Scientists at CERN have found apparent evidence that neutrinos can travel faster than light.

Suppose that tomorrow historians at Harvard find apparent evidence that the South won the American Civil War — not in some metaphorical “they accomplished their goals” sense, but in the literal sense that it was actually Grant who handed his sword to Lee at Appomatox and not the other way around.

Question: Of which conclusion would you be more skeptical?

Of course your answer might depend on exactly what this new “apparent evidence” consists of. So let me reword: As of this moment, which do you think is more likely — that neutrinos can travel faster than light, or that the South won the Civil War?

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Each generation wishes it could go back fifty years and shake some sense into those people who were so bound by unnecessary customs, and so blind to the options they could have chosen and the changes that loomed on the horizon. As I said on Tuesday, this was Edith Wharton’s theme when she wrote in 1920 about the 1870’s, and it’s the theme of Mad Men, written in 2010 about the 1960s.

I invited you on Tuesday to speculate about which of our own quirks will trigger this sort of bittersweet nostalgic frustration among our descendants fifty years from now. There were some great responses in the comments.

Here are some predictions of my own that I think are least plausible — some moreso than others, but I’ll throw them out in no particular order.

1. Future generations will look back with bemusement on a time when airline passengers couldn’t pay extra for a flight that’s guaranteed first place in the runway queue, and more generally on our odd reluctance to embrace prices. They’ll be unable to imagine why we thought it was better to let people die of liver disease than to pay organ donors, or why the “net neutrality” cult had a problem with Internet content providers being able to purchase resources to serve their customers better.
2. Future generations are likely to be appalled by the moral blindness of either their pro-life or pro-choice ancestors, though I’m not sure which. Like slavery, this issue will eventually be settled, whereupon the losing position (whichever it is) will start to seem not just wrong but unthinkable.
3. Future generations might look back tenderly on the naivete that led us to believe we (meaning, say, middle-class Americans) could go on much longer leading lives mostly untouched by violence.
4. Choose a random movie made before, say 1990, and the odds are good that all of the plot complications could have been resolved in the first five minutes if only somebody had a cellphone. Choose a random movie made today and the odds are good that all of the plot complications could be resolved in the first five minutes if only the characters were polyamorous. (Of course, then there would be a whole new set of complications.) As incomes, lifespans, and the quality of communication continue to improve, I expect that our societal fixation on monogamy will wither, and our grandchildren will look back in wonder at their ancestors’ blindness to the lifestyle options they could have chosen.
5. The moral circle will continue to expand. As we look back in horror on our ancestors’ harsh treatment of slaves or of Native Americans, our descendants will look back in horror on our treatment of immigrants and our reluctance to trade with foreigners. Slogans like “Buy American” will strike our grandchildrens’ ears the way “Buy White” would strike ours.
6. Our treatment of animals might seem almost as horrific as our treatment of foreigners.
7. Our descendants might well wonder why so few of us chose to be cryonically preserved (or to put this another way, why so many of us chose to die), and wish they could come back and shake some sense — and some life — into us.

Which of these strike you as likely, and which don’t? And do continue to add your own.

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Am I right about that? Over the course of human history, what is your estimate of the fraction of males who have reached adulthood without participating in a military conflict?

(Obviously, there’s some fuzziness about what counts as military conflict. I’m thinking here not about the occasional street fighter, but about the guy living in mud and getting shot at for weeks at a time — or things equally dangerous/traumatic/uncomfortable.)

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2) This weekend marks the anniversary of a world-changing event — an event that might be of particular interest to readers of The Big Questions, both the book and the blog. Who can tell me what event I have in mind? (Hint: It’s an anniversary ending in zero.) I’ll blog the answer on Monday.

3) The discussion of the Allais paradox rages on in comments on multiple posts. For the few of you who have not yet tuned this out, my latest comment is an attempt to cut through the fog and identify the locus of some commenters’ confusion, or disagreement, or both. I think it will very much help focus the discussion if the dissenters could tell us where they stand on these questions. (My answers are all “yes”.)

