Scott Adams' Blog

Could Iran Become One of the Greatest Countries in History?

Posted June 7th, 2012 @ 2:50pm in #General Nonsense

Warning: This blog is written for a rational audience that likes to have fun wrestling with unique or controversial points of view. It is written in a style that can easily be confused as advocacy or opinion. It is not intended to change anyone’s beliefs or actions. If you quote from this post or link to it, which you are welcome to do, please take responsibility for whatever happens if you mismatch the audience and the content.

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We humans (also known as moist robots) celebrate greatness when we see two things:

1. A huge accomplishment that benefits the world
2. Sacrifice, or at least a big risk

1. The age of war among modern nations is over. Economic sanctions are a reminder that the world is connected, and no nation can or should be a deliberate thorn in the side of others.
2. To mark this new age, Iran has decided to become history’s first and greatest model of how economic forces can and should be a substitute for war. This is also an example of how Islam can lead the world toward peace, they might say.
3. Iran agrees to full nuclear inspections and a discontinuation of support for Hezbollah. In return, it asks for a two-state solution for the Palestinians and Israel that permanently grants Israel everything it already controls (just being realistic here), and gives the Palestinians huge International financial aid for economic development - far more than ever before - plus a big pile of money for the people who were displaced in Israel’s formative years - the so-called right-of-return folks. In other words, Iran embraces the use of economics instead of violence to solve the Palestinian situation too. But Iran doesn’t ask Israel to foot the bill. The entire world has an interest in settling things in that region. Remember, we’re all connected.
4. Iran asks for a security guarantee from the United Nations to help protect it against future acts of military aggression from any other nation.

1. Get bombed.
2. Agree to inspections and look like weak losers.
3. Endure continued crushing sanctions.

Nerd Wars

Posted June 6th, 2012 @ 1:30pm in #General Nonsense

The good news about the Iranian nuclear situation is that it probably signals the end of traditional large-scale war, at least for countries with modern and near-modern economies. I say that because I predict economic sanctions will eventually work and Iran will allow inspections. When that happens, economic sanctions will become the go-to weapon of choice until someone invents an even nerdier way to wage war.

It helps that the countries with the biggest and baddest armies also have nukes and an incentive to keep the world order stable. And it helps that the Middle East will become less problematic as the world develops other sources of energy.

Meanwhile, the Internet will make it increasingly difficult for dictators to control information. And when dictators can’t control information, they can’t easily start unwinnable wars of aggression.

I think we’ll see special ops attacks against terrorists for another hundred years or more. And obviously there will be regional skirmishes in parts of Africa and other sub-modern economies. But the days of big, traditional wars might be behind us. We’ve entered the age of Nerd Wars.

Nerd Wars involve cyber attacks, disinformation, economic sanctions, and other brain-over-brawn aggression. We’ll see plenty of that for decades to come, if not centuries.

I can’t rule out the possibility that North Korea or Pakistan will someday go extra crazy and launch nuclear weapons. But that sort of catastrophe will last less than a day or two in terms of the “fighting.” I’m not sure that qualifies as a war. It’s more in the unthinkable catastrophe category. And it would probably be caused by a technical error or other misunderstanding. It will look more like a tragic accident of epic proportions than a war.

I’ll grant you that no one predicted Al Qaeda would attack New York City in 2001 and trigger wars in Afghanistan and Iraq. Wars come from unpredictable places. That makes me look a bit ridiculous to predict an end to them. But keep in mind that I’m not predicting an end to aggression in general. I’m only suggesting it will evolve from physical violence, which no longer works as well as it once did, to nerdier attacks involving information technology and economic sanctions.

Wars have always evolved from what works poorly (spears and rocks) to what works better (bombs and drones). At the moment, the weapons that work best are economic sanctions, disinformation, spying, and cyber attacks. Nations won’t adopt those tactics because humans are becoming more enlightened or more peaceful; we will simply move to the tools that work most effectively, as we have always done.

