Four humbugs

It is all too easy and fun to point out widespread notions that are wrong. Because I’ve seen a bunch lately, and it’s easy, and at the risk of being smug, here are four.

Impossible space drive is impossible.

Headlines like “NASA validates ‘impossible’ space drive and Fuel-Less Space Drive May Actually Work, Says NASA and so on and so on are silly and even irresponsible.

What actually happened is that a single small “let’s try out some weird stuff” lab at NASA (and I’m glad NASA has those, really) published a paper saying:

They tried out some mad scientist’s law-defying reactionless thruster, and they detected a tiny itty-bitty nearly-indetectable amount of thrust.

As a control case, they tried out a variant that shouldn’t have produced any thrust. In that case, they also detected a tiny itty-bitty nearly-indetectable amount of thrust.

The proper conclusion would be that there is probably an additional source of noise in their setup that they hadn’t accounted for.

Instead they concluded that both the experimental and the control setup were actually producing thrust, and that they are “potentially demonstrating an interaction with the quantum vacuum virtual plasma [sic]”.

Which is just silly, per this G+ posting by an actual physicist, and various similar things.

For the other side of the issue, see Wired.co.uk’s doubling-down Q&A. But I would still bet many donuts against there being any real effect here.

Brain-like supercomputer chip super how, exactly?

“IBM Builds A Scalable Computer Chip Inspired By The Human Brain“, “IBM’s new brain-mimicking chip could power the Internet of Things“, “IBM reveals next-gen chip that delivers Supercomputer speed“, etc, etc, etc.

Chief among the things that make me skeptical about how important this is, is that none of the articles that I’ve read give an actual example of anything useful that this chip does any better than existing technologies.

You’d think that’d be kind of important, eh?

Apparently there was a demonstration showing that it can do pattern recognition; but so can an Intel Pentium. It’s also touted as being very low-power, but again it’s not clear to what extent it’s low-power when doing some specific useful task that some conventional technology takes more power to do.

I like this quote:

While other chips are measured in FLOPs, or floating point operations per second, IBM measures the chip in SOPs, or synaptic operations per second.

“This chip is capable of 46 billion SOPs per watt,” Modha said. “It’s a supercomputer the size of a postage stamp, the weight of a feather, and the power consumption of a hearing-aid battery.”

Amazing, eh? If only we knew what a SOP is actually good for…

Hey, my right little toe is capable of 456 trillion quantum vacuum flux plasma operations per second (QVPFOPS) (which I just made up) per watt! It’s a supercomputer! In a little toe! Buy my stock!

(Disclaimer: I used to work for IBM, and they laid off at least one friend who was doing interesting work in actual brain-inspired computing, which I have to admit has not increased my confidence in how serious they are about it. Also I now work for Google, which is sometimes mentioned in the press as experimenting with the “D-Wave” devices, which I suspect are also wildly over-hyped.)

Numbers about “sex trafficking” are just made up.

On the Twitters I follow a number of libertarian posters (with whom I sometimes agree despite no longer identifying as libertarian myself), and lately there’ve been lots of postings about the various societal approaches to sex work.

I tend to think that the more libertarian “arrangements between consenting adults should be regulated only to the extent that there is force or fraud involved” arguments are more convincing than the more prohibitionist “things we wish people wouldn’t do should be outlawed and thereby driven underground where they can be run by criminals who do force and fraud for a living” arguments. (As you might perhaps be able to tell by how I have worded my descriptions of them.)

Recently there was this interesting “In Defense of Johns” piece on Time.com, and this also interesting “Actually, you should be ashamed” rebuttal.

One very striking statement in the latter is this:

U.S. State Department estimates that 80% of the 600,000-800,000 people trafficked across international borders every year are trafficked for sex.

which is a really striking number. Half a million people a year kidnapped and taken to other countries and forced into sex work? That’s horrible!

It’s also completely made up, and almost certainly false.

Here’s a paper on the general subject that includes considerable analysis of these numbers, how wildly they vary from source to source, and how little actual fact there is behind any of them. One salient Justice Department quote:

Most importantly, the government must address the incongruity between the estimated number of victims trafficked into the United States—between 14,500 and 17,500 [annually]—and the number of victims found—only 611 in the last four years… The stark difference between the two figures means that U.S. government efforts are still not enough. In addition, the estimate should be evaluated to assure that it is accurate and reflects the number of actual victims.