4) In view of my travel schedule, I’m unlikely to blog on Friday (unless, of course, something either delights or annoys me so much that I can’t resist). I’ll be back on Monday with the big anniversary post.

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Today, I will attack none of these questions. Instead, I will attack the meta-question of how to attack such questions. For economists evaluating alternative policies, the industry standard is the efficiency criterion, also known as the welfare criterion. (I’ll illustrate what that means as I go along.) But now comes Princeton Professor Uwe Reinhardt with a piece in the New York Times that questions the orthodox approach found in virtually all modern textbooks (including one in particular).

Let’s first dispense with the straw man. I’ve never heard of an economist who believes that every efficient policy is good, and I’ve heard of very few who believe that every inefficient policy is bad. It’s true that most economists do seem to believe that any good policy analysis should start by considering efficiency. That doesn’t mean it should end there.

I think economists are right to emphasize efficiency, and I think so for (at least) two reasons. First, emphasizing efficiency forces us to concentrate on the most important problems. Second, emphasizing efficiency forces us to be honest about our goals.

I’ll illustrate the first advantage with a stylized example adapted from Chapter 17 of The Big Questions. Suppose you live next door to Bill Gates. Bill likes to play loud music at night. You’re a light sleeper. Should he be forced to turn down the volume?

An efficiency analysis would begin, in principle (though it might not be so easy in practice) by asking how much Bill’s music is worth to him (let’s say we somehow know that the answer is $10,000) and how much your sleep is worth to you (let’s say $25). It is important to realize from the outset that no economist thinks those numbers in any way measure Bill’s subjective enjoyment of his music or your subjective annoyance. Only a crazy person would think such a thing, and I’ve never met anybody who’s that crazy in that particular way. Instead, these numbers primarily reflect the fact that Bill is a whole lot richer than you are. Nevertheless, the economist will surely declare it inefficient to take $10,000 worth of enjoyment from Bill in order to give you $25 worth of sleep. We call that a $9,975 deadweight loss.

Why is that an important calculation? Here’s why: It reminds us that there might be a better solution to this problem, such as allowing Bill to crank up his speakers and forcing him to pay you, say, $5000 in compensation. Compared to shutting down the music, that’s better for Bill and better for you. Maybe that’s an alternative we should consider. In fact, whenever a policy is inefficient, there’s always an alternative policy that, in principle, is better for everyone. That’s what inefficiency means.

Now in this case the proposed alternative policy might not be such a good idea. It might, for example, encourage Bill to lie about the value of his music, and encourage you to lie about the value of your sleep. It might even encourage you to move a little closer to Bill just so you can find more things to complain about and get compensated for. Or it might have negative long-term consequences for the way we think about wealth and social status. So maybe we don’t want to pursue this alternative policy after all. But, says the economist, we ought at least to consider it.

And — here’s the point — the bigger the deadweight loss, the greater the potential gains from an alternative policy. Therefore, the bigger the deadweight loss, the more it’s worth at least attempting to devise a good alternative policy. We calculate the deadweight loss as a rough but useful guide to how much effort we should put into this problem. (Calculating deadweight losses is the same thing as worrying about efficiency.)

Take a more realistic example: Should we spend, say, a billion dollars a year to subsidize end-of-life health care for poor people? It would be, I think, a terrible mistake to settle this question without at least asking whether the recipients might prefer that we spend our billion dollars some other way — say by subsidizing their groceries or just giving them cash. If so, the difference in value between what they’re getting and what they could be getting (as measured by the recipients) is a deadweight loss. The bigger that deadweight loss, the more we should reconsider our spending priorities.

