Institutions

I want to share some thoughts about institutions. What makes them special as organisations? What is their history? Will there be more institutions in the future? Should there be?

As a first definition, I'm tempted to say that institutions are organisations that are neither family-based, nor for profit. This makes a difference for what holds it together. 

In a family, members stick together out of loyalty to other individuals, because of personal relationships. There may be some fixed roles, but in principle a person in a family is irreplaceable. This was less true in the past, when families had to do more of the tasks that institutions and companies do today. Back then, a person's role in a family came with much more specific expectations. This may have been partly cultural, but it also makes sense for an organisation that has to fulfill a lot of complicated functions where people sometimes need to be replaced. 

In a company, members are attached to the organisation through equity, or through a contract (or both). To members without equity (most employees), there is not much difference if they work for a for-profit company or an institution. If the company doesn't fulfill its part of the contract, the individual should leave. If the individual doesn't fulfill their part of the contract, the company should kick them out. At least in theory. Having equity, on the other hand, means being entitled to a share of the profits. This is an entirely different relationship, which has proven historically to be a very powerful way to align people's interests. However, for there to be a company, there must be the potential for profit.

This leaves us with institutions. An institution is an impersonal organisation that exists to produce some value that can't be sold for profit. When does it make sense to produce something that can't be sold for profit? Take roads, for instance. The economic value of roads clearly is larger than the cost of building them. However, it is often impractical to collect money from people based on how much they use a specific road, and adding the infrastructure necessary to do so adds cost and decreases the economic value of the roads themselves. So, the modern solution is to tax some combination of vehicle owners and everyone in general to finance the roads, and to make them freely available. 

Let's challenge this definition. What about education and healthcare? Clearly, it's possible to sell these things for profit, and yet this is mostly handled by non-profit institutions. I'll just leave this aside for now, saying that it's an ongoing process to determine which model really works best here. In the case of general education, it is hard to measure the value the education will provide (since it takes to long to pay off), which makes it difficult for the client to know how much to pay. In the case of healthcare, the client is often at a natural disadvantage since they may have a strong time preference. 

What about publicly owned companies? Why not be completely an institution? Probably, the reason is that it makes it easier for a government to raise money quickly by selling a part of the company. 

Area effects

In this piece, I'll go over some thoughts around area effects.

To me, they seem understudied. I think it's the sort of thing that makes "common sense", but not sense to people more used to actively model the world. 

Let's start with a story to illustrate what I mean by area effects. I grew up in a suburb of single family houses. In that neighbourhood, there used to be a cat, a single black cat called Licorice. At one point, Licorice died of old age. What we saw in the following months was that our garages would get invaded my mice, and perhaps also rats. The mice eventually became fatter and fatter and would hardly even bother to scurry away quickly when a person approached. In the end, another neighbour got a new cat called Elsa. Right away, the mice disappeared. The drastic change in number of mice seemed disproportionate to me, for just the difference of one cat. Then I realized that the cat was actually 'killing' more mice than it ate since it was constantly denying the mice the opportunity to forage. Since a cat could come around at any time, it was never safe to be a mouse in the neighbourhood anymore, and the mice starved.

Let's talk terrorism. During the attacks of 2015 to 2017, they killed in total about 200 in Europe. Media and governments were reacting like World War III. At that point I was thinking "Why are people freaking out? They can't kill all of us, they can even make a dent of a dent in the population". Surely some of this fear was due to cognitive availability bias. Getting killed in an attack felt very likely because a Dunbar number of people had been killed and we had heard about all of them. Also being unable to take in just how many people 500 million people really are. But the widespread fear wouldn't have been possible if the victims hadn't been chosen at random. If they had only targeted satiric cartoonists, almost no-one would have felt a personal fear. 

Same thing with Covid. The widespread panic definitely died down when it became clear that unless you had a preexisting health condition, Covid for you would be a heavy cold and that would be that. 

There is a kind of risk calculation everyone does. I'll repeat an idea from Taleb here. The ensemble probability is not the same as the time probability in the presence of irreversible events. Let's break that down. An irreversible event to a person would be death. To a company or state, being dissolved is usually irreversible. To someone in certain positions of power, losing that power is irreversible. 

What about ensemble average? Let's take Covid again. You take 100 people, they all get Covid. Mortality rate is about 1%, so one of them dies. Seems like okay odds, right?