The Third Option

Posted June 4th, 2012 @ 1:47pm in #General Nonsense

Economists and politicians have offered two potential solutions to the economic woes in both the United States and Europe:

1. Austerity budgets that will kill the economy.
2. Continued deficit spending that will kill the economy.

Will Power and Imagination

Posted June 1st, 2012 @ 1:19pm in #General Nonsense

As regular readers know, I don’t believe will power is a real thing. It’s an unnecessary complication to the simple observation that people pursue whatever paths they think will generate the greatest happiness. If I decline a cookie and you don’t, it’s not because I have greater willpower; it’s probably because you enjoy cookies more than I do, or you’re hungrier, or I have a dental appointment. We are just moist robots executing our programs. Willpower is nothing but cause and effect romanticized.

I have a hypothesis that a person’s ability to forgo short term pleasure in favor of future gains is largely a function of imagination. If you improve a person’s imagination, you will improve his so-called emotional intelligence.

A recent study found that people will save more for retirement if they see a digitally aged picture of themselves. In other words, when you help people imagine their own futures, they make different choices. So the science lines up with my hypothesis at least that far.

I came to my hypothesis about imagination and willpower by observing people who routinely choose short term happiness over long term payoffs. If you ask enough questions, you’ll find that people of that sort don’t have an imagined future. Ask where they expect to be in five years and you’ll get a shrug.

I’m the opposite. I’ve always imagined my future in great detail. If you observed my life over the years, you’d see what looks like loads of willpower. I got good grades in school, avoided the worst physical and legal risks, worked long hours, saved for my retirement, and stayed fit. According to my hypothesis, it probably means I have a good imagination. And I do. As a kid I always imagined myself in my retirement years. I could see my future home so vividly that I could walk through it like a 3D model. By the time I was in kindergarten I could tell you what my face would look like in retirement, how I would feel, and even how I would dress. I’m not saying my imagination was accurate, just vivid and persistent.

If my hypothesis is correct, and imagination drives our choices, what happens to kids in an Internet world who no longer need to exercise their imaginations? When I was a kid, imagination was essential for turning sticks into rifles and trees into enemy combatants. Today a kid just grabs a joystick and lets the game designers do the imagining for him.

My prediction is that people raised in the Internet age will have less practice using their imaginations, and as a result will have less of what society labels as willpower, or emotional intelligence. That should translate into greater rates of obesity, unbalanced national budgets, skepticism about climate change, and lots of people graduating with useless degrees. Hmm.

Do you think a kid born in the Internet age will have the same powers of imagination as older generations?

Reality Game

Posted May 31st, 2012 @ 1:28pm in #General Nonsense

I wonder if you could make a reality “game” that involves lifting poor villages out of poverty. Imagine that a team of show producers land in some African village and offer village leaders the following deal: If the village agrees to let the producers have full access to the village and its citizens, and broadcast them on the Internet and regular TV, the village will get substantial assistance in return.

The game model is that folks at home can sign up to help any one of the several villages in the game. There’s no cost to sign up for a village, but you might decide later to donate your time, money or expertise. The team is comprised of the village plus the producers plus the audience for that village all working together. The objective is to make the most improvement in your village compared to the other teams helping other villages.

A key to making this work is that metrics for success need to be tracked. Perhaps literacy, illness, or even access to running water or electricity could be among the things tracked. That still leaves a lot of subjectivity, so perhaps judges could pick winners each week just to keep things competitive and interesting.

The audience at home would have access to social media tools to organize their efforts. They would pick leaders among themselves and establish their own set of rules for communicating and voting on ideas to try in their chosen village. If a team needs money for its plans, and presumably they would, it’s up to them to figure out how to get it and how to spend it. They could tax themselves, sell ads on their social media tools, or offer promotional consideration to companies that help out, and so on. The rule is that there would be no rules.

The smarter teams would start by gathering as much information on the village as possible. They would want maps of the area to understand the need for roads and irrigation. They would want baseline statistics on whatever needed to be measured. And they would want to get to know several villagers particularly well in order to gather ongoing intelligence and negotiate their planned solutions. Producers would try to get the more interesting villagers to star in the production. Half of the challenge is getting the villagers to cooperate and accept the new ideas. That’s where most of the drama would be.

