Are We Smart Enough to Know How Smart Animals Are?

Humans are not so special as we ourselves think, argues Frans De Waal convincingly in this book. “Less anthropocentric orientation (…) animals should be given a chance to express their natural behavior” (p275) and “proponents of human uniqueness (…) can’t stand the notion of humans as modified apes”. (P268).

De Waal favors the cognition for animals camp above the behaviorists (eg Pavlovian training, skinner boxes).

Many experiments comparing humans to apes are flawed. Young children sit in their mothers lap, whilst apes are separated in cages. Especially hard to correctly test social interactions.

Also, initially, gibbons were considered least intelligent because they performed bad on certain tests. Turned out, they lack fully opposable thumb and had hard time picking up things from flat surface “Only when their hand morphology was taken into account did gibbons pass certian intelligence tests” (p14). And another experimental mistake: “premature denials of mirror self-recognition in elephants based on their reaction to an undersize mirror”. (P157). With elephant-sized mirrors elephants do recognize themselves.

Good blend of anecdotes and hard research; “Subjective feelings won’t get us there. Science goes by hard evidence.” (P234). The painstaking field experiments by biologists/ethologists, observing animal behavior in the wild, is a testament that it is possible but very hard. Humanities should take note, especially Gloria Wekker-like, subjective approaches to “science” (check @RealPeerReview on Twitter for some examples).

P208 Nice story on hiding something for chimps. Similar experiment five years (!) with another chimp, made Socko look at exactly the hiding place from 5 years ago.

P228 Work by Sarah Boysen; chimp Sheba gets to choose between two cups with different amounts of candy. The one Sheba points to is given to another chimp. “Yet unable to overcome her desire for the fuller cup, she never learned to do so [point at smaller cup]”. If cups were rep,sced by numbers, she did choose correctly, consistently pointing to the lower number.

P231: Both macaques (Robert Hampton 2004) and rats (Foote and Crystal 2007) volunteer for tests only when they feel confident, suggesting that they know their own knowledge.

Other cool references:

Sorge 2014 Olfactory exposure to males, including men, causes stress and related analgesia in rodents

Capucin monkeys reject unequal pay

Redonan Bshary on cooperation in fish


The Psychology of Advertising [Book]

The Psychology of Advertising by Bob M. Fennis & Wolfgang Stroebe.

My rating: 3 of 5 stars

A book written because there was no good book on this topic. A primer on persuasion for advertising people (and text book for university); Elaboration Likelihood Model (ELM) by Petty, and Ajzen. Not yet definitive answer to Chapter 6’s title “How advertising influences buying behavior”


Alpha strategies: approach motivation – Omega strategy: avoidance motivation (p.11).

How advertising works: what do we really know? Vakratsas & Ambler – The Journal of Marketing, 1999.

p36 DAGMAR model (Defining Advertising Goals for Measured Advertising Results),
9 effects of advertising in hierarchical order:

  • Category need
  • Brand awareness
  • Brand knowledge/comprehension
  • Brand attitude
  • Brand purchase intention
  • Purchase facilitation
  • Purchase
  • Satisfaction
  • Brand loyalty

p80-81 Four stages involved in the process of information acquisition and processing:

  1. preattentive analysis
  2. focal attention (salience, vividness, novelty)
  3. comprehension
  4. elaborative reasoning

View all my reviews

Review: Darwin’s Unfinished Symphony: How Culture Made the Human Mind

Darwin's Unfinished Symphony: How Culture Made the Human Mind
Darwin’s Unfinished Symphony: How Culture Made the Human Mind by Kevin N Laland

My rating: 4 of 5 stars

The breadth of the Laland lab is incredible. This book is crammed with research, experiments and models by Laland and co-workers. They work on things like social learning (animals are social learning specialists, evolved for specific function; humans are learning generalists, can generalize across domains), evolution of intelligence, gene-culture coevolution, and cooperation.

Laland is also well know because of niche construction; “Through our culture we have built our own world, but that is only possible because our minds are fashioned for culture” (p282).

