Designed/designated value


[Casa de inquietante Musica…]

Just read somewhere that Litecoin had jumped from $100 to $30.000 in one year. Bitcoin, same sort of jumps up and down all over the place. And other, less known eCurrencies will probably have the same patterns.

My question now is: Would someone know how to establish the proper value vis-à-vis ‘old’ currencies – with all their absolute sameness as described in an earlier post. Given that everything is artificial (and economically, relatively! simple) about these ‘new’ currencies, there should be some formula to determine its true ‘value’ (however expressed..!), shouldn’t it?
Yes, I know, it’s whatever the markte price would be (expressed in something as extremely flimsily, asymptotically non-, defined as the ‘dollar’ unit of value). But surely, we may construct some formula now that the underpinning elements of value can be established so much better ..?

Bias time (1 of 9)


[Check out the paleo!]

Yes, it’s bias time. As first in a series of biases that you, yes you, have. Even if you are aware of these, and even if you consciously try to correct for them to be, heh, ‘objective’, as in what e.g. auditors pursue, you will fail.
I’ll just jot them down for your reading pleasure. Additional explanation, e.g., how they would work out in your professional practice, we can discuss out of band I guess.

Decision-making and behavioral biases

  • Bandwagon effect – the tendency to do (or believe) things because many other people do (or believe) the same. Related to groupthink and herd behavior.
  • Backfire effect – the tendency for corrections to initial misinformation to increase misperception
  • Base rate fallacy – the tendency to ignore available statistical data in favor of particulars.
  • Bias blind spot – the tendency not to compensate for one’s own cognitive biases.
  • Choice-supportive bias – the tendency to remember one’s choices as better than they actually were.
  • Confirmation bias – the tendency to search for or interpret information in a way that confirms one’s preconceptions.
  • Congruence bias – the tendency to test hypotheses exclusively through direct testing, in contrast to tests of possible alternative hypotheses.
  • Contrast effect – the enhancement or diminishing of a weight or other measurement when compared with a recently observed contrasting object.
  • Déformation professionelle – The tendency to look at things according to the conventions of one’s own profession, forgetting any broader point of view
  • Denomination effect – the tendency to spend more money when it is denominated in small amounts (e.g. coins) rather than large amounts (e.g. bills).
  • Distinction bias – the tendency to view two options as more dissimilar when evaluating them simultaneously than when evaluating them separately.
  • Endowment effect – “the fact that people often demand much more to give up an object than they would be willing to pay to acquire it”.
  • Experimenter’s or Expectation bias – the tendency for experimenters to believe, certify, and publish data that agree with their expectations for the outcome of an experiment, and to disbelieve, discard, or downgrade the corresponding weightings for data that appear to conflict with those expectations.
  • Extraordinarity bias – the tendency to value an object more than others in the same category as a result of an extraordinarity of that object that does not, in itself, change the value.
  • Focusing effect – the tendency to place too much importance on one aspect of an event; causes error in accurately predicting the utility of a future outcome.
  • Framing – using an approach or description of the situation or issue that is too narrow.
  • Also framing effect – drawing different conclusions based on how data is presented.
  • Hyperbolic discounting – the tendency for people to have a stronger preference for more immediate payoffs relative to later payoffs, where the tendency increases the closer to the present both payoffs are.
  • Illusion of control – the tendency to believe that outcomes can be controlled, or at least influenced, when they clearly cannot.
  • Impact bias – the tendency to overestimate the length or the intensity of the impact of future feeling states.
  • Information bias – the tendency to seek information even when it cannot affect action.
  • Interloper effect – the tendency to value third party consultation as objective, confirming, and without motive. Also consultation paradox, the conclusion that solutions proposed by existing personnel within an organization are less likely to receive support than from those recruited for that purpose.
  • Irrational escalation – the phenomenon where people justify increased investment in a decision, based on the cumulative prior investment, despite new evidence suggesting that the decision was probably wrong.
  • Just-world phenomenon – the tendency to rationalize an inexplicable injustice by searching for things that the victim might have done to deserve it.
  • Loss aversion – “the disutility of giving up an object is greater than the utility associated with acquiring it”. (see also sunk cost effects and Endowment effect, in a later bias post).
  • Mere exposure effect – the tendency to express undue liking for things merely because of familiarity with them.
  • Money illusion – the tendency to concentrate on the nominal (face value) of money rather than its value in terms of purchasing power.
  • Moral credential effect – the tendency of a track record of non-prejudice to increase subsequent prejudice.
  • Need for Closure – the need to reach a verdict in important matters; to have an answer and to escape the feeling of doubt and uncertainty. The personal context (time or social pressure) might increase this bias.
  • Negativity bias – the tendency to pay more attention and give more weight to negative than positive experiences or other kinds of information.
  • Neglect of probability – the tendency to completely disregard probability when making a decision under uncertainty.
  • Normalcy bias – the refusal to plan for, or react to, a disaster which has never happened before.
  • Not Invented Here – the tendency to ignore that a product or solution already exists, because its source is seen as an “enemy” or as “inferior.”
  • Omission bias – the tendency to judge harmful actions as worse, or less moral, than equally harmful omissions (inactions).
  • Outcome bias – the tendency to judge a decision by its eventual outcome instead of based on the quality of the decision at the time it was made.
  • Planning fallacy – the tendency to underestimate task-completion times.
  • Post-purchase rationalization – the tendency to persuade oneself through rational argument that a purchase was a good value.
  • Pseudocertainty effect – the tendency to make risk-averse choices if the expected outcome is positive, but make risk-seeking choices to avoid negative outcomes.
  • Reactance – the urge to do the opposite of what someone wants you to do out of a need to resist a perceived attempt to constrain your freedom of choice.
  • Restraint bias – the tendency to overestimate one’s ability to show restraint in the face of temptation.
  • Selective perception – the tendency for expectations to affect perception.
  • Semmelweis reflex – the tendency to reject new evidence that contradicts an established paradigm.
  • Status quo bias – the tendency to like things to stay relatively the same (see also loss aversion, endowment effect, and system justification).
  • Von Restorff effect – the tendency for an item that “stands out like a sore thumb” to be more likely to be remembered than other items.
  • Wishful thinking – the formation of beliefs and the making of decisions according to what is pleasing to imagine instead of by appeal to evidence or rationality.
  • Zero-risk bias – preference for reducing a small risk to zero over a greater reduction in a larger risk.