An underlying assumption for this idea is that the world already has more solutions available than we have mechanisms for implementing those solutions. For example, the world already has technology for inexpensive hand pumps, water purifiers, solar power generators, and whatnot. The part that’s missing is the process for getting the right equipment into the right villages without it later being stolen, broken, or ignored. This is where the producers are valuable. They are the hands and eyes on the ground. And perhaps the first hurdle is getting your chosen village onboard with the plan, and making sure they can provide security and training for whatever assets arrive.

Half of the entertainment value would come from the audience itself as it tries to self-organize, pick leaders, raise money, and decide what to do. I can imagine one team organizing by expertise, with engineers and teachers in key positions. Another team might choose leaders by how much they are willing to personally donate to the village. That would put the richest donor in charge. If the richest donor is also a Bill Gates type, that might be an effective strategy. And you can imagine that every person gets a vote that counts in proportion to their contribution. If you donate nothing, you still get one vote. But the biggest donor might get 100,000 votes. If you don’t like that model, you’re free to switch to a team that organized another way.

I think it would be compelling programming. And in the process it would create models for helping villages that are in the worst shape.

 

The Digital Crossover

Posted May 28th, 2012 @ 2:28pm in #General Nonsense

One of the predictions in my book, The Dilbert Future (1997), is that holodeck technology, as shown in Star Trek, will spell the end of humanity. As soon as sex and marriage in the simulated world of the holodeck become better than the real thing, no one will bother with the expense, stress, and inconvenience of actual procreation. Today I’m going to double down on that prediction, but instead of blaming it on holodeck technology, or sexy robots, I’ll blame the Internet in general.

Young couples in the 1950s got as much enjoyment from spending time together as any young couple might today. I assume the sex felt just as good back then, the oxytocin release was the same, and the marital bliss was similar. Evolution works slowly, so things won’t be much different in that department in the next hundred years. As a form of entertainment for each other, humans have plateaued. And frankly, the plateua isn’t terribly high.

Comedian Chris Rock observed that humans only have two options: single and lonely, or married and bored. There’s a natural limit to how good things can be in your personal life. One person can’t provide the love, comfort, and safety you want while also offering the endless variety and excitement of something new. It’s a logical contradiction.

The Internet, however, just keeps getting better, with no end in sight. Every year brings faster speeds, better screen clarity, more content, more variety, smarter applications, and improved user interfaces. No matter how unusual your hobbies, interests, and fetishes, you can find a growing supply on the Internet. The Internet offers a virtually risk-free experience aimed directly at what gets your heart pumping. It doesn’t matter if you’re into competitive quilting, first person shooter games, or you have a foot fetish; the Internet serves it up. And it keeps getting better.

At the moment, spending time with nice humans is generally better than playing on the Internet, but the gap is closing. Humans aren’t becoming any more enjoyable whereas the Internet is getting more addictive. The crossover for some folks has already arrived. You’ve seen stories of people playing video games until they die of dehydration. Every day you see stories of Internet porn addicts, Facebook addicts, and Pinterest addicts. How much more addictive can the Internet get? Answer: You haven’t seen anything yet.

If you’re like most people, you enjoy seeing images of attractive humans on television and in print ads. We’re wired to appreciate beauty. But we’re also wired to have strong individual preferences. Soon the Internet will know your preferences so well that it will deliver ads featuring the specific types of beauty each person likes most. If you like tall brunettes wearing tee shirts and jeans, that’s what the ads on your screen will feature. The Internet might even predict fetishes and preferences for you that you didn’t know you had. As the Internet learns to anticipate and feed your desires with increasing accuracy, your addiction will deepen. You might even start to love the Internet because it “gets you” and it boosts your oxytocin without ever complaining or having a headache.

Unattractive people will be the first to give up on humanity in favor of the Internet. Generally speaking, unattractive people only have the option of sex with other unattractive people, unless money is involved. For that group, Internet porn is probably already the best option for a sexual thrill. In time, the Internet will evolve and improve until even the people with the best social and sexual options will abandon human contact. I label that phenomenon the Digital Crossover just to make it sound smarter.