The chapters I enjoyed most were Chapter 3 on the social learnings strategies tournament with Luke Rendell. See 2010 Science paper Why Copy Others? Insights from the Social Learning Strategies Tournament. “Copying beat asocial learning hands down over virtually all plausible conditions” (p69). “The selective performance of behavior by the copied individual [not randomly chosen, but rather a select, tried-and-tested, high-payoff behavior] is what makes social learning so profitable to the copier.” (p71).

And chapter 4 on the threespine and the ninespine sticklebacks (=fish). “Ninespines are capable of exploiting public information, while their close relatives, the threespines, were not” (p81). Public info in this case is the feeding rate of other fish (3 or 9 spine, doesn’t matter) to determine richness of a feeding patch. Threespines are less vulnerable out in the open (their spines do protect them), so they can learn asocially (ie on their own); that is often too dangerous for ninespines, hence the evolution to use public information. And ninespines prefer public information over social cues, because it is more reliable. What looks like a interesting paper; “Nine-spined sticklebacks exploit the most reliable source when public and private information conflict” (2004).

p118, based on work by Louis Lefevbre; “Natural selection may have favored innovativeness as a part of a survival strategy based on flexibility – that is, the flexibility to cope with unpredictable or changing environments and to alter their behavior to outcompete others. Perhaps selection for innovativeness could be driving brain enlargement over evolutionary time.”

The longest recorded utterance of Nim Chimpsky, the chimpanzee taught sign language by Herbert Terrace was ‘Give orange me give eat orange me eat orange give me eat orange give me you.’ Chimpanzees, bonobos, and gorillas seem to make rather poor conversationalists (p178)

p193 Mark Pagel quote: “language evolved as a trait for promoting cooperation”

p240 “Hunter-gatherers are effectively trapped in a vicious cycle that severely constrains their rate of cultural evolution”. Because they have to move a lot, they don’t develop/use heavy tools. And they have to space their offspring, because a mother can only carry one child at a time when moving around.

Couple of interesting papers:
p100: Herring gulls drop rabbits from cliffs to kill/drown them and eat them (Young, 1987, Herring gull preying on rabbits)
p106: Crows use passing cars to open nuts (Nihei, 1995. Variations of behaviour of carrion crows Corvus corone using automobiles as nutcrackers
p106 thieving birds stealing quarters from a car wash
p280: Humans are more likely to copy an action that is performed by three individuals one time each, than an action performed by one individual three times. Haun et al (2012)Majority-Biased Transmission in Chimpanzees and Human Children, but Not Orangutans

View all my reviews

Review: Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy

Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy
Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy by Cathy O’Neil

My rating: 3 of 5 stars

Important topic; how can new online tools and algorithms influence our behaviour? These new tools allow good salesmen to leverage their impact. In the old days, a good car salesman only reached hundereds of potential customers, a good Facebook-marketeer might reach a billion people.

These tools when used for evil are dubbed Weapons of Math Destruction (WMD) by Cathy O’Neill. Good, sticky name. And she rightly warns of the perils. The book, however, is a bit too superficial. It provides examples from different domains (finance, education, job-market), but feels repetitive and shallow.

I docked a star on my rating because of two elementary mistakes: on page 136 a teacher scored 6 out of 100 one year and 96 the next year. O’Neil writes “The 90 percent difference in socres”, which should be precentage-points (nit-picking, but in a book about math you’d expect that to be correct). And onpage 176 she botches the Body Mass Index formula; “The BMI is a person’s weight in kilograms divided by their height in centimeters”. In fact it is height in meters squared.

Quotes & interesting links
p7 In WMDs, many poisonous assumptions are camouflaged by math and go largely untested and unquestioned.

p12 For many of the businesses running these rogue algorithms [WMDs], the money pouring in seems to prove that their models are working (…) The software is doing its job. The trouble is that profits end up serving as a stand-in, or proxy, for truth. We’ll see this dangerous confusion crop up again and again.

p17 Moneyball: The Art of Winning an Unfair Game is now shorthand for any statistical approach in domains long ruled by the gut. But baseball represents a healthy case study (…) models are fair, in part, because they’re transparant. Everyone has access to the stats (…) the number of home runs and strikeouts are there for everyone to see. (…) The folks building WMDs routinely lack data for the behavors they’re most interested in. So they substitute stand-in data, or proxies.