Now once again, efficiency is not the be-all and end-all of policy analysis. Even if poor people prefer subsidized groceries to subsidized health care, we might still choose to give them health care if, for example, we believe that they are less likely to make wise decisions about their own health care than about their own groceries, or if we’re afraid that subsidizing groceries (or handing out cash) is somehow more likely to invite fraud. But the bigger the deadweight loss, the more we should probably rethink those concerns, because the bigger the deadweight loss, the more opportunity there is to improve life for the recipients. That’s the first reason we should care about efficiency.

The second reason we should care about efficiency is that efficiency analysis strikes down political smokescreens. Like this:

Politician: Here’s my program to make the health care system work better by subsidizing health care for the poor.

Economist: Your program costs a billion dollars and delivers half a billion dollars worth of benefits. That’s inefficient.

Politician: So what?

Economist: Well, the “so what” is that maybe you could take that billion dollars and deliver a full billion dollars worth of benefits instead if you spent it a little differently. Why not just hand the cash out to poor people?

Politician: Because I don’t want to help all poor people. I only want to help sick poor people — and this is the only way I can think of to do that.

Economist: Ah. So your goal here is not to make the health care system work better after all. Instead it’s to transfer resources to sick poor people.

Politician: I guess so.

Economist: That’s fine. Now we can have a healthy debate about whether that’s what we want to do.

And now, you see, thanks to the economist’s insistence on thinking about efficiency, we end up having an honest debate about the politician’s real goal instead of a dishonest debate about the politician’s feigned goal. However the debate turns out, that’s a useful exercise.

It’s not just politicians who sometimes hide their true goals behind smokescreens. Suppose, for example, that one of Professor Reinhardt’s colleagues were to write a series of columns in the New York Times calling for more fiscal stimulus, including higher unemployment benefits. On some days, he argues that these policies will increase GDP. Other days, he argues that they will reduce unemployment. Other days, he tells you that it’s cruel to deny benefits to suffering jobseekers.

Those are of course all different (though intertwined) arguments. You might accept some but not others. Even if you accept them all, you still can’t draw a policy conclusion until you weigh these benefits against the policies’ offsetting costs (including the opportunity cost of the expenditures, the effect on long run growth, and so forth). The advantage of an efficiency analysis (along, say, the lines suggested here) is that it would force Professor Reinhardt’s colleague to be clear about his priorities. Is he, for example, concerned primarily about increasing current output or about redistributing current output? Either might be a worthy goal, but we can’t have a useful debate with someone who won’t tell us what his goals are.

Usually, when economists take policy stands, they start with an efficiency analysis precisly in order to clarify their goals and so make it easier for opponents to identify the locus of their disagreement. They say things like “I support this policy because it’s efficient” or “This policy is inefficient — I estimate the deadweight loss at $X — but I think that much deadweight loss is worth tolerating for the following reasons.” That’s called intellectual honesty. I think it’s a good thing.

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Data from 9,785 users of the dating site OKCupid reveal that iPhone users have 50% to 100% more sex partners than Android users, at every age.

This graph combines men and women, but the same pattern holds for each gender separately.

Explain this to me!

More info here (if you scroll down a couple of screens).

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That central question is called the “P versus NP” problem, and for those who already know what that means, his claim (of course) is that P does not equal NP. For those who don’t already know what that means, “P versus NP” is a problem about the difficulty of solving problems. Here’s a very rough and imprecise summary of the problem, glossing over every technicality.

Deolalikar’s paper is 102 pages long and less than about 48 hours old, so nobody has yet read it carefully. (This is a preliminary draft and Deolalikar promises a more polished version soon.) The consensus among the experts who have at least skimmed the paper seems to be that it is a) not crazy (which already puts it in the top 1% of papers that have addressed this question), b) teeming with creative ideas that are likely to have broad applications, and c) quite likely wrong.

As far as I’m aware, people are betting on point c) not because of anything they’ve seen in the paper, but because of the notorious difficulty of the problem.