The main uncertainty in the Digital Crossover hypothesis is the assumption that society’s standards for human-to-human interactions will remain about the same. I think you might see people adapting to compete with the Internet. Perhaps we’re seeing that already. Some observers believe that young women are more willing to have casual sex because young men are finding Internet porn more convenient than dating. In other words, women are adapting to compete with the Internet. In a hundred years, we might see humans stepping up their game in ways no one predicts. We’ve entered the first period in human history where human-to-human interaction has legitimate competition. Maybe it’s a good thing. Perhaps someday people will be nicer to each other because they know they are competing with the Internet. That could be a positive development.

The other possibility is that people will, on average, continue their trend of getting fatter and more argumentative. In that case, the Digital Crossover is less than ten years away.

No Banks on Mars

Posted May 25th, 2012 @ 2:05pm in #General Nonsense

I assume banks will always be with us here on earth. They have enough power to influence governments and create laws that guarantee their existence. But as technology marches forward, the practical need for banks is evaporating. Allow me to make that case.

Someday all payments will be digital. We won’t need ATMs, and we won’t need anyone to process physical checks, or to check IDs. That much is easy to predict.

The world will always need scorekeepers for money, of course. But that’s just a cloud application. Google could hack that together in a weekend. All the system needs to do is keep track of who has what, and make transfers between accounts according to electronic transfer instructions. If you like competition, imagine several clouds from different companies that all talk to each other.

One major function of banks is to inspire trust in depositors. But I think you’d agree that banks have screwed the pooch on the trust issue. If you had a choice of keeping your virtual money in Google’s cloud application versus giving it to Bank of America or JP Morgan Chase, which one makes you feel safer? I’m looking at you, Jamie Dimon.

I think you’d agree that if the only thing banks did was keep track of deposits and move payments around, they are already nearly obsolete. But of course they do more. The loan side is the main reason banks exist.

In my earlier life, I spent a few years as a loan approver for a large bank. In theory, we used our expertise to examine small business startup applications and determine their credit worthiness. In reality, the customers’ projections were total bullshit, so we ignored them, looked at the collateral, and applied simple rules of thumb. Some of the rules of thumb included:

1.      Make sure you have life insurance on key people.

2.      Don’t make loans for someone’s “hobby,” e.g. a sporting goods store.

3.      Make sure applicants have plenty of skin in the game (their own money).

4.      Cut the revenue projections in half and increase the expense projections by 50%.

5.      Restaurants are bad ideas with the exception of established franchises.

6.      Husband-wife businesses are risky because of divorce.

7.      Has this sort of business worked around here before?

8.      Do the applicants have experience in this business?

9.      How much competition is there?

10.  Do the applicants have enough collateral to repay the loan if the business fails?

We had other rules too, but all of them would fit on a one-page checklist. It wasn’t rocket science. If you imagine a future world in which anyone can lend money to anyone else, I think you’d find banks unnecessary.

For example, let’s say someday in the future, a business wants a loan that is far too complicated for the average civilian to evaluate, and banks don’t exist to do that work. What happens then? Well, in that world, you still have plenty of individuals who would be qualified and willing to evaluate even a complicated business situation. CPAs, for example, have that training. If qualified people loan their own money to a particular project, I’d probably feel comfortable lending my money as well, even if I don’t understand the deal. I’d just make sure the lead individuals have good track records, and I wouldn’t put all of my money in one deal. Let’s say the qualified individuals take a higher share of the interest payments on the loan to compensate for their extra effort and talent. That seems fair.

Most bank loans are actually quite simple to evaluate. A typical business loan might involve a company that has been in business for decades and always runs short of cash in the spring as they build up inventory for the summer. It’s a very low risk loan. That’s the type that banks prefer. Untrained individuals could make those loans with their eyes closed.

My guess is that person-to-business lending would be every bit as good, or better, than bank-to-business lending. We already see something similar in the angel investing area, and that seems to work fine without banks.

I could imagine the government limiting individual loans to a percentage of the lender’s net worth, just to keep things sane. Or perhaps the government would require some sort of minimum diversification instead. It wouldn’t take many safeguards to keep people out of trouble. Social networks, such as Facebook, could provide all of the identification and background checking you need.

Credit cards would be unnecessary in the future. I assume credit cards are issued according to formulas that look at income, expenses, and credit scores. In the future, the cloud would have all of that information, since every bit of it would be flowing through the cloud for capture. The cloud could keep an ongoing credit figure for each person, without the need for an application. If an individual spends more than he has on deposit in the cloud, an interest calculation starts. It’s that simple.