p27 [on crime and recivism] the model itself contributes to a toxic cycle and helps to sustain it. That’s a signature quality of a WMD.

p31 So to sum up, these are the three elements of a WMD: Opacity, Scale, and Damage.

p67 The number of “graduates employed nine months adter graduation” can be gamed (…) Some schools hired their own graduates for hourly temp jobs just as the crucial nine-month period approached. Others sent out surveys to recent alumni and counted all those that didn’t respond as “employed” See…

p103 But that objective [uphold community standards] has been steamrolled by models that equate arrests with safety (…) From a mathematical point of view, however, trusts is hard to quantify. That’s a challenge to people building models. Sadly, it’s far simpler to keep counting arrests, to build models that assume we’re birds of a feather and treat us as such.

p108 Frank Schmidt (Univ Iowa) analyzed century of workplace productivity data to measure the predictive value of various selection processes. Personality tests ranked low on th escale – they were only one-third as predictive as cognitive exams, and also far below reference checks.

p109 The primary purpose of the [personality] test,” said Roland Behm, “is not to find the best employee. It’s to exclude as many people as possible as cheaply as possible.”

p137 (on the example of a teacher who scored 6% one year and 96% the next year); the problem was that the administrators lost track of accuracy in their quest to be fair (correcting for too many factors).
More on the Value Added Model;…

p158 from…

ZestFinance, at its core, is a math company – analytical models run in parallel to interpret more than 10,000 data points per credit applicant to arrive at more than 70,000 signals – all in under five seconds. Compare this to the 10 to 15 pieces of data that traditional lenders use and it’s unsurprising that the company is better able to assess consumer credit risk. (…)
the way a consumer types their name in the credit application – using all lowercase, all uppercase, or correct case – can be a predictor of credit risk. Other seemingly trivial data points include whether an applicant has read a letter on the company’s website and whether the applicant has a pre-paid or post-paid cell phone.

p165 In Florida, adults with clean driving records and poor credit scores paid an average of $1,552 more than the same drivers with excellent credit and a drunk driving conviction (…) I cannot imagine a more meaningful piece of data for auto insurers than a drunk riving record.

p197 With political messaging, as with most WMDs, the heart of the problem is almost always the objective. Change the objective from leeching off people to helping them, and a WMD is disarmed – and can even become a force for good.

p200 Being poor in a world of WMDs is getting more and more dangerous and expensive

p202 Fairness, in most cases, was a by-product

p204 We have to explicitly embed better values into our algorithms, creating Big Data models that follow our ethical lead. Sometimes that will mean putting fairness ahead of profit.

p205 The Financial Modelers’ Manifesto (oath)…

p210 Take a look at the inputs [of models]

p210 Princeton Web Transparency & Accountability Project

p218 Thes [WMD] models are constructed not just from data but from the choices we make about which data to pay attention to – and which to leave out. Those choices are not just about logistics, profits, and efficiency. They are fundamentally moral.

View all my reviews

Review: Arnon Grunberg leest Karel van het Reve

Arnon Grunberg leest Karel van het Reve
Arnon Grunberg leest Karel van het Reve by Karel van het Reve

My rating: 5 of 5 stars

Zeer goede overzicht van werk van Karel van het Reve. Heldere denker en schrijver, met gezond wantrouwen/scepsis tegen conventies of zogenaamde vaststaande feiten (je moet herhaling van een woord vermijden, bij eb zwemmen is gevaarlijker dan zwemmen met vloed). Veel stukken zijn tijdloos, de heilige huisjes bestaan nog steeds.

De inleiding van Grunberg sluit ook goed aan:

In dit boekje treft u stukken van Karel van het Reve aan die ik het best, het leukst, het mooist en het scherpst vond. Eigenlijk had dit boek veel en veel dikker moeten worden, maar dat mocht niet van de uitgever.