Of course not. That's not the calculation people make, not intuitively. For that, you have to imagine one person, being subjected to something as dangerous as Covid, several times over their life. On average, a person will survive 100 such events. After 70 such events, they have a 50/50 chance of being dead. So it seems like taking such a risk about once per year wouldn't make the average lifespan of an adult much shorter. However, it's not a psychologically implementable rule to say "I'll only take 1% risks once per year". It's too easy to lose track of how often you take the 1% risks. Internally this will have to be implemented as never deliberately taking a 1% risk, and only taking it in the face of an even bigger risk to yourself or someone close to you. So something that has a chance of killing a random 1% of the population will cause huge disruptions as people try to avoid it at all costs. 

Baby Daddy

The Proposal

Suppose you are a man (this is important to the point being made). You go on a date with a woman who is out of your league. She has some combination of beauty, intelligence, humor, popularity, status, and wealth that would normally preclude a relationship between you two, or at least make it unstable since she has, honestly speaking, better options. Let's also assume that she is seen as a high-value partner in your eyes, not just general opinion. She is kind to you, treats you with respect, and there is some personal chemistry. Now she makes the following deal (as indirectly and subtly as custom requires):

-She will donate an egg that is to be fertilized with your sperm. 

-The fertilized egg will be gestated by a surrogate mother, whose free cooperation and compensation she will provide for.

-When the child is born, it will be taken care of and raised by you. She will pay for about 2/3 of the expenses for the both of you, so unless you're ready to lower your living standard a bit, you will have to be a working single parent eventually.

This is of course just a gender-flipped version of an arrangement that women have been presented with throughout all of history, and that some have gone along with. That is, having a child with a wealthier man out of wedlock (he is most likely married to someone else), but with his financial support. The mechanics are a bit different, but the pros and cons from your perspective are the same. 

Internal & External explanations

In this essay, I will describe two distinct ways in which a system can be understood, or explained. I call them the Internal explanation, and the External explanation. This is a very useful distinction to keep in mind when trying to understand a new system.

The internal explanation tells you what you see when you "pop the hood" of the system. For software, the source code is an internal explanation. It can also be diagrams that shows how data flows in the software system, for example. For a car, a schematic or a blue print are internal explanations. For the human body, internal explanations can be the genome, an anatomical diagram, or an illustration of the Krebs cycle. For a country, internal explanations are laws, economic data, or population statistics. 

The external explanation, one the other hand, tells you about how the system interacts with its surroundings. It tells you what kind of selection pressures it's subjected to, what risks it needs to mitigate to survive, or what it's optimized for. It tells you why a system is the way it is, rather than how it works. For software, a use case is an external explanation. For a car, we have urban planning and traffic models. For the human body, the theory of evolution combined with a history of humans' ancestral environment is an external explanation. For a country, we have political science, as well as models for things such as trade, war, and crime. 

System	Internal explanations	External explanations
Software	Source code Architecture diagram	Use case Threats
Car	Schematic	Urban planning
Body	Genome Anatomical diagram	Theory of evolution Evolutionary history
System	Internal explanations	External explanations
Country	Formal structure Laws	Military history Diplomatic realities
Company	Cap table Company policies	Competitors Customer behaviour

Explanations and education

I'm tempted to propose the following heuristic: for every system that you don't have to be an expert in, be biased towards learning external explanations. For systems that you do have to be an expert in, focus on internal explanations (though obviously don't forget about the external ones).

The less you need to know about a subject, the more you should focus on how it fits in with everything else, rather than how it works internally.

Schools like teaching internal explanations. Maybe because curricula were at some point put together by experts in their respective fields, and experts are biased towards internal explanations about their field. 

Personally, my formal education (engineering) consisted of over 95% percent internal explanations of the subjects. The context was rarely made explicit, but more often implied by the examples that were brought up. The external explanations had to be mostly learned during the first years of working. Things like: how is technology developed and maintained in real life? What is the role of a single engineer? What is the history of the engineering profession, and how has that affected how we teach engineering?

What about the best order to learn things? Suppose you want to study for 5 years to become an expert at a system. Maybe the optimal ratio is to spend 4 years learning the inner workings, and 1 year learning context. But is it smart to put the context bit first, and then go more in depth? Or is it better to study the main theoretical results first, and pick up the context later? 

I think it's best to basically follow the graph and do most of the external explanations at first, and only pick up internal explanations later if it becomes necessary. The argument in favor of that is that it is more agile: you're less likely to learn something just because it sounds like a thing you should learn. The argument against is something I heard quite a few times during my education, that if you don't learn the internal explanations properly first, then you might do some irrecoverable damage to your understanding of the subject field. But I don't think that argument bears. Programming is something I learned by trial-and-error as a teenager. When I finally did take a programming class, I of course had some terrible habits. However, most of that could be corrected by the courses, and the classes were more rewarding because I had tried by myself first. 

