Rogue Analyst

An old school memo on vehicle rollover ratings

2004-11-13T11:29:00.000-05:00

I've posted this here as a reference to a post at Radically Inept, More points I'm pondering, and a little admin.

SUBJECT: Assessment of the National Highway Traffic Safety Administration’s Rating
System for Rollover Resistance, Chapter 3, “Statistics and Data Analysis”

DATE: March 17, 2002

The recently released Assessment of the National Highway Traffic Safety Administration’s Rating System for Rollover Resistance, Chapter 3, “Statistics and Data Analysis” largely supports the findings of National Highway Traffic Safety Administration (NHTSA) reported in the Federal Register 2000 and 2001. “The first point to note is that an increase in the SSF reduces the probability of rollover” (Ibid. 3-15). However, there are a few notable caveats. This assessment’s findings and recommendations include: 1) criticism of statistical methodology employed (Exponential Model) in the original findings (Federal Register, 2000); 2) support for the methodology (Logit Model) used in the second reporting (Federal Register, 2001) 3) suggestions for directions and methodologies (primarily the ‘non-parametric binary-response model) for further analysis; and 4) criticism of the current practice of dividing the risk values across only five striations (Star System) with relevant recommendations for expanding and refining the relationship between rollover risk and Static Stability Factor (SSF). There are also two points in the body of the Assessment that were not included in the summary of findings and recommendations, which the reviewer believes are pertinent to future policy considerations by NHTSA.

The first two points, the criticism of the earlier Exponential Model as a viable statistical methodology, and the validation by the assessment committee of the statistical merits of the second methodology, the Logit Model, is largely moot for policy purposes. The Exponential Model’s validity is sharply criticized for failure to take advantage of the volume of data available to provide high confidence in its findings. However, both, the criticized model and the validated model come to the same basic conclusion: “The problem…arises of how to predict the rollover probability for these make/model groups. The rollover curve provides a solution to the prediction problem…Given the SSF of the new make/model, the estimated rollover curve can be used to predict the rollover probability”, (Ibid. 3-14).

The third point, suggestions on directions and methodologies for future analysis, the Assessment concludes that the Logit Model is supported by the limited Non-parametric binary-response model (Non-parametric model) conducted in the course of this assessment, “The estimated rollover curve based on the Logit Model appears to be a reasonable approximation to the Nonparametric[sic]-based rollover curve using limited data, suggesting the Logit Model is a sensible starting point for…a rollover rating system,” (Ibid 3-24). The Assessment states, “A more extensive analysis using a larger dataset will be required to obtain a rollover curve that provides information at the national level’, (Ibid. 3-24). Figure 3-9, pg. 3-24 of the Assessment, graphically depicts the relative agreement between the Logit Model and the Non-parametric Model.

The final point is a criticism of the five star rating system currently employed by HTSA. This is broken into two points: 1) The lack of accuracy resulting from…an overly coarse discrete approximation, and 2) The lack of resolution resulting from the choice of breakpoints between star rating categories. Basically, the Assessment states that the current five star rating system does not allow for fine distinctions in the performance with in vehicle categories, notably the SUVs, and recommends further gradations within the rating system for a more refined risk communication.

A point, which failed to make its way to the findings and recommendations portion of the assessment, was the value of historical make/model rollover data; the Assessment recognizes the value of historical data to provide simple unbiased information. “If the objective is to estimate the true probability of rollover for a given make/model group, than…the best estimate of the rollover probability is the sample proportion of rollovers calculated from the crash population mean…for an old make/model group, there is no reason to estimate the rollover curve” (Ibid. 3-24). It goes on to say, “Given the SSF of the new make model, the estimated rollover curve can be used to predict rollover probability.”

The reviewer’s conclusions of the Assessment are mixed. To the first two points, the improved methodology (Logit Model), more accurate, and statistically defensible, still supports the validity of the rollover curve and the SSF as useful tools. The third point is more contentious. The value of further spending to improve accuracy using the Non-parametric Model seems to be self contradictory with the finding that historical data negates the need for estimating the rollover curve. The value of additional funding for further statistical analysis is not adequately supported. To the fourth point, that the current five star rating system fails to provide information of sufficient accuracy and refinement for the benefit of consumer decision making, this seems well supported by the Assessment. Discernment of risk levels between models of a specific type (i.e., SUVs) through the five star rating method is not refined enough. Increased graduations would contribute to the precision of data with which consumers make their choices.

However, based on the value of ‘real’ data to provide “simple unbiased” information and give the “true probability” of rollover with no need to estimate, NHTSA should use this as the basis of its rollover rating system with increased gradients.

Will try to post here more frequently

2004-07-18T16:21:00.000-04:00

I've updated links, and plan on doing maintenance, as well as some posting here, in the near future.

The photon economy, or what is the value of a license plate

2004-05-05T10:18:00.000-04:00

Okay, this is actually part of a re-edit of a portion of what I had originally posted below. I brought up an ideas/question, and then really didn't do such a great job of providing an explanation.

I realize my neglection of this blog, and can only say that speed has to give way to not only the development of the argument, but deciding upon an effective (hopefully) approach has it's own development time. Also, I am going to update the interface value here to at least that of Radically Inept in the near future, Sort of penance work for the neglect. Rest assured, it is more based on the Germanic concept of the 'fates' than any judeo-christian structure. Combined with a healthy dose of buddhism, taoism, gnostizism, chaos theory, quantum theory, Bentham, Kant, Hegel, Jung, Wheeler, Pirsig, Poppler, Kuhn, Bill Hicks, Cheech and Chong, Humphrey Bogart, Lauren Bacall, Sidney Greenstreet, Robert Mitchum, Heinlien, Adams, London, Twain (especially), etc.

But, I joined the quest for the Grand Unification Theory (GUT). I do not expect to provide answers, but I do hope I inspire someone else to provide the answers based to the questions. I will provide what I hope proves to a rational position, and hope that others contribute in either refutation or in support. Well, enough preview, let's get on with some meat.

Are photons an irreducible factor in all information exchanges?

That ultimately what I hope to be the basis of a common point of reference in the dialog of information transfers. I mean this in the broadest of senses, and am trying to derive the basics. I am working 'ass-backwards', I know, but I'm hoping to find some value in this approach.

Let me start with this picture. Visualize a license plate. At every point of it's existence, it is reflecting a certain value of information in photons, regardless of the degree to which these photons effect the macro level. How to you capture the economic value to the transfer of information through the course of the 'life' of the license plate? Is it all the photons reflected or only the photons that were absorbed and acted upon, and than what metric is used to measure the affect of the effect? Dollars spent? Acres farmed? Miles driven? Gross receipts? Is there a common metric in these transactions that can be reduced to photon exchanges? Can this be the first rung of a matrix, which admittedly and over-ambitiously strives to provide a bridge work across disciplines?

Because that is part of the concept that seems like the influence, in some stochastic method, possibly, can be measured. Can we look to math, and see the energy of the photon in all information exchanges? Can it be used as a common factor in measuring information exchanges? Can something like mega-photon out-put, or photon-micro influence become valuable in the discussion of information?

So, the first question for you, is in your particular field, can information ultimately be factored down to some multiple of photon transfer? If not, and especially not, why not?

So, now for some development of the idea.

I realized in speaking with Donna, from Merrill, and 'The Pacifier', that there was a specific level of categories in information measurements crucial to the discussion. The first is the distinction between the quantity of the information v the quality of the information. Using a metric like photons might prove valuable in measuring the quantity of the information involved in any exchange, and it is this that I am going to explore a little further. I deal a little with measuring quality in the post below, but I plan to do more on that subject later.

In the second category that is useful in measuring information processes, I am borrowing directly from Newtonian Physics. All information is either kinetic information or potential information, and that objects may possess both simultaneously. However, a quick example of what I mean is in order here, so consider a letter in a sealed envelope. As long as the letter stays in the envelope, it has information potential, but when someone opens the envelope and reads the contents, that information is kinetic at that stage. It does not, however, lose any appreciable potential information value unless it is destroyed. Someone else could read the letter, and receive the same quantitative amount of information. The quantity of photons exchanged in the first and all later readings of the letter, are the same. For now, let's call the letter, and other objects from which we derive information 'messengers'

The Quality of the information exchanged could on the otherhand vary widely depending on the reader, and other factors, such as time (currency of the information), events that have taken place external to the letter, a persons ability to read, and in fact, the volume of photons exchanged, quantity, is independent of a readers ability to comprehend, which is a qualitative measurement.

Consider the informational value of a license plate (our first choice of messenger) from it production to its ultimate demise. From the time it is completed by the prisoners, the quantity of the information 'emitted' by the plate in terms of photon exchanges is established. The quality of the information may change, but the photon value will remain, at least roughly, the same. Now, the prisoners put it in a box to ship to the dept of motor vehicles, or some other bureaucratic system for dispersal. While in the box, the license plates have only potential information. Their photons are confined to the volume of the box, and no one is there to receive the information. This last point about the role of a receiver in an information exchange, remains an intriguing vector throughout this concept.

When the owner finally receives his new car tag, and mounts it on the car, it may also be the last time anyone reads that information. But, the license plate will continue to emit the same level of information constantly, regardless of the existence of a receiver. And, it should be possible to derive a average daily photon out put for the license plate. Granted, when the light is dimmer, it will put out less than on a bright day, but a daily average should be definable. Here it bears repeating, that while the license plate is a 'constant' emitter, it's information potential does not degrade.

Let me quickly offer a somewhat counter example, which might help. Let's use a receipt that a patron now receives, at let's say the gas pump at his local filling station, is done on a thermal paper as a messenger. Here the information degrades quickly. So, that when it is first printed, it emits far more photons than it will three months hence, and will over time, cease to contain any of the original information. Instead, it will become a smudged piece of paper. It still emits photons based on its area, but the complexity (information) is gone. So, it losses it kinetic information, and its potential information, whereas our license plate appears to stay constant.

So, this leads to a few more questions which I am pondering. Is there then a way, to define the license plate using the costs of production, shipping, administrative record keeping, etc. I'm not sure how to factor in the money/taxes paid by the car owner i.e., does it go in the plus or minus column for the purposes of our accounting, but I'm sure it's easily resolvable. Anyway, it should be possible to find a dollar to photon rate, such that the license plates value could be expressed in those terms, perhaps something akin to mega-photons per penny, or something, and this ratio could be applied to virtually all economic information exchanges. At this point, I am not arguing it has a utilitarian value, only that it is how I'm constructing this mental model for further exploration.

