Demand, Meet Supply

Around 2012, there was a big concern that we desperately needed computer science majors or the economy would falter. Quite a bit of hand-wringing ensued, though the underlying premise was mostly debunked.

It’s 2019, and now people can’t even get into computer science classes.

Why?

“I had a faculty member who came in with an offer from a bank, and they were told that, with their expertise, the starting salary would be $1 million to $4 million,” said Greg Morrisett, dean of computing and information science at Cornell University.

The Hard Part of Computer Science? Getting Into Class

The market provides!

See also Kamala Harris’s Disappointing Economics.

The Value of Loyalty

Yesterday I amplified Juan Pablo Villarino’s comments on the importance of being able to demonstrate your value to your community.

Also yesterday, David Brooks wrote these words about the philosophy of Josiah Royce, a late 19th century American historian / philosopher:

Royce argued that meaningful lives are marked, above all, by loyalty. Out on the frontier, he had seen the chaos and anarchy that ensues when it’s every man for himself, when society is just a bunch of individuals searching for gain. He concluded that people make themselves miserable when they pursue nothing more than their “fleeting, capricious and insatiable” desires.

So for him the good human life meant loyalty, “the willing and practical and thoroughgoing devotion of a person to a cause.”

A person doesn’t have to invent a cause, or find it deep within herself. You are born into a world of causes, which existed before you were born and will be there after you die. You just have to become gripped by one, to give yourself away to it realizing that the cause is more important than your individual pleasure or pain.

. . . . .

Royce’s philosophy is helpful with the problem we have today. How does the individual fit into the community and how does each community fit into the whole? He offered a shift in perspective. When evaluating your life, don’t ask, “How happy am I?” Ask, “How loyal am I, and to what?”

Your Loyalties Are Your Life

Geopolitics vs. Globalism

The principle that investors and firms should be treated equally regardless of their nationality is being ditched.

Evidence for this is everywhere. Geopolitical rivalry is gripping the tech industry, which accounts for about 20% of world stockmarkets. Rules on privacy, data and espionage are splintering. Tax systems are being bent to patriotic ends—in America to prod firms to repatriate capital, in Europe to target Silicon Valley. America and the EU have new regimes for vetting foreign investment, while China, despite its bluster, has no intention of giving foreign firms a level playing-field. America has weaponised the power it gets from running the world’s dollar-payments system, to punish foreigners such as Huawei. Even humdrum areas such as accounting and antitrust are fragmenting.

The steam has gone out of globalisation

Perhaps this is a necessary adjustment, and temporary. But if there is a long-term strategy for growth (and there should be), this kind of splintering is deeply problematic. The goal should not be “we win, you lose.” The goal should be “we all win.”

I hope someone intelligent gets ahold of Trump’s trade war and pivots into reducing the impact of geopolitics. China is fairly to blame for pervasive national favoritism. So blame them. But this is not a zero-sum game.

Five People Shot in Florida

Another day, another senseless shooting.

Even the Onion has seemed to stop posting its satirical commentary unless the shooting is truly shocking. Are more than 10 people required now? Do kids have to be involved?

Worth amplifying this:

But it’s interesting what you said about the shootings here in the US. It’s something that, of course, as an outsider and as someone who it’s his first visit to the country, it would be not proper to give a very deep reflection on that.

Going back to the hitchhiking issue, there is some sort of relation I can establish. When you hitchhike, you’re trying to establish social links with random people.

I feel that in a very developed society like the US, where the value of independence has been stressed over interdependence too much, and much more than in Latin America, for example, or even Europe.

I feel that when you are absolutely independent and you don’t need help from your neighbors, then also, no one is needing your help.

Then how do you feel that you are needful for your community? I think that we are losing…probably something happening here that some people — just some people — don’t have the chance to demonstrate their value to the community. This leads to social anomie.

Juan Pablo Villarino on Travel and Trust

What are the rules for AI?

No one knows. But lots of folks are asking.

Microsoft has one answer. Google has another, similar answer. The Future of Life organization has another (23 point!) list of ethical rules.

These rules have a lot of overlap, but also a lot of noise. Of course systems should be safe and reliable and just and secure. This is marketing noise and no one disagrees. We need to figure out the hard rules. How transparent should we require AI systems to be? How explainable? This could be hard.

In any case, this year seems the one for forming advisory boards to figure out what rules we should have around (1) letting AI’s defend / kill us; (2) letting AI’s treat us; and (3) maintaining US dominance in AI.

Fragmenting the Internet

As we all get more concerned about privacy, content moderation, and intellectual property protection, we are making lots of new rules about what can and cannot be done online. These new rules apply only to specific countries. For example, the online privacy regulation known as GDPR enforces complex rules on data collected and distributed via the internet, but it applies only to European residents.

In practice, however, the internet does not have borders. Americans routinely access European internet servers, and vice-versa. If different rules apply to different visitors, what are your options? You can basically go in one of two directions: (1) treat all visitors the same, or (2) try to determine who is who and treat them accordingly.