Mo’nay


[Prime Valencia]

Just to drop it here. May take a textbook full of source-annotated analysis, but just feel there is something in the following:

In Negri & Hardt’s Empire (of which I like parts of the analyses, not necessarily the conclusions/synthesis/solutions!), the analysis goes about Worker Production being larger than Worker pay, the rest flowing to Capital, of which a tiny part is shaved off as Capital Owner ‘pay’. The rest of the surplus seeking redeployment ‘outside’ of the system and how the outside may no longer exist.
Haven’t read on far enough, but I feel that when Capital (surplus) folds back onto itself, it creates a sort of Non-Worker Production in the form of investment in financial instruments created out of thin air for no other reason than creating ‘value’ (quod non); with money producing ever more … money, surplus.

And that’s the bubble that deflated ‘recently’, it was no longer sustainable, stretched too thin.
And that’s why ‘the 1%’ wants to keep ‘capitalism’ as is, with creation of more worker proletariat squeezing out the middle class to lower Worker pay to (literally) starvation levels, in order to keep and increase their own cut of surplus and inflate the bubble in some other direction again.

Whereas ‘we’ need not money as an end goal, but as place- and time-shifting grease against the frictions of barter. There are no markets, there’s demand, and there’s supply.
Well, more on this later.

Icarus’ Deception


[On the lake]

As part of a new project, I herewith present the first ‘Book By Quote’: An attempt to subjectively summarise a book by the quotes I found worthwhile to mark, to remember. Be aware that the quotes as such, aren’t a real unbiased ‘objective’ summary; most often I heartily advise to read the book yourself..!

So, now then; Seth Godin’s The Icarus Deception, Penguin Books, december 2012, ISBN 9780670922925

Industrialists have made hubris a cardinal sin but conveniently ignored a far more common failing: settling for too little. It’s far more dangerous to fly too low than too high, because it feels safe to fly low. We settle for low expectations and small dreams and guarantee ourselves less than we are capable of. By flying too low, we shortchange not only ourselves but also those who depend on us or might benefit from our work. We’re so obsessed about the risk of shining brightly that we ‘ve traded in everything that matters trying to avoid it. (p.2)

The safety zone has changed, but your comfort zone has not. Those places that felt safe – the corner office, the famous colleague, the secure job – aren’t. You’re holding back, betting on a return to normal, but in the new normal, your resistance to change is no longer helpful. (p.3)

Creating ideas that spread and connecting the disconnected are the two pillars of our new society, and both of them require the posture of the artist. (p.5)

It took a hundred years for us to be brainwashed into accepting the industrial system as normal and safe. It is neither, not for long. (p.6)

Competence is no longer scarce, either. We have too many good choices – there’s an abundance of things to buy and people to hire. What’s scarce is trust, connection, and surprise. These are three elements in the work of a succesful artist. (p.10)

The simplest plan is to keep it all, to embrace what worked before, and to hide, mostly to hide, from the open vistas of the new postrevolutionary world. It’s so easy to do, and if the world moves slowly enough, you can even do it succesfully for a while. No longer. (p.21)

Capitalism is driven by failure, the failure of new ideasto catch on or the failure of the organization that fails when it is beaten by new competition. Industrialisation is about eliminating the risk of failure, about maintaining the status quo, and about cementing power. (p.27)