Now, a brief summary:

Premise: Information can be measured in quantity and in quality. These are separate aspects of an
exchange.

Premise: Photons are an irreducible factor in measuring the quantity of information exchanged in all exchanges.
This quantitative value of Information exchanges can be measured in photons.

Premise: The complexity of the photon pattern emitted, is information (I just added this, and I'm going to think further
on whether this makes sense in this model, but I like it intuitively,so...)

Premise: Messengers have a kinetic informational value or a potential informational, or both simultaneously.

Premise: Messengers may or may not degrade in volume of photons emitted, appreciably, over time.

Premise: It should be feasible to develop a factor combining the 'economic' cost of information, with the amount of
information generated in photons, such that you have a photon to currency ratio as a useful expression of the
value of an information exchange. And, that this expression will be useful in measuring information exchanges
across fields, i.e., IT, marketing, Risk Communication, policy, etc.

Well, that's my thinking on the quantitative aspect of information exchanges so far.

The post below deals a little with the measurement of the qualitative aspect of information exchanges. I got and pasted the post below from a .doc, and I apologize for all the crap, like boxes replacing quotation remarks. If I find the time I'll try to go in and clean it up. Oh, Wu is a concept I'm working on, and I chose Wu as a term, because I had not heard that term used in any of my cross readings. Wu should be thought of as the beginning of the original Star Trek series, where the music starts with, 'woo wooooo, woo woo woo woo', or whatever. And, the symbol for the term, which I don't know how to import here yet, is a cursive 'w' with a bar across it. It was a symbol that I had also not run across in my readings.

Well, you comments and criticisms are welcome, even urged. No sense in doing a whole lot of thinking in a bad direction, if one of you sees a huge fallacy that I've overlooked. Save me the time please.

Information Metric

2004-05-03T18:23:00.000-04:00

Okay, the following is from a paper that I truly consider a work in progress. It also is in a more academic vein, but some how that seems appropriate for my goals. The following, was an earlier attempt, and there are many changes that I would make, but I believe it might still be valuable as a point of discussion:

There have been many attempts to analyze the data from a large number of surveys conducted in twenty-one of the wealthy democratic countries since the early 1960Âs, and to compare those results with surveys conducted in the US on the publicÂs trust in the government and other large institutions going back to 1958. Researchers have concluded that the beginning of the trend in ever lower levels of trust in institutions in the US seems to coincide with the Vietnam War and the Watergate scandal, but this correlation would not explain the same decline in trust in the other Western democracies which began about the same time. This has led researchers to look at a host of other sources for explanation of growing distrust. Among the hypotheses put forward are that the decline in trust parallels economic trends or that is due in part to the growth of negative media coverage and the increasing trend of the public using major media as its primary source of political information. Still others have looked to a generational shift from the materialism prevalent in the pre-WWII generations to a post-materialist outlook found increasingly among newer generations as a contributing factor. The increasing polarization of the American political parties to extremes which are not reflective of the populace in general; a growing trend on the part of politicians criticize the very institutions for whose offices they are campaigning and the reliance on negative campaign advertising to include disparaging the performance by the government in its role in solving social and economic problems have all been considered in the past forty years (Nye, et al 1997). In 1964, 75% of Americans said they trusted the federal government, while the 1997 figure was only 25% of the comparable levels of trust. Simultaneously, trust in universities as institutions fell from 61% to 30%, major companies fell from 55% to 21 % and medical institutions saw a downward shift from 73% to 29%. Trust in the media, which was not high to begin with in comparison to the other institutions measured, fell from 29% to 14% (Nye 1997).

While the survey data cited above reflects a general downward trend in trust in institutions, the actual values at any given time are subject to sudden changes reflecting geopolitical events as they occur. A recent example was the event of Â9/11Â (2001):

A May 2002 survey commissioned by the Brookings Institution, however, contends the air of trust quickly faded. The survey, conducted by Princeton Survey Research Associates, found that the number saying they trusted the government to do what is right at least most of the time rose from 29 percent in July 2001 to 57 percent in October 2001, but dropped down to 40 percent in May 2002. The number who said the government could be trusted only "some of the time" rose from 39 percent in October to 53 percent in May. By September 2002, the CBS/New York Times survey found that only 37 percent said they trusted the government to do the right thing "always" or "most of the time (http://www.publicagenda.org/specials/terrorism/terror_pubopinion10.htm 4/22/03)."

The data above seems to validate the often cited concept that the public will rally around the countryÂs leadership in times of crisis, but these types of rallies are often extremely short lived. The first President Bush saw his approval ratings jump during the Gulf War only to decline swiftly in its aftermath.

While the growth of distrust in institutions appears to be statistically proven, no single cause or aggregation of the causes looked at by various scholars appear to provide a sufficient explanation to adequately explain the phenomenon. This downward trend in distrust continues; the World Economic Forum released Gainternationallynal's 2002 Voice of the People survey of 36,000 citizens in 47 countries. 66% do not believe their country is "governed by the will of the people." Among the findings in the leadership categories included in the 2002 Voice of the People survey, leaders of non-governmental organizatiNicosia(NGOs) are trusted by majority of the respondents. Of particular note for the purposes of this paper is that of the five characteristics important for trust in leaders, 49% chose honesty. And, of five factors to cause distrust in leaders, respondent s chose Ânot doing what they sayÂ (45%), self-interest (28%), secrecy (11%) (World Economic Forum 2003). The growing body of research on corruption in government often looks closely at the role secrecy plays in developing or deconstructing trust in leaders and institutions, and appears to support the specific survey finding of the negative impact of secrecy, especially when secrecy involves transactions between elites.

ÂÂit also may be that popular conceptions of wrongdoing rest not only on the law, but on a variety of other norms and values. For the non-rulebreaking actions, significant predictors of strict judgments included secrecy in a transaction (by far the strongest predictor); large and tangible stakes; high-status givers or victims, and highstatus takers. By contrast, transactions involving a combination of private-sector giver and private-sector taker were seen as less seriously wrong, other things being equal. In other words, a secret, high-stakes transaction of tangible value between high-status, public-sector figures was likely to be seen as seriously wrong Â even when no rules were being broken.Â (Johnston, ÂCorruption, Inequality, and ChangeÂ,)

An initial review of research from several disciplines and applied fields, including political science, computer science, public policy and management, sociology, psychology, and organizational behavior (Viklund 2002, Jane E. Fountain 2002, Walker 2000, Vargas 1998, MajtÃ©nyi 2002, Gaines 2003, Minogue 2002, Stapenhurst 1997, Heller 1998, Johnston 1998, Helper 1999) revealed a great deal of research and data, but no consistent definitions of trust or credibility across or even within fields. And, though various papers discuss corruption and its dependency on secrecy (except in cultures where bureaucratic rent seeking is the norm and not secret) no research was found that measured the effect of secrecy on the level of trust in a manner useful for policy makers in developing and implementing polices. The reason for this may be the obvious; the impact of what is not known is difficult to measure, though as the physical sciences have demonstrated, it is not impossible. Of the sources reviewed, the following potentially provides the basis for a practical starting point with which to build a framework for measuring secrecy and its effects:

Hardin (1992) provides one promising way of moving beyond this conceptual impasse. It is useful, he argues, to conceptualize trust as a three-part relation involving properties of a truster, attributes of a trustee, and a specific context or domain over which trust is conferred. From this perspective, strategic, calculative and instrumental considerations would be expected to exert a dominant influence in some organizational contexts (e.g. transactions involving comparative strangers). However, in other contexts (such as those involving members of one's own group), relational considerations might be more salient and exert more influence over how trust is construed. Fully elaborated, a three-part theory of trust would thus afford adequate attention to both the calculative and relational underpinnings of trust (Vargas citing Hardin, 1999).

The first section will provide definitions used of terms useful for building a common framework for discussing the potential costs and effects of information secrecy versus transparency relative to an individual or an organization. For the sake of consistency, the term ÂprincipalÂ will refer to the possessor of information and the term ÂagentÂ will refer to those with less or without access to the information in the principalÂs possession. Both principals and agents may be either individuals or organizations depending on the context of an information exchange. Also, to avoid confusion, this paper will not utilize the economic/game theory conventional use of agent as being in the employ of a principal. For those acting on behalf or in the employ of principal, principal associate will be used. In many cases a principal associate will fall under the category of Third Party. Third parties are considered as ÂpartiesÂ involved in an information transaction, but disinterested in the actual content of the information (see Exposure Â Third Party initiated, below). For simplicity and unless otherwise noted, information will always be deemed ÂtransparentÂ to the principal.

The following formula is generally in line with the suggestion above and will hopefully lend itself as an aid to policy makers in understanding an agentÂs perception of a principal or organization based on the principalÂs or organizationÂs past known information transfer activities. Additionally, it is hoped that the formula will demonstrate some utility as a framework for policy makers and implementers when deciding on the degree of secrecy or transparency to be utilized in future policy decisions and implementation.
C Â±  Â± R = T, where T denotes the resulting level of trust on the agentÂs part based on the credibility (C) of the principal plus the ÂWuÂ (), where  is based on the agentÂs biased (B) estimate of the principalÂs integrity and the agentÂs perception of the degree to which the content of the information has been subjected to spin (S) by the information delivery medium (which may be the principal, a principal associate or a disinterested third party, and R is the risk as defined below. So, that T ≥ C Â±  Â± R for Âpositive actionÂ, or the level of trust required for a transaction to take place must be greater then the agentÂs perception of the risk involved.

Trust
Trust (T) is the sum of the principalÂs credibility (C), the subjective assessment of the principalÂs integrity combined with the equally subjective valuation of the best and worst possible outcomes of a transaction with the principal (), and the agentÂs perception of the risk (R) involved in the transaction. It is important to point out here that there are circumstances where the agent may ÂtrustÂ the principal to perform a negative action. For example, agent may trust the principalÂs assertion that the principal will harm the agent or something the agent values, unless the agent completes a specified action. In this case, there is a perverse relationship between a positive trust value and a negative transaction value.