And when I say betting, I really mean betting. Scott Aaronson, whose judgment on this kind of thing I’d trust as much as anyone’s, has publicly declared his intention to send Deolalikar a check for $200,000 if this paper turns out to be correct. Says Aaronson: “I’m dead serious—and I can afford it about as well as you’d think I can.” His purpose in making this offer?

I could think of only one mechanism to communicate my hunch about Deolalikar’s paper in a way that everyone would agree is (more than) fair to him, without having to invest the hard work to back my hunch up.

On the one hand, this seems like quite an effective way for Scott to communicate the strength of his hunch, which is obviously something he very much wants to do. On the other hand, I’m a little baffled by Scott’s remark (in the comments to the linked post) that “If P≠NP has indeed been proved, my life will change so dramatically that having to pay $200,000 will be the least of it.” I’m sure that if P≠NP has indeed been proved, it will dramatically change the life of a complexity theorist like Scott Aaronson, but I’m not sure why it will change it in a way that makes $200,000 less valuable.

But that’s of course his call. I just wanted to share this and invite your comments.

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Here’s a data point: On Friday, Hewlett Packard’s CEO Mark Hurd resigned unexpectedly — and pretty much instantly the value of HP stock dropped by about $10 billion. If we assume Hurd would otherwise have been around for another 10 years or so, that means shareholders think his departure will cost the company about a billion dollars a year. Which, incidentally, makes his $30 million or so in annual compensation look like a hell of a bargain.

Now maybe some part of that $10 billion reflects expected short-term losses due to the turmoil of an unplanned transition. But even if that turmoil were to cost HP a full month of revenue (which seems like a pretty extreme assumption), that’s still less than a billion — leaving over $9 billion to represent the difference between what the market expected from Hurd and what it expects from his successor.

This doesn’t mean Hurd is that much better than anyone who could run HP, but it might mean he’s that much better than anyone HP is likely to hire. Most of the world’s best executives are already occupied. Hurd’s replacement will come from the second string. So (insofar as we are reckless enough to extrapolate from this one data point), it appears that there’s a huge gap between the very best and the almost-very-best. Like in baseball, where the 1000 or so major leaguers are, well, in an entirely different league from the 1000 best minor leaguers.

If this kind of gap is the norm, then there’s a huge cost to diversity-for-the-sake-of-diversity in positions that require extraordinary talent. Do you really want to settle for a distant second best just so you can fill your Albanian quota?

Coincidentally, the news from HP comes just as President Obama is seeking a replacement for departing economic advisor Christy Romer. It’s been reported that the President believes it’s important to hire a woman.

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Over at Overcoming Bias, Robin Hanson objects that if people really believed this argument, they’d want to criminalize lesbianism and extramarital affairs, both of which also contribute to the problem of men-without-partners.

But I think one could consistently take the position that while lesbianism contributes to the problem, it’s just not widespread enough to be worth stamping out, while polygamy (if legal) might well become so. And as far as extramarital affairs, I think Robin has it completely backward: When the wife of a 30 year old man (who is well past the prime age of violence) has an extramarital affair with an 18 year old, she is alleviating the problem, not contributing to it. Besides, most extramarital affairs do not deprive the husband of a long term sex partner.

I’m all for legalizing polygamy, because I’m all for legalizing almost everything. But I don’t think you can dismiss this argument—or the sincerity of its proponents—as easily as Robin seems to think you can.

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A colleague points out that it seems equally odd for a company with pockets the depth of BP’s to be engaged in as risky an activity as deep water oil drilling. Why wasn’t this project sold off to someone with a lot less to lose?

Maybe BP expected to be protected by laws limiting its liability, but surely it was foreseeable that those laws might be circumvented, as it appears they’re about to be. So if that’s part of the answer, it’s only a small part.

I’m not saying it would be a good thing for more of these risky ventures to end up in the hands of relatively judgment-proof firms. I’m just saying I don’t understand why we don’t see more of that. What am I missing?

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