After nearly a century of effort, the industrial system has created the worker-proof factory. (p.28)

Within a generation, the Homeric myths of bravery and guts were supplanted by the workaday unbrave myths of Leave it to Beaver and Archie Bunker. Sure, there will be superheroes in the comic books hidden under our beds, but these heroes were never meant to be us – they were the idle pastimes of boys who hadn’t yet come to realise that the army has no room for Captain America and that, yes, in fact, Spider Man couldn’t get a job. Our parents bought us Batman underoos and Superman T-shirts, but it was clearly stated: Yo can pretend to be a hero, but you are not one, and you will grow up to be an obedient member of society. (p.75)

The fear has been shifted. It went from the wild animal’s fear of survival, the fear of the dark and of predators, to the industrialist-invented fear of noncompliance, fear of authority, fear of standing out. The industrialist offers us a trade. We can trade in our loneliness for the embrace of the mob and trade our innate fears for a steady paycheck. We can trade our yearning for something great in exchange for the safety of knowing that we will be taken care of. In return, all he asks is that we give up our humanity. (p.79)

Until we have a humility shortage, then, the real problem is this: We continue to fly too low. We’re so afraid of demonstrating hubris, so afraid of the shame of being told we flew too high, so paralyzed by the fear that we won’t fit in, hat we buy into the propaganda and don’t do what we are capable of. (p.90)

Our economy has worked overtime to emphasize and reward the lizard. … The rest of us,the story goes, are drones, the worker bees that are unentitled to the benefits reserved for the few. (p.101)

“We want talent”, they say, “as long as that talent is true, productive, and predictable. We want talent if talent means more product per dollar, more effort per day, more of what we think we’re paying for. …” ( p.114)

But lying low is now a recipe for ending up far outside your safety zone. The industrial economy sold you on the bargain that avoiding attention meant avoiding shame and that obedience led to stability. (p.125)

The kind of art I’m describing doesn’t seek to please the masses. The masses (by definition) aren’t pleased by the new. They are pleased by what others think. Harry Potter’s first fans were enthralled by the art that J.K. Rowling challenged them with. The next hundred million readers embraced a mass cultural phenomenon, not an unproven book from an unknown author.
Your goal as an artist is to move the audience of your choice. (p.128)

And so a car guy learn to tell the difference between a car design that’s going to sell and one that’s not. And a cop learns to recognise the symptoms of behaviour that might lead to trouble. Until they don’t. At some point, we stop seeing patterns and start looking for shortcuts. … We profile because it speeds up, but mostly we profile because it’s safer. (pp.148-149)

The problem with labels is that once they’re applied, it’s impossible to see what lies beneath. When the world changes, then, our labels cease to function and we’re blind to the opportunities that are presenting themselves. (p.149)

It’s best to get as many people as possible into a room. And then go somewhere else. (Jason Fox, p.173)

The industrial economy won’t disappear, but the agenda will increasingly be set by those who make connections, not widgets. (p.175)

And this is why art is rarely for the masses. The masses don’t appreciate the flash of originality and are happy to buy the copy or the knock-off. But that’s fine, because the masses matter less than they ever did before. The masses are interested in what’s popular, and the weird, the ones who get the joke, have more influence than ever in bringing ideas to them. We’re all the masses sometime. We’re part of the masses when we don’t appreciate nuance, when we merely want what is good enough, when price matters more than impact. The explosion of niches, of diverse tastes amplified, of weirdness, means that the masses are easier to ignore now. (p.179)

The simple reason that creativity, leadership, and brainstorming books and courses fail is that people don’t want them to work. We’ve been brainwashed into becoming afraid of art. (p.179)

We think we’re being safe and smart and conservative and avoiding flying too close to the sun. But all the generator is doing is pushing us closer and closer to the waves, so that we’re flying too low, daring too little, and blowing our best chance ever to matter. (p.183)

The pain-free life will elude you. You can work to smooth out all the edges, to eliminate all risk, and to be sure that everyone you encounter likes you. (I hope that seeing this in writing helps you see the absurdity of that mission.) But in the unlikely event that you accomplish this, you’ll soon be beset by the knowledge that it won’t last long at that it’s only a matter of time before someone comes along and ruins the entire thing. (p.188)

Freedom isn’t the ability to do whatever you want. It is the willingness to do whatever you want. (p.189)

In short, you can screw up with impuny as long as you screw up like everybody else. (David Putnam, p.203)

We’ve built a postdeception society, one where our future is created by those who replace the status quo, not those who defend it. (p.208)

It may take seven years for a fast-moving Internet company to become an overnight success. (p.211)

