Tuesday, November 30, 2010

Saturday, November 27, 2010

Coming upon Christmas

With less than a month to go until Christmas, I thought I'd touch, very briefly, on the more materialistic aspect of it - namely, gifts. I used to have the notion that Christmas had become corrupted by the capitalistic urge to make money, with retailers utilizing the holidays as an excuse to sell you many things you didn't necessarily need, for yourself and others. Those people would be influenced by all those advertisements, like puppets on strings, giving their dollars to whoever pulled their strings the best. And then to alleviate their buying binge, they'd give some of the purchases to friends and family, expecting them to do likewise so they'd feel somewhat better (reciprocity bias). Then I realized that I am a capitalist, and my viewpoint changed.

Well, it didn't really change, per se. At least, not my cynical view that people might purchase things they didn't need. However, I no longer thought of the holiday as "corrupted" and people being played like puppets on strings. And so, I felt no guilt at retailers and everyone using the holidays as an excuse to sell things. If people wanted to buy things (choosing to enter into a transaction as responsible adults), regardless of need or not, then who was I to judge them for buying them, and who was I to judge retailers for taking advantage of that desire and discounting merchandise in competition for those people's dollars/pounds/euros/whatever? After all, if they didn't want to participate in Christmas from a gift-giving view, they did not need to. Sure, there is the social proof bias that everyone else in your family is doing it, and so you should too. Then there's the reciprocity bias that everyone will give you a gift, and so you should return the favor too (even if the gift given is not the same dollar value as the gift received). So opting out of the holiday could be hard. But people didn't seem to want to opt out - why opt out of receiving gifts, even if it means you have to buy gifts yourself?

The view in the first paragraph is a Galbraithian inspired view, incidentally. The view in the second paragraph is more Hayekian in influence. My viewpoint has shifted in general from a Galbraithian viewpoint to a Hayekian one, and I thought the example above might be a nice illustration of how those two economic schools of thoughts see the world. We are puppets on strings in a Galbraithian world, and the person who understands our bias can easily manipulate us into doing whatever they want, via advertisements, speeches, or whatever. There is some truth in this, I think.

However, there is also truth in a Hayekian point of view that we are not mere computers who will do things if the proper line of code is written. To extend the metaphor, we are computers who can reject the line of code no matter how it is written. We can be influenced, but we can choose what to be influenced by. There are many lines of code written by different programmers, but we can choose which one to accept. And we often do. This is very easy to do for a person aware of the psychological biases in our mind, but I think that any person can do this, and people do this more often than we realize. So I think there is some truth in this too.

My perspective, ultimately? I think the truth lies somewhere in between. We are rational creatures who can be manipulated some of the time, but other times we pause to reflect and make the choice to transact or not, to listen or not. We are Galbraithian and Hayekian in our behaviour.

(Greg Mankiw does a much better job of explaining this than I do. To see his little summary, go here where he discusses the little box of information he put into his Economics textbook on Galbraith and Hayek.)

One more thing. After 24 years of opting out of Christmas each year, I've decided that I might as well opt in this year. I partially opted in last year, but copped out by getting boxes of chocolate for people. This year I've decided to have some fun by thinking of what book or object a friend of mine would like. Of course, a wishlist by that person would also be good, though part of the pleasure of giving a gift finding something that the person doesn't know about but would want it if he or she knew about it. As I've signalled over the majority of my life that I do not participate in Christmas though, I am curious if this contradictory signal will be properly interpreted by friends and colleagues. In other words, I wonder if reciprocity bias will assert itself in time. I don't think so if people receive their presents on Christmas day. But before, giving ample warning? I think that would give enough time for reciprocity bias to do its work (I have a wishlist, incidentally, but I think anyone reading this is smart enough to figure out where to look if they happen to receive a gift from me and choose to listen to their  reciprocity bias). Though I might end up with a bunch of chocolate as a result, which would be a hilarious turn. (If so, I'll have to host loads of wine and champagne tasting parties to get rid of them, which some people no doubt would like.)

Why books, by the way? Because I consider my friends erudite enough that I think each of them would enjoy a book that broadens his or her horizons. Though I may give wine or champagne/sparkling wine (to satisfy the aparatchiks of the EU) to some in lieu of books.

Sunday, November 14, 2010

While I'm in London...

