Interesting stuff

  1. A (really) deep analysis of the weaknesses in the Big 5 personality tests
  2. The cult catastrophe at WeWork
  3. Our egos + social media – community = mayhem
  4. Discrimination by the State against women and minorities
  5. Social media has fed our egos and rage at the same time as our local social networks have collapsed
  6. Wikipedia’s “culture of neutrality” limits the damage from “my opinion over your facts.”
  7. China’s assurances about flood control may be as hollow as their assurances that “Covid is under control” in Wuhan.
  8. Race and fragility in universities. Related: On White Fragility:Few books about race have more openly infantilized Black people than this supposedly authoritative tome.
  9. The story behind airline ticketing
  10. The extremely effective, Swiss political system explained (part 1)

Review: Codes of the Underworld

I met Diego Gambetta back in 2005 when I was a student at a summer school on organized crime. I am still interested in crime and corruption, so I bought this 2009 book awhile back.

So what are criminal codes, and how do they work? At their best, they allow communicating and signalling in a way that non-criminals do not notice, wanna-be criminals cannot counterfeit, and real criminals can understand easily and accurately.

Good codes might be a tattoo that indicate what gang you’re in, a nickname that friends can use but the law cannot, or sexual slang that sounds like a grocery list. In many cases, codes are associated with criminals or terrorists, but they are also used by forbidden groups (gays, prostitutes, activists) whose existence is illegal or forbidden.

Gambetta is a smooth, fluid writer. His elaborate prose sometimes seems too measured for the topics, but his citations, caveats, and hypotheses provided enjoyable, cautious perspectives on the forms behind the shadows.

Chapters are organized into two parts: Costly Signals (e.g., putting yourself at risk to gain trust, fighting for respect, or self-harming to empower) and Conventional Signals (“Fat Tony”, [the organization that shall not be named], and messy dressing).

Here are some notes I made as I read…

  • Prison time is valuable for criminal skills and contacts, but time also strengthens one’s reputation as someone who “has been inside.”
  • There’s no honor among thieves, so they find creative ways to build trust. One is incompetence, i.e., being gangster enough to provide protection for 10% of revenues but not smart enough to take over your business.
  • Corrupt power-brokers promote the most incompetent to show their power surpasses objections. Caligula appointed his horse as senator. Trump hired his son-in-law (and many other incompetent scoundrels).
  • KGB operatives had experience laundering money abroad to fund shell companies pursuing political, economic or military goals. When the USSR fell apart, ex-KGB officers (including Putin) used their skills to entrench their power and wealth. (Listen to this podcast I suggested last month.)
  • If someone knows you have broken a law, then they have power over you. Italy has over 100,000 laws (Germany has 6,000) so Italians have a lot of power over each other. That power can ensure conformity or good behavior. It can also help people evade prosecution.
  • Prison fights increase when prison populations have high turn-over and few opportunities to communicate. “Lifers” have time (and reason) to establish order and reduce violence. A jail of itinerant young men will have many fights, as each new arrival needs to be “put in place.”
  • Women fight more than men.
  • Many threats are bluffs. Prisoners want rank, not injuries. Rape threats and robberies are often directed at rankings.
  • If you do get in a fight, then fight to win, or suffer the long-term consequences. A weaker reputation means abuse.
  • Here, I was annoyed that prisoners were fighting instead of organizing to overcome authorities and escape. Then, Gambetta explained how Polish prisoners organized themselves to improve their conditions. They did not escape, but ex-cons can use their organizational skills outside to become bigger and badder.
  • Psychologists and civilians assume self-harm means self-hatred, since many people think the goals of life are maximum happiness and minimum pain. Self harm can deliver gains — in attention, protection, or respect from others afraid of “that crazy mothafucka.”
  • Mafia are very careful about their body language. A wrong signal can get someone (even the signaler) killed.
  • Gays don’t really use colored handkerchiefs to advertise sexual preferences.
  • Underworld types will use a signal until the general public catches on, then it’s abandoned to posers (who occasionally get killed over confusion about the legitimacy of their signaling).
  • Trademarks retain customer loyalty and pricing power. Heroin stamps mattered on the East Coast of the US because users bought white powder. On the West Coast, “tar” heroin was easier to identify. Stamps are easy to counterfeit, so gangs either switch stamps quickly or kill anyone using their mark. 
  • Mob dads are proud when their sons are inducted into another gang. They prefer an outside confirmation of quality over nepotism (unlike Trump). “The Godfather” got this wrong as “families” are not usually made of blood-relatives but those worthy of becoming “men of honor.”
  • Most of the book focusses on the Italian (and American) mafias, but Gambetta includes examples from prisons, Russia, Japan, and a sprinkling of European countries. I just heard a podcast explaining how law enforcement has trouble decoding minority languages, which also means that scholars have a hard time learning about the criminals that use them. Even so, I would have liked to hear more about the Latin American underworld, which is probably more violent (in murders) and successful (in revenue) than Italy’s mafia.
  • When a family grows larger than the Dunbar number (~150), then they need safe ways to identify each other. The safest way for two wiseguy strangers to meet is to find a made man they both know, who can then introduce them.
  • It’s hard to jail “Ciapudda” (Onion) as a gang boss if the guy you’re holding is named Salvatore Bondino.
  •  Gangsters love to see themselves in movies. They adapt habits (and strategies) from movies. If they are dangerous and nasty in movies, so much the better: It’s easier to intimidate the public, and gangsters make easier money from “protection” than they do on drugs, gambling or prostitution.