The best art is made by artists who don’t know how it’s going to work out in the end. The rest of the world is stuck with the brainwashed culture that the industrialists gave us, the culture of fear and compliance. But culture is a choice. … Others have always done that art, always chosen that culture of hope, but you haven’t done it enough (’too risky’, the lizard says), because you’ve been held back by a need for proof, by a reliance on assurance, and by the fear of humiliation. (p.218)

Judging money


[Picture’s perspective lines skewed to create akward feelings… AMS again]

@JudgeJoice_ tipped a couple of days ago about a judge with humour (in Dutch, unfortunately no English translation available). They seem to exist even in the Netherlands…

All very nice to rule that if defendant claims to not have received a loan because the bank only transferred some bits from one account to another and no ‘real’ money switched accounts (the scandal! the fraud! the defendant claimed), and hence no ‘real’ money would need to be repaid, but the defendant did all sorts of transactions with third parties where she presented the fake money (quod non) as ‘real’ herself, then the defendant would have no trouble ‘repaying’ the loan without ‘real’ money wouldn’t she?
With the court siding with the claimant (bank), heh, but coating the whole judgement with all sorts of ‘yeah, banks are Naughty not nice’ “analysis” of the situation.

By doing so, the judge came close to, on the one hand, dismissing ‘real’ money as worthless scraps of paper (mostly, to amount to anything) with only vague promises of ‘repayment’ in something that would actually be money or so: Since dropping the gold standard for <nothing>, no-one has ever explained what that would be – no, not even gold as that would be just an alternative currency with skyrocketing / flatfalling exchange rates.
And, on the other hand, the court also came close to recognition of Bitcoin et al. as sufficiently real money to count as currency. Why would some (unelected! no, you elect politicians, the administration is de facto not controlled by them) government be trusted, whereas a transparent, transparently operating self-formed community of Bitcoin much less so?

But I seem to be repeating myself re this little postlet

Now with the addition of a court’s ruling to the same effect. Thanks, it’s official now.

Floating up levels


[Airplane, close to AMS]

Seems like true professions work the same as life philosophies (‘religions’ et al.).

The masses, the first 85%, work like worker bees. Need to be kept in check as they are ‘unfree’ (in a sense…) to think for themselves, need to just follow the rules even if these create moral / consciousness conflicts.
The next 10-13% are petty-little-rule-whizards. You know them all, they know nothing about Why. Think they are the next 2% … But are evil as they ruthlessly hunt down anything non-compliant.
The last 2% (or less), are the true Understanders, philosophers. That have Insight, Wisdom.

Yet another reason to manage the masses with care (as in: empathy), be suspicious about the penny-wise, and seek out the calm and quit ones.

Still no real investment


[Not NN, you fool]

Inspired by the picture: How come we still haven’t recovered from the age of panicky crawling backwards ..? As witnessed by the lack of real, true investment for the longer term. Longer term, not being as in “Short term I would usually define before lunch. Long term is after lunch”. But long term, like invest heaps now, reap the benefits over the decades. Very deep but later very flat hockey stick.

If not when there would be true investments made, things like the CN tower and other, relatively, follies, could again bolster the general spirit of a region, leading to unmeasurable but enormous productivity and general well-being gains.
Else we remain stuck in the negative, the fearful, the slow collapse, crumble to dust.
Endif // there are no other options.

Less more


[Colmar, of course]

Being in a Christmas spirit.

Just read a piece in HBR on ‘prosperity’. Which seems to hinge on the definition of that so much that it hurts.
It appears that ‘prosperity’ is slaving oneself to death … ?

Or is true prosperity about just working enough to sustain oneself, and have time to do the stuff of higher Maslow levels ..? What is the purpose of life ..?

We need less of the more, more, more when it comes to the ‘importance’ of money. We need more of … well, what? All religions, and all other philosophies on how life should be, have money as evil. Money is just a necessity, and shouldn’t be more than that.

But should we force people to consider for themselves where enough is enough, and what if we don’t like the results..? E.g., when the ‘rich’ are found to be incapable of thinking theý are well beyond Enough by any standard, can we take away their surpluses? Clearly not. But we should, as we consider them to be insanely, irresponsible – with their surpluses, lifes could be saved. So their lack of understanding extends to, in fact, killing people by non-action (Artistotelian sin).

Which brings us to John Rawls much too underestimated and unregarded Veil of Ignorance. But ah, politicians… Have we moved beyond the point of collapse of Democracy already so far …?
No, I’m not (a) socialist or ‘worse’ ;-] but still …

Prediction of “A”PIs for IoT


[Some years ago, IL]

Ah, one thing I was concerned about, is elucidated elsewhere, already.
And ten more, halfway between hard tech deep innovation and societal acceptance.

IoT to retail


[East South Bank]

I had these ‘predictions’ for retail. Now IoT comes along (though 2014 is way too early; 2016-2018 is more likely); would’ve had to include it. But may take a while. So enjoy, and stitch both together…

Maverisk / Étoiles du Nord