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The death of insurance2008-02-24 22:51:56

Saw this posted on Slashdot, and it reminded me of a discussion I had back when I took SOC 232 (an otherwise useless course). Insurance works because of lack of perfect information. It's basically a way of hedging your bets - insurance companies take the average cost of whatever it is they're insuring across a number of people, and charge that to each person (plus a little something for themselves). Within that group of people, there are some who would otherwise have to pay a huge amount, but most of them wouldn't have to pay as much as they do in insurance premiums. From the point of view of the insurance company, those high-paying people are liabilities, and the low-paying people are assets. People agree to get insurance for the same reason that insurance companies offer it: neither of the two know which category an individual belongs to, so it's a mutually beneficial arrangement.

The slashdot post describes what happens as our information gets more exact (at least with regards to health): insurance companies stop accepting the high-paying people as customers. Of course, there's a flip side that isn't mentioned: the low-paying people will simply stop getting insurance. If you got one of these miraculous DNA tests that told you your entire medical future, and you realized that you would never be severely ill, why would you bother with insurance? It would much cheaper to simply set aside some money and pay the costs yourself. With insurance companies refusing to accept some people as customers, and the remaining people refusing to pay for insurance, it's should be pretty obvious that insurance companies are going to start going broke (note that this only applies to areas where the accuracy of our information will increase dramatically, such as possibly health care).

This puts us back in the state we were in before insurance, where a few unlucky people will have to pay huge amounts and the rest will lead merry lives. The way I see it, this will lead to one of two possible outcomes. One is that the role of insurer will be taken up by the government and done through taxes (such as already happens in various countries that are not the United States). The other is that the unlucky people will simply fade away in a few generations (evolution by financial selection). I suspect that which of the two outcomes takes place in any given country hinges upon their current policies towards health care. I much prefer the first outcome, so I'm glad (again) that I'm not living a little farther south.

[ 4 Comments... ]

Problems of scale2008-02-17 14:00:01

I was in India recently for a couple of weeks, and while I was there, I noticed a few things that I found interesting. India is currently going through huge growth spurts (economically, anyway), and they're trying to develop infrastructure to match more developed countries. However, the way I see it, they're going about it all wrong. As I see it, there are two main problems, both of which are driven by the huge population.

The first is simply one of scale. The population is so large and the population density is so high that approaches that work elsewhere simply can't scale to work in India. Problems of transportation and distribution in particular are hard to deal with. Traditional distribution methods (say, for example, using a truck to deliver food to grocery stores) requires infrastructure, which takes up space. The more people you have, the more stuff you need to distribute, the more infrastructure it requires, and the more space it takes up. When high population density (i.e. lack of space) is a problem to begin with, this approach runs into problems pretty fast.

The same applies to transportation - people need to get from one place to another, which usually requires roads and cars. The more people you have, the more cars and roads you have, and the more space this takes up. In fact, a 32-lane toll plaza was recently opened on a new highway in Delhi. The thing is huge, and it's still not big enough to handle the traffic that goes through (although partly because of the second problem, which I'll get to in a bit).

To their credit, they are greatly expanding the metro system (which I unfortunately didn't have the time to see) so mass public transit in Delhi at least should be somewhat better. On the other hand, the introduction of the Tata Nano later this year is bound to clog up whatever space is freed as people upgrade from scooters to cars.

The second problem is also population-driven. The problem is that people in India have, over time, learnt that following the rules is bad. Rules in general are designed for the greater good at the expense of the individual. Usually, the expense to the individual is negligible, but when you scale up to the population in India, that expense becomes significant. For instance, when you're trying to obtain something, the general rule is to wait in the line until the people ahead of you have been served. This works fine until there's a million people waiting in line ahead of you. Following the rules gets you stuck at the end of the line, waiting for days. By the time you get to the front, the place is closed or they're all out.

So people won't follow the rules. They take the greedy approach and cut to the front of the line. And of course, if one person does it, everybody else will do it because otherwise they'll never even get to the front of the line, let alone get what they were waiting for. I don't really blame them for this, since usually the rules don't take into account the problems introduced by population. However, the end result is chaos. Following the rules is something that happens only by accident. For a relatively tame example, see this video of how traffic works. I say that example is tame because I myself saw plenty of cases where people ran red lights, went the wrong way up a one-way street, or parked in the middle of the road. In one case, somebody decided that the quickest way to get their flock of sheep from one side of a superhighway to the other side was simply to walk across, blocking all traffic. Who needs rules when you've got sheep to feed?

Getting back to that toll plaza, guess what happens when you have 32 lanes and people who don't follow the rules? People go lane-hopping, resulting in all sorts of unnecessary traffic jams and gridlock. They built the toll plaza with 32 lanes because they calculated that it would be enough capacity to deal with the traffic. And if people followed the rules, it would be. The problem was that they didn't factor in people's tendency to ignore the rules. They took a solution that works in other countries, scaled it up, and expected it to work, without taking into account all the other problems that creep in when things are pushed beyond their scalable limit (if nobody's yet coined the term "scalable limit", then I'm laying claim to it!)