I'm going on holiday in London for about a week, from tomorrow to the 23rd. I'm quite excited about it, because I don't know quite what I'm going to do. Oh, I know that in the first hour of my trip, after customs, after dropping my luggage off at my flat, I'll get on the Underground (Bakerloo line, I believe), get off at Trafalgar Square, walk to the National Gallery and go up a flight of stairs to the room with two Turner paintings, and stare at them, allowing the matrix of what those paintings mean to me to come to my mind. That's a whole other post, what I see when I look at certain art, because I like to think of a piece of art from the point of where it is in history - what was occurring in the era in which it was painted, does it reference anything in that era, etc. One of Turner's paintings, Rain, Steam and Speed, is particularly evocative to me because of its historical context, Industrial Revolution era Britain. But again, a post for another time.

No doubt I'll go to some other museums while in London, such as the V&A. I'll try to go to a play, concert or the opera too. And I'll be running outside a lot too - I bought some Vibram Five Fingers specifically for the purpose. I'll also be enjoying coffee shops too - I found this insight about coffee houses to be rather delightful, so while I will probably not notice it (and how applicable would it be to Britain?), I thought it would be fun to attempt it:

In the cafes where men meet, are they older men, retired? Or are they young men? Are the cafes crowded with men in their forties drinking tea or coffee, going nowhere? Are they laughing and talking or sitting quietly as if they have nothing left to say? Official figures on unemployment can be off a number of ways. But when large numbers of 40-year-old men have nothing to do, then the black economy — the one that pays no taxes and isn’t counted by the government but is always there and important — isn’t pulling the train. (George Friedman, Stratfor, A Geopolitical Journey, Part 1: The Traveler).

I'll also write a decent amount if I am bored or having such a good time thinking and debating that I simply must write down my thoughts. For example I had a brilliant debate with my sister regarding the merits of consumer choice in the area of obstretics, specifically the delivery method. (I have some sensitive readers, I think, otherwise I would write like I would talk at a party about this.) I was of the notion that if the patient is informed of the risks, and wants to go with the surgical method even though it is riskier and an invasive abnominal surgery, rather than waiting and waiting, then damn the torpedos. The patient's choice should be respected. The doctor has fulfilled his/her ethical obligation to inform the patient of the risks, and now the doctor, in my mind, has an ethical obligation to fulfill the patient's choice or direct the patient to a doctor who will. (I realize I must have made some lawyer happy with those words too.)

My sister was of the other opinion, that if the patient is told the risks but wants the surgery anyway versus waiting (if after a week you're still waiting, surgery is appropriate, apparently, but not before then), the patient is making ill-judged decision and the doctor ethically should refuse to provide the surgery. (She also was offended by my comment then that the patient would then shop around for a doctor who would respect her choice.) If the doctor decides to not be a supplier then, fine by me, but to say that the patient should not make that choice for surgery unless nature has been given time and is too tardy is to fundamentally ignore the fact that the patient is a consumer and making a choice. (Of course, if the system is not a free market, consumer choice driven system, but a nationalized single payer system, then such bias that are anti-consumer while purporting to serve the consumer are incorporated into the system, usually for the worse in my opinion. We're adults, thank you very much.) A choice that is informed by the risks.

I was coming at the argument from one mental model, that of economics and choice, and my sister was coming at it with another. I shall be quite amused to see if I can understand her mental model and then see if her point of view is the right one. I don't quite think it is. But nevertheless, I shall enjoy stretching my mind with a different mental model of my sister's. After all, if I bemoan the fact that people do not utilize the mental models that economics offers, then I should take the opportunity to understand a non-economics mental model and incorporate it into my referential frameworks to use in conjunction with my other mental models as necessary.

Whoever thought that vacation would be so taxing on the mind? :)

Monday, November 1, 2010

Classical Music...

All I can say is that I'm rediscovering my love for classical music. I used to listen to Beethoven's 2nd, 5th and 7th symphonies often on my drives to and from Richmond. Or the 8th symphony, with the 2nd movement of the 2nd symphony replacing the 2nd movement of the 8th.

Classical Music that I've enjoyed recently:

  • Sinfonia in D Minor (W.F. Bach)
  • The Planets - Mars (Holst)
  • Short Ride in a Fast Machine (John Adams)
  • Overture 'Coriolan', and Piano Concertos 1 through 5 (Beethoven)
And since the Phillips Collection in DC has Sunday classical music concerts, I'll probably make time for a few of them, particularly one on Dec 12 featuring Brahm's Variations on a Theme by Paganini. I've heard Rachmaninov's Rhapsody on a Theme by Paganini, so I'm curious about Brahm's piece.