Explanations and information representation

Something I noticed when making the examples is that the internal explanations are much more likely to lend themselves to a compact, complete, representation (such as source code). Many external explanations on the other hand are theoretical frameworks that need to be adapted to the system in question (for instance: how does the theory of evolution apply to this species?). Other external explanations are just unstructured sets of data points that need further filtering, narration, or interpretation to be useful (for instance: the digital revolution has affected this particular corporation in a million different ways, which ones really mattered?). 

There are clearly many advantages with a compact representation. It's easier to teach, easier to discover gaps in one's own knowledge, and easier to test a person's knowledge of a subject matter with a compact representation. Perhaps we should make an effort to create compact representations of external explanations? Maybe this would make external explanations more palatable to institutions?

Explanations and the history of science

Let's take the following narrative: in the early Western history of science, internal explanations were very dominant, and the guys in charge suppressed external explanations because of ignorance or narrow-mindedness. It was only in the 20th century that external explanations and holistic views of systems started being taken seriously, but the bias still persists. The best counterargument I can think of is that internal explanations have a longer life time, and the external explanations or holistic models of the past have mostly become irrelevant. The asymmetry here is that internal explanations tend to make fewer assumptions. However, there are a couple of external explanations that have proved to be very long lived: the theory of evolution, and the theory of microeconomics. So maybe there really is something useful in trying to find great external explanations. 

A compromising narrative that doesn't throw out history while still providing a path forward could be: reductionism, the prevailing scientific philosophy, is about dividing a system, describing the individual parts, and then putting everything together. Our predecessors in the history of science have mostly done the work of describing the parts, and it is our role to put everything together.

I don't want value. I want to be lucky.

A fundamental assumption that I make as part of a decision process, is that I want as much value as possible. A recent thought experiment has made me doubt this. 

Background: I arrive at a train station that I've never been to before, where I'm going to catch the next departure. I don't know anything about how often the trains go from this station, or when the next one will be. Now I consider which of these scenarios will make me happier:

Scenario A: The train departs every 10 minutes. When I get there, the previous train is just pulling out of the station, which means I will have to wait for 10 minutes.

Scenario B: The train departs once every hour. When I get there, the next one is scheduled to arrive in 12 minutes.

The contrast here is of course: Scenario B has a longer wait time, i.e. the value to me is strictly lower. However, Scenario B clearly feels luckier. 

If I could press a button to land in either scenario, I would press B. The thought of Scenario A just pisses me off too much, whereas thinking about B feels like lowering myself into a hot bath. Am I stupid?

I think the source of my irrational instinct here is that in Scenario A, I immediately take the high frequency of the train service for granted, not realizing that I've actually been lucky with respect to the distribution of train services. It is also easy to imagine a peer who arrives just a minute earlier in Scenario A. In Scenario B, at least the unluckiness does not just affect me. Preferring B now seems pretty selfish of me. Perhaps this is a preference we should try to fight? 

Are there any other situations that could provoke the same irrational decision, something that matters more?

Discovery Processes

Introduction

A Discovery Process is a piece of work that takes approximately zero time to do the second time one has to do it. In other words: something that is extremely easy once you know how to do it. Modern mental work abounds with discovery processes, such as finding specific information, finding out what is causing a problem, and solving abstract problems. It is a natural consequence of the computer and the internet: if the result of one's work can be copied without cost, then it only needs to be done once, ever. Since it is only useful to know how long a specific Discovery Process takes to complete when we have exactly zero data on it, it is inherently difficult to estimate the time it will take. This creates problems for those of us who want to produce good work reliably, as well as for those who are dependent on it. In this post, I will analyse some consequences of the abundance of discovery processes for modern organisations, and for individuals. 

Examples

Let's first hone in on the definition so that we know what we are talking about. A simple test as to whether a given task is a discovery process or not, is to ask what would happen if the work's deliverable was lost. Suppose a craftsman makes a beautiful table. The table itself is the deliverable of the work. If the table is stolen or destroyed, replacing the table will take almost as much time as making the first table. I say almost as much time, because I'm counting on some learning from the craftsman [1]. The bigger the "design" part is of the tablemaking, the less it matters that a single table is lost. Compare with a program: most of the work in programming is finding out the right way to do something. If the code is lost (immediately after the coding is complete), it will not take nearly as much time to rewrite it. This applies more the more high-level the programming language is. Somewhere in between we find classic engineering, where a prototype or production process is developed and set up. Having to start over that work would be frustrating, but it would probably take at most 50% of the time the second time around. This pattern (carpenter, industrial engineer, programmer) gives us a clue for how work will develop in the future: all work, that is not about maintaining relationships or signalling, will become more and more like an ideal discovery process. If this is really true, it seems extremely important for us to start making sense of the properties of discovery processes. 