Credibility
Credibility (C) is based on the known history of past actions on the part of the principal and can be treated like business and personal credit histories commonly used to determine Âcredit worthinessÂ. Credibility is one factor in establishing trust. Thus credibility of a principal is determined by the agentÂs knowledge of the principalÂs past activity. Past actions may have positive, negative or neutral impacts on credibility dependent on the agentÂs knowledge of past actions, and the impact of those actions themselves. True secrets and truly anonymous information have a value of zero, and have no effect on the balance sheet; they do not increase or decrease a principalÂs credibility. To the degree to which information is not completely secret or anonymous is the degree to which an agent can use the information, however, partial knowledge may potentially influence the Bias (B) factor (explained below) in unexpected ways and have impacts out of proportion to their actual value. A principal associateÂs credibility may be largely determined by the principalÂs credibility, for instance, a person may not know the individual FBI investigator that comes to question them, so the investigatorÂs credibility may be partially or solely dependent on the FBIÂs overall credibility as perceived by the agent or third party. It is helpful to consider credibility as the sum of transparent (Tr), exposed (E) and disclosed (D) information pertaining to a specific information area or concerning a particular principal received by the agent in the past. C = %Tr + %E + %D. Whether this results in a positive or negative credibility value is dependent on the actual content of the information. For example, it could be that the information exposed actually puts the principal in a better light than had the information remained secret, or that information revealed through transparency leads to a negative credibility rating. While it is useful to think of credibility as a composite term, for policy makers considering specific information to be released and the appropriate delivery vehicle it may prove expedient to use survey results if available for a quick numeric value until such a time that more accurate values can be determined.

Risk
Risk (R) is utilized here, is the same as risk perception, and is the attempt on the agentÂs part to gage the potential gain or harm, which may result to the agent at some time in the future, due to an incorrect assessment of the validity of a specific piece of information. Risk may also have a positive or negative value. For instance, the agent may perceive that trusting the information may save the agentÂs life, a positive R with a potential value of ∞, versus those times when the agent perceives trusting the information may cost the agentÂs life, a negative R with a potential value of -∞. In less extreme situations, the values may approach zero. Unless the agent is a paleontologist, there is no risk (or, the risk is near zero) in believing that dinosaurs became extinct due to disease or whether the extinction was caused by a meteor strike. On the other hand, believing the proverbial used car salesmanÂs pitch that the car was owned by a little old lady who only drove it on Sundays, may lead the agent into a harmful financial transaction, and the risk value may be the potential financial outlay. Or, in the case of a Superfund site, an agent who lives adjacent to the site might perceive that acting on information from the Environmental Protection Agency carries less risk then acting on information communicated by alleged polluters, and in this case, the risk value might be the cost to the agents of relocation versus the probability of acquiring a disease. An agent may tend to be more skeptical of information the greater the agent perceives the potential harm that may befall him if he is if he has incorrectly placed his trust. Risk then, as used here, is potentially a combination of true risk (actual probability of an event) measured through a subjective the subjective lens of the agent. Since it is not practical to measure every agentÂs perception of risk on all potential information, it may often be expedient to use probability estimates from appropriate sources. The actual seismic probability of an earthquake in a specific region may of necessity be substituted for an individuals ÂguesstimateÂ when policy makers are considering communicating related information.

Bias
Bias (B) is an agentÂs predisposition to trust the veracity of the information based on the medium through which the information was communicated. The communication medium may be the principal in person, or the principal through electronic media such as the television, the internet or the phone, or other physical media such as a letter, newspaper. It may also be delivered via a principal associate, or a disinterested third party using any of the different mediums. Further, bias can be heavily influenced by the medium that communicated the information, which again may be the principal directly, a principal associate or a third party. If the source is not directly from the principal, then the bias will potentially be effected by the source and the principal. Whether the information was made available to the agent by the principal through active transparency or if the information was disclosed in response to routine compliance regulations versus a court order, or the whether information about the principal was exposed against the principalÂs volition by a third party or other agent, are some of the potential motivations that an agent may consider. It is possible that transparency would tend to influence bias in a positive manner, routine compliance might have a neutral effect, and exposure might tend to have a negative effect. The agent will make a ÂbiasedÂ decision on the degree to which he can rely on the information content. This will be an inherently subjective estimate and will be influenced by personality, personal history, subject matter knowledge, and many other factors. In a study surveying Swedish citizenÂs trust in five Swedish institutions the following attributes were found to have a positive effect [this effect is positive bias] of various degrees on trust:

Competence
Efficiency
Commitment to a goal
Openness
Consistency
Honesty
Credibility (promise-keeping)
Fairness
Concern/care

In contrast, Âacting in self-interestÂ and being Âpart of a power eliteÂ were found to have a negative effect on people perception of trustworthiness. (Viklund 2002). The latter is largely supported by the growing and now, fairly extensive research done on corruption. However, the factors cited above provide only a limited idea of the range bias may have. Examples of biasÂ potential range in opposite extremes are: A parent who completely trusts their offspring (+∞) despite full and even first hand knowledge of their offspringÂs history of extreme immoral and/or illegal past acts; and in contrast, the bigot who refuses to trust a coworker (-∞) of different ethnic descent in spite of having had only positive interactions with this particular individual and all other individuals of the same ethnic persuasion in the past This remains a gross oversimplification since in each information transfer the actual content of the information in each transfer is greatly and independently subject to the agentÂs biases and the biases themselves may change over time. Bias is sometimes unexplainably positive or negative toward the principal, and toward a principal associate divorced from the principal, even toward the potential outcome of the transaction itself. Bias includes those factors which effect an agentÂs rationality such as addictions, situation dependent desperation, religious/moral/ethical belief systems, compulsions such greed, etc. And, bias may effect the valuation of the potential gain or loss which could result as an outcome from the transaction, i.e. some agents may place an ÂirrationalÂ economic or personal value out of step with the common market value, such as the idea of the cherished family farm or the last item to complete a personÂs favorite collection of memorabilia,

Wu
ÂWuÂ () is the combination of the agents Bias relative to the content of the information and the delivery vehicle, and the amount of Spin put on the information. Wu increases or decreases to the degree that the agent perceives that the information has been subjected to spin (S), and the agentÂs bias (B) toward the delivery medium or principal. As such, P = Perception of Spin and  = Â± B Â± (S/P). As defined above, transparency is the absence of spin, so that in the case of transparent information,  = B. Since wu is based on bias it is also highly subjective, so that the potential value of  ranges from -∞ to +∞ no matter how great the value of spin. Wu is a primary factor in establishing an agentÂs level of acceptance of information. In fact, this term, Wu, and the accompanying symbol, , were chosen to express the potential for a huge degree of irrationality on the agentÂs part in making an estimate of the proper level of trust to accord a given piece of information. As stated above, ÂSpinÂ efforts made through marketing or disinformation campaigns on the part of the principal or third party intermediaries, such as the media or even an agentÂs trusted associates, will have a less effect to the extent that agent perceives the spin. This is a generalization, and the actual results will vary based the specifics of a particular information transfer i.e. transparent information may be perceived as negative by the agent and conversely, any detected efforts at spin may not effect the absolute value of a given piece of information.

It is believed that the definitions and formulas presented above could be used in a method similar to the following. We can let the value of Spin (S) be of the actual or estimated costs of developing and implementing a specific communications, marketing or disinformation campaign. The value for Credibility (C), in the absence of more refined information on a particular organization, could be assigned based on surveys measuring trust in a particular institution, such as:

From: ÂHow Americans View Government,DECONSTRUCTING DISTRUST,Â by the Pew Research Center for the People & the Press, Survey Reports Released: March 10, 1998

The value for an individualÂs the Bias (B) factor could be based on some measure of interpersonal trust (Viklund 2002), perhaps using Julian RotterÂs 1980 "Interpersonal Trust Scale," which measures the belief that another person's word or promise can be relied upon. Or, on a population/community aggregated level, such as the Community Quotient developed for the Social Capital Community Benchmark Survey on community trust conducted in 2002 by Taylor Nelson Sofres Intersearch Corporation for the Saguaro Seminar of the John F. Kennedy School of Government at Harvard University may prove a useful basis for assigning a value to Bias to explain how it is envisioned to work within the framework being suggested here.

Community quotient -- Along every dimension of social capital (such as social trust, inter-racial trust, etc.) a community quotient (CQ) shows a community's performance on this dimension relative to what was predicted given its urbanicity, ethnicity, levels of education and age distribution. A CQ above 100 indicates that a community shows more of this community connectedness than its demographics would predict; conversely, a CQ below 100 indicates that a community shows less of this type of social capital than its demographics would suggest. Roughly 68% of all communities would fall in the 85-115 range, and almost 95% of all communities would fall in the 70-130 range (Social Capital Community Benchmark Survey by Taylor Nelson Sofres Intersearch Corporation for the Saguaro Seminar of the John F. Kennedy School of Government at Harvard University, 2002).

However, it must be noted that these scales were made for other purposes, and they do not reflect the full range of bias described above. Neither of these scales provides negative values which would be especially useful in applying the formulas suggested here. These scales are very different in their methodologies and in the ranges of their scales, but for general purposes, as long as the two scales are kept separate, for back of the envelope calculations, they may suffice.

An example of C Â±  Â± R = T, where  = Â± B Â± (S/P) using the Environmental Protection Agency communicating information on AtlantaÂs water quality might look something like this: Credibility (C) rating might be considered slightly positive based on a 69% favorability rating found in Pew Research Center survey above. The Spin (S) could be given the dollar value of the public information that might be enacted. For example purposes, assume the EPA and the information itself, is not completely transparent to the populace at large (possibly in spite of EPAÂs efforts), S might have a value of $10,000. The Bias (B) rating for Atlanta could be considered fairly negative based on its community quotient of 83 found in the Social Capital Community Benchmark Survey mentioned above. For example purposes, the Risk of being infected by E.coli bacteria from swimming in the Chattahoochee River may in fact be one in ten, but it is the agentÂs evaluation not only of the risk of becoming infected, but also, the risk of death versus the risk of diarrhea or an eye infection, and is dependent on the degree to which individual agents value health and life. Trust hypothetically will be measured by the number of people who do not swim in the Chattahoochee based on the information campaign. Using this as a framework or one similar, overtime should allow policy makers to get a sense of how much money should be spent to overcome agentsÂ biases when trying to communicate information.

SecrecyÂs impact in the above example might be found in the actions of a different principal, the polluter, should there be one. To the extent that the polluter actively works to keep its activities secret, or counters the EPAÂs information campaign with efforts of its own spin, based on misinformation of disinformation, the costs to the EPA and potentially the agents, will increase. It is also possible for the polluter to directly attack the EPAÂs credibility and information with similar results. Thus, in our example, the polluter could also use the equation to estimate the value of its efforts, and conduct a similar Âcost analysisÂ, though with an eye toward secrecy.

