Market Parasites

Megan McArdle (July 30, 2008) - The death of Doha

What to say about the most recent collapse of the Doha Round? I feel like I've just gotten out of one of those relationships where you both knew it was over a year before it finally ended--practically relieved, really. It's been obvious to me since early 2007 that Doha wasn't going anywhere, and going through the motions had become a painful parody. The forward motion on trade has ground to a halt, because most trade in goods and services has been liberalised in the Western world. The remaining issues are either sacred cows, like agriculture, or require much deeper integration of sensitive areas like finance and law. Moreover, we're now at the point where poor nations can no longer simply free ride on rich country liberalization; to get further benefits from trade, they need to prise open their own markets, and few places have a political system capable of attacking those entrenched interests.

That's right folks. Uncle Juan is gonna have to sober up, get off the couch and get a job. He'll be better for it and his children will thank him.

D4-7 Allele - The Expat Gene

I've always been a novelty seeker, so the following really caught my attention.

Sample Chapter for Lal, D.: Reviving the Invisible Hand: The Case for Classical Liberalism in the Twenty-first Century.

A recent book, American Mania, by a colleague, Peter Whybrow, director of UCLA’s Neuropsychiatric Institute, summarizes this evidence. He begins by noting that human migration is one major form of risky and novelty-seeking behavior. Only a few of our species left their ancestral home in the African savannahs and began that long walk to the ends of the earth which allowed homo sapiens to colonize the world. Who were these earliest migrants? It turns out they had a particular genetic profile. They had a higher percentage of an exploratory and novelty-seeking gene than those remaining behind. As novelty seeking and risk taking “are . . . behaviors essential to exploration and migration. . . this should be reflected in a distribution pattern of the relevant allele [the D4-7 allele gene] that is similar to the ancient migratory paths of our species.”2 How do we know this? The geneticist Luigi Luca Cavali-Sforza of Stanford University and his colleagues have provided a genetic mapping of the geographical dispersal of homo sapiens from their original home in Africa.3 Subsequently, Dr. Chauseng Chen of the University of California, Irvine,4 found that a coherent pattern emerges from this mapping “where those who stayed close to their original homeland have a higher percentage of the common D4-4 allele in the population and a lower prevalence of the exploratory and novelty-seeking D4-7 allele.”5

I wonder if this would explain why I seem to live in google reader.

Five Things I'll Likely Never Do (Again) - Age 37

1] Take on Bad Debt

Obvious, right? I may take on a loan for the purchase of property or some other fruitful endeavor but credit card or car loans (bad debt) are things of the past. I'd rather go without.

If most of our earnings are spent on an empty game of status, we should not expect much improvement in quality of life.

Hat tip to Robert Frank.

2] Not Own a Home

Outright ownership of my home (aka the bunker) has been the greatest financial achievement in my life. Talk about options!

3] Work for a boss I don't respect.

Thanks to #1 and #2, I'll never make this mistake again.

Rule 8: If you don’t respect your boss, resign before you are fired.

Sometimes you can suddenly find yourself working for someone you
despise. Listening to this walking calamity will make your face express incredulity or sniggerly turn toward those who share your outrage. If not your boss, one of his or her henchmen will notice your disloyalty. All too soon, your job becomes hell with the odds overwhelmingly favoring your being forced out as opposed to your orchestrating your enemy’s removal by a still higher-up official. Cut your losses by quitting before you are axed.

Hat tip to James Watson.


4] Breed.

Many folks reading this will feel a little uneasy at the thought of not having children but if you don't already have them, read this.


5] Let my Ego Start a Business
I was young, what can I say? What are Residual claims? Sure I know what Profit is... sorta.

Strict economists point out that much of what is conventionally called "profit," especially in a small, owner-operated business, is nothing more than wages received in a variable form. Even a successful owner-operated business-- and the bankruptcy rate is high-- often pays no more under the name of "profit" than the proprietor would have earned for the same amount of work for someone else who paid him under the name of "wages."

Hat tip to Thomas Sowell.

What 5 things will you never do again?

Garcia : Charly or Jerry?

And I thought Jerry Garcia was the only famously self destructive rocker. Turns out this Weird Al look-alike could give a pre-rehab Robert Downey Jr. a run for his methadone.

Jokes aside, I'm listening to Charly's 1985 release "Piano Bar" and it's not bad.




Next up -- Hayek: Frederick or Salma.

Scalable Professions

Nassim Nicholas Taleb on scalable professions:

A scalable profession is good only if you are successful; they are more competitive, produce monstrous inequalities, and are far more random, with huge disparities between efforts and rewards--a few can take a large share of the pie, leaving others out entirely at no fault of their own.

Billers, Players, and Income Inequality, Arnold Kling:

Yes, this is just the economics of superstars. But it suggests a simple dichotomy. As Taleb points out, there are safe professions where you charge by the hour, so I might call them Billers. As a Biller, your earnings tend to have a high floor but a low ceiling. Think of an accountant.

What Taleb calls scalable professions are ones where you are not limited by what you can charge for an hour. Recording artists, professional baseball players, entrepreneurs, corporate CEO's, and financial speculators enjoy scalability. But, as Taleb points out, they have to compete in tournaments where there are a few winners and many losers. So we can call these sorts of people Players.

I think this can be a helpful frame in which to view the financial choices faced by the modern-nomad. Rules of thumb follow:

• Context is King or 50 is not middle aged.
  
• Never confuse your Billing job with a Scalable job.
• For the modern-nomad, Billing is better
  

What's Wrong w/ The Valley

As if I needed more reason for never going back to Silicon Valley.

Julia Allison : The worst person in the Valley.

I had my doubts about the creative and moral bankruptcy of the valley but when people like this start showing up, it's hard to deny it.

Hamstrung by Knowledge

Seth’s blog » Blog Archive » “My Advantage Was Ignorance”

“The main advantage I had was ignorance,” he said. He didn’t know all the things that could go wrong. “I wasn’t afraid.” Someone who knew more would have been. Geoffrey Bateson said something similar: If I’d known how hard everything was going to be, I would never have done anything. This is the upside of the ignorance that Nassim Taleb talks about.

Amen brother. For some time now, and especially since Julia has started her own business, I've been thinking about starting a software venture of some kind. I've thought about doing a micro ISV servicing the mac community, an agile consulting firm, a voip market place, a opensource PPM, and a handful of other ventures. In each case I've been hamstrung because I know, or at least think I know, the risks.

I'd probably be better off in a line of business w/ fewer bits and more atoms.