Estimating remaining time

I propose a simple model for estimating the remaining time of a discovery process: if one has worked X hours on it, then on average it will take another X hours to finish. A bug that has evaded the programmer's attacks for 1 day, will on average take another day to resolve. A conjecture that remains unproven despite 10,000 mathematician-years will take on average 10,000 more mathematician-years to finally crack (though I expect that many years from a single mathematician will pay off much better than a few years from a great many, who will have to redo a lot of thought-work between each other). 

Caveats

When does this not apply? It does not apply if we know that the right answer hides in one of a finite amount of places, and we have to do some nonzero amount of work for each place (such as compiling, restarting, or moving a lot of data). In those rare cases do we ever find ourselves saying something like: I have worked on this problem for 4 hours, but now I am certain that it will not take more than another 2 hours. These are really rare cases, and they're actually not good signs. A team lead who hears that a piece of work is certain to finish in a known amount of time is probably happy to have a solid figure for once, but they shouldn't be! The fact that one's organisation can know how exactly to do something but not actually be able to do it (yet) means that the work is not progressing at the speed of thought! It means that the bottleneck in development is not the most expensive part (developers' brains) but a relatively cheap part (computers) [2]. When I hear that a software project will take another 2 years, it makes me think that either their organisation is bottlenecked by the wrong things, or that they cannot be certain that the project is even possible. 

Another example when we need to locate a specific piece of information in a book. After the "shortcut" approaches have been tried, such as grepping for keywords, googling for a quote, or trying to narrow down the search by looking at the table of contents, we know that finding the information (or realizing that the information is not in the book) can take no longer than it takes to read the entire book from cover to cover. However, this is significantly longer time than it takes to try all the shortcut approaches, so we're better off starting with them. 

Consequences of having a job dominated by Discovery Processes

• Constant uncertainty about when tasks will be finished. This is actually a good thing for the slacking employee: uncertainty of hardness of tasks makes it difficult for the employer to know how to price it. In the other extreme, highly repetitive work, the employer has very good information about how long tasks take and can therefore set a price just at market price for the class of workers who can perform the task. The information asymmetry should make us expect that companies are very hesitant to start paying for new software projects, especially ones that sound a bit weird. The result is largely the state of software consulting that we see today: well-paid consultants working less-than-optimally on software projects that seem safe and doable to a big organization. 
• Divide and conquer is golden. Any insight about how a discovery process may be divided into independently solvable parts can drastically reduce the time is takes to solve it. 
• Knowledge is valuable. Having a large toolbox of general solution methods to be thrown at any new discovery process can make a developer much more productive.
• Experience is valuable. Having heuristics for discovery process in one's field can help with prioritizing solution methods. 
• Curiosity is valuable. Being mentally malleable enough to reshape one's mental models on the fly when working on a new discovery process can make up for lack of experience. 

[1] This gives us an alternative definition for an (ideal) discovery process: it is work that has an infinitely steep learning curve. 

[2] This does not apply for industries that are limited by their tools, such as large-scale machine learning, super computing, or astronomy. 

History of the Electric Scooters

At this point, in July 2021, it has become clear that the electric scooter is here to stay. I will refer to the vehicle as a 'scooter' in this post, for brevity. It seems likely that this shorter name will become more common, as the vehicle itself becomes more common relative to the lightweight moped vehicle that is already called a scooter. 

A scooter.

Initial wave

The scooter had its breakthrough in 2017. The first successful commercial application was scooter sharing. The business idea was straightforward: buy a few hundred scooters from China and place them without permission in a city one night. The user downloads an app on their phone which can be used to unlock the scooter. When finished, the user could initially park the scooter anywhere. The service quickly became popular among users. The author can't recall a single city where it flopped. Early companies were Lime and Spin in California. Copycats soon followed; Bird (California), Tier (Berlin), and Voi and Moow (Stockholm). There were many more in other cities. 