Since the dawn of the internet, we have mostly treated all visitors the same: everyone sees roughly the same version of the internet as everyone else. That may change.

Option 1: Apply the strictest of laws and treat all visitors the same.

If the strictest standard works for all laws, then great, you can use that standard for everyone. For example, GDPR is currently the strictest online privacy regime and there’s nothing preventing its application to everyone. It may be easiest to use it everywhere, so long as incentives align.

This strictest-standard-for-all approach isn’t possible if local laws either conflict or are offensive to our democratic principles (e.g., censorship). For example, we don’t want China’s censorship rules applying to the Wall Street Journal.

Option 2: Try to determine who is who and treat them differently based on their location.

It is possible to determine, with pretty good accuracy, where someone is located based on their network IP address. This isn’t foolproof and it is in fact fairly easy to circumvent, but it works most of the time for most of the people. Thus, one option is to determine where your visitor is located and use a version of your site that applies to them. (Or just block access.) There are a few major issues with this approach:

  1. Fragmentation. If everyone is doing this, we have essentially created different versions of the internet for different people. The internet has been transformative precisely because it reduced the cost of sharing and access to information. Fragmentation will make certain types of information harder to find.
  2. Cost. It is much harder to build and maintain a service with different versions depending on where visitors are located.
  3. Ineffectiveness. It is relatively easy for an interested visitor to pretend to be outside their own jurisdiction in order to access the version they wish to see. For example, you can visit Canada’s version of Google right now by typing in google.ca. And geo-blocking based on IP addresses can be defeated easily with Virtual Private Networks (VPNs).

Different versions of the internet are already here. China is the best example. The country’s Great Firewall has been active since roughly 1998 and prevents most Chinese citizens from seeing the internet the same way the rest of us do.

The West seems to be continuing the slide towards internet fragmentation. When Spain decides that an individual has the right to be forgotten, does Google need to forget that information just on Spanish sites? Or on all EU sites? Or on all sites around the world? Does it need to take measures to actively block Spanish citizens from visiting the Canadian Google site?

So far the answer appears to be that information can be available outside the jurisdiction, but you still have to prevent local users from accessing it. And just like that a new filter bubble pops into existence, and the internet fragments a bit more.

New USPTO Section 101 Guidance

On January 7, 2019, the US Patent and Trademark Office issued revised guidance on whether an invention is eligible for patenting. (For example, can you patent a method of hedging risk?)

Patent law has always been, and remains, unpredictable on the eligible-for-patenting point. But the Supreme Court’s decision in Alice Corp. v. CLS Bank (2014) reset much of the case law that had built up, and it therefore allowed district court judges wide latitude to invalidate “bad patents” on the basis that the underlying ideas simply weren’t eligible. The sudden spike in invalidations increased the sense that the law was unpredictable.

Hence, there is much guidance and revised guidance on whether certain ideas are patentable. But I hate reading this kind of guidance; it’s boring. So I drew a picture.

The main revision appears to be the following:

Examiners should note, however, that revised Step 2A specifically excludes consideration of whether the additional elements represent well-understood, routine, conventional activity. Instead, analysis of well-understood, routine, conventional activity is done in Step 2B. Accordingly, in revised Step 2A examiners should ensure that they give weight to all additional elements, whether or not they are conventional, when evaluating whether a judicial exception has been integrated into a practical application.

And… you’re welcome.

Efficiency of Bankruptcy

These numbers from a recent Matt Levine column on how much money the Lehman bank creditors got back from bankruptcy are intriguing benchmarks:

Creditors got back 31 cents on the dollar in nominal terms (about 21 to 26 cents accounting for the time value of taking 10 years to get paid). At the high end, the costs of bankruptcy came to 21 cents on the dollar, meaning that if bankruptcy could have somehow magically been free and instantaneous, creditors would have gotten back about 52 cents on the dollar. The rest of the loss was due to Lehman, not bankruptcy.

The direct cost of the bankruptcy (fees and costs for advisors and lawyers) appears to have been around $7.28 billion. But then you have to account for the 10-years between the bankruptcy filing and the actually getting your money back.

Bankruptcy is widely regarded as a positive legal mechanism: intelligently carve up what’s left to maximize value to creditors and minimize the chance that knee caps get busted. But it’s striking to consider the costs of the bankruptcy proceeding itself, here about half of the value of what was left when accounting for the time delay.

Levine notes that the Madoff victims got back about 70 cents on the dollar (hooray!), so your mileage may vary.

Paper Summary: Faith-Based Intellectual Property

Is there any evidence — like actual data — that intellectual property protection does what we want, namely encourage creativity and innovation? This turns out to be highly controversial. And relevant when reviewing proposals that would, for example, “chang[e] the copyright regime without really understanding where the problem is.”

I recently ran across a set of papers discussing this truly fundamental inquiry in intellectual property law. The most easily accessible of these is Mark Lemley’s Faith-Based Intellectual Property, which reads almost like a personal complaint.