I think it falls far short of the argument I thought i could make, and I think I can make a better one now, but I think the overall points brought out in the piece would still be the basis of it's own conception of a particular metric in information exchanges. I think of it, as a potentially utilitarian equation, and the...well, admittedly it needs a lot of work, so, give me a hand here, "Does this work as a simple framework in your particular field? If so, how whould you use it? If not, where do you believe the fallacies are? The whole thing is a work in progress, so all input is welcome.

Note: You only get limited comment space in my current 'comment' format. If you have something longer that you'd like to contribute to the discussion/debate, please email me at 'otte1@mindspring.com", and if I think it contributes, I cite you and post it. I reserve the right to edit, but I'll communicate with you, and ultimately, you'll decide whether it's posted or not. (The start of a some sort of blog/reader/contributor agreement? Yes. Edited comments will not be posted without permission of the originating source)

I'll come back to all this later, but I'm hoping to have further input from you first.

Note: I finished reading Amazon.com: The Transparent Society: Will Technology Force Us to Choose Between Privacy and Freedom?: Explore similar items, and well, he does a good job of laying alot, out. But, I found it a little plodding. And, I found I differed after all in the conclusions. I think the current revelation of the 'torture' photos, support my idea, that the asymmetry of information flows is going to become more and more difficult to control. Influence will always be possible, but ultimate control, will remain an unachievable paradise. A fantasy. I don't think Huxley vision is likely, though I haven't written it off yet.

If you're new to this blog, please check out the lighter side. Well, as light as it gets anyway: Radically Inept

Note: I plan to take this converstion back to atheism, I'm just a little plodding : )

Ambiguous Absolutes Creates Absolute Ambiguity

2004-04-08T15:31:00.000-04:00

I promised readers over at Radically Inept a serious posting on atheism, and this is it. This will be a work in progress because I feel the subject deserves a well thought out articulation, and while I have notebooks filled w/ a huge number of ideas, this will be my first attempt at putting them all together in some semblance of an argument. As the argument develops, I'll surely have to come back and re-edit for logic and continuity. So there is no point in trying to write a summary or introductory paragraph at this time as I really don't know where it will wind up going. I do feel that I need to lay out some definitions at the beginning (and I expect to add others as I progress).

The Omni-Verse will be used to denote EVERYTHING. There is no realm, dimension or anything that exists outside my definition of Omni-Verse. If you are a christian and believe in a god that created our universe from outside the confines of our universe, than the realm said god exists within is within the Omni-Verse. And, it is infinite in time, space and any other metric one can measure; it is boundless.

Visual aids often help, and my method is to visualize a non-existent point residing in a vacuum. From this point, radiating outward, visualize every possible Fractal [see Infinite Fractal Loop: Index for visual examples]. Of course, the set of all possible fractals is infinite. Then, when you have all the fractals radiating out, add fractals moving in every other direction, including tangentially and in opposition. Once you have that visualized, take a moment and assign each shade of each color as a unique dimension, and couple that with concept that each fractal measures 'its' own time in relation to the other fractals that it 'encounter', but that also, many of the fractals will not interact with all of the dimensions of the other fractals that it comes in contact with. Where there is interaction between fractals, there is energy exchanged in some manner. This is not a perfect mental representation of my Omni-Verse, and I'm sure I will come back and make this passage clearer for readers, but it will have to do for now.

I must now confuse the matter further by saying that while the above passage makes the visualization easier, there is a problematic twist. None of the above exists. Everything in 'reality' is just an abstract relationship to a non-existent point. And, I am totally enamored the idea that I first saw put forth in Michael Moorcock's Elric Saga, where in the hero stands at the edge of the Universe, and through the force of will, shapes the chaos beyound into usable order. I think it interesting that today some scientists are pondering whether quarks and other sub-atomic particles and their 'behaviors' even existed before we 'discovered' them, or did we in fact create at them by applying order to chaos.

Infinity, is exactly that. Without end. Infinity, since it can be applied to various aspects and areas, applies to and is contained within the Omni-Verse.

Life. Life is the reason time exists. If there was no life, there would be no need of time, and of course, nothing to measure it. 'Time' is a construct of life, to allow life to take advantage of any and all energy transfers within the Omni-Verse, including energy changes between life forms. [I believe that life in some form exists anywhere there is a predictable pattern of energy exchange]. All life is of equal value. There is no hierarchy to measuring the value of life; no 'higher' form of life exists. There are more complicated and less complicated forms of life, and some life forms are able to achieve a greater influence upon their environment spacially, chemically or through some other method, but this does not determine the 'value' of its existence w/in the Omni-Verse.

The value of a particular life, mine or yours, is entirely subjective and of our own making. And the idea that somehow the life of a plant or fish has less value than a mammal, or that our lives have greater value than the other mammals, is also of our own making. Further, they is no way for a human to not take life during there existence. Every breath causes the death of thousands, possibly millions (maybe I'll find out some specifics and add them later) of bacteria when they come into contact with our saliva and other bio-defense shields.

I must shut down for a while now, and I did not even get to the main subject of atheism. I will try to do some more posting later, but it might well be tomorrow before I find the time. Hopefully the above will have been worth the visit.

A look at some of the costs of secrecy

2004-04-03T08:47:00.000-05:00

Newtonian Secrecy: Analyzing Secrecy in Public Policy Decisions

A national security system was in place, and would thereafter be on the defensive more than otherwise. It became easy to argue that the Government was hiding something. Conspiracy theories emerged to explain misfortune or predict disaster. There is nothing novel in the appearance of conspiratorial fantasies, but it could be argued that it is something new for large portions of the American public to believe that agencies designed to protect them are, in fact, endangering them. Senator Daniel Patrick Moynihan, “REPORT of the COMMISSION ON PROTECTING AND REDUCING GOVERNMENT SECRECY”, 1997 (SENATE DOCUMENT 105-2 PURSUANT TO PUBLIC LAW 236, 103RD CONGRESS)

Polls show that nearly 80 percent of Americans believe JFK died as a result of a conspiracy, and about half believe the CIA was somehow involved. Whatever remains in the CIA files cannot be nearly as awful as the American public imagines. To be sure, I hardly saw everything there was to see, but I got not even a whiff of dirty tricks that had somehow remained hidden from Church Committee investigators or the army of historians and authors who write about the CIA. I really believe that it would be in the Agency's interest to let historians see for themselves what remains classified. I do not see why the Agency does not declassify almost any secret that is more than 30 years old. Evan Thomas, Gaining Access to CIA's Records, Studies in Intelligence, Volume 39 Number 5, 1996:

This paper explores the value of secrecy in its various forms, the relationship of secrecy to trust, and is a call on policy makers to develop a framework which allows policy makers in various organizations and at multiple levels to visualize the potential benefits and consequences of different levels of information communication. It is with this in mind that this paper looks at this reliance on secrecy to conduct many of our basic interactions as a potential contributory source for a great deal of our dissatisfaction and distrust of major institutions. Yet, as individuals, we wish to maintain our right to privacy, and few citizens would question the value of keeping the codes to our nuclear weapons secret. In the current climate, there is now a call to keep a great deal of the research findings in biotechnology and nanotechnology from the public. Is the risk in keeping the operations of chemical companies operations secret greater or less than continuing to require disclosure of the chemicals they are using which may potentially fall into the hands of terrorists? Have we come to rely on secrecy to too great an extreme? Have increasing levels of information technology made the cost of maintaining secrets far greater then in the past? To what extent does secrecy affect public trust? And, can an effective framework be developed to help policy makers make decisions related to secrecy? An argument can be made that ultimately secrecy, by its nature invisible, is too great a challenge to attempt to measure and evaluate its impact. But, no one has seen electricity, and yet we have all seen the effects. Additionally, there exists a vast amount of literature on electricity which not only defines electricity in a useful manner, but also provides the means to measure its effects. In light of the impact of secrecy on the information economy and the economy in general, and secrecy’s impact on the public’s trust in major institutions, especially when secret and often illegal activities are exposed, it is hoped that the following concepts, though by no means definitive nor complete, will spur others to pursue the development of a useful common framework upon which secrecy can be better defined and measured, and its impact predicted to a level of accuracy not available to policy makers today. Answering all the questions raised above is beyond the scope of this paper, but it does attempt to point out many of the difficulties, and hopefully it will spur others to investigate ‘secrecy’, its costs and its benefits, to a greater depth then is available at present.

This paper is composed of three major sections. The first section provides an overview of the current known status of secrecy in the United States, and provides definitions of the terms related to secrecy upon which the other two sections build. The second section provides an overview of the current state of trust in major institutions and defines terms for utilization in the final section, as well as introducing a formula for measuring trust. The final section utilizes the concepts and definitions and the trust formula introduced in the first two sections to introduce ‘Wu’, a concept to aid policy makers in visualizing the affect of irrational biases and their influence on information transactions involving secrecy and trust.

Secrecy
The 1997 “Report of the Commission On Protecting and Reducing Government Secrecy”, chaired by Senator Daniel Patrick Moynihan is the second Congressional Commission to attempt a comprehensive assessment of government secrecy. The first Commission, established in 1955, was the Commission on Government Security and issued its final report in 1957. The findings of the two commissions and their subsequent reports are remarkably similar. Both reports recognize the legitimate need for the government to protect information in the interests of national security. Surely, anyone can recognize the legitimacy of restricting access to information in the case of the codes and access procedures for arming and launching America’s nuclear arsenal. Or, of similar importance, citizens understand the restriction on the information concerning troop movements in time of war. However, both reports found the procedures for classifying information and the amount of information classified as out of step with actual legitimate national security concerns. The report issued by the Moynihan Commission is a very comprehensive guide to current levels of secrecy in government and the related costs, in a very broad and detailed sense. Two of the surveys cited in the report provide what may be a very conservative cost estimate of the costs to taxpayers for protecting classified information. The first survey cited, 1994, estimated the total annual security costs of reporting agencies and departments for 1993 to be approximately $2.27 billion (costs for the CIA were omitted). The second survey, using improved methods, was issued in 1996, and put the costs of classifying information for government agencies at $2.7 billion (again excluding CIA cost data), and the cost to related defense industry firms at $2.9 billion, for a total outlay to protect classified national security information of approximately $5.6 billion annually. The report also looked at the broader intelligence community distributed among various departments and agencies, the related contractor organizations and a large host of university and research institutions as a large information economy. In this light, the report views secrecy and the classification system as a set of regulations, and provides insight into how the system distorts the information economy. Of course, much of this must rely on extrapolation from the data available, as this regulatory system self regulates itself into intentional/unintentional levels of obscurity. The report states that secrecy is the ultimate mode of regulation; leaving citizens unaware that they are being regulated. Regulations of the normal nature inform a citizen about his required behavior and are therefore disseminated to inform the citizen. In contrast, secrecy regulates what knowledge a citizen may have, but does not let him know what he legally may not know.