Het bestaansrecht van deze bundel is dat u na lezing van mijn selectie denkt: ik wil meer van Karel van het Reve lezen, en naar de boekhandel wandelt om zijn boeken te kopen. Gelukkig werd hij uitgegeven door een uitgever die niet snel verramsjt.

Doet u dat niet, dan heb ik gefaald .

Natuurlijk ontbreekt de uitstekende Huizinga lezing uit 1979 niet:Literatuurwetenschap: het raadsel der onleesbaarheid. Helaas staat de reactie op de reacties (“Wat waren ze kwaad”) niet in deze bundel. De lezing besluit: “Daarom geloof ik ook dat deze voordracht volstrekt nutteloos is. Maar er moet nu eenmaal af en toe iemand zijn die iets zegt. Ik dank u voor uw aandacht.”.

Ook het dankwoord bij de ontvangst van de PC Hooftprijs staat erin (zie ook dit blogbericht). Met ook een mooie afsluiting:

Ik kan hier alleen maar zeggen dat ik wel degelijk van plan ben om met het geld van deze prijs ongelimiteerd en vooral ongelegitimeerd mijn gang te gang, zonder mij ook maar iets aan te trekken van welke hoognodige vernieuwing dan ook. Als de minister dat niet goed vindt, dan moet hij dat geld maar terugvragen.

Uit de Lezing over Popper te Enschede op 23 oktober 1982:

Men zou over een reusachtig fortuin moeten beschikken om alle academici de kost te kunnen geven die denken dat men over een zaak iets te weten kan komen door er een definitie van te geven.

Ook is het een grote verdienste van Popper dat hij er op gewezen heeft dat het streven om de mensheid gelukkig te maken iets heel, heel gevaarlijks is, zodra een aantal mensen het eens is over de manier waarop dat moet gebeuren.

Ook kun je van Popper leren dat je bij het debatteren, bij het bestrijden van iemands beweringen niet de oorsprong van die beweringen moet bespreken, maar die beweringen zelf. Dat iemands argumenten voortkomen uit nijd of lafheid of uit frustratie of uit racistische vooroordelen of uit zijn maatschappelijke positie of uit zijn milieu bewijst niets ten aanzien van de juistheid of onjuistheid van die argumenten. Bij een debat over de juistheid of onjuistheid van die argumenten behoort de oorsprong van die argumenten geen rol te spelen.

Ook wijst Popper er op – en hij brengt die opvatting ook in praktijk – dat je de argumenten, de theorieën, de beweringen van je tegenstander zo gunstig en redelijk mogelijk moet interpreteren, dat je geen gebruik moet maken van zwakke plekken die bijvoorbeeld het gevolg zijn van slordige formulering. Integendeel: je moet eventuele zwakke plekken desnoods zelf repareren. De argumenten van je tegenstander zijn het bestrijden te meer waard naarmate zij sterker zijn. Je moet dus te werk gaan als ik meen admiraal Tromp, die zijn tegenstander kruit en lood liet brengen.

En bij dit alles heeft Karl Popper meer dan een halve eeuw lang met voorbeeldige trouw gediend onder een vaandel waaronder wij eigenlijk allemaal dienen en waaraan wij eeuwig trouw verschuldigd zijn – een vaandel dat veel deserteurs kent. Ik bedoel dat hij nimmer de grote plicht verzaakt heeft die rust op iedereen die meent iets te zeggen te hebben, op iedereen die probeert iets mee te delen, de dure plicht namelijk om dat dan zo duidelijk en eenvoudig en eerlijk en naïef mogelijk te doen.

De ongelooflijke slechtheid van het opperwezen staat ook in het boekje. “Daarbij meten zij [gelovigen] telkens met twee maten. Doet God iets dat hun bevalt, dan wijten zij dat aan zijn goedheid. Doet hij iets gruwelijks – er valt immers geen musje ter aarde of het is zijn uitdrukkelijke wil – dan wijten zij dat aan de ondoorgrondelijkheid van zijn raadsbesluit.” Gevolgd door de anekdote over Wilhelmina die God dankbaar was dat schoonzoon Bernhard te ziek was om te vliegen. Dat vliegtuig vertrok zonder hem en stortte neer; “De vraag dringt zich dan natuurlijk op of het niet veel eenvoudiger en vooral veel aardiger geweest was om dat vliegtuig gewoon in de lucht te houden. (…) Waarom die hele oorlog niet afgeblazen?”