As India grows, they have a huge opportunity to innovate and solve these problems of scale in new and original ways. One example is the WiMAX network they're building (and already deployed in some cities). WiMAX is still fairly new, but they realized that it was a solution that would work at the scale they needed it to, so they went ahead and tried it. It may turn out to be a total failure, but I'd still give them credit for trying something new instead of going with some old solution that obviously won't scale.

Also, while I've focused mostly on the technological aspects above, I don't think that all of the problems are solvable technologically, particularly if the population keeps growing. At some point they're going to have to look into cultural and societal changes too, although that's probably happening already as the younger generations are more exposed to outside influences. In the end, I'm sure everything will sort itself out, but it would be nice if they didn't completely wreck the planet in the process.

[ 4 Comments... ]

Link of the day2008-02-16 08:57:20

Better than Free - an excellent essay on qualities that people will pay for in a world where everything is free. It's not overly verbose, either; he writes just enough to get the point across, so I highly suggest reading it.

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Also, I recently updated the OpenID library I'm using for this website, so it now supports the OpenID 2.0 protocol. Note that Yahoo! and AOL have also jumped on the OpenID bandwagon, so if you have an account there you can use that to log in to this site (hopefully, I haven't actually tested Yahoo! or AOL OpenIDs, but they should work). Let me know if there's any problems.

[ 1 Comment... ]

The future of evolution2008-02-09 14:08:43

I was reading this article on Wired about how families are shrinking in developed nations, and it reminded me of something that I was thinking about a while ago. It occurred to me that the human race seems to have outgrown natural selection. By now we control enough of our environment that small changes in nature don't really put any evolutionary pressure on us. Yes, there are still catastrophic events that kill thousands of people, but that doesn't really qualify as natural selection, since it kills people based on where they're geographically located rather than selecting against some genetic trait.

But anyway, if natural selection no longer applies to us, then we, as a race, need to find other selection processes in order to keep evolving. I was thinking that on a long enough time scale, the only feasible selection process is self-selection. We're going to reach a point where people who are below average will still be smart enough to realize that they are below average (or more generally, people will be more aware of the quality of their genetic material), and will remove themselves from the gene pool in order to improve it. (Note that by "remove themselves from the gene pool", I don't mean "kill themselves", just that they will choose to not have kids).

However, the point in that article above that struck me was that even though the family size in developed countries is much smaller than in developing countries, there is still a variation. "Even among these highly successful people, the richest of them tended to have bigger families." That is interesting, because it seems to imply a sort of self-selection is already happening in developed nations. People who are rich realize that they are above average and have larger families. Or maybe people who aren't as rich realize that they are below average and have smaller families. Either way, I'm not sure if this is fully conscious decision on their part, of even if it's self-selection at all, but it's an interesting possibility.

The article seems to come to a wishy-washy conclusion saying (as I understand it) that having more children requires more effort and resources, which is why families are smaller, but I don't think that fully explains why richer people would have larger families in the developed countries. Anybody else got any thoughts as to why this might be happening?

[ 8 Comments... ]

Micro-hoo2008-02-08 00:24:32

The Microsoft bid for Yahoo! seems pretty stupid to me. It reeks of desperation, and I'm also very suspicious of the timing. Sure, it came just after Yahoo! announced poor earnings and a plan to cut 1,000 jobs, but it also came just after the reserve price was met in the 700 MHz auction.

None of the news articles I've read seem to have connected the MS bid with the auction, but I think the auction is a huge win for Google, and might have been the one of things to push Microsoft into actually making their offer. Since the reserve price was met, the open access requirements that the FCC mandated will go into effect, which is good for users and, of course, Google. They're going to be able to push more ads to everybody, and possibly subsidize entire mobile packages using the revenue they're going to get from location-based mobile ads.

This means a widening gap between Google and everybody else, so Microsoft needed to do something to offset that. Never mind the integration problems (Yahoo! runs all their stuff on open-source platforms and FreeBSD, whereas Microsoft uses (presumably) Windows and .NET). Never mind the horrible, horrible duplication of services (see the cage match for an amusing comparison). It's all about getting Yahoo! users into Microsoft's pocket.

Ironically, if this deal goes through, I'm betting it's going to help Google much more than Microsoft or Yahoo!. All the best Yahoo! engineers will take the CalTrain down a couple of stops and start working for Google. Inspired by the Google culture, they will do more for Google than they've been able to do under the crappy management at Yahoo!. Microsoft will end up with the Yahoo! employees to lazy or stupid to jump ship. Microsoft is going to attempt to integrate Yahoo! services with their own, but fail miserably and have to shut down a bunch of them (see cage match). Users, rather than migrating to the services Microsoft decides to keep, will abandon Micro-hoo altogether and switch to using Google products which are superior anyway.