Between “we’ve found only one-tenth of one percent of the victims” and “the estimates people have pulled out of their hats to get funding are wildly inflated”, I know where I’d put my money.

There are people forced into sex work, and that’s a terrible crime that we ought to find and punish and disincent. But we need to do that by getting all of the truth that we can, not by artificially inflating numbers (or just outright lying) to get more than our fair share of funds, or by conflating a voluntary activity that we don’t like with actual coercion, or by otherwise acting in bad faith.

Sergeant STAR is not AI.

Okay, this one is a bit of a last-minute addition because it was on On The Media this morning, and it fits with our occasional theme of how bad “chatbots” are.

Basically the U.S. Army has this chatbot that answers questions from potential recruits (and anyone else) about being in the Army and all. The EFF got curious about it and filed a FOIA request which was (after some adventures) more or less answered. Details (and some rather confused distracting speculation about different kinds of bots and privacy threats and things) are on the EFF site.

The Executive Summary is that Sgt STAR is basically an FAQ, with something like 288 pages of Q&A’s, and some kind of heuristic matcher that tries to match each incoming question to one that it knows the answer to, and displays that answer. No big deal, really.

And then (the actually useful part) there are some humans who constantly review the log of questions and update the answers to better match what people are asking, and how reality is changing.

The reason the good Sgt qualifies for a Humbug list is that people (including the bot himself) are constantly referring to it as “intelligent” and “AI” and stuff like that.

You Asked: Are you alive?

SGT STAR: I am a dynamic, intelligent self-service virtual guide…

No, no Sarge, I’m afraid you aren’t.

You’re a well-designed and well-maintained lookup table.

And that’s not what intelligence is.

Fractionally Reserved

I’ve run across an internet troll or two railing against fractional reserve banking in the past, but I had the impression it was sort of a fringe-of-a-fringe thing, in the same realm as the “NASA faked the moon landings” idea.

(Fractional reserve banking is where the bank can loan out some of the money that is deposited with it, as explained by Professor Stewart in that scene from It’s a Wonderful Life.)

But now I’ve just finished L. Neil Smith’s Pallas (a wonderful and awful piece of escapist fiction that I ought to write more about, related to that Waking from Libertarianism posting that I also ought to write), and in one memorable scene an “overstuffed” banker is arranging a loan to Our Hero from his (Our Hero’s) best friend and lover (a hooker with a heart of gold and a big bank account), and the narrative voice mentions that the banker can’t just lend him money himself because he (the bankers) isn’t rich, and he can’t loan from the bank’s deposits because fractional reserve banking is considered “felony fraud”.

Now L. Neil Smith isn’t exactly a moderate, but I have the impression he’s more or less a mainstream libertarian writer, so this suggests that the idea is at least a bit more popular than secret government treaties with space aliens.

Last time I was within hearing distance of a troll blaming our economic problems on fractional reserve banking, I used a little just-so story to show how it seems perfectly consistent with libertarian ideas about individual liberty and so on. He replied by contemptuously dismissing me as not understanding, which is what that flavor of troll does when you ask a hard question, and I didn’t pursue the issue.

But if L. Neil Smith is saying the same thing, it occurs to me I should write out the just-so story in a little more detail, and put it here in the weblog where it can be picked up by Major News Media.

So, the story.

Without fractional-reserve banking, a banker is just a particular kind of warehouse guy, one who specializes in storing high-value low-volume stuff (like gold nuggets, hundred-dollar bills). You give him a box with your gold in it, and he promises to keep it safe and give it back to you when you ask, for a mere four-fifty a month. Maybe he even specializes in stuff that is valuable solely for its monetary value, in which case you give him two thousand dollars worth of gold, and he promises to give you back the same value in gold (although not necessarily the same actual atoms), when you ask for it, for either four-fifty a month, or possibly some fee scaled to the value of money on deposit.

This guy isn’t going to make much more money than any other warehouse guy, probably; he can charge more per cubic foot because the stuff is more valuable, but then he also has to spend more on security for the same reason; a vault costs more than a simple warehouse, and the guards have to be paid more to resist the extra temptation offered by small valuable stuff that’s easy to resell.