In Is er vooruitgang in de kunst?: “Het is al een beetje vreemd als mensen hardnekkig Nederlandse boeken lezen, terwijl ze de wereldliteratuur tot hun beschikking hebben. Maar nog vreemder is het, dat men voorkeur heeft voor boeken van de eigen tijd.”

Op staan meer stukken van Karel van het Reve.

Ook een aanrader: het Marathoninterview met Karel van het Reve uit 1985.

View all my reviews

Review: The Folly of Fools: The Logic of Deceit and Self-Deception in Human Life

The Folly of Fools: The Logic of Deceit and Self-Deception in Human Life
The Folly of Fools: The Logic of Deceit and Self-Deception in Human Life by Robert Trivers

My rating: 3 of 5 stars

“We deceive ourselves the better to deceive others” (p3). Why do we lack self-knowledge and how does that affect us and other animals? Biologist Trivers treats this subject from many different sides; the biological and the personal-takes are the best. And his bashing of social sciences that don’t incorporate biology, or stories of the author cursing at himself are amusing.

The title is based on Proverb (14:8): “The wisdom of the prudent is to know their own way but the folly of fools is deceit” (p298)

p16 On self-inflation, Epley & Whitchurch (2008):

Participants were more likely to recognize an attractively enhanced version of their own face out of a lineup as their own, and they identified an attractively enhanced version of their face more quickly in a lineup of distracter faces

p33 Interesting paper on frequency dependent selction in arms race between cuckoos and hosts; Rapid decline of host defences in response to reduced cuckoo parasitism: Behavioural flexibility of reed warblers in a changing world

p68 “scientists have created false memories in mice experimentally”- Ramirez et al (2013, Science): Creating a false memory in the hippocampus. Write up in The Guardian.

p90-91 “Natural variation in intelligence, corrected for age, is positively correlated with deception (…) Until shown otherwise, we should assume that the intellectually gifted are often especially prone to deceit and self-deception”.

p100 “There appears to be no difference between the sexes in ability to recognize whether children are the offspring of a given parent” From Daly & Wilson (1982) Whom Are Newborn Babies Said to Resemble?

p132 Musak produced an increase in output of an important immune chemical by 14%, while jazz did so by only 7%. No sound had no effect, and simple noise had a 20% negative effect. Charnetski & Brennan (1998)

p205 “as has been noted, the space program shares with gothic cathedrals the fact that each is designed to defy gravity for no useful purpose except to aggrandize humans.”

p281 Like in The Righteous Mind: Why Good People are Divided by Politics and Religion (see my review), Richard Sosis’ work is refered to; “In each year, the religious sect is four times as likely to survive into the next year as the secular.”

p314 Good quote by John Kenneth Galbraith: “Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gest busy on the proof.”. Trivers adds: “This is perhaps especially true in academia”
View all my reviews

Review: The Righteous Mind: Why Good People are Divided by Politics and Religion

The Righteous Mind: Why Good People are Divided by Politics and Religion by Jonathan Haidt

My rating: 5 of 5 stars

Very rich, good and candid book on moral psychology. Open-minded. Lots of ideas and concepts explained very well and also from different angles. Excellent structure and summaries. Haidt makes a well-rounded case, with empathetic take on views he personally does not hold, echoed very wel in Chapter 12’s title “Can’t we all disagree more constructively?”

Three principles of moral psychology:
I. Intuitions come first, srategic reasoning second
Metaphor: the mind is divided, like a rider on an elephant, and the rider’s job is to serve the elephant (the elephant is akin to Kahneman Daniel’s Fast-system in Thinking, Fast and Slow and the rider is the Slow system. Also ties in to Switch: How to Change Things When Change Is Hard, where the Heath brothers have added “shape the path” (for elephant and rider)).

