of English supermarkets.
Two years ago we replaced the dishwasher with a common Spanish/German make. The unimpressive installers asked me if I had a Torx screwdriver. What? Everybody has flat and Philips screwdrivers and Alllen keys, but I thought Torx was not a normal expectation. As it happened I did have a set of bits including Torx heads, but still. If Henry Maudslay had decided to design a screw head along with his bolt thread, he might have gone for something like Torx, but he didn’t and it’s impossible to rewind the clock. You can see his first screw-cutting lathe of 1800 in the Science Museum in London, the direct ancestor of every machine-cut bolt since; though nobody uses his original thread any more, it’s all DIN 13 (1 to 52). Scaling down from a master is just a matter of reduction gearing.
It’s capitalism, stupid! (Directed at P.K. and other liberals who are still essentially pro-capitalist rather than say democratic socialist.)
It’s all very well for Paul Krugman to bemoan the current state of things. But he basically still supports capitalism does he not? I am open to correction on that issue, if I am wrong. This is what capitalism, especially deregulated, unfettered capitalism, leads to. It’s an axiomatic outcome of the rules of system. Indeed, under standard capitalism, even regulated capitalism, the concentration of money, and thus the concentration of money power increases over time, and this leads to the ever greater influence of money on politics. It’s a feedback system. Too much money in too few hands leads to too much political influence which leads to even more money in even fewer hands… and so on in the vicious spiral to extreme oligarchic capitalism.
This has been the experience of the entire capitalist era. The punctuations to this capitalist concentration spiral have been the major crises be they depressions or widespread wars (most commonly until now. Only under these conditions was the capitalist wealth concentration spiral re-set. The work of Thomas Piketty has amply demonstrated this with empirical data (which is “as empirical” as one can get in such a difficult field for both historical data gathering and data interpretation).
The tendency to oligarchy and oligopoly is intrinsic to the prescribed rules and prescribed calculations of capitalism. Only by changing the design of the current system profoundly and radically will we escape the wealth concentration / crisis collapse oscillation. We have to progress beyond capitalism or we will completely collapse. The next full crisis collapse will not be escapable by capitalist political economy methods. Socialism or barbarism will be the choice then… or rather soon. The final disaster of Western capitalism is very close now in historical terms (meaning a few decades at most and maybe as little as 5 years).
PS Word of the day: “The official generic name [for Torx], standardized by the International Organization for Standardization as ISO 10664, is hexalobular internal.”
James: Scaling down from a master is just a matter of reduction gearing.
The denominator of the ratio between metric and imperial is not small enough for a realistically sized gear to be fitted to a lathe, or even a plausible combination of them. So there are metric lead screws, and imperial lead screws, and never the twain shall meet. A CNC lathe *may* be able to cut both if it is sufficiently precise and accurate, but many mistakes have been made when guessing. The common solution is to allow enough slop in the parts produced that the work despite the approximations.
There are other threads-per-length standards but they are much less common. Two is bad enough.
No, this analogy with torx is bs.
Torx is clever design, after the failings of the Phillips head et al.
It’s the progression of science, get over it!
Moz in Oz: “The common solution is to allow enough slop in the parts produced that the work despite the approximations.”
The technical terms for “slop” are geometric tolerances, deviations and fits, whether it’s for:
* metric, or
* imperial
https://en.wikipedia.org/wiki/Engineering_fit
Torx not better than Phillips head. Is different. Failing of Phillips head — popping out under strain, bad thing one situation. Good thing in other. Advantage of Phillip head everyone have one. Advantage of Torx no one but Wimberly have one.
akarog: when was the last time you bought something that needed fixing to a wall, and it came with a little packet of Torx screws? It may well be a superior design, but as a standard it’s a failure. It’s quite true that standards can inhibit innovation and lock us into inferior designs. This shows how large the offsetting benefits of standardisation are.
Apologies to JQ for derailing his and his colleague’s impressive pro algebra with something all Real Men can understand and have strong uninformed opinions on.
Mix in Oz: I didn’t make myself clear. I wasn’t talking about switching between thread designs, but scaling within one. Subject to correction, Maudslay’s hugely important invention started with a large wooden master screw, cut very laboriously by hand. But with a simple lathe he was able to reproduce the master screw exactly and repetitively. With reduction gears, he could make copies of different and more useful sizes.
