Archive for February, 2006

On the Value of Edge Content

Posted February 27, 2006 * Comments(0)

EdgeIO, a new start-up that aims to disrupt the centralized listings model of Craigslist and eBay, has launched. The main idea is that people will own their own content [i.e their listings for jobs, items for sale and so on], and post them in their blog or via RSS feeds. EdgeIO will aggregate them. Many such “edge aggregation” services are now springing up. I find some of the technical ideas in EdgeIO, including their clever use of tags as URL APIs interesting.

This post is about the issue of the value of edge content. Let us say I post a job ad in my blog. Today, by tagging it with a couple of simple tags, EdgeIO will aggregate that posting in their service, so that the service visitors can find it. The difference between posting this ad in Craigslist [for free, I must add] vs posting in my blog is that I get to own the listing content, and other aggregators can also find me.

I can easily understand the value of this if I post items often - i.e I am a “power seller” in eBay terms. But for those people who post an occasional item, most of the value of that content seems to be in the aggregation. The individual posting, by itself, has little or no value.

The same issue applies to blogging in general. A casual blogger may not particularly care to own their content, and may look for convenience, rather than ownership of content, in choosing where they post. Discussion forums or comments on other (presumably more popular) blogs are a natural alternative, because they have a steady stream of visitors.

If my reasoning is right, EdgeIO’s success in unseating Craigslist will depend on how many people are occasional posters vs power sellers in Craigslist. My feeling is that Craigslist is dominated by occasional sellers, while eBay is dominated by power sellers. The fact that posting on Craigslist is so easy will make a difference to that occasional user. However easy EdgeIO makes their service, it cannot be made any easier than Craigslist is today.

Viewed this way, one strategy for EdgeIO is to court the eBay power seller audience, which may be more interested in finding lower cost channels to sell, and which is also interested in owning its listings. By having those “anchor stores”, they can court the non-power users by allowing them to list items directly. In other words, combine Craigslist with eBay, offering different value propositions for both groups.

The problem for EdgeIO is that Craigslist could do the exact same thing, and start to aggregate listings from the edge, in addition to their present model.

One thing is clear: the job of linking buyers and sellers will only get even more disintermediated. Today, eBay and Google are the two most profitable inter(net)mediaries. Who knows what the future will bring?

The Perils of Credentialism

Posted February 23, 2006 * Comments(0)

Richard Cohen of Washington Post wrote an interesting, semi-serious rant on requiring a course in Algebra to graduate from high school. Here is an excerpt:


Quote:

I am haunted by Gabriela Ocampo.

Last year, she dropped out of the 12th grade at Birmingham High School in Los Angeles after failing algebra six times in six semesters, trying it a seventh time and finally just despairing over ever getting it. So, according to the Los Angeles Times, she “gathered her textbooks, dropped them at the campus book room and, without telling a soul, vanished from Birmingham High School.”

…

I confess to be one of those people who hate math. I can do my basic arithmetic all right (although not percentages) but I flunked algebra (once), barely passed it the second time — the only proof I’ve ever seen of divine intervention — somehow passed geometry and resolved, with a grateful exhale of breath, that I would never go near math again. I let others go on to intermediate algebra and trigonometry while I busied myself learning how to type. In due course, this came to be the way I made my living. Typing: Best class I ever took.

Here’s the thing, Gabriela: You will never need to know algebra. I have never once used it and never once even rued that I could not use it.

While I personally loved math, I sympathize with him and Gabriela. But there is a deep problem here that Cohen doesn’t address. Schools and universities in the US are evolving to be “diploma mills” - something very familiar in India. Standardized testing is inexorably leading towards this. If you can’t pass the test, tough luck, you can’t “progress” in your education, even if the subject in question is not at all related to other subjects in which you may have flair.

And all of this in the name of enhancing the competitiveness, so employers can get “qualified” [by which people mostly mean “credentialed”] candidates. I disagree with this approach fundamentally. Credential-driven education is ultimately incompatible with capitalism and freedom [see Frederick Hayek and Milton Friedman]. Its goal is to offer “standardized” norms to evaluate people, ignoring the infinite variety in people.

When such a system reaches its advanced terminal state, as it has reached in India, the end result is that credentials themselves start to carry little meaning, because the whole aim of schooling [as distinct from education] becomes getting that stamp of approval, so people learn to game the system towards that goal. In religious terms, God has left the temple.

Over the years, we at AdventNet have learnt to completely ignore credentials in our hiring, and go by our own subjective assessment instead. I say “subjective” because I don’t believe there can be any “objective” standards in evaluating human beings, because ultimately these are value judgements. For example, if we are hiring a sales person, a pleasant outgoing personality, good communication skills and a drive to succeed are important, and assessing all of these is an imprecise art. Why would the fact that the person flunked algebra in school be important?