II. There’s more to morality than harm and fairness
Metaphor: the righteous mind is like a tongue with six taste receptors (six moral intuitions; with different implications for liberals and conservatives. Liberals’ foundations have 3 pillars: care/harm, liberty/oppression and fairness/cheating. To conservatives, loyalty/betrayal, authority/subversion and sanctity/degradation are also relatively important).

III. Morality binds and blinds
Metaphor: human beings are 90% chimp (egoistic) and 10% bee (social, in need of hive-life).

p26: Morality can be innate and learned. “We’re born righteous, but we have to learn what, exactly, people like us should be righteous about.””

p28: The rationalist delusion: Western philosophy has been worshipping reason and distrusting the passions.
p34: Damasio’s (DAMASIO ANTONIO) patients had damaged vmPFC (pre frontal cortex), so they had no emotions, only rational decisions, but made foolish decisions; “shocking revelation that reasoning requires the passions (…) The head can’t even do head stuff without the heart.”

p37: Scenario: people we are asked to sign: I, ____, hereby sell my soul, after my death, to Scott Murphy for the sum of $2. This form is part of a psycholog experiment. It is NOT a legal or binding contract, in any way. Only 23% were willing to sign, rose to 37% after some goading.

p40 “Moral reasoning was mostly post hoc search for reasons to justify the judgements people had already made”

P42 Howard Margolis 2 cognitive processes: ‘seeing-that’ and ‘reasoning-why’
Moral judgement is a cognitive process. Two different kinds of cognition: intuition and reasoning.

p65 Joshua Greene 20 moral stories (e.g. trolley problem)

p76: “Our moral thinking is much more like a politician searching for votes than a scientist searching for truth”. Haidt was inspired by Glaucon. On his website he writes:

One of the heroes of my book The Righteous Mind is Glaucon. He’s the guy in Plato’s Republic who challenges Socrates with the story of the Ring of Gyges, which makes a man invisible at will. He says that a man with such a ring would behave abominably, once freed from concerns about detection and reputation. I think Glaucon was right, and so we must design “ethical systems” for Glauconian creatures like ourselves.

p89: Schwitzgebel Do ethicists steal more books? (Yes).

p99 Shweder identified 3 clusters of moral themes: ethics of autonomy, community, and divinity. Utilitarian concept of autonomy is prevalent in Western society.

p120-121: “In psychology our goal is descriptive. We want to discover how the moral mind actually works, not how it ought to work, and that can’t be done by reasoning, math, or logic (…) Kant’s rationalism (…) felt wrong to me. It was oversystemized and underempathized.”

p138 Two kinds of fairness; “On the left, fairness often imlies equality, but on the right it means proportionality – people should be rewarded in proportion to what they contribute, even if that guarantees unequal outcomes.”

p204 Tomasello quote: “it is inconceivable that you would ever see 2 chimpanzees carrying a log together.”

p218 Multilevel selection would go a long way toward explaining why people are simultaneously so selfish and so groupish.

p223 Human beings are conditional hive creatures. Hive switch is an adaption for making groups more cohesive, and therefore more succesfull in competition with other groups.

p244 Happiness comes from between (getting the right relationship between you and others).

p248 “Many scientists misunderstand relgion (…) they focus on individuals and their supernatural beliefs, rather than on groups and their binding practices”

p256-257 Richard Sosis studied 200 US communes in 19th century: “just 6 percent of the secular communes were still functioning twenty years after their founding, compared to 39 percent of the religious communes”. What determined success: more costly sacrifices (fasting, dress code) did increase life for religious communces, but not for secular ones. “religion is a solution for cooperation without kinship”

p294 Fundamental blind spot of the left: don’t consider moral capital.
p307 “We need groups, we love groups, and we develop our virtues in groups, even though those groups necessarily exclude nonmembers. If you destroy all groups and dissolve all internal structure, you destroy your moral capital.

p295 Haidt is an Durkeimian Utilitarian. Durkheimian: people need healthy hive to flourish (10% bee). Utilitarian: increase overall good of society.