Even so, “overregulation” is a continuing theme in American public life, as in most modern administrative states. Secrecy would be such an issue, save that secrecy is secret. Make no mistake, however. It is a parallel regulatory regime with a far greater potential for damage if it malfunctions. Sen. Moynihan, Chairman’s Forward, 1997

And, in keeping with the concept of economics, the report points out that free markets provide players with the most information. And that as the free flow of information is restricted the markets become less efficient. In 1995, Executive Order 12958 authorized twenty officials to classify as Top Secret “information, the unauthorized disclosure of which could be expected to cause exceptionally grave damage to the national security.” This authority has been delegated to 1,336 “original classifiers.” “Derivative classification” authority is given to two million government officials and to one million industrial contractors. In 1995 there were 21,871 “original” Top Secret designations and 374,244 “derivative” designations. Were there 400,000 secrets created in 1995, the disclosure of any one of which would “cause exceptionally grave damage to the national security”? ibid.

However, it is not just in matters of national security where there is a legitimate need for secrecy, which may be abused. In many aspects of our system the use of secrecy is viewed as a legitimate tool for the protection of various institutions and systems including the Grand Jury systems, the government witness protection programs, and with a proper court order, the authority to use covert surveillance while investigating criminal activity. The right to privacy, which may be considered the right of individuals to have secrets, has been alluded to in a number of cases as protections arising from the 1st, 4th, and 5th amendments of the Bill of Rights. One of the first cases of significance might be MEYER v. STATE OF NEBRASKA, 262 U.S. 390 (1923), in which the right of the state to prevent parents from teaching their children in a language other than English was considered an invasion of liberty and related to parental privacy. It was not until GRISWOLD v. CONNECTICUT, 381 U.S. 479 (1965) that an independent right of privacy was explicitly expounded by the Court, which has since been refined in numerous decisions. The activities that have received various levels of legal protection include the lawyer client privilege, the doctor/patient relationship, the confessional of the Catholic Church, and the prohibition of one spouse being forced to bear witness against another. In the market, businesses have the right, and even the legal obligation to protect trade secrets from would be competitors, and the media, though often contested, has the right to protect its information sources. With this in mind, secrecy of various levels and in various forms is an integral and important aspect of our existing system. There is a great deal of debate today on the impact of technology and interconnectedness on personal privacy and anonymity.

Interestingly, while there have been the increasing cries for greater transparency on the part of governments, businesses and other large institutions there has simultaneously been a vast amount of popular dialogue on the right of individuals to keep secrets from these same institutions. This effort appears to be in response to the increasing technological abilities by these organizations and other individuals to access personal information. This may well be due to the perception that individual secrets are under more imminent threat than those of larger organizations, or it may be motivated by an increasing perception/recognition of an asymmetric access to information which is by its very nature inequitable. With this in mind, the advancements in information technology over the past several decades have several distinct impacts in the area of information both for the individual and institutions. First, it has allowed an incredible increase in the volume of information, the rate of exchange and the transmission of information, much of which is of suspect validity. It has aided in the advancement of research so that the pace of newly acquired information in all areas has advanced rapidly; in fact, so rapidly that ever increasing specialization is required in fields so that depth and breadth of information become almost mutually exclusive. Information technology has also enabled the storage of vast amounts of information into ever smaller spatial volumes, and allowed for the oft cited global interconnectedness.

More to follow, and of course the right to revise and re-edit at will, which I think it needs...

2004-03-25T12:08:00.000-05:00

I've added several new links over to the left. I will continue to review the links for editing, but I do one to point readers to one in particular:

WorldChanging: Another World Is Here

It appears to do an excellent job of covering a lot of science news, especially in the realm of the enviroment and sustainability issues.

2004-03-21T22:47:00.000-05:00

Post copied from Radically Inept:

I am not going to being posting very much for the next couple of days. I plan to spend tomorrow morning calling and sending out resumes to some potential employers (feeding the family must come first), and in the afternoon, I plan to attend 2004 Ivan Allen College Founder's Day Celebration: "The Impact of Terrorism on Society: Global Perspectives" at Georgia Tech.

Panelists:
Gilles Andreani: Head, Policy Planning Staff, Ministry of Foreign Affairs, & Advisor to the Foreign Minister, France
Uday Bhaskar: Deputy Director, Instiitute of Defense Studies and Analysis (IDSA), India
Lawrence Papay: V ice President for the Integrated Solutions Sector, Science Applications International Corporation (SAIC), San Diego
Robert J. Ursano: Chair, Department of Psychiatry, Uniformed Services University of the Health Sciences, Bethesda, MD
Moderator:
Susan Cozzens: School of Public Policy, Georgia Tech (one of my former teachers).

And on Tuesday, all day (it includes free breakfast and lunch : ) ), I will be attending The Sam Nunn Bank of American Policy Forum, "Bioterrorism Preparedness: The Imperative for a Public-Private Partnership".

These two events, coupled with my "Mandatory Mondays" at my local American Legion, and my weekly Tuesday night attendance at the "Democratic Government in Exile" (local DeKalb and Fulton County, and Atlanta and Decatur cities) at Manuel's Tavern, will probably ensure that I don't have much time to post. I might sneak some time in for posting, but I really doubt it.

Oh, quick note, I'm not necessarily a committed democrat (though arguably I should be committed somewhere), as much as I am anti-corporatist, and according to a recent libertarian test, a 'libertarian lite'.

So, I hope to have some good information to post on Wednesday.

2004-03-19T17:09:00.000-05:00

I have been a little remiss on posting to this site, but my excuse is I have been very busy. And I still haven't finished reading The Transparent Society: Will Technology Force Us to Choose Between Privacy and Freedom?: by David Brin. But, I'm close. Anyway, he has covered much of the area that I have been researching, and he came to many of the same conclusions I have in deciding between transparency vs secrecy.

But, what I want to do now, is offer up a couple of analogies that I think are useful when thinking about information transparency vs secrecy. And, as I often do, I'm going to fall back on popular games to make the analogies. I will start with secrecy and work toward transparency. So, onward ho!!!

Governments and businesses that operate in secrecy can be likened somewhat to playing a game of Spades or Hearts. You know what your cards are, and you know your partner, in the case of Spades,and your two opponents each have thirteen cards to start, or in the case of Hearts, your three opponents have thirteen cards each. But you don't know their distribution, and the information is revealed one card at a time during the course of play.

The first step toward greater transparency may be likened to a poker game such as Five Card Draw. Here you have a little more information. You know how much money your opponents have available to bet, and you know how many cards they have drawn prior to the final showdown. Of course, they may be bluffing, but you still have this level of information in the course of play.

Moving further on, I think Five or Seven Card Stud games work well. You lose the information concerning your opponents' discards, but you still can see the money on the table, you know how your opponents have been betting and now, some of their cards, as well as yours, are now visible (transparent?). This may be the closest representation I make here, to how I think our current business model works.

Near complete transparency is maybe best represented by Chess or Go. Here all of your opponent's and your pieces are completely visible. The only aspect that is not 'visible' is your opponent's strategy. There are no hidden moves in these games, but you still have to try to determine your opponent's intent. This is also why I think a transparent market place might actually be achievable. It would still allow for the best business strategy to win, and it might actually be far more efficient since the information exchanges are transparent, thus obviously reducing information asymmetries.

Football works here as well, and football has a history as a popular analogy for business people to use. The point here, is that football is largely transparent. The only thing hidden to the opponent, unless you have information security flaws, is the play calling - the intent. NASCAR might make a similarly good example for largely the same reason. I had thought about golf. While golf is entirely transparent (there doesn't appear to be a place for 'hidden' strategies, it falls apart as a good analogy because opponents lack the ability to affect their opponents' play (aside from maybe 'psyching' them out).

Going back to football, I think professional football, may arguably be one of the most transparent of business markets. Everyone knows, or can know, who the players on a given team are, and the individual players stats. But, also, the players' and coaches' contracts are generally public. The cost of the stadium, the revenue from television, advertising, ticket sales and concession revenues, are all largely public knowledge, as is team ownership, management, etc. It is virtually a model of how a successful business can be run in a transparent market place.

Enough for now, but I'm going to reserve the right to comeback to this post, re-edit, and even add on.

2004-03-16T11:48:00.000-05:00

Just a reminder, if you don't see anything new posted here for a few days, it is because I try to only post more developed pieces to this site. If you are interested in the 'lighter side', please check out my other blog at Radically Inept.

2004-03-14T16:16:00.000-05:00

I am going to post this at both sites, since I feel this works for both formats.

This may come across as a bit of a diatribe, and to some extent that is valid. Part of the invective that will come through in this piece is a direct result of the fact that I tried to post something similar to the blog on Friday, but it failed to post and I lost all of it in the ether. Part of it is the result of my long standing disdain for economists. My personal belief is that economists make a good sub-branch of history, but that they are so divorced from reality that their skills of prognostication are the equivalent of the daily horoscope - so general as to be worthless. Anyway, on with the show:

Many of the economists I have been reading lately have a serious tendency to use the terms 'productivity gains' and outsourcing as the explanations for our current economic doldrums. And, they are in fact correct, but they truly fail to understand the magnitude of what is happening, and completely miss the point on what it means for the future. At least the ones that I have read; it may be that other economists are discussing this, and I have just missed their writings. I do not read every journal article. I don't have the time. But, the stuff published in the popular press is woefully inadequate.

First, let me take the term 'productivity gains' into more depth then is generally done, and do so by citing examples of which I have some personal knowledge. Much of the gains in productivity are not gains in productivity as the term seems to imply. They are in fact gains to a corporation's bottom line resulting from having employees work twice as much for the same wage. One example I can provide is a family member's recent experience at Home Depot. She made a very good salary working for Home Depot at the local corporate headquarters, but only if you thought she achieved this salary by working a 40-45 hour work week. She actually worked something on the order of 80-90 hours per week for this salary. What she had in reality was two jobs at a decent pay scale..maybe. I do not know what her salary was (she has since left the company, which I will come back to later), but for the sake of discussion, let's say it was $100,000 per year. Now many of us dream of making a six figure salary, but in this case, she was actually working the equivalent of two jobs at $50,000 per year. For a long time, I just thought she was an aberration, a workaholic, but I ran into another individual who works for Home Depot at an alumni function. I mentioned my family member's experience, and this person, who works at the corporate headquarters, stated that Home Depot has a reputation for burning out employees. This person said the average person stayed at Home Depot no more then 6 - 9 years. Now, as a statistic this may or may not prove true, but that is the perception among the small sampling I've done. So, this aspect of productivity gains is actually just changing your corporate culture form one of a team with camaraderie to one of a sweatshop with everyone sacrificing their personal lives out of fear of losing their jobs.