Business model

The economics were a bit unsure, however. A scooter purchased from China cost $300-$500. Initially, the price was $1 for unlocking and $0.15-$0.3 per minute of subsequent usage. Vandalism and theft of the scooters quickly became rampant. The author remembers seeing a figure that the average lifetime of a scooter was only 28 days. With an average travel times of 10 minutes, this would mean that each scooter would have to be rented about 5 times per day throughout its lifetime. The companies also had to charge the scooters. Lime did this using gig-workers called 'juicers'. According to the Lime homepage, a juicer is paid $5 for a full charge. Since a full charge was enough for about 60 minutes of usage, about 40% of the minute-fee was eaten up by the juicers. Business models diverged after a while. Lime introduced longer-range scooters, reducing the cost of juicers. Voi introduced a 30-day unlimited ridership pass in the summer of 2020, costing $60 for Stockholm and less for smaller Swedish cities. There were also scooters without the unlocking fee but with a higher per-minute fee, for short trips. 

Regulation catches up

There were many complaints from other road users. Mark Wagenbuur of BicycleDutch, a youtube channel, complained that the scooters were encroaching on space meant for bicycles in a video. Anecdotally, the scooters were used rather recklessly, particularly by teenagers. They were not only used for simple transportation, but also for urban 'sport'. Parked scooters were often in the way on sidewalks. Another common complaint was safety concerns. Most fatal accidents included collisions with motor vehicles, and were similar in kind to fatal bicycle accidents, i.e. occurring when both motor vehicle and scooter are travelling in the same direction but the motor vehicle makes a turn across the lane of the scooter. In Ontario, scooters and other similar vehicles were illegal even before the scooters appeared, due to a preexisting blanket law. In May 2021, the Toronto city council voted unanimously to uphold the ban. Stockholm, as of Spring 2020, had introduced geographic restrictions on riding, high speeds, and parking. The speed of the scooter on a plain surface was limited to about 25km/h from the beginning, due to technical constraints. It was however possible to achieve a higher speed when going downhill, but the user had to promise not to ride the scooter downhill before starting a ride (this was not followed, of course). As of Summer 2020, the scooter would automatically brake when going downhill or being kicked forward, limiting the speed to about 22km/h. The United Kingdom established public tenders for the right to do scooter sharing in several cities. In November 2020, the tender was awarded to three operators. 

Prior systems

Bikesharing had been proposed and tried several times since 1965. In European cities, the concept took hold as municipality-supported initiatives to promote less car traffic starting around 2010. These systems featured fixed locations for parking the bicycles. The cost of a seasonal pass was usually over 10x less per day than a single-day pass, implicitly subsidizing commuters at the expense of tourists. In Malmö, a day pass cost 72 SEK and a 365-day pass cost 250 SEK in 2018. This system was not a complete failure, and may very well have encouraged a few people to leave the car behind. However, it suffered from being overused on some distances, and underused in other places. The user had to worry about not being able to park their bicycle when arriving at their intended destination. There were also several private bikesharing companies, such as Donkey Republic from Copenhagen, started in 2014. This business model was identical to the later scooters, except for the vehicle being a bicycle. It was also much less successful, despite having much lower prices, with 30 minutes costing €2.2, compared to €7 for a scooter (assuming €1 for unlock and €0.2 per minutes). The un-electrified scooter had long been present on the market, under the name 'kickbike', however it was used mainly as a toy vehicle for kids, and for sport by teenagers, similar to the skateboard.

Normalization

The scooter sharing led to social normalization of riding a scooter in public. I saw the first privately owned scooters in Vienna in April 2019, ridden by geeks. As of July 2021, it is a common sight on bike lanes, and sidewalks and car lanes too. People (always teenagers) even ride their privately owned scooters inside supermarkets and the metro. I expect scooters to be banned soon from such places. This would present a problem for scooter owners, since it is not obvious how to lock the scooter when going inside a place. Special scooter parking spaces with locks may appear, and perhaps future models will feature better physical security. A standard scooter costs $300-$700, which is about the same price as a bicycle. 

Related vehicles

A recent addition to the ecosystem of vehicles is scooters with a small seat in the back part of the standing area. Another type of vehicle that has become popular is the 'fatbike', which looks like a crossbreed between a scooter and a motorcycle. It is electric and has very wide wheels. A benefit of this type of bike seems to be that it can climb sidewalk edges with comfort. The fatbike is the SUV of the bicycle world, a heavier vehicle that has the advantage in the case of a collision with a regular bike. The standard electric bicycle has also become popular in recent years, especially among the elderly. An electric bicycle costs about twice as much as a regular bike.