p303 David Goldhill: How American Health Care Killed My Father

“I find it ironic that liberals generally embrace Darwin and reject “intelligent design” as the explanation for design and adaptation in the natural world, but they don’t embrace Adam Smith as the explanation for design and adaptation in the economic world. They sometimes prefer the “intelligent design” of socialist economies, which often ends in disaster from a utilitarian point of vies.” (p305)

View all my reviews

Review: The Great Escape: Health, Wealth, and the Origins of Inequality

The Great Escape: Health, Wealth, and the Origins of Inequality
The Great Escape: Health, Wealth, and the Origins of Inequality by Angus Deaton

My rating: 3 of 5 stars

Interesting stuff on (in)equality and the effects of Aid. Some a bit too much details (technical side of Purchasing Power Parity). However, always very accesible and readable.
I did skim parts because I had to return the book to the library…

p69: Mortality curves (deaths per 1000 at different ages) have shape reminiscent of Nike “swoosh”.


P89 Adult life expectancy (number of additional years to live). Figure 5: Until around 1900, adult life expectancy (at age 15)in Britain was actually higher than life expectancy at births. So a 15-year old was expected to live more years than a newborn.


p143 Doblhammer & Vaupel (PNAS, 2000): in Northern Hemisphere life expectancy at 50 is half a year higher for people born in October than for people born in April. The pattern is reversed in the Southern Hemisphere, except for those born in the North who later emigrated to the South; they too show the Northern pattern. Plausible reason: green leafy vegetables, chicken, and eggs used to be readily and cheaply available only in the spring, which meant that nutrition in the womb was better for unborn children whose due date was in the autumn.…

p157: Case&Paxton; Deprivation in childhood can have serious and long-lasting consequences (e.g. shorter people). Cognitive function develops along with the rest of the body, so that shorter people, on average, are not as smart as taller people…

p210: One study showed that top executives in oil companies were paid more when teh price of oil was high, suggesting that the rewards were paid because the money was there, not because the recipients had done anything to earn it.…

p254-255: In 1990 Indian National Survey changed question: how much rice have you consumed in past 30 days, to ‘in past 7 days’. “This obscure and technical statistical change cut the Indian national poverty rate by half; 175 people wer no longer poor”

p324: “When Princeton students come to talk with me, (…) I steer them away from plans to tithe from their future incomes, and from using their often formidable talents to increase the amounts of foreign aid. I tell them to work on and within our own governments, persuading them to stop policies that hurt poor people, and to support international policies that make globalization work for poor people, not against them.”

View all my reviews

Review: Phishing for Phools: The Economics of Manipulation and Deception

Phishing for Phools: The Economics of Manipulation and Deception
Phishing for Phools: The Economics of Manipulation and Deception by George A. Akerlof

My rating: 1 of 5 stars

Akerlof and Shiller are clearly very good economists. But this book feels like they had to fulfill a book deal they made 5 years ago. There are much better books for many of the points they make (see below).

Topics are all over the place with no clear common thread, the phrase Phishing for Phools occurs about 500 times but is not a very clear concept (I did like the “mining a reputation”, that concept makes intuitive sense). Adding “PH” to words is only gimmicky. The afterword reads like a glowing review of their own book and makes (too) large claims on novelty and impact.

All the crossreferences and “here is what we’re going to say, we say it, here is what we said” (meta-text signposting) annoyed me in a book of 175 pages (the last 100 pages are notes, index and references)

“A phool is someone who is succesfully phished” (p xi). Two kinds of phools: psychological and informational. Psychological phools come in two types: emotions overcome common sense or cognitive biases lead the phool to misinterpret reality. “Information phools act on information that is intentionally crafted to mislead them” (p xi)

Goldman Sachs partner John Whitehead coined 14 principles: “Our clients’ interests always comes first (…) If we serve our clients well, our own succes will follow”. Quite different from the Vampire Squid Goldman is now sometimes portrayed as.

Pretty bold claim: “Securities regulation is one of the most essential government functions” (p.156). I think I can name a couple more important ones (education, infrastructure, defense even). Of course regulation is important (I work at a regulator myself), but this statement tells us a lot about the lens these authors view the world. And it is also ironic to hear this from two men who praise free markets so much. Albeit they also warn for the free-market as a two-edged swords (also has downside).