My one-handed conclusion is that this book is a fun read for anyone who wants to think about communication — or start a gang. Five Stars.

Here are all my reviews.

I/O, continued. Division of labour. The influence of machinery.

Book 4, Chapter 9

§1. Marshall promises to look into labor, its division and relation to capital and management over several chapters. He begins by supporting “practice makes perfect,” i.e., that:

The mind of the merchant, the lawyer, the physician, and the man of science, becomes gradually equipped with a store of knowledge and a faculty of intuition, which can be obtained in no other way than by the continual application of the best efforts of a powerful thinker for many years together to one more or less narrow class of questions.

While I agree with this formulation, I call attention to the use of “intuition,” which most people define as something you’re born with, but Marshall defines as something acquired. Websters defines it as:

1a: the power or faculty of attaining to direct knowledge or cognition without evident rational thought and inference
2: quick and ready insight

…so Marshall (and many academics) misuse the word, to the detriment of students who seem to “lack intuition” towards non-obvious ideas — a topic I’ve written about [pdf].

§2. The division of labor allows a worker to become more productive, but an efficient worker’s methods of breaking down tasks into simple, repeated steps makes it easier to replace that skilled worker with a machine or “guided” unskilled worker.

§3. Workers are not replaced by machines due to the division of labor as much as the need to produce large volumes of identical parts at scale. It is thus the size of the market that drives mechanization. Put differently, a business will pay fixed costs (FC) if that’s less than the cost savings (Δc) times volume (q), i.e., FC ≤ Δcq.

Mechanization is also a learning process, so each generation of machines, unlike each generation of skilled workers, is likely to be even more efficient.

§4. Since machines are good at producing identical parts, they allow for interchangeable parts, which aid in repairs (no special modifications needed), lower costs, and make remaining workers (with better general skills) more productive.

Marshall gives the example of American watch-manufacturers using standard parts as a means of taking market share from the Swiss watchmakers selling more expensive, less-reliable watches. That’s one reason I was happy to buy this 1921 Hamilton:

§5. Marshall turns to printing, which has also gone through several technological revolutions (from hand-cut plates, to hand-placed letters, to hot-lead type, to digital layouts). These steps, he emphasizes, can be broken into smaller and more specialized niches (somewhat weakening the power of craft), but their output facilitates new trades requiring more skills (journalist, photographer, artist, et al).

§6. Marshall pushes back against claims that automation has left workers with nothing to think about, without craft. Instead, he emphasizes how a woman can run four weaving machines to produce far more cloth than she could make after a day’s drudgery at the hand-loom. The children of poor farmers, likewise, can earn more and use more education, than they could growing potatoes. Also interesting is his point on how machine labor saves a man’s muscles, so he can relax rather than collapse at the end of a working day. (The traditional critique of the Agricultural and Industrial Revolutions is that they resulted in more work — and less satisfaction? — than hunter-gatherer lifestyles, but those lifestyles are neither possible for nearly 8 billion people, nor attractive to most.)

§7. Marshall ends by clarifying how improvements within a factory or business are called “internal economies” (of efficiency) whereas “external economies” arise from what would today be called a “cluster” of related businesses, suppliers and buyers. External economies are next.

This post is part of a series in the Marshall 2020 Project, i.e., an excuse for me to read Alfred Marshall’s Principles of Economics (1890 first edition/1920 eighth edition), which dominated economic thinking until Van Neumann and Morgenstern’s Theory of Games and Economic Behaviour (1944) and Samuelson’s Foundations of Economic Analysis (1946) pivoted economics away from institutional induction and towards mathematical deduction.