Lemley begins by summarizing past attempts to actually answer this question. Here’s one:

Fritz Machlup, commissioned by Congress in the 1950s to evaluate the patent system, came to the strikingly wishy-washy conclusion that if we didn’t have a patent system, the evidence wouldn’t justify creating one, but since we already had one the evidence didn’t justify abolishing it.

62 UCLA L. Rev. 1328 at 1331-32

This excerpt reflects the consensus tone. Researchers don’t seem to be able to say whether the data supports the notion that intellectual property actually accomplishes what we believe it accomplishes.

Frustratingly, Lemley complains, many researchers react to this ambiguity by retreating to “moral rights theory,” the notion that intellectual property protection is simply a recognition of what you own as a matter of basic rights, the fruit of your labor. He calls out Prof. Rob Merges at Berkeley specifically:

After decades at the forefront of economic analysis of the patent system, Merges threw up his hands: “Try as I might, I simply cannot justify our current IP system on the basis of verifiable data showing that people are better off with IP law than they would be without it.” While one might think that the logical thing to do if the evidence doesn’t support one’s theory is to question the theory, Merges instead observes that “through all the doubts over empirical proof, my faith in the necessity and importance of IP law has only grown.” IP rights, he decides, are Rights in the moral sense: things to which people have some intrinsic entitlement that “social utility alone is not reason enough to override.”

Id. at 1336-37.

Lemley suggests that justifying IP protection solely on the basis of moral rights is deeply problematic. Intellectual Property law does not correspond well to our instincts about what intellectual labor should be awarded property rights:

We grant extremely valuable patents to accidental discoverers [citing photography and penicillin] and extremely valuable copyrights to photographers who happened to be in the right place at the right time [citing Zapruder film of JFK assassination and Reginald Denny beating that led to LA riots]. Further, we allow those rights to be enforced even against people who put more productive work into the final product than the IP owner—the companies who actually make products based on an idea sketched out by a patent troll [most lawsuits are filed against independent inventors] and the artists who remake a photo into an iconic image [discussing copyright case against Shepard Fairey].

Id. at 1340.

Lemley concludes with his rather personal, and it seems well-founded, complaint:

Rather, the line I hope to draw here is between theories of IP that are responsive to evidence and those that are impervious to it. The evidentiary support for the current IP regime is dubious enough that it should prompt us to have a serious conversation as a society about when IP is serving the goals of encouraging the creation and dissemination of new content and when it isn’t.

Id. at 1345.

But serious conversations are in short supply these days.

Impeach Trump Now

“Impeach Trump Now” is the title of an Atlantic article by Yoni Appelbaum being published in the March edition, which focuses on the Trump presidency at its midway point. Its central premise, as the title suggests, is that impeachment proceedings should begin now because such proceedings would have benefits even if Trump is not ultimately removed by the Senate.

Opponents of impeachment point out that, despite the greater severity of the prospective charges against Trump, there is little reason to believe the Senate is more likely to remove him than it was to remove Clinton. Indeed, the Senate’s Republican majority has shown little will to break with the president—though that may change. The process of impeachment itself is likely to shift public opinion, both by highlighting what’s already known and by bringing new evidence to light. 

Appelbaum argues that impeachment proceedings would have five distinct benefits:

  1. Trump loses control of the public conversation as attention turns to the proceedings;
  2. the undemocratic elements of Trump’s agenda will be paralyzed while he deals with the Congressional investigation: “There may be no more effective way to run out the clock on an administration than to tie it up with impeachment hearings.”
  3. impeachment proceedings can be used as a tool for discovery, discernment, and (in my own view) summary and distillation of the transgressions;
  4. it defuses the potential for actual political violence by providing a legitimate option for removing a divisive leader: “The public understood that once the impeachment process began, the real action would take place in Congress, and not in the streets.”; and
  5. it would damage Trump’s political prospects even if unsuccessful.

In fact, it’s the very efficacy of these past efforts that should give Congress pause; it’s a process that should be triggered only when a president’s betrayal of his basic duties requires it. But Trump’s conduct clearly meets that threshold. The only question is whether Congress will act.

The remainder of the article is a history lesson about prior impeachment proceedings — those of Andrew Johnson, Richard Nixon, and Bill Clinton — and how those proceedings impacted their respective presidencies even though none of them were ultimately removed. Appelbaum argues that Trump’s presidency will be similarly constrained, and that this constraint alone should justify the exercise.

I would add one other benefit to this list: demonstrating the health of our institutions. We have long influenced the world through our military power and moral and institutional superiority. As our numbers and power are inevitably challenged globally, it is vital that we continue to command respect for our democratic principles, transparency, and excellent decision-making. Much of Trump’s impact can be reversed, but the most serious long-term impact will be the undermining of trust and respect for our public institutions. Impeachment would demonstrate that we remain a healthy democracy with the continuing capability to root out corruption, prejudice, and incompetence.

Winston Churchill may or may not have said that, “You can always count on the Americans to do the right thing after they have tried everything else.” Hope springs eternal.