“Free markets make people free to choose. But they also make them free to phish, and free to be phished” (p.162) The follow this with a strawman argument “Ignorance of those truths is a recipe for disaster”. A better book on choice: The Paradox of Choice: Why More Is Less

“the role of narratives, which is perhaps our book’s most important takeaway” (p175-176) If you’re interested in narratives, read Don’t Think of an Elephant! Know Your Values and Frame the Debate: The Essential Guide for Progressives.

Chapter six is on Pharma; skip it and read Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients

Chapter ten on junk bonds and Milken; read Barbarians at the Gate: The Fall of RJR Nabisco

People are not rational; read Dan Ariely, e.g. Predictably Irrational: The Hidden Forces That Shape Our Decisions and how we all fudge (not phish): The Honest Truth About Dishonesty: How We Lie to Everyone – Especially Ourselves. Or on psychology and economics: Thinking, Fast and Slow. A good, more applied book: Switch: How to Change Things When Change Is Hard
View all my reviews

Review: When Genius Failed: The Rise and Fall of Long-Term Capital Management

When Genius Failed: The Rise and Fall of Long-Term Capital Management
When Genius Failed: The Rise and Fall of Long-Term Capital Management by Roger Lowenstein

My rating: 5 of 5 stars

Great book on the rise (1994-1997) and fall (1998) of Long Term Capital Management (LTCM). Very well told, with the right amount of details and story in 236 pages. Lesser financial problems have gotten bigger books, but this book’s strength is its brevity, no unneccesary detours. How academic arrogance led to a tail-spin, instigated by the Russian ruble crisis. With a clear lesson: “a reminder that foolishness [e.g. Imprudent risks] carries a price would be no bad thing” (p230)

How very smart people underestimated fat tails; “The correlations had gone to one (…) The professors had ignored the truism – of which they were well aware – that in markets, the tails are always fat. (…) they had forgotten that traders are not random molecules, or even mechanicalmlogicians (…) The professors hadn’t modeled this. (…) They had forgotten the human factor.” (p173).

And: “during a crisis, the correlations always go to one. When a quake hits, all markets tremble. Why was Long-Term so surprised by that?” (p188)
“Long-Term put supreme trust in diversification – one of the shibboleths of modern investing, but an overrated one. As Keynes noted, one bet soundly considered is preferable to many pporly understood. The Long-Term episode proved that eggs in separate baskets can break simultaneously.” (p233).

The seeds for LTCM were laid in John Meriwether’s (J.M.) Arbitrage group at Salomon. JM hired and protected his ‘porfessors’. “The professors spoke of opportunities as inefficiencies (…) and [had as a] credo, learned from academia, that over time, all markets tend to get more efficient”
“Every price was a “statement”; if two statements were in conflict, there might be an opportunity for arbitrage.” (p12)

Nice anecdote on JM; a losing trader asks permission to double up and JM gave it rather offhandedly. “Don’t you want to know more about this trade?”. Meriwether’s trusting reply deeply affected the trader. J.M. Said, “My trade was when I hired you.” (p15)

When LTCM approached Warren Buffett for starting capital “The jovial billionaire was his usual self – friendly, encouraging, and perfectly unwilling to write a check.” (p32)

“As Scholes remarked at its [LTCM] inception, “We’re not just a fund. We’re a financial-technology company”” (p65; Lowenstein’s footnote cites this Business Week article from 1994, but I could not find the quote there…)

P89: [Chase banker] Pflug was too smart to go head-to-head with the guy [Scholes] who had invented the formula. “You can overintellectualize these Greek letters,” Pflug reflected, referring to the alphas, betas, and gammas in the option trader’s argot. “One Greek word that ought to be in there is hubris.”

“A bit of liquidity greases the wheels of markets; what Greenspan overlooked is that with too much liquidity, the market is apt to skid off the tracks.” (p106; Lowenstein adds an endnote here; “The phraseologyis so close to that of an earlier writer that I must add an (end)note of gratitude to Louis Lowenstein, my father” Nice touch!).
View all my reviews