American education is going in the wrong direction, but I would argue that it is precisely because of increasing government involvement, especially by federal and state governments. What was once a purely local affair has become increasingly federalized. This is inevitable - governments are not great at performing subjective value judgements, and if they tried, corruption would be the result. So to avoid that, they have to standardize, thereby robbing the system of flexibility to fit individual needs.

Gabriela, in that story above, may make an excellent saleswoman or an excellent doctor [most doctors I know are very poor at math!]. By flunking her out, the system is basically telling her “You are worthless”. And yet, the solution is not some self-esteem enhancement program favored by the left, effectively telling Gabriela “You are good at math” when she is not. The real solution is to get rid of credentialism, and leave the problem to the marketplace, which is perfectly capable of solving it. Milton Friedman outlines how this would work in Capitalism and Freedom, so I will spare the details.

I have a personal stake in this. I have a son with autism, and my wife and I recognize that he will need a highly individualized education. He has some strengths in areas like visual memory and pattern recognition, and major areas of weaknesses, like language. We believe his areas of strength could lead him to a fulfilling life, but only if we don’t inflict standardized education on him.

Structure vs Flexibility in Programming Languages

Posted February 23, 2006 * Comments(0)

JavaLobby had linked to a very interesting blog post Java is my corral. Ruby is my open range by a Mr. Ted. The post is well worth reading. Here is an excerpt (emphasis mine):

Quote:
Ruby is a wonderfully expressive and unrestrictive language, allowing you to perform gloriously clever feats of logic with such esoteric syntactic sugar. This makes it a pleasure for me to work with in my free time, on my pet projects, but the thought of introducing Ruby into my office chills me to the bone.At the office, I manage a team. Teams have to work together. They have to be on the same page. They have to drink the Kool-Aid, so to speak. They have to be able to touch each others code and play well together. Structure is very important to productivity in a team environment. When somebody tries to get clever, other members of the team get confused, and productivity flies out the window. Any tools that provide inherent structure for my team are welcomed with open arms. Java provides us with a lot of structure that Ruby cannot.

…

Essentially, what makes Ruby so powerful and so liberating is also what makes it so dangerous in the wrong environment. Sometimes you need structure. Yes, you could achieve the same level of structure through documentation, training, process, testing, and peer review. But if the language enforces it for you out of the box, amen to that! It’s easier to herd the cats in a corral than on the open range. Java is my corral. Ruby is my open range.

This is a very important insight. I have tried to say something like this about Lisp in Lisp is Poetry and Most Programmers want Prose but I don’t think I captured it quite as well as he has done. In hindsight, the essential point is that poetry permits a lot more individualized expression than prose. And it is almost blasphemous to think of “team poetry”.

Since my political philosophy inclines towards libertarianism, should I not favor individualized expression in code? Libertarianism stresses voluntary cooperation over coercion. It is hard to imagine producing an operating system or a web browser without voluntary cooperation among a lot of different programmers. One form of voluntary cooperation for a programmer is to write his/her code in a style that another programmer can understand and enhance - perhaps long after the original code was written. Part of that cooperation is code having a clear, widely-understood structure, or better still, program in a language that provides pre-built structure. Inevitably, such structure constrains flexibility, and the trick in language design is to make that trade-off intelligently.

Of course, it is possible to have that structure in a very individualized language like Lisp or Ruby - indeed almost every non-trivial program in Ruby will have some sort of structure. But requiring every programmer to invent that structure requires a programmer to be a language designer, sort of like requiring every driver to be an auto-mechanic. Even if that were possible, agreement is difficult to achieve on the “correct” structure between different programmers. And if a common structure were agreed upon at the beginning [say something like “Thou shall not add methods to existing classes in different files”], the effect would effectively be a custom dialect of Ruby or Lisp. A much more structured [and therefore less flexible] language like Java supplies that structure ahead of time. And it has the benefit that the structure is standard across the industry.

None of that should be controversial. Where it becomes controversial is when the flexible language enthusiasts start to say things that effectively mean “If you prefer to code in Java, you must have low IQ” - see for example “Blub Paradox”. There are a whole range of pragmatic reasons other than low IQ to prefer Java. This is not to say that Java programmers should not learn flexible languages - they should. But learning it for expanding your horizons and using it for work are two different animals. Ted captures this distinction so well.

Pimco View on Ivy League Economic Advisors

Posted February 21, 2006 * Comments(0)

Chris Dialynas of Pimco, the highly respected bond management firm, had something interesting to say about Ivy League Economists serving as advisors to the Federal Government. The full interview is at http://www.pimco.com/LeftNav/PIMCO+Spotlight/2006/Dialynas+Feb+2006.htm


Quote:

The Clinton and Bush administrations, as well as the Greenspan Fed, have relied upon many internal and external advisors. Without doubt, most of these advisors are of Ivy League vintage. It is particularly noteworthy to understand that the endowments of most of those universities—endowments that substantially accrue to the benefit of the respective professors—are primarily invested in very high-risk assets and high-risk strategies (as are numerous other investors in their quest for high returns in a low interest rate world). It is, consequently, of little surprise that policy advice has tended to aggressive stimulus. A disciplined, “take-your-medicine/rebalance-the-economy” set of policies would most likely be detrimental to the endowments of many of this country’s leading educational institutions. As long as these institutions maintain high-risk portfolios, the policy advice from the ivory towers will be highly stimulative based upon new, bizarre economic ideas. The global imbalances will grow.

