Looking forward to New York. Your advice?

Going to spend a few days in New York, visiting my friend Raj. I have unstructured plans for a number of tourist things I want to do (museums, Broadway…); it’s been a few years since I last had some leisure time to spend in the city.

You all who lurk out there: what’s not to be missed these days in New York?

Thanks in advance for your suggestions.

Eric D. Beinhocker, The Origin of Wealth: a must read

How long does it take to finish a 527-page book? No more than a week, in my experience, if the book is as fascinating as Eric Beinhocker‘s “The Origin of Wealth“. By now, you probably already suspect that the classical economics you’ve learned in school is wrong – or, if not “wrong”, a pretty poor description of reality. So, what does a more useful economic science look like? Here’s a few clues:

  • You’ve read about emergent properties of complex systems ever since “Gödel, Escher, Bach” by Hofstadter.
  • You know that a system doesn’t even need to be complex in order to produce unpredictable outcomes, for example if you’ve ever played the Beer Game, which was a big deal in System Dynamics training back in my McKinsey days.
  • You’ve followed the progress in the field of behavioral economics and you’ve enjoyed a few laughs with “Freakonomics” by Levitt and Dubner.
  • You may have heard about Epstein and Axtell’s Sugarscape model, where even agents modeled with very simple rules for metabolizing commodities and trading them with each other results in simulated economic landscapes in which the degree of inequality is strikingly similar to the one we witness in human societies.
  • You’ve heard some of the debate around Matthew Miller’s “The Two Percent Solution“, who writes “Suppose I told you that for just two cents on the national dollar we could have a country where everyone had health insurance, every full-time worker earned a living wage, every poor child had a great teacher in a fixed-up school, and politicians spent their time with average Americans because they no longer had to grovel to wealthy donors? Suppose I also said we’d largely be using ‘conservative’ means (like tax subsidies and vouchers) to reach these seemingly ‘liberal’ goals–and that when we were done, government would be smaller than it was when Ronald Reagan was president?”
  • You’ve enjoyed the descriptions of “open-source” companies in LaBarre and Taylor’s “Mavericks at Work“.
  • When the mess of your desk has gotten out of control, you’ve invoked the Second law of thermodynamics.

What Beinhocker does, admirably, is put it all together. This is an ambitious book, far-reaching and stopping just short of intellectual sprawl. Overall, it is a great success and a must read for anybody interested in these issues. (Thanks to Simon Darling for blogging about it a few months ago).

A few, admittedly minor, quibbles. Why call the unifying theory Complexity Economics? If you can explain it without a single recourse to calculus in over 500 pages, it’s way less complex to understand than traditional economics. Of course, if the economy is like the weather, sitting in constant disequilibrium, requiring massive computational power to simulate, and defying forecasts, it is complex indeed. But it is complex for reasons that even a child can verify, by playing a simple computer game. I don’t have a proposal right now, but I’d like to suggest that the field needs a better label.

Finally, Beinhocker’s four concluding chapters about the theory’s implications for real life are not as insightful and innovative as the rest of the book. “Strategy” and “Organization” are useful, but don’t tell you anything new if you’ve gone to business school in the last, say, fifteen years. “Finance” is a bit more interesting (so, here’s what was wrong with CAPM!) and “Politics and Policy” makes you wish that, well, you could vote for the guy. But overall, I almost wish he’d finished the book at the end of Part III. Still, one of the best books I’ve read this year.

The Virginia Tech tragedy and the debate America ought to be having

I am often in rather uncanny agreement with policy positions that happen to be advocated by The Economist, a weekly I tend to read with some loyalty (well, let’s face it: if I’m on vacation somewhere and they don’t have The Economist, I have a problem). This week’s leader about the tragedy at Virginia Tech University is another instance that makes me plaud at insightful journalism. To quote just a snippet:

No phrase is bandied around more in the gun debate than “freedom of the individual”. When it comes to most dangerous products—be they drugs, cigarettes or fast cars—this newspaper advocates a more liberal approach than the American government does. But when it comes to handguns, automatic weapons and other things specifically designed to kill people, we believe control is necessary, not least because the failure to deal with such violent devices often means that other freedoms must be curtailed. Instead of a debate about guns, America is now having a debate about campus security.

I encourage you to read the whole article, if you agree, and even more so if you don’t agree.

Two predictions about Google

So, early this morning I saw the future, and this is what it looks like.

  1. Before the end of 2008, Google will make a significant entry in the Direct Marketing business, online and offline. DM is a sizable industry, running faster and faster (against declining response rates) just to stay in the same place. It is also plagued by bad data (otherwise I wouldn’t have gotten that slick Marlboro Classics brochure in the mail last week) and stale targeting techniques. Some direct marketers wring their databases through clustering algorithms by brute force alone, some extract interesting consumer insights. Just think about what Google could add to the mix.
  2. In the 2012 U.S. presidential election, the winner will be whoever has engaged Google Election Analytics (TM). The 2008 campaign will be run by fundraisers and consultants with detailed geomarketing databases and years of experience in (1) how and where a candidate can raise the most dollars per campaign hour, and (2) how and where to get the most voters per marketing dollar spent in the campaign. Add Google’s layer of data on Web searches, clicks, mails, calendars, photos, videos and so on, and you can start getting a feeling for the potential. I’m not saying that Google will choose the President of the United States: voters will. Yet, within the same street, within the same city block, within the same household, Google will be able to tell that Voter A is interested in a candidate’s message about gun control, Voter B is attracted by the candidate’s position on abortion rights, and Voter C agrees with the same candidate’s stance on free trade. And will be able to deliver, well, targeted marketing messages for each voter. It’ s starting to happen today, but it will be in full bloom by the election after this one.

You read it here first.

Luis von Ahn and Human Computation: how smart is this guy?

These days, many people talk about crowdsourcing, harnessing the power of the masses, and social everything (one of them is my former European boss Gil Penchina, today at work with Jimmy Wales on a better way to search).

Yet, I’ve started to believe that research conducted by Luis von Ahn at Carnegie Mellon is showing a most crucial insight about how to get this stuff done in mass volumes: make it fun and addictive. Today, I took about 40 minutes to watch this video of his Google TechTalk last July, in which he describes his approach to human computation. You don’t have to have a Ph.D. to watch it, and it’s actually quite humorous. The guy is cool, and not in a totally nerdy sort of way. The thought even passed my mind that if I were about ten years younger, that’s the kind of guy I’d want to date. (Well, the Pittsburgh press points out that he’s already engaged, to another CMU Assistant Professor).

But to get back to the point: we know that there are problems that brute computing force has a very hard time solving. Appealing to the fun and gratification mechanism in each of our brains, and doing so on a massive scale, is a very elegant solution. Now, if we could only invent an elegant game to solve for peace in Palestine, that would be an even more stunning achievement.

More museum restaurants: Bistrot Bovisa, Milano

Here’s an interesting new museum restaurant, Bistrot Bovisa, in the old industrial ouskirts of Milan. The somewhat minimalist food is designed by chef Moreno Cedroni, and while not all the restaurant design choices make sense (I can’t help foreseeing a short lifespan for those chain mail placemats), the place is pleasant enough for a lunch or dinner break after visiting the exhibition next door.
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