(Similarly, at this stage of the story, an investment guy is pretty much just a matchmaker. In the example in Pallas, where Cherry has lots of money and wants to lend some to Emerson, and they already know each other (in the Biblical sense, even), he serves no purpose at all except to allow Smith to show that he doesn’t like bankers.)

Now one day a warehouse guy of the “you give us money, we give you money back” type notices that there is all this money sitting in his warehouse, and it’s doing nothing. And he starts up a brand-new service, where if you sign up for it, he will take oh say ten percent of the money that you give him, and lend it out at interest. He will then keep part of that interest for himself (his profit on this great idea), and use the rest to lower your monthly fee.

Sure, it’s possible that if you want all of your money back at once, and when he tries to call in the loans that he’s made with ten percent of it, the people with the money won’t be able to come up with it all at once, but that’s not very likely really is it? That small risk is worth the lower monthly fees, at least to some depositors.

And in version 2, he has the bright idea of changing the contract so that it says that if that does happen, he can use on-deposit funds from anyone else in the program to pay back the difference. Then he can only come up short if lots of people want to withdraw more than 90% of their funds at once, and at the same time lots of people that he’s lent to can’t pay up when he calls in the loans. And (since this is such a good idea that he is prospering, and has lots of depositors and lots of borrowers now), the chances of that are so small that he can actually insure himself against it.

This works out really well, and he dominates the money-warehousing market because of his low fees, and dominates the money-lending market because he has lots of money to lend.

Since this is a libertarian just-so story, his success naturally leads to competitors improving on the idea!

One competitor in particular notices that people have so much faith in this whole system now that hardly anyone ever gets cold feet and wants to withdraw even half of their money all at once. So in his contracts, it says that he can use up to 60% of the deposited funds for loans. Also, because he can get insurance against the bank runs that seldom happen anyway, he can say in his loan contracts that he will never call in the loan unless the client doesn’t keep up the payments; naturally this extra sweetening of the loan contract means he can charge higher interest.

His calculations show that with this much money to lend, and these higher interest rates, not to mention needing a smaller vault, he’ll be able to make a modest profit and not only eliminate the monthly fees to his depositors, but actually pay interest on deposits!

Naturally, customers flock to him, and eventually almost everyone in the money-warehousing industry is doing it this way.

So now we’ve got fractional reserve banking: you deposit money, the bank keeps some of it in the vault, lends the rest out at interest, and pays some of that interest back along to you, the depositor. Banks are insured against runs up to some amount. All of this is clearly documented in the contracts between depositors and the bank, borrowers and the bank, and the insurance company and the bank.

There is no fraud of any kind.

Basically, if we want to describe it more briefly and collectively, a bunch of people have got together and said “hey, we never need all of our money at once, so why don’t we pool it together and lend some of it out at interest, and get free profits?”.

It’s not at all clear that there’s any step in here that a libertarian government can step in and stop. No one is being lied to, no one is being forced to do or not to do anything. People are voluntarily deciding to try to maximize their individual utility by making certain agreements with other people. And the result is pretty magic; there’s lots of loan money available to start new companies and invest in new things and carry out research, and yet on the other hand there’s also lots of liquidity, and you can withdraw some money to buy that special Solstice gift anytime you want.

I admit I don’t quite understand the railing against it by internet trolls and L. Neil Smith; but whatever objections they have to the resulting institutional arrangements, it seems pretty clear that there’s nothing inherent to fractional reserve banking simpliciter that a libertarian government can forbid and still keep its credentials.

Unless I’ve overlooked something?

Wednesday, January 4, 2012

Off to Florida for a memorial service for Dad at his church down here. It will be good to talk about him to more people who knew him, and to hear from people who knew him in this part of his life.

I decided to bring only the iPad, because it’s just a few days and it let me travel very very light, just my Christmas present messenger bag. Bringing the big laptop (and therefore the cooling pad) would have at least doubled the space and weight, and bringing the work laptop would probably have meant doing work, and I’m still on vacation, dagnabbit!

(I did do work email on Monday; fortunately it looks like basically nothing significant happened after I wrote the triumphant “we’re all done for the year!” email and teleported away.)

So I miss SL, and to an extent I miss WoW (although with WoW the longer I don’t play it the less I tend to miss it), and I even miss Portal (stayed up late Monday night installing it on the big laptop via Steam, and getting I think about halfway through the post-chamber-19 section; having played through it before on the playroom computer definitely helps).

