Reading Roundup - December 2024
A monthly roundup of random readings from around the web.
Generative AI, the scourge of speakerphone, Dutch bonds, health insurance, religion, the secretary problem, Schopenhauer, and more. Happy holidays!
(1) The Gen AI Bridge to the Future
Each new computing paradigm has a bridge application layer that connects the old and new, from mainframes to computers to mobile to wearables (the endgame might be Neuralink’s brain implants). Since the iPhone, mobile has seemed like the “end of history” for computing—AR/VR hasn’t taken off, wearables are merely enhancements for a phone first experience, etc. ChatGPT looks like a bridge application to the post-smartphone computing paradigm. Similar to how the touchscreen-based interactions replaced keyboards for PCs (which replaced IBM punchcards for mainframes), voice-based interactions with AI may become the new “interface” layer for how we interact with computers. The post-mobile computing platform is wearables with AI agents.
Capital substitution is coming for white collar labor… AI will transform fragmented services-driven businesses (i.e.., labor intensive) in which intelligent workers using their brains (the “intelligence” layer of the service) can be outsourced to AI. Typically when variable costs are replaced with fixed capex that has increasing returns to scale, industry consolidation ensues. The article argues for consolidation of industries like accounting, insurance processing, and parking management (e.g., Metropolis… even parking spots can be VC-funded if they “use AI”). There will likely be more private equity rollups enabled by labor reductions from AI, but the deeper philosophical question is: what’s left for humans? If “intelligence” (basically everything) can be outsourced, where is human labor still required? Let’s hope Skynet doesn’t ask.
(3) Flying Was Already the Worst. Then America Stopped Using Headphones.
Speaking of Skynet, this is the opposite of being self aware: “there’s a new scourge facing travelers: a surprising number of people who think it’s totally OK to have phone conversations on speaker, or watch movies and [TV] without headphones.” The behavior is baffling for a lot of reasons: it spans generations (from Gen Z watching Tik Tok to grandparents on speakerphone calls); the offenders are oblivious to how annoying it is; and offenders become aggressive when asked to wear headphones (maybe it’s because “the sound of gentrification is silence”). Quote of the month: “I don’t want to watch TikTok with you […] it’s gobsmacking to me—we used to have headphones.” The simplest explanation, from Schopenhauer, would be “the coarse quality and strong texture of their brain tissues.”
(4) We Need to Talk About Europe’s Kevins
For Europeans who “require names to come from an approved list (mainly of Christian saints),” the middle class habit of naming kids after secular celebrities is looked down upon: “In England, “Kev” has become a synonym for working-class wastrel, a denigration as severe as being called Karen in America. Germans speak of Kevinismus, or the plight of prejudice felt by those bearing the name; a Kevinometer app helps parents avoid giving their kid a name that [will be] seen as a marker of poor parental taste come 2040. So bad is the name’s reputation there that a German wag once summarized the existential angst of bearing it: “Kevin is not a name, it’s a diagnosis.” Apparently “Dylan” is the other worst name on that list… “the countryside and poorer suburbs of western Europe have their fair share of 30-something Jordans, Dylans, Jessicas and Cindies too, often coinciding with characters’ debuts in a TV series […] we need to talk about Dylan.” Ouch!
(5) Happy 400th Birthday to the World’s Oldest Bond
In 1624, the local water authority in Utrecht (Netherlands) issued a series of 2.5% yield perpetual bonds to finance dike repairs. The NYSE owns the sole surviving bond from this issuance and collected its 400th coupon last month. The NYSE received the bond as a gift from a Dutch banker who noted the Dutch-American connection with 1624 (the Dutch founded New York, originally named New Amsterdam, in 1624). It’s both a historical curiosity and a reflection of the importance of finance to the modern world: “The 1624 bond is a financial wonder of the world. If you don’t like a four-century-old Dutch goatskin perpetual that still pays interest then I’m afraid we can’t be friends.”
