Nathan’s Blog

Why do we give each other gifts at Christmas? What if someone gets you something you don’t want? Wouldn’t it be better if everyone just exchanged cash?

This is the argument that Tyler Cowen and Alex Tabarrok (from Marginal Revolution) make in this funny holiday video:

Basically, their argument is:

• When you’re buying a gift for someone, you don’t have the knowledge or motivation to spend the money as effectively as they would spend it on themselves, which explains why people often get things for Christmas that they don’t like.
• This creates a sort of “negative-sum transaction” that, in aggregate, creates roughly $20 billion dollars of waste in the US economy every year around the Holidays. (This number came from a study that showed, on average, people would only be willing to pay $40 for every $50 worth of gifts they receive).
• This leads to the inevitable conclusion: we would all be better off, at least in terms of the utility we get from our gifts, if we just exchanged cash instead.

I’m no expert, but I strongly suspect this line of thinking entirely misses the point of gift-giving during the holidays.

It seems to me that the main point of gift giving is not the use of the thing. It’s to create a physical reminder that you love someone; or to nudge a loved one towards certain behaviors (e.g. “you should get into jazz!”); or to show off your sense of humor.

In other words, gifts are primarily social transactions, not economic ones.

Generally speaking, when you look at something that happens in every culture all over the world, and you realize that your theory says it shouldn’t exist, it’s probably a sign that there is a problem with your theory. Not the world.

See also: Chesterton’s fence. Also, thanks to Robin Hanson for teaching me that X is often not about Y.

There is an argument happening in public about what responsibility companies like Facebook, Twitter, and Google should accept for the content they host.

One side says that these platforms need to accept the reality that they are, in fact, media companies, and they should hire real journalists with proper training to make informed decisions to guide what content is seen by the public. Otherwise, we’ll be mired in a swamp of fake news, harassment, and sensationalism — and the fabric of society could come unraveled.

The other side says that these platforms are just tech companies, and they should bear no more responsibility for the content distributed through their system than a paper company would. If they did intervene, it would amount to thought policing, which, by the way, is the exact same thing opponents of Net Neutrality are warning against.

You can probably guess what I think: neither side has it right. And the thing that hangs them both up is the unhelpful distinction between “tech company” and “media company.”

When someone suggests that social platforms start acting like media companies, I honestly wonder what they have in mind. Do they literally think it would be a good idea to hire people who have a background in editing a newspaper or blog, and put them in charge of editing a feed of user-generated content? The skills you learn when you spend your career working in a newsroom (coming up with story ideas, research and reporting on them, cultivating sources, writing, and editing) do very little to equip you to solve the kind of problems that Facebook, Twitter, and Google are facing. Could a smart person from a media background maybe figure it out? Yes! But that’s because humans are extremely adaptable to new scenarios. Not because there is some obvious lesson “tech companies” should learn that “media companies” have already figured out.

Likewise, does anyone really think that content recommendation algorithms developed by social platforms are entirely neutral, and devoid of human judgment? Of course not! Every time you search, or look at a feed, the platform decides what content to show you. The platforms that can get you to keep coming back are the ones that turn into large businesses. In some ways, they’re no different from newspapers, television channels, or any other aggregator of attention. The difference is, Facebook and other behemoths seem to be many orders of magnitude more powerful than the media monopolies of yesteryear. It’s hard to know how much crap society would have to put up with before it would create a sufficient amount of pressure for people to actually leave Facebook, but it’s probably a lot. (Remember, the things that everyone complains about are side-effects of these platforms being too good at attracting attention!). So there should probably be some basic consumer protections put in place, just like we have for other industries that have incentive to create negative externalities.

To me, the bottom line is this:

These are new kinds of companies. Their success has created new kinds of problems. Let’s not pretend the answers are obvious or easy.

What do you think?

I saw a tweet yesterday that made me chuckle:

If you don’t know who Chamath Palihapitiya is, he is a guy who used to lead the Growth team at Facebook and now is a venture capitalist / NBA team owner. Obviously I don’t know his motives for publicly declaring Elon Musk to be our generation’s “most important entrepreneur,” but it’s hard for me to shake the suspicion that it has something to do with another opinion he articulated recently:

From The Verge:

Chamath Palihapitiya, who joined Facebook in 2007 and became its vice president for user growth, said he feels “tremendous guilt” about the company he helped make. “I think we have created tools that are ripping apart the social fabric of how society works,” he told an audience at Stanford Graduate School of Business, before recommending people take a “hard break” from social media.

The thing is, Chamath isn’t the only former Facebook executive to turn against the company. Sean Parker, speaking at an Axios event in November, also had some harsh words for Facebook:

[they’re] exploiting a vulnerability in human psychology

And:

The thought process [was] ‘How do we consume as much of your time and conscious attention as possible?’

And:

[Facebook] literally changes your relationship with society, with each other … It probably interferes with productivity in weird ways. God only knows what it’s doing to our children’s brains.

Yikes!

What’s happening?

This is a fascinating case study in human behavior. What makes a person publicly attack the company they built a significant portion of their fame and fortune on?

More interestingly: are they right? Is Facebook really that terrible?

Personally, I find it hard to imagine that Facebook is destroying “the fabric of society.” I mean, what would that even look like? But even if they aren’t destroying society, I do think clearly they’re making a permanent mark.

And indeed, the 2016 election seems to be the ultimate proof that American society is splitting into two incompatible factions with two incompatible ideologies. It seems to not just be happening here, but also globally (Brexit in the UK, Le Pen in France, whatever is happening in Catelonia, etc.

It’s hard to believe this is all just “politics as usual.” But we should remember that the world has lived with these technologies for a very short span of time, and throughout history, when major technological shifts have happened, culture eventually adapted and evolved.

Take, for example, urbanization.

When it first started happening, people really, really, hated it. Cities were hotbeds for disease, crime, poverty, and all sorts of social ills. It seemed like the normal world was ending.

But that’s obviously not how people think of cities today. We evolved new mechanisms to solve the new problems that cities created. City life isn’t perfect, but it feels perfectly normal and healthy to live in one.

The same will happen over time with social networks, which exert a kind of urbanizing force on our minds. New memes, norms, policies, and institutions will emerge that solve problems as we get a better understanding of what they actually are. If you pay attention, you can see it happening already.

Life goes on the same as always: unlike ever before.

I realized today that I’ve let Twitter consume all of my writing.

When I think of something interesting, my first impulse is to dash off a quick tweet and bathe in instant gratification, but I think it would be better if I allowed ideas take shape in my own mind, and worried less about how the internet will react to them.

So I’ve decided to start writing here.

Don’t expect long essays. This is more inspired by Marginal Revolution than Wait But Why. The idea is to write regularly—perhaps daily!—in a space that’s not too crowded, without any fuss.

At some point I’ll add an about page, a blogroll, a bookshelf, etc.

Ok, that’s it for now. I’ll leave you with a quote from one of my favorite essays:

I read the other day some verses written by an eminent painter which were original and not conventional. The soul always hears an admonition in such lines, let the subject be what it may. The sentiment they instill is of more value than any thought they may contain. To believe your own thought, to believe that what is true for you in your private heart is true for all men, —that is genius.