[ 2 Comments... ]

Breaking the web2008-01-22 19:48:05

A slashdot post on IE8 and it's three different render modes. For those who don't want to read the article, the basic problem is the same as what happened with IE7: it was more standards-compliant than IE6, and as a result, a lot of websites that checked for IE and implemented workarounds simply broke.

The option they've chosen to go with for IE8 is to make it opt-in using a meta tag. So if a web developer wants their page to be rendered using the new IE8 engine, they have to update their site. This is a horrible solution for a lot of reasons, most of which have to do with cruft. It adds cruft to the page (in the form of proprietary meta tags or HTTP headers). It also adds cruft to the browser codebase since now IE will have to support 3 different rendering modes (which will be 4 with the next IE, then 5, and so on).

Of course, all the other solutions are horrible too. The IE teams seems to have shot themselves in the foot plenty of times, but what's annoying is that they just don't seem to learn from their mistakes. Every time they pull a stunt like this, it's done in order to preserve backwards compatibility, and every time it ends up causing more trouble in the long run because it encourages backwards behavior. Web developers assume that since their old crappy pages still work, there's no reason to change what they're doing. And with every release, IE faces the same problem over and over.

My favorite solution for them in this case is to just change the user-agent string. That way all the workarounds that depend on detecting IE will still work on the older IEs, but not on IE8. It'll be treated like all the other standards-compliant browsers out there, and provided it actually does support the standards from here on out, all should be well (of course, that would be asking a little too much).

[ 5 Comments... ]

19842008-01-13 19:55:21

There's an interesting interview with Rick Falkvigne (founder of the Swedish Pirate Party) over at this forum. I found some bits particularly relevant (since the text of the interview is in the public domain, I copied those bits here for posterity):

Not only are politicians implementing a big brother state, they are also confusing and joining the government interests with those of large corporations.

[snip]

We know exactly where this road leads, for we have seen many walk it before us. And while each step can seem convincing, we know what the endpoint is.

Each step is usually justified by "efficient law enforcement". This is deceptive - for who would stand against a bill and demand INEFFICIENT law enforcement? In reality, it is a shift of power from citizens and civil liberties to law enforcement. There have been plenty of governments, historical and contemporary, where efficient law enforcement has been a priority: East Germany, Soviet Union, Cuba, North Korea, Pinochet's Chile, etc. The question that needs to be asked is if it's worth having that efficient a law enforcement, or if something else is lost on the way?

[snip]

A mass surveillance proposal for wiretapping every communication crossing the country's border was introduced in 2005, then retracted because - get this - it had received too much attention. It was reintroduced by the new administration and is pending a new vote this summer.

Update: apparently this was Slashdotted too, but the quote in their blurb isn't nearly as good.

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Catching up to nature2008-01-06 12:47:29

From what I can tell, this basically seems to be artificial photosynthesis. Funny how it takes us something "the size and shape of a beer keg" to essentially duplicate what plants have been able to do far more efficiently for a very long time.

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Input methods2008-01-05 09:46:14

Holy cow. Imagine if all the keys on the Optimus Maximus were a little bit closer. In fact, imagine them placed right next to each other with no space in between. Now imagine the keys didn't have the beveled edges and fit together so as to form a completely flat surface on top. What you'd have is a keyboard that can double as a display. Using the tops of the keys as parts of larger display (similar to how they used to have giant TV screens in malls made up of an array of lots of smaller TVs) would mean that a device could have a display *and* a full-size keyboard, all within the area of a full-size keyboard. Add a little multi-touch to the mix (probably a technical challenge, so unlikely to happen on the first iteration) and you have all the input/output devices you need crammed into a very small space.

If anybody can pull this off, it's Apple.

[ 1 Comment... ]

Food for thought2008-01-03 20:36:36

Today's post inspired by the gust of wind that almost flattened me on the walk back from the grocery store.

Assume, for the sake of argument, that climate change is caused entirely by cars. A quick google search reveals the number of cars in use in the world to be around 600 million (maybe a bit off, but this is just an estimate anyway). This means that each car is responsible for 1.67 x 10-7% of climate change. That's 0.000000167%. Tiny, no? Now let's say that climate change ends up killing 3 billion people (improbable perhaps, but not impossible). That means each car is responsible for killing 5 people. That means each person who drives a car that pollutes an "average" amount is responsible for killing 5 people. Think about it.

Obviously there are other factors to climate change, and my number of 3 billion is pretty random, but the moral of the argument is simple: when calculating responsibility and guilt, you can't just divide it into a billion pieces and then round each piece to zero. Use infinite precision math, people.

[ 1 Comment... ]

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