But I’m catching up with Twitter and the news (How about them wacky Iowa Republican caucuses, eh?), and here I am writing in the weblog even. So that’s all good.

Fascinating to see the Twitterverse getting Verizon to back off of a new nickel-and-diming fee, just like the Bank of America one last month, and the whole splitting-up-Netflix thing (“Qwikster” lol) before that.

Keep an eye on the “Paypal forces destruction of antique violin” story; maybe the next crowd-driven policy change.

(How is that even legal? If Paypal doesn’t make the payment, presumably the object is still owned by the almost-seller, so how can they make the almost-buyer, who doesn’t own it, destroy it? Very odd…)

I need to write more sometime about my disillusion with the big-L, and to some extent the small-l, libertarians, and with Ron Paul in particular. Pains me a bit now that I once voted for him for President, although I’m not entirely unhappy with the message that I intended that to send.

Government truly is pretty bad at various things. Some of those are things that therefore the government shouldn’t do. But significant ones are ones that we need the government to do, and that therefore our only option is to have them do it, and keep a really close watch over them (over ourselves) at the same time.

Even if we take the libertarian line that the only proper role of government is to prevent force, theft, and fraud (and I’m no longer sure that I do), it turns out you still need a significantly large government, because force, theft, and fraud can be big, subtle, powerful, and very well organized. However much we might want to believe it, Sheriff Taylor isn’t going to keep either Organized Crime from terrorizing the countryside, or Big Business from polluting the water, or Wall Street from stealing billions of dollars from its customers, with just his smile and a comical deputy or two.

It’s bright and sunny and unusually cold in Florida this morning; frost on the car windows! Pretty though. I’m sitting looking out the big windows, typing with my thumbs and wondering how differently I write with this tool than with other ones. Another interesting question…

Griftopia

So I said the other day that my libertarianness was slipping because of undesirable things that can happen even in a libertarian system with everyone obeying the (comparatively few) laws.

And that may still be true (something for another post), but at the moment I’ve decided that it isn’t relevant to what’s currently going on. I’m reading Matt Taibbi’s Griftopia, and he’s convinced me that what’s currently happening is mostly people getting vast sums of money through blatantly illegal actions, and then using a small fraction of those vast sums to avoid any sort of punishment for their crimes.

(And then using the less savvy parts of the Republican voter base, rebranded as the Tea Party, to create a huge noisy distraction around the premise that our problems are caused by giving poor people food stamps.)

There’s also an element of “getting vast sums of money from the government that you in no way deserve”, where a libertarian can say that, well, the government shouldn’t be structured in such a way that it can give anyone that much money, and that’s probably right.

But the general observation that if you steal enough money, quickly enough, you can then use some of it to deploy resources to avoid punishment (and even avoid capture, prosecution, indictment, discovery), probably applies to any society with anything like money in it.

How do we prevent this kind of crap? I think the need to prevent it (or at least minimize it) is one argument against the sort of libertarian minimal state. If the state is that minimal and simple, it’s not going to be able to defend itself against a really well-heeled miscreant, who can employ his stolen resources to baffle and evade the comparatively small and simple state.

Or as Taibbbi says in the book, talking specifically about Ayn Rand’s libertarianism:

Obviously it’s true that a Randian self-made millionaire can spend money on private guards to protect his mansion from B-and-E artists. But exactly where do the rest of us look in the Yellow Pages to hire private protection against insider trading? Against price-fixing in the corn and gasoline markets? Is each individual family supposed to hire Pinkertons to keep the local factory from dumping dioxin in the county reservoir?

We can tell lots of stories here about voluntary associations of private people getting together to hire some really good Pinkertons, but it’s not at all clear, given that even a non-libertarian nation-sized government has a hard time marshaling enough resources to do this sort of thing, that these voluntary associations could actually have enough clout to prevail against, or even sufficiently deter, people with the amount of money that this sort of crime can produce.

In some sense “criminals who make so much money that they can use it to escape detection and identification and prosecution” are an edge-case. But edge-cases can be ignored only if you’re sitting in your armchair opining about how much better a minimal government would be. In the real world, if there’s some edge-case that someone can use to get rich, it’s got to be at the center of our attention, however peripheral it is seen from the armchair.

Anyone else read Griftopia? Any nice comforting debunkings of it you can point us at?