That is one side of the 'productivity gains', another is the direct result of technological advances that allow a worker to actually produce more within the same time frame. In this case, I will use another local corporation with which I have even more familiarity, and that is UPS. I worked for UPS for about two years, and I personally have no gripes with UPS, but recent technological advancements put in place in their distribution hubs and delivery cars provide excellent examples for this type of productivity gain. When I worked for UPS, a good loader on the line I worked could load between three to four cars during a 4-5 hour shift, depending on seasonal volume. Part of the work in loading the cars involved knowledge. The loader had to get to know where packages with particular addresses were to be place in the delivery car, so that the driver could efficiently run his route. Since it was difficult to remember every street address and their proper shelf location, charts were developed which the loader used as reference if he saw a new address, or simply forgot. At that time, UPS was investing a huge sum of money in information technology to make this system more efficient and to increase productivity. Their idea was that every package that came into the system should have a machine readable address (scanner readable), and that these scanners would be used to route an individual package throughout UPS's facilities. This included placing scanners on each of the delivery cars so that when the loader entered the car, the system would tell him exactly where in the car to place the package. Further, it would also provide information to the driver's 'board', informing the driver exactly how many packages were in the car, where they were located, and in what order he should deliver them. The board also provides information to the driver's managers on exactly when he had delivered a particular package to a particular address, increasing managements ability to hold drivers accountable for their time on the road (just a hair Orwellian, that).

UPS succeeded in doing exactly that. The system was not yet in place at the distribution center that I worked in when I left UPS, but has since been fielded there. I have a long time friend who still works there, and this new technology came up in a recent conversation. When I asked him about the effect of the new technology, he told me it allowed the loader to nearly double the number of cars that a loader could load during a shift, by taking all thought out of the process. While no one has lost a job due this innovation that he was aware of (it is a union job), do not expect your local UPS distribution center to hire new employees anytime soon. In fact, the volume of packages would have to rise to astronomical heights to put any hiring pressure on UPS at that center, and that center already operates at four times the capacity for which it was originally designed. This is the other side of 'productivity gains'; these the result of technology as opposed to longer working hours. But in both cases, there was no benefit to the employees, other then the opportunity to work harder for the same wage, and keep their job.

Here, I will give what many might consider short shrift to the problem of outsourcing, but this is because it is so much in the news, I do not believe I have anything constructive to add to this part of the dialogue. I just want to point out, that it is largely the result of technological improvements, especially information technology, which allows the outsourcing of jobs that Western countries are experiencing.

So, lets move on to what I believe supports my contention that most of the economists I've read, especially those representing our current administration, are missing the real point of all of this. There is no reason to expect jobs to come back, and there is every reason to expect job losses, not only to continue, but to accelerate over the next twenty years. Consider a very recent example of technological research that is currently in the news, which has the potential to eviscerate yet another area of domestic employment. The much ballyhooed attempt to develop automated fleets of vehicles for the US military. This is a congressionally mandated project, which requires the military to have a third of its fleets, non dependent upon human control. It is on the face of it, a very laudable goal, and if successful, it should save a great deal of lives. It will also have two other, much less discussed impacts. It will be so much easier to send our country to war, regardless of the reason for the war, if we can do so without suffering casualties. It will also put every trucker, delivery person and cab driver out of work. That may indeed sound hyperbolic, but I see no reason to doubt that conclusion. Once the technology is developed to the degree that a vehicle can operate completely independently, the costs of capital investment in that technology becomes anywhere affordable to corporations and the vehicles gain an acceptable safety level for use on public roads, the trucking industry will switch to automated systems. So, I would advise my readers not to invest in re-training for the trucking industry, unless you already have a plan to re-train for something else in the semi-near future.

Follow me just a little further here. Consider the impact of other technologies that are currently being developed, or are developed but have not yet come down in price far enough for general consumption. The automated lawn mower, when its cost drops to a level that makes it mainstream how many landscapers will lose work? Worse, anyone who has looked at the potential of nanotechnology, an area in which Georgia Tech has recently and with great fanfare, made extensive investments, will radically impact the manufacturing industry. If one subscribes to Google's newsletter on the subject of nanotechnology, one develops a real sense of the investment being made around the world, including the fact that a nanotechnology market has recently been developed to allow investors to hedge across an index fund of corporations in this area. But the potential is there for nanotechnology to destroy the economy as we know it through the development of self-replicating machines, and machines able to replicate anything at the atomic level once they have been programmed.

I will continue on this topic at a later date, but I want to close this section by saying that economic forecasts and public policies that underweight the technological progress that is coming down the pike in the next twenty years, are almost worthless. How to deal with these coming changes in very real terms is not easy. I have addressed one area in previous posts, that of bringing the average person into the information economy, as having potential for easing the painful economic disruptions on the citizens of Western economies, but I recognize it as limited in scope and effectiveness. More real analysis by greater thinkers across disciplines is needed to develop a real feasible road map to the future.

Edited 9:53 3/15/04

2004-03-08T08:48:00.000-05:00

Well, I've been busy, but I found this following article today through the KurzweilAI.net newsletter at Economist.com | Economics focus. It appears that the digital divide is shrinking, not growing. This confirms a 'feeling' I've had for a while, and a train of thought and research that I've been developing for the past two years. I am currently reading Amazon.com: The Transparent Society: Will Technology Force Us to Choose Between Privacy and Freedom?: Explore similar items: " The Transparent Society " by David Brin. I haven't finished reading his book, yet, and I may find this comment to be incorrect when I do, but I can't resist making it. So far, it appears then Brin's argument is that we should make the 'policy choice' to use technology to 'watch the watchers'. He apparently recognizes, as Reg Whitaker does in "The End of Privacy: How Total Surveillance Is Becoming a Reality", that privacy is a thing of the past. Technology has provided the means for the state, corporations and the wealthy to monitor virtually anything they like. Brin wants a formal policy where in all of the information from cameras that watch us, are open to the average citizen to also watch. And further, that we put camera's in police stations and the like to watch the people watching us. And, I totally agree with him so far. The point where I appear to differ with him (again, he may address this later in the book), is that I believe it is inevitable. I do not believe the government and elites will be able to buy privacy in the future, anymore then the average citizen will.

I will come back, and fill out this argument later. Also, as soon as I figure out how to access my web space at my ISP, I will post a link to a paper on secrecy and transportation that I wrote last spring. Now, back to news scanning and job hunting...

2004-02-27T09:07:00.000-05:00

Going back to the argument that I started in my second post, Monday, February 09, 2004 (I haven't learned the html yet to link within this blog. Help?), concerning the development of a personal information mutual fund type structure, I have some new points to support my position.

Reg Whitaker, in "The End of Privacy: How Total Surveillance Is Becoming a Reality" makes several good points in his section entitled 'From Surveillance to Dataveilance', pgs 125-128. The current system of data collection, data collation, the sources and availability, and the inaccuracies that occur. He points to the often heard problem of inaccuracies finding their way into an individuals credit report. More importantly, the virtual inability of the individual to get major credit companies to correct the inaccuracies once discovered. These mega data-corps have no real incentive to spend much time in cleaning their files. Worse still, even though there has been legislation to provide the individual the 'force of law' to have their files corrected, it is ineffectual at best, and people may suffer from inaccurate information in their files for decades.

Here is where the individual information account managed by a not-for-profit foundation would be a vast improvement to the individual. The foundation structure would allow the individual to manage his own information, and the individual has every incentive not to allow erroneous negative information in his personal account and to keep the information updated. Conversely, there could be a real an incentive for individuals to inflate the information in their accounts. But, as I previously stated, the foundation would need to establish its own mechanism for verifying the information that individuals enter into their personal accounts, and establishing its own information credibility rating system. And, I do think that current technologies make this easy, and data collection companies already do this to a great extent. The distinction being one that I keep coming back to, the individual should get paid for their information at free market prices.

At some point, when I have the time available I will consolidate the posts on this subject into a single piece, but for now...

2004-02-24T08:52:00.000-05:00

For some reason, I was unable to access the blog yesterday. So, I will add a few new posts today.

The first item I wish to add concerns the credibility of scientific research. While I am trying to keep this blog objective in analyzing information and the policies that are derived from that information, I think it is fair to point out incidences of malfeaseance. The current administration appears dedicated to taking the truth out of science and replacing it with profit. I have been following this administrations efforts at replacing objective science with profit motivated 'science' (faith-based science, maybe?), but this article, The Junk Science of George W. Bush by Robert F. Kennedy, Jr, [via lies.com] does an excellent job of summarizing many of the incidents, and I believe there is no reason to re-invent the wheel, so to speak.

2004-02-20T19:11:00.000-05:00

A working definition of Secrecy:

Secrecy requires action on the part of a principal or a collective of principals to deny full knowledge or some portion of related information to agents, and third parties. These actions may include denial of physical access to information on the part of agents and third parties, and/or active efforts at deception which may include disinformation or misinformation. If no active methods are used to deny others access to information, but the information remains beyond of the awareness of potentially interested agents and third parties, it is categorized as anonymous, not secret. As stated previously, secrecy requires the principal to take an active and intentional role in the information denial. Secrecy can have an almost infinite number of motivations, and these motivations influence the degree to which a principal attempts to control the information in his possession. A simplified list of motivations include the protection of self interests, a more altruistic protection of an agent’s interests (which may be practiced by parents shielding their young children from knowledge of their sex life), protection of a collective interest, for personal gain, for the gain of an agent, and for a collective gain. Further, it is possible for various permutations of these motivations to exist, and it is possible that more than one can be involved to varying degrees. It be that maintaining a secret works to protect the principal and provides the principal personal gain, or that the partial disclosure of information is beneficial while retaining the rest in secret. In fact, secrets themselves may fall into two different groupings. These are ‘known secrets’ and unknown secrets. Unknown secrets are self explanatory. Known secrets exist when agents know that the principal is in possession of information, and the agent’s actual knowledge of the information may vary in specificity from knowing that a research is being conducted to the area of research to almost everything about the research project except key details. A good example of why a principal may even wish the agent to know that a secret exists would be the codes to the ‘football’. This is the device under the President’s control which would be used to launch US nuclear capabilities should that eventuality occur. The existence of the US’ nuclear capability is known to provide a certain amount of deterrence to potential enemies of the US, but no one would suggest releasing the actual codes to be used to the public. However, known secrets can also have unintended negative effects as when information is released by the government in response to various requests from agents under the Freedom of Information Act, and the documentation released in response to those requests is full of redactions. This may lead the agents to speculate wildly concerning the undisclosed portions of the information and lead to even greater distrust than had the information not been released at all.