Interesting stuff

  1. How communications technology changes our brains
  2. The Writing of “Silent Spring”: Rachel Carson and the Culture-Shifting Courage to Speak Inconvenient Truth to Power
  3. “…because of poor political decisions [in the US] that every public-health person I know disagreed with, everything that could go wrong did go wrong.”
  4. Re-opening schools will be much harder than closing them
  5. Why are cases up and deaths down in the US? Lagging data and more.
  6. Some good background on the rise of Putin (and KGB power)
  7. The world is getting angrier, outrage defeats our public discourse, and how poker players are better at dealing with uncertainty
  8. Colonial powers used opium for income, then made its use criminal.
  9. Rethinking public spaces in the era of Corona
  10. The first EMTs in the world were Black guys from Pittsburgh, until they were shut down by a racist mayor
  11. A funny angry rant on climate change deniers

Industrial organization

Book 4, Chapter 8

§1. Industrial organization (I/O) is the branch of economics concerned with the internal workings of organizations (e.g., Coase’s 1937 Theory of the Firm) as well as their interactions in (non-)market settings.

Marshall’s discuss predates these ideas. He begins with a discussion of how individual specialization (based on the division of labor popularized by Adam Smith) requires group cooperation. Marshall asserts that such inter-personal cooperation is the key to evolutionary success, a point elaborated in authoritative detail in Joseph Heinrich’s 2015 Secret of Our Success [my review]. Marshall cautions that success is not based on “build it, and they will come” skills but a market demand for one’s skills. He also points out (foreshadowing Heinrich) that “those races, whose members render services to one another without exacting direct recompense are not only the most likely to flourish for the time, but most likely to rear a large number of descendants who inherit their beneficial habits” [p 202]. This characteristic is quite important in this corona-era if you want to understand the differences between public health successes and failures (see image).

A side note on sustainability, a concept that grew popular after WWII but whose roots date back to Malthus (1798) but whose implications grew more prominent during the Industrial Revolution:

The law of “survival of the fittest” states that those organisms tend to survive which are best fitted to utilize the environment for their own purposes. Those that utilize the environment most, often turn out to be those that benefit those around them most; but sometimes they are injurious.

§2. Marshall elaborates on the the benefits of group loyalty:

[De]liberate, and therefore moral, self-sacrifice soon makes its appearance; it is fostered by the far-seeing guidance of prophets and priests and legislators, and is inculcated by parable and legend… [T]ribal affection, starting from a level hardly higher than that which prevails in a pack of wolves or a horde of banditti, gradually grows into a noble patriotism; and religious ideals are raised and purified. The races in which these qualities are the most highly developed are sure, other things being equal, to be stronger than others in war and in contests with famine and disease; and ultimately to prevail. Thus the struggle for existence causes in the long run those races of men to survive in which the individual is most willing to sacrifice himself for the benefit of those around him; and which are consequently the best adapted collectively to make use of their environment.

…before commenting on “parasitical races”:

For, though biology and social science alike show that parasites sometimes benefit in unexpected ways the race on which they thrive; yet in many cases they turn the peculiarities of that race to good account for their own purposes without giving any good return. The fact that there is an economic demand for the services of Jewish and Armenian money-dealers in Eastern Europe and Asia, or for Chinese labour in California, is not by itself a proof, nor even a very strong ground for believing, that such arrangements tend to raise the quality of human life as a whole

Marshall’s perspective here is not just racist; it contradicts the basic economics of gains from trade. Money lenders play an important role. Jews and Armenians did not take that role out of parasitical desires or genetics, but due to legal restrictions that prohibited them from other work while leaving money lending open to “infidels.” The case with Chinese — who were banned from entering the US by the 1882 Chinese Exclusion Act (only fully cancelled in 1965) — is likewise racist. The Chinese were not parasites but willing laborers hired by willing employers. For anyone following the nativist rants of Trump, Brexiteers (and other chauvinistic populists), Marshall’s attitude will be sickeningly familiar.

§3. Marshall speaks of the natural benefits to caste and class systems (systems the British reinforced and exploited, via “divide and conquor”, in colonial India), and how those systems have been swept aside by the social, political and economic mobilities that have taken over industrial nations. He then reflects (and worries) that these freedoms risk being lost by the rise of “new caste systems” represented by division of labor.

§4. Marshall laments those who ignore Smith’s caveats on the division of labor (satirized by Charlie Chaplin’s 1936 “Modern Times”) in their insistence that more division is always better.

§5. Marshall states that species are will flourish if their members possess habits instincts useful to the individual and group, but he does not assume that’s the same case with humans, who have more discretion — to drink excessively, for instance. With a quick dismissal of the potential for children to inherit their parents learned skills (Mendel’s work had recently been rediscovered; Lysenko’s errors were yet to come), Marshall makes an easier claim: that the children of healthy, well-adjusted parents were likely to grow up healthy and well-adjusted.

Marshall ends the chapter with a plea for slow, thoughtful and persistent advances to improve Mankind, with a special emphasis on rescuing the “lower grades” to improve their lot and on improving the distribution of wealth. How would he drive this process?

Progress may be hastened by thought and work; by the application of the principles of Eugenics to the replenishment of the race from its higher rather than its lower strains, and by the appropriate education of the faculties of either sex [p 207].