Professor Bernanke is a member of this fraternity. He is a very thoughtful economist who was an expert guest speaker at a PIMCO Secular Forum a few years ago. He was impressive then and impressive subsequently. There is an extraordinary challenge for a very high-quality person. My concern is his presumed pro-reflationary bias.

On grounds of preservation of liberty, I am opposed to handing this much power over the economy to the Federal Reserve. Their institutional bias is towards the “financial” sector of the economy - i.e the well-connected “early recipients of new money” in Austrian/Libertarian terminology. The result is the enrichment of the financial sector, which has expanded massively in the last 15 years, and the progressive decline in the living standards and increase in indebtedness of the middle-class. This is classic redistribution of wealth, enabled by government policy. Alas, this will provide fodder to future left-wing politicians promising “fairness”, by which they mean a reverse redistribution of wealth, causing further erosion of economic liberty for everyone. The left would point to the self-evident problem of the rising debt and decline in living standards of the middle-class [for example, the “Cross of Gold” issue over a century ago], but its prescription would be further centralization of economic power.

The PhD glut

Posted February 12, 2006 * Comments(0)

Gary North writes a beautiful article on the over-production of PhDs by universities in America.

http://www.lewrockwell.com/north/north427.html

I have a personal interest in the subject, because I had the misfortune of wasting 4 precious years of my youth getting a PhD. Alas, I figured out only towards the end that I was wasting my time [and other people’s money]. It didn’t help in any subsequent job - note that I have been involved in fairly advanced technology. I would go as far as to say that for 99% of even advanced engineering jobs in the industry, a PhD is a waste of time. The point is not that I learnt absolutey nothing in 4 years, the point is it wasn’t worth 4 years, and it wasn’t worth the price the “system” paid to get me through that PhD.

Advanced engineering jobs do require specialized knowledge, but that is not is what is imparted in a typical engineering PhD. Instead, most of your time is spent churning out research papers, most of whom are of dubious value to anyone outside of a closed academic network (and even for those in the network, the primary value being their own career advancement), just to show that you can perform independent research. You can learn to perform independent research perfectly well in high technology industry, while doing more relevant work, and not requiring any kind of taxpayer subsidy.

Some quotes from North’s article:


Quote:

Academic departments grow in terms of the number of students enrolled. We know from Parkinson’s Law that growth is an institutional imperative. Administrators advance their careers by expanding the number of subordinates in their department. So, every academic department wants more students – students of a special kind.

Students are not of equal value to a department. The lower-division student (freshman or sophomore) does not rate highly in the currency of academic resource allocation: the full-time enrollment, or FTE. The FTE figure is what justifies the hiring of a full-time faculty member. The lower the ratio, the better. It may take 15 lower-division students to generate one FTE. It may take only eight Ph.D.-level graduate students to generate an FTE.

The more Ph.D. students a department can attract, the faster the growth of that department. This is the iron law of academia. All other economic laws are sacrificed for it, as the economist says, other things being equal.

This fact of academic economic life creates an incentive for departments to enroll lots of graduate students. It also rewards those departments that persuade M.A. students to go into the Ph.D. program.

Also, the brightest graduate students may be asked to do unpaid or grant-paid research for senior professors. The professors then publish the results of this research under their own names, thereby advancing their careers. It’s the division of labor at work.

…

Graduate students do not learn about supply and demand, and it does not pay senior professors to teach them. Here is evidence. In response to the ever-growing glut of Ph.D.’s, the American university system turned out about 30,000 Ph.D. graduates per year, 1969 to about 1975. Since then, it has increased the output. In 1980, it was 33,615. In 1990, it was 38,371. In 2000, it was 44,808. In 2003, it was 46,024. (Statistical Abstract of the United States, 2006, Table 290.) Despite this, we read on a website devoted to selling “how to get higher learning degrees” materials,

…

Most degree-granting universities are funded by taxpayers. A university used to be an institution of higher learning that was authorized by a college-accrediting agency to grant the Ph.D. Employees of all but the most prestigious four-year colleges want to be called a university. So, title inflation has matched degree inflation and grade inflation over the last 35 years.

The supply of college graduates with ever-lower academic abilities is funded by money coerced from taxpayers. The American higher education system is structured by the professorate to reward those professors who teach small classes of graduate students. So, year after year, decade after decade, the supply of Ph.D.-holding students increases, despite an academic market that does not hire most of them, and hires a minority at wages that do not compensate them for the money and time invested in earning their degrees.