Secrecy also carries with it costs, both direct and indirect. Direct costs include the physical security of the information itself, the cost of ensuring that the principal associates are trustworthy, the oversight of principal associates who are engaged in handling secret information to ensure they are performing their roles in keeping with the principal’s interests, and increased transaction costs on the part of principal associates in the transfer of secret information between offices i.e. signing for documentation, security check points, etc take time. Secrecy may also incur indirect costs stemming from among others the inability to readily share information between departments within the organization which can result in duplication of efforts or the loss of creative ideas concerning the subject matter, or to share the information with important associates external to the organization such as suppliers or vendors which may slow productivity.

2004-02-20T13:29:00.000-05:00

Well, I've created a second blog, 'Radically Inept'. I wanted to maintain this site with a hopefully more academic tone, and for attempting to come up with solutions to problems that I see occurring. But, I also really wanted a place to rant and rave on current events. Hence the creation of the new blog, which will probably possess the journalistic standards of Rush, Sean Hannity and Ann Coulter. Well, maybe not quite that low.

2004-02-18T23:53:00.000-05:00

Well, this is a work in progress, I hope, but I did mean to add to the previous post: I had to sign in to see an article at the Washington Post today, and they wanted to know not only where I lived, but my occupation, my position in the company, company size, age, zip code, gender, etc.; all to see a single article. I agree the article is worth something, and I understand their desire to gain demographics about their readers, but WaPo has declined to the point of being largely a worthless rag (a far cry from the guts it showed when it had investigative reporters), so I lied. Okay, it may be I'm rationalizing here, but why should I give my life history to read an article. If they want that much information on me, PAY me for it. My information is valuable enough for them to want it...

2004-02-18T23:31:00.000-05:00

Well, as usual it's late. I always have ideas earlier, but I never seem to have the motivation to add them, until I should be getting some sleep...

Going back to the personal information mutual fund concept, I am currently reading "The End of Privacy
How Total Surveillance Is Becoming a Reality" by Reg Whitaker. It's really well written, and he provides a great deal of insight on a subject I have been researching for two years. Considering the book was published in 1999, I could have saved myself a lot of research had I found the book earlier. I'm not done reading it yet, but I'm hoping he didn't take all the thunder, and there's still room for me to add to the subject.

Anyway, reading the book, he points out how contrary to what those of us who surf daily or even have computers in our homes, are really a small fraction of the global population, and universal access to the net is no where close to be completed in this country. So, actually trying to set up the infrastructure to make personal information accounts work, requires providing access to the web. Well, thinking about it (as usual over a few beers in the best tradition of some of my favorite authors), it makes sense to adopt the banking community's ATM (Automated Teller Machine) technology. Provide people an account, a PIN number and put in place 'info teller machines', and people w/o home/work access to the web could update their personal info on the nearest machine; on the way home form shopping, dropping the kids of at day care or coming home form work, whatever...But, it's cheap infrastructure now a days.

2004-02-16T01:27:00.000-05:00

Late night thought:

Any corporation which has greater then 49% of its manufacturing base or greater then 49% of its employees off shore should forfeit its right to the US court system. Corporations that fall under the above criteria should be treated as foreign corporations. If the majority of the corporation’s manufacturing or jobs are in China, then they can hope that China does not nationalize their industry (or Russia, or India). Or, let them pay the tax rate in Germany, England…Why should the American government provide protection to a company that only has a masthead in this country? Any corporation that feels it is better off using a majority of foreign labor should be subject to the laws in the country in which they are most heavily invested. Comparative advantage does exist. It’s called the American legal system.

I’ll post more on this idea later…

2004-02-16T00:15:00.001-05:00

I realize that I didn't, perhaps, really make clear the argument from the previous post. It can be summed up as this: It might be far more effective to prioritize developing the information infrastructure in Iraq, then any other part of the infrastructure. Providing access to the web, may do far more to democratize Iraq and the entire region, then any other thing we can do. And, I would argue for flooding the region w/ information sharing capability in place of flooding it with more weapon systems. And, I would hope the technology would be black marketed in Iran, Pakistan, Syria, etc. The wider spread the sharing of information, the greater the pressure would be democratize.

I have applied for work in the region (hope I get it), so I can get a better understanding of the complexities involved.

Re-edited: 1104 hrs, 2/16/04

Found this article, "Smart Software Gives Surveillance Eyes a ÂBrainÂ" from the University oRochesterer via the KurzweilAI.net News Letter, and it seems to fall well with in the above concept:

University of Rochester researchers have developed "smart camera" software that monitors security cameras for such things as a gun in an airport or the absence of a piece of equipment in a lab.

2004-02-15T19:06:00.000-05:00

Well, as I promised, I'll start at the extreme and leave ya’ll to argue me back to center on a new subject. I'm not done w/ the others, but the news of a 100 more dead from an attack on an Iraqi jail; the attack on General Abizaid's convoy, and the 4 aid workers killed in Afghanistan, have made me think the time is right for these ideas.

My theory (I’m using the term theory very loosely here) is that Rumsfeld, for all his talk about transitioning the military for the new information age warfare, is still stuck in the industrial age. If you truly want to use information as a way to minimize US casualties, Iraqi civilian casualties, and speed up the transformation of Iraq from a despotic dictatorship to a modern democracy, you really need an appreciation of what information can do.

The premises I present below are generalizations, i.e., when I say that the Iraqi's love their children, I don't mean every Iraqi loves all their kids; I am generalizing for the point of the argument. Just as I believe that a percentage of American parents don't love their children, I am sure there are Iraqis who don't care about their children.

Premise: The average Iraqi loves and cares for his/her children.

Premise: The average Iraqi would like to have running water, working utilities, oil sales contributing to their economy, and other infrastructure improvements.

Premise: The US has an absolute advantage in projecting combat power, and bringing death and destruction on any grid coordinate it so desires.

Premise: The Iraqi resistance, terrorists, insurrectionists, whatever title works for the reader, has several advantages in their favor:
1. Knowledge of terrain (this advantage may be largely mitigated by the US's technological strengths, but is at this time still an advantage)
2. The ability to move throughout the country and the populace largely undetected, almost at will
3. The ability to gain intelligence from the populace, and potential moles with in the Iraqi security apparatus
4. Allies in the region will to support the Iraqi efforts in their own interests (similar to China and the USSR using the Vietcong as surrogates in their efforts against the US)

Premise: Sun Tzu knew what he was talking about, and information is the key to victory

Supposition: If the US could gain information parity, this coupled with the ability to project force, would provide US Forces a decided advantage overall

I would argue that using the World Wide Web (WWW) is one way to achieve information parity with the Iraqi resistance. My concept is that by providing modern information technological capabilities to the Iraqi people would in effect create information parity. If every Iraqi had the ability to place ‘web cams’ where they could watch their children go to and from school, monitor activities on the Iraqi infrastructure, the comings and goings of their police force, and to monitor the activities outside their mosques, they would do so. It is in the self interest of the majority of Iraqis to have a working infrastructure, and to monitor their neighborhoods for potential violent activities that would disrupt their own lives. If those same images were simultaneously placed on the WWW, that in effect would allow the entire world to help monitor the activities occurring in-country. In fact, the information would be captured in the ether, providing a permanent record.

If there were three systems in place, it would become virtually impossible for the resistance to disrupt all three systems simultaneously. So, if there were one system supplying data to the WWW that was under the direct control of individuals, they could decide where they wished to place their cameras to monitor locations of personal interest. If a second, separate system was put in place that allowed the Iraqi interim government to place web cams where it felt was most beneficial, these would to a certain extent overlap the individual system, but allow the interim government to prioritize their own electronic information. Again, if this system were broadcast to the WWW, you would allow the entire world help monitor activity, and capture the information in the ether for later review.

The third system would be a UN system (possibly a fourth US system…). Again, this system would likely overlap the previous two systems, and broadcasting events to the world.

For the US, this might not prevent attacks, but it likely would allow the US to use the WWW to track the terrorist/resistance fighter back to their point of origin, thus allowing military strikes to target terrorist camps/locations w/ potentially minimum civilian casualties. But, it could provide a great deal of credibility to strikes on terrorist camps locations, if the entire world were able to also back track the terrorist event to its ‘source’.

Triple redundancy of information should prove to be extremely beneficial to the efforts to engage the average Iraqi populace in peaceful rebuilding efforts and aiding in the reduction of violence, especially on civilians.

As usual, this is work in progress and is subject to change and revision based on the readers’ comments, criticisms, and suggestions.

2004-02-13T16:49:00.000-05:00

Wow. Just had to share this, since it ties in so nicely to what I've been posting below. I just received a call from a marketing survey/research group, and they offered me the opportunity to participate in an all-day consumer focus group. If I had qualified, it would have paid $150 for the day (I believe it was a 6 hour day), anyway I failed to qualify as I had not flown in the past 6 months. I also did not qualify for a beer survey because I drink imports and microbrewery products by preference and not Mich Lite. However, we (the original caller is an old high school friend of my son's) were able to finally find a marketing research project that would want my information - an unnamed firm - on the topic consumer electronics, which pays $75 for an evening session.

So, if we had an active information mutual market, and I had an account, presumably these companies could have trolled the information mutual fund, found out if I was in their target demographic groups, and contacted me via the fund. And, saved themselves some costs. I do not know how much money this marketing group charges to find the appropriate and willing people, but that middleman charge could have been avoided, or split between reduced costs to the company and an increased payment to my account. In which case, the fund takes let's say 5% for administrative overhead, and I personally would earn some of what the marketing firm is charging, plus the $75, minus the 5%. I would presumably (have no idea what the marketing firm is charging) come out better under such a scenario.

2004-02-13T14:53:00.000-05:00

Following up on the questions I asked in my first posting:

If entrepreneurship and small businesses are the backbone of the country as is so often stated, then why is this not reflected in the national education policy? If entrepreneurship is so important, why don't we teach it?

Brad DeLong's web site has a lot of discussion on the subject of job exportation overseas, employment/unemployment, and the overall state of the economy. One of the issues that's been raised repeatedly, is job retraining, and just as importantly, retrained to do what?