Eugenics again. Read the wikipedia article for more on its long history (from Plato to Lee Kwan Yew), but I agree with its opponents: Any eugenic program is likely to be abused (e.g., forced sterilizations in Australia, Canada, the US, et al.), and eugenics are far too slow and ineffective compared to improved public health and education.

When I think about the supporters of Trump, Hitler or other sociopaths, I don’t think “what we need here is some genetic winnowing.” What I think is that we need a population better educated on cause and effect and institutions for resolving conflict with something other than hate and violence.  One can hope.

This post is part of a series in the Marshall 2020 Project, i.e., an excuse for me to read Alfred Marshall’s Principles of Economics (1890 first edition/1920 eighth edition), which dominated economic thinking until Van Neumann and Morgenstern’s Theory of Games and Economic Behaviour (1944) and Samuelson’s Foundations of Economic Analysis (1946) pivoted economics away from institutional induction and towards mathematical deduction.

Interesting stuff

  1. Higher education faces a financial reckoning with charging a lot for little. Related: The notion of education for education’s sake no longer carries any weight
  2. Really living off the grid changes your timing
  3. Air conditioning is reinforcing climate change, but it isn’t really needed.
  4. Trump’s behavior reflects his upbringing as a spoiled brat. Related: Historians on why Trump is America’s worst president ever
  5. A very Canadian reflection on the passport. Related: Citizenship used to be about community; now it’s mostly about rents 
  6. Heavily monopolized markets make a joke of consumer choice
  7. The museum of whale penises raises many questions
  8. Myths about the Black Death, Middle Ages and Renaissance
  9. What’s wrong with WhatsApp?

As any frequent user of WhatsApp or a closed Facebook group will recognise, the moral anxiety associated with groups is rather different. If the worry in an open network is of being judged by some outside observer, be it one’s boss or an extended family member, in a closed group it is of saying something that goes against the codes that anchor the group’s identity. Groups can rapidly become dominated by a certain tone or worldview that is uncomfortable to challenge and nigh-impossible to dislodge. WhatsApp is a machine for generating feelings of faux pas, as comments linger in a group’s feed, waiting for a response.

Ask me anything — my answers

  1. How the agriculture industry will be like in post covid? Who will dominate the world? 
    Covid does not really affect the growth or trade in crops, but it has reduced access to cheap labor and cheap air transport. Cheap labor is falling because workers cannot cross borders due to restrictions or get sick because of their cramped living conditions. Cheap air transport is gone because passenger traffic is down, so there are fewer planes to airfreight cargo. Costs will rise as labor is domesticated, protected and replaced by machines. Trade in high-value crops will perhaps be replaced by growing the crops in local greenhouses, which often means a larger carbon footprint, since more energy is added for greenhouses than saved from reduced flights.
  2. School me on Universal Basic Income. I can’t see how it would benefit low income recipients because within a year, rents and grocery prices would spike higher to reap their excess dollars.
    UBI, as income, can be spent anywhere. Some people will spend it on food, but others on education, cars, paying off debt, etc. Since the income can go to any mix of goods, there’s no uniform rise in demand that would justify a rise in prices. Put differently, any landlord who raised rents would face competition from other landlords since there’s a competitive market in renting (in most places!). For more, read about lump sum transfers.
  3. Ed Barbier, an environmental economist, is pointing out how the pandemic is turning out to be bad for the environment (despite the downward blip in CO2 emissions). Here in rural Wyoming we’re seeing a wave of city slickers move in. In Teton County that means $3 million and up is the hottest part of the real estate market. That has profound consequences on our community character. What else are you seeing globally in terms of migrations from urban to suburban and rural? What data are you tracking? How profound is this change? Also, as a teacher who encourages your students to blog, you might find this seventeen-year old’s take on the pandemic interesting.
    Good post! Ariel is quite perceptive! I think people are moving from cities to suburbs and rural areas — reversing the “hipsters to city centers” trend that began in the 90s and which (itself) reversed “white flight” that began in the 1960s — for reasons of climate chaos (cities are vulnerable to bad weather and supply-chain disruptions) and contagion (it’s hard to socially distance on a subway car). At some point, this trend will slow, probably due to job concerns (but see UBI above ;). I’m not tracking data, but Amsterdam hit a record population this year. I think the move to/from cities will be uneven, since some cities are more competent than others in dealing with C19 and CC. 
  4. Is there any scientific evidence that someone has contracted Covid-19 from contact rather than airborne? 
    I’m no scientist, but I’ve read that contact-spreading is much less common than airborne spread, which might be 15-20x more common.
  5. Boxers or briefs?
    Boxers when I am sleeping at someone’s house but briefs for daily wear. I grew up with briefs and do not worry about “overheated gonads” affecting my fertility because I got a vasectomy in 2001 😉

My one-handed conclusion is that people are interested in many more topics than Alfred Marshall 😉