What depressed me about the paper was that large parts of the verbal part were just as incomprehensible as the math part to me. So better to save the zoom presentation for a good stress- free day. Back to screwdrivers please!
I found the presentation difficult and that is likely due to my own “cognitive limitations”. I didn’t get much intuition. A minor example: How can the math offer insights on retirement issues when it posits infinitely-lived investors?
Most people with “limited awareness” pay others for financial advice or buy ETFs, mutual funds, or REITs. The difficulty here is that the evidence suggests these experts don’t outperform a dart-throwing monkey which also accords with my interpretation of the EMH as implying a lack of predictability rather than unbiased asset pricing valuation. My intuition is that, with finite lives, those with limited awareness (e.g. are unaware of foreign investment opportunities) earn lower rates on return than the real sharpies but that most survive.
People with limited information do get fooled by bad schemes and bad advice but that is nothing new.
It would be nice to read a more policy-oriented paper – even a note – that draws out the main possible implications of this work.
James: yes, definitely. I was both pointing out that a: there’s subtly more to it; and b: per my earlier post, the time taken even just to learn how profoundly ignorant I am about a particular topic can be excessive.
On that note, different fastener heads are often for different purposes and it’s not just marketing wankers wanting to sell more tools that mean you have 6 or more different options in the hardware shop. One consideration is how easy it is to clean gunk out of a head should you later want to remove the fastener… slot and the three main cross heads all suffer here by being hard to clean and easy to strip.
One reason for the popularity of hex drive system is that it’s much cheaper and easier to have 300 different drive shapes when each is 53/64″ long and 1/4″ across the flats. But I also have… 3 sets of smaller drives, because T1-T5 are ridiculous when smooshed onto a 1/4″ drive.
MOz: Fewer words: Fraud By Complexity
I’m impressed that the tchnically informed Moz still thinks is inches. European plumbers use legacy imperial sizes for taps and connectors, though the labels are all metric
The Encyclopedia Britannica has the standards history of the inch, starting with the Romans:
“The old English ynce was defined by King David I of Scotland about 1150 as the breadth of a man’s thumb at the base of the nail. To help maintain consistency of the unit, the measure was usually achieved by adding the thumb breadth of three men—one small, one medium, and one large—and then dividing the figure by three. During the reign of King Edward II, in the early 14th century, the inch was defined as “three grains of barley, dry and round, placed end to end lengthwise.””
James, many things are still measured in inches. You can say your hex drives are 6.35mm if you like, but it gets annoying quite quickly, especially when tapping imperial threads (quick, what’s an F size drill in metric? I need to find one in my 0.1mm increment set of drill bits… or maybe, rather than a set of 1800 metric drill bits, I’ll just buy a set of 20 imperial thread drills*). The 53/64th was more of a jab at the “standard” being 21mm by 1/4″ (yes, it really is)
Arguably since the US introduced the “metric inch” in the 1960’s and the other two countries who use those units never said anything we’ve been using metric about-an-inch all along. Luckily there’s not much high precision imperial-imperial machinery still in use.
* at the bottom “diameter of letter and number drills” http://www.crosstools.com.au/tapping-drill-chart—tapping-chart—metric-threads—imperial-threads–number—letter-drill-chart.html
Don’t you Imperials (the bad guys!) risk running out of barley? For a reference metre, all the Rebel Alliance needs is light, a perfect vacuum for it to travel in, and a very good clock that can count out 1 / 299,792,458 of a second.
It’s not about any great love of imperial units, it’s about not having the time and money to replace every single imperial thing with a metric equivalent. It’s not just that half the cheap trash Bunnings sell has imperial fasteners somewhere, it’s that a lot of older machinery does too, and some of that is only replace-with-new’able. Where I see a classic work of engineering and architecture, you modernists just see an eyesore across Sydney Harbour that we don’t need any more. It’s a fine line, a shiny new MP might be fully compliant with the latest standards but some people have a weird fondness for the grotty old one with the wandering hands and the constantly having to be reminded that he has daughters.