(6) Insurance Companies Aren’t the Main Villain of the US Health System
Health insurers are easy punching bags. Consumers directly experience denial-of-claim nightmares and administrative errors, which makes it easy to blame healthcare companies for astronomical healthcare bills. But this article argues that the real profit center (and thus source of skyrocketing costs) is the providers. Hospitals, doctors, and pharma companies capture a way larger share of overall healthcare earnings than the insurance companies. It is not a popular opinion, but the main driver of rising costs is probably excessive consumer demand (which is both cultural and company-driven)… there is an expectation that every health issue should be fixed with more healthcare. Healthcare utilization is just too high. The marginal spend achieves marginal results.
(7) Religion’s Claim to be Non-Disprovable
“Only after failing to find confirming evidence, and finding disconfirming evidence in its place, did [the religious] retreat to “I believe because I believe.” The Old Testament offers various examples of God proving his existence to the Israelites en masse—the many miracles of Moses, God speaking the Ten Commandments from Mount Sinai, Elijah’s challenges to the prophets of Baal, etc. Only later did miracles become “personal” in nature, and later still, did believers make an absence of evidence a feature, not a bug (just have “faith”). “I believe because I believe” only works with non-falsifiable claims, which is why normative ethics are the final God of the Gaps .
(8) Cracking the Code of Decision Making: The Secret Behind the Secretary Problem
The “secretary problem,” also known as the optimal stopping problem, concerns the question of how many options to evaluate before making a decision (e.g., interviewing secretaries, dating people, buying a house, etc.), when one cannot return to an earlier option after passing on them. Among n randomly-sampled candidates, the optimal decision is to evaluate the first ~37% of candidates before choosing the next candidate that is better than all previous candidates. This article has a simple proof of the “37% rule” (which equals 1/e), but the main lesson is that there is a time to gather (“explore”) info about a decision landscape, and a time to apply (“exploit”) that info to maximize the odds of an optimal choice. Of course, real life is more complicated: n is unknown, the candidates are not distributed randomly, and sometimes a candidate comes back.
(9) The Essence of Love Is… Annoyance?
“We are given aphorisms like “No one is perfect” and “relationships are hard.” [We] are given diagnoses like codependent and avoidant attachment and “the day-to-day entanglement of marriage is fundamentally opposed to the mystery that sustains sexual attraction.” [I will add]: closeness is fundamentally annoying. [There is an] unavoidable friction [in] making life work with another person. Closeness is annoying because it’s about the surrender of control. You’re trying to fall asleep. Beside you, your partner is snoring. You push their jaw so it stops. Two minutes later, the snoring returns. You lay there in the dark wondering how you got here. Oh, right: three years ago at a party you saw someone and thought they were very beautiful.”
(10) On the Vanity of Existence
Ending the year with some Schopenhauer: ”To gain anything we have longed for is only to discover how vain and empty it was; and though we are always living in expectation of better things, at the same time we often repent and long to have the past back again. We look upon the present as something to be put up with while it lasts, and serving only as the way towards our goal. Hence most people, if they glance back when they come to the end of life, will find that all along they have been living ad interim — they will be surprised to find that the very thing that they disregarded and let slip by un-enjoyed, was just the life in the expectation of which they passed all of their time. Of how many a man may it not be said that hope made a fool of him until he danced into the arms of death!”
Miscellaneous
The growing risk of AI-enabled wire fraud. Coming soon: Grand Theft Auto VI. Adult literacy is declining. Shoe startups are challenging Nike and Adidas. Various fun facts from 2024. Javier Milei has “infinite contempt” for the Argentine state. The growth of Warhammer. The story of Lord Hanson. The race to save the axolotl. Some reasons to great works of fiction. Even more underrated reasons to be thankful. The unstoppable growth of Dallas. London is closing the Smithfield meat market. The empty promises of data moats. List of the best Robin Hanson blog posts. Bayesian CAPM. Succession planning at European conglomerate D’Ieteren. The story of Spindrift seltzers. Urban planning in Brussels. Rollups in deathcare. Detailed predictions about our AI future. Apple News and the power of defaults. You search for Rome in Rome?