None of this can happen on this planet because banks have a death grip on governments, and society would be petrified of a change that radical. But if you think you hate big banks now, just wait until you realize how unnecessary they are.

When I start my new country, perhaps on Mars, my first two edicts will be as follows:

1.      No banks

2.      No insurance companies (for the same reasons)

I’ll be taking applications for my country on Mars sometime soon.

Confirmation Bias Test

Posted May 21st, 2012 @ 1:04pm in #General Nonsense

Instagram versus Facebook

Posted May 17th, 2012 @ 11:58am in #General Nonsense

The Facebook IPO happens tomorrow, and I have a question for my readers: If you use Facebook, are you still spending as much time on it as you did last year?

I was talking to a young Facebook user recently and asked if her new obsession with Instagram had come at the cost of Facebook time. Her answer was yes, and I got the sense that Facebook was for old people and Instagram was for the young. Ouch.

Instagram is a brilliant business concept. It strips out the best part of Facebook (Hey, look at my photo, friends!) and then makes improvements on that feature (Hey, look at my sepia-toned photos, friends!). In addition to besting the best part of Facebook, Instagram also improved on the worst part of Facebook: sketchy privacy. While a parent might ban a kid from Facebook for privacy reasons, Instagram is relatively less of a privacy issue. The keyword here is “relatively,” since either service lets you post dumb comments and incriminating photos of yourself.

It’s no wonder Facebook threw a billion dollars at Instagram, apparently to kill the competition by absorption. If I were Zuckerberg, and I noticed young people migrating from Facebook to Instagram just as I prepared for my IPO, I’d spend a billion dollars to make the problem go away too. I wonder if Instagram would have sold for something closer to $100 million if Facebook had already done its IPO. Timing is everything.

Readers of this blog, are you using Facebook less this year than you did last year?

Venture Capital

Posted May 11th, 2012 @ 2:36pm in #General Nonsense

The media treats with reverence the geniuses who invested early in tech giants such as Google, Facebook, and other big Internet names. If you’re a super wealthy person, and you obtained your wealth by luck, inheritance, or financial manipulation, you’re probably eager to prove you have something useful to offer the world. You want to be associated with a sexy new startup to demonstrate your brilliance and establish some family honor. You want to do the modern equivalent of buying yourself a title. Instead of becoming Lord of Devonshire, you can be an early investor in a startup that might become a household name. You want to be like Sean Parker, who will forever be introduced as co-founder of Napster and founding president of Facebook. Internet companies are the new royal titles.

My theory is that venture capital used to be a more rational business model. Today, I think venture capital is largely ego-driven. For wealthy investors, it’s more about proving how smart you are, and having the chance to forever associate your name with a startup success. It’s sort of like the Kennedy family transitioning from their bootlegging roots (allegedly!) to politics. Rich people often need to scrub their family reputations. Investing in startups is the modern way to do that.

I came up with the Ego Theory of Venture Capital while reading through a list of startups that recently got funded. Maybe it’s just me, but I didn’t see anything in the bunch that looked like a potential winner. Ego has to be behind much of the funding because economics wouldn’t explain such weak investments, even under a venture capital model. Historically, a venture investor hoped to succeed 10% of the time. Now I’m seeing startups that seem, at least to my non-expert eyes - to have something like a 1% chance of success.

Interestingly, all of the doomed startups comprise, collectively, a system in which poor people can redistribute wealth from the top 1% to themselves. If you want the rich to have less money, one sure way to do it is by starting an Internet company and getting venture capital funding. The only way your scheme for income redistribution can fail is if your startup unexpectedly succeeds and makes the rich investors richer. And what are the odds of that? Check out this article in Business Insider about the poor performance of venture funds.

Now we have this absurd situation in which society is complaining that the rich have too much money at the same time the rich are begging the poor to take their money. The only condition the wealthy put on the transfer of money is that the poor need to put together some PowerPoint presentations that use the words “social” and “cloud.” Is that too much to ask?

If you think the rich have too much money, stop complaining and do something about it: Start your own Internet company and go get some venture capital funding.