The following is my post to this thread at Brad's site:

I read these posts, and I think most of you are well aware of the problems facing our economy, and especially job losses. And, it seems none of us wants to completely abandon free trade in capitalist economy. The problem is that the current situation is a natural event. I listened to Greenspan on C-SPAN (never realized that rhymes) yesterday, and he too said that education was the single biggest tool for transitioning our workers. He pointed to what America did with our education system to help all those people move off the farms and into the factories, further, he pointed to this as a successful model of education to aid in economic transitions.

I agree, but I think he could have gone further with this thought. For instance the educational system we set up, and still have in place, educates our children in the skills needed to work for someone else. And yet he, like all economists and politicians, site the small business owner and entrepreneur as the spine of our economy. Our current education system makes no sense in that light. We need to begin teaching entrepreneurship in high schools. It should be blended in as major part of our curriculum. People can no longer expect to work for an employer, and especially not the same employer, and often not even in the same field, all their working lives. Entrepreneurial skills such as negotiating, knowing the value of the skills they bring to the table, understanding the bottom line morality of businesses, etc. coupled w/ a broader education and specialized education, is what is needed.

2004-02-13T11:54:00.000-05:00

The following was written almost as soon as I got home after reading Mara Shalhoup's article in Creative Loafing. The somewhat strident tone may be partially the result of libations imbibed, but sometimes your initial thoughts are worth reviewing to ensure you're not going to far astray:

An Information Economy: It’s MY information; it’s MY money!

The information is yours; you should get the money. There is currently a large vibrant market place trading in your information. Companies that compile lists, categorize and correlate the information and bring the information to market are growing and thriving. It is your information about you that they are selling, and they are making the profits. So, why not sell your information – Yourself. This is the basis for transitioning from a manufacturing economy to an information economy. The concept is to form an ‘information mutual fund’ to allow individuals to compete and sell their information in the market place.

People must take possession of their information in a very real and urgent sense. Many of the jobs leaving the US for abroad will not be coming back or at least in any foreseeable future, and certainly if they do comeback, the cost of labor will be depressed. In fact, the cost of information should follow a path ‘fractally’ similar to the cost of food and manufactured goods in the previous century; the market value of information will go down as supply increases. Only in this century, the loss of market value for information will happen at an ever accelerating pace. This is why the present economic situation is urgent. To help mitigate the overall economic consequences of the transition from a manufacturing company to the information economy and beyond, a market based vehicle is needed. Arguably, such this market based vehicle should ideally meet a host of criteria, including:

1. Democratic, available to all classes
2. Entrepreneurial/Capitalist, rewards efforts
3. ‘Easily’ adaptable, existing successful market model

See, I'd forgotten to include the three criteria, which I think are crucial if something like this is to work.

Again more later....

2004-02-13T09:54:00.000-05:00

Continuing on with how the Information Economy, specifically a personal information market, may work to minimize the impact of globalization.

Companies such as ChoicePoint, Inc. are making money by collecting and aggregating information, much of which is personal information. There is another company (I'll post the name and link later), which charges an individual $35 to open up an account. For this, the company will forward to you surveys that you can complete for remuneration. Why should the companies not send me the surveys directly, by-passing the intermediary, and allowing the individual to capture the full value of their information?

It is the existence and the success of these types of companies that demonstrates that personal information has an economic value that can be captured in the greater marketplace. In fact, companies that compile lists, categorize and correlate the information and bring the information to market are growing and thriving. This is the basis for transitioning from a manufacturing economy to an information economy. The concept is to form an ‘information mutual fund’ to allow individuals to compete and sell their information in the market place. Can the individuals band together to compete in the information market place? For individuals to benefit from entering into this market place, several questions would be resolved, especially ownership. For instance, can the argument can be made that I 'own' my driver's license number, my credit card number, my health information, etc. In the case of the driver's license, does the individual share ownership of the information with the state of issuance? For instance, does the individual have exclusive ownership of the information in the domain of the marketplace, and the state owns the information only in the domain of government? These are some of the questions to be resolved in order to establish a personal information market to compete in the global information economy.

Other important issues to be resolved for establishing a personal information market place are the administrative issues. If a foundation were set up which administered the personal information accounts, how would costs and revenues be distributed? First of all, as I stated previously, I think the structure of mutual funds provides a good place to start. As with a mutual fund, individual account values would vary depending on an individuals specific information, its credibility rating (I'll provide some thoughts on this later), the timeliness of the information upkeep, and the needs of information purchasers. However, just as individual mutual funds benefit from the quantity of investors, including small investors, this mutual information fund would gain from the quantity of people investing their information, including those of 'lesser' market value. The quantity of information aggregated and available would directly influence the value of the fund.

More down this path later...

2004-02-11T17:04:00.000-05:00

Actually, I should have started this line of inquiry into a personal information market by linking to the story in Creative Loafing by Mara Shalhoup concerning the company the information reseller ChoicePoint, Inc.. I was already aware of the DataBase Technologies involvement in the Florida voting debacle in 2000, but was unaware that they had been acquired by ChoicePoint,Inc. It was reading this article, while sitting in Manuel's Tavern, that the idea occurred to me.

2004-02-10T12:11:00.000-05:00

Continuing the subject of an personal information market:

I referred earlier to the potential value of a personal information market in buffering the economic consequences of the ongoing transition toward ever higher technologies and their productivity increases, as well as the consequences of globalization. The premise(s) is that based on a consumerist economy the informational value of the more affluent populations to the marketplace will be greater then that of less wealthy populations. So, presumably my informational value is directly influenced by my economic power, and hence over time, both may vary. Looking broadly at the direction the current US job market is going - largely overseas, there may be a sense of urgency in this proposal. If the market were started today, Americans could be establishing personal information accounts and earning a return on their efforts while their information is still very valuable. For the foreseeable future, I think the argument could be made that even on a global information competition scale, personal information about an American consumer, even if un-employed, will continue to hold a very high premium in the global information marketplace. I would expect that value to decline relative to other populations as they become more affluent.

Sort of to sum up, so far: As US jobs move overseas, the value of information concerning US citizens will remain high, and then I'd expect the value to decline as the other populations become more affluent through the jobs they gained.

It might also be possible, that since the jobs going overseas largely pay only a fraction of what they pay currently, or in the recent past, in the American economy, that the rise to a competitive level of affluence, and therefore informational parity, will not happen quickly, but that it will take real effort not to allow the value of the information of current affluent countries to fall to quickly.

More later...

2004-02-10T08:54:00.000-05:00

Found this article, "If you kick a robotic dog, is it wrong?", at the Christian Science Monitor through KurzweilAI.net. It's good to see we are starting to debate the ethics of the issue early on, before we develop something like the robotic/AI child found in the movie "AI". Personally, I found the movie disturbing until the cop out ending made me mad.

At some point in the near future, I am going to explore a similar tangent: What system of ethics is appropriate for a virtual world? At first this may not seem much of an issue, but I think it takes on greater importance when you realize that in recent studies by Edward Castronova, PhD, the virtual world and real world economics are not all that separate. In fact, in one study by Castronova, "The Price of 'Man' and 'Woman': A Hedonic Pricing Model of Avatar Attributes in a Synthethic [sic] World", it turns out that even in the virtual world there is a gender bias. And, ethical acts in the virtual world may result in real world harm. See "Ruling issued in China's first lawsuit involving virtual assets from an online game" as an example. More depth on this later.

2004-02-09T19:33:00.000-05:00

It’s your information, WHY SHOULDN’T YOU GET PAID?!! Or, can the Information Economy be used to cushion the blow of Globalization?

Sorry, but I thought the scream very appropriate. If this web site were to achieve nothing other then to make people aware of the potential financial value of their information, and inspired someone to establish an economic vehicle to realize that potential, well, Nirvana, I guess.

The Get Paid For Your Information Foundation, at least that is what I would call it. I’m sure that if it were ever established, it would wind up with a name like Global Information Equity Fund, or something equally pretentious. As I currently envision it, the ‘foundation’ is similar in structure to a mutual fund initially, and competes in the corporate information marketplace; just as a mutual fund earns an ‘equity value’, though is traded separately from equity stocks. In an ideal world, someone of Jack Bogle’s [founder of the Vanguard family of mutual funds] stature and credibility would take the lead on this [I’d love a board seat if it ever happens]. In theory [okay, trial balloon], an individual would be allowed to open a ‘Personal Information Account’ (PIA), where in the individual would enter information that they are willing to sell. That said, it may well be the timeliness of the upkeep of the information in an account, as well as other factors, that determine the potential price. If an individual maintains a ‘diary’ of purchases, radio listening/television viewing habits, broader entertainment interests, driving habits, travel itineraries, etc. this would be potentially more valuable then someone who only updates once a month or longer. The motivation for inputting the information (opportunity cost) would be the ‘profit’ from the sale of the information. I do not envision this as replacing the current information purveyors, but rather, empowering the individual to compete in the market of his/her own information. In concept [much better term], the value of the information is determined by the information market. The market for information on people using child care within three miles of their home vs. information on people planning to buy a car in the next six months in a specific geographic location would vary overtime in response to changes in the greater market place of information. Individual account holders would decide which information they are willing to sell to which customer at what price. Account holders might base their decisions on a host of factors, and they might reasonably include who the potential purchaser is (government vs. corporation vs. NGO vs. university research vs. an individual, etc); how the purchaser plans to use the information, including having an interest in limiting or receiving compensation for the propagation of the information, among others. It appears prudent to include some sort of credibility rating at the outset. One possibility is to give a greater credibility rating to someone who has physically come to a kiosk and presented documentation establishing identity, or who allows the foundation to verify information with other entities. Additional factors that an information purchaser might use to establish value is an account holder's economic status, cash purchasing patterns (especially forecasting future purchases), education level, survey participation, political affiliation, physical health, etc.

The foundation would administer the transactions, and distribute revenues earned on the information on, say, a semi-annual basis. The foundation itself extracts an administrative charge of, say, three percent initially, but over time, the administrative costs should eventually approach a ‘Near Zero Administrative Charge’ [I borrow from all fields]. Also at the outset, it might be prudent to plan to redistribute two percent of the total revenue across all accounts to encourage participation since the volume of information potentially is of value by itself.

More to follow...

2004-02-09T11:04:00.000-05:00

If entrepreneurship and small businesses are the backbone of the country as is so often stated, then why is this not reflected in the national education policy? If entrepreneurship is so important, why don't we teach it?