Buying shares of people

Fantex, Inc. announced today that it has entered into brand contracts with five Major Leaguers: Phillies third baseman Maikel Franco, Astros right-hander Collin McHugh, Orioles second baseman Jonathan Schoop, Twins right-hander Tyler Duffey and Padres third baseman Yangervis Solarte (as noted on
Fantex offers professional athletes an up-front, one-time payment in exchange for a portion of that player’s future earnings both on and off the field. Fantex then sells “shares” of that player to public investors for a set price (thus covering the up-front payment to the player), allowing those investors to turn a profit if said player crosses a certain threshold in his career earnings. Obviously, that creates risk for the investors, who stand to take a financial loss if the player fails to earn enough money in his career to justify the shareholders’ investment. Angels left-hander Andrew Heaney became the first player to enter into an agreement with Fantex last September, taking a $3.34MM up-front payment in exchange for 10 percent of his future earnings. (Notably, the league and the MLBPA each approved that agreement, and Fantex’s announcement seemingly suggests that the same is true of these five agreements.)

Hmm. I wonder if this becomes more widespread. I'd heard this idea proposed before but never heard of Fantex. Purchasing shares of Jennifer Lawrence just after you'd seen her in Winter's Bone might feel like scoring a Mantle rookie card, back when baseball cards still had real scarcity (and thus value).

Innovation in organization design

For example, Uber has a mobile app (UI) that talks to their servers (API). You can imagine that their servers effectively take three parameters: credit card, drive from, and drive to… and they dispatch a human to do it., pointA, pointB); // pseudocode obviously
What does that make the drivers? Cogs in a giant automated dispatching machine, controlled through clever programming optimizations like surge pricing? Drivers have often told me that the job grants them incredible autonomy: they can drive whenever they feel like it, and they’ve stopped looking for jobs in finance or construction because the daily freedom is so valuable to them. There’s liquidity in the marketplace that allows them to come and go as they see fit. But the actual driving is perfectly orchestrated by software, and it’s not a secret that Uber intends to eventually replace all their drivers with self-driving cars. I worry that the army of Lyft and Uber drivers is opting into an easy, and sometimes-intended-to-be-temporary, dead-end career path. This may be ok at the moment for some drivers who enjoy driving and the flexibility of the job. But driving as an occupation will disappear practically overnight when self-driving cars hit the road.
Similarly, 99designs Tasks has a web interface for the customer to explain a simple and quick design task, plus an API to dispatch a visual designer to complete the task. At Segment we’ve actually built a 99designs Tasks API to create vector logos from an image url:
99designs.logo(card, url); // pseudocode ;)
What’s bizarre here is that these lines of code directly control real humans. The Uber API dispatches a human to drive from point A to point B. And the 99designs Tasks API dispatches a human to convert an image into a vector logo (black, white and color). Humans are on the verge of becoming literal cogs in a machine, completely anonymized behind an API. And the companies that control those APIs have strong incentives to drive down the cost of executing those API methods.

Peter Reinhardt wrote this a while back on replacing middle managers with APIs. It speaks to a broader trend, but depicting this gaping skills gap as an API call is an elegant visualization.


Mistress dispellers

Mistress-dispelling services, increasingly common in China’s larger cities, specialize in ending affairs between married men and their extramarital lovers.
Typically hired by a scorned wife, they coach women on how to save their marriages, while inducing the mistress to disappear. For a fee that can start in the tens of thousands of dollars, they will subtly infiltrate the mistress’s life, winning her friendship and trust in an attempt to break up the affair. The services have emerged as China’s economy has opened up in recent decades, and as extramarital affairs grew more common.

(h/t Ken)

Well this is something. Coming this fall to ABC, the explosive new series from Shonda Rhimes: The Dispeller, starring Halle Berry.

Mistress dispelling typically begins with research on the targeted woman, said Shu Xin, Weiqing’s director. An investigation team — often including a psychotherapist and, to keep on the safe side, a lawyer — analyzes her family, friends, education and job before sending in an employee whom Weiqing calls a counselor.
“Once we figure out what type of mistress she is — in it for money, love or sex — we draw up a plan,” Mr. Shu said.
The counselor might move into the mistress’s apartment building or start working out at her gym, getting to know her, becoming her confidante and eventually turning her feelings against her partner. Sometimes, the counselor finds her a new lover, a job opening in another city or otherwise persuades her to leave the married man. Weiqing and other agencies said their counselors were prohibited from becoming intimately involved with the mistresses or from using or threatening violence.

Even the term is spectacular—mistress-dispelling—like some overly literal translation of a Chinese phrase.

At first blush, this seems like a ridiculous solution, but understand the social context and there is a Coasean efficiency, an almost ingenious elegance, at work.


Style transfer

Frank Liu developed a technique he calls “style transfer” in which he renders an image in the style of another. 

Bhautik Joshi riffed off of that for video, resulting in experiments like this rendering of clips from Blade Runner in the style of Van Gogh's Starry Night. 

Prisma has capitalized on this technique by taking it mobile. I've enjoyed using the app to render some photos in my camera roll in a variety of styles. I had previously found expensive apps and plugins on the desktop that could do something like this, but now it's available in a free mobile app. Any sufficiently advanced technology is indistinguishable from a free app on your phone, eventually.

I'm looking forward to when Prisma can handle video, it's only a matter of time before style transfer videos like the one above are flooding your social media feeds.

A market opportunity for human ingenuity remains, however, for those who can actually transfer not just the visual style but the entire cinematic grammar of one artist to another. What if Werner Herzog directed Toy Story? What if Stanley Kubrick directed Star Wars? Who wants to see Terrence Malick's take on Captain America?

I draw much too much pleasure from style transfer in prose, like imitations of Hemingway, Cormac McCarthy, and the such. James Wood once wrote of McCarthy:

To read Cormac McCarthy is to enter a climate of frustration: a good day is so mysteriously followed by a bad one. McCarthy is a colossally gifted writer, certainly one of the greatest observers of landscape. He is also one of the great hams of American prose, who delights in producing a histrionic rhetoric that brilliantly ventriloquizes the King James Bible, Shakespearean and Jacobean tragedy, Melville, Conrad, and Faulkner.

Interview with Matthew Gentzkow

Due to this work, we now know that newspaper media slant is driven mostly by the preferences of readers, not newspaper owners. And by examining browser data, he discovered that people don’t largely live in internet “echo chambers”—that is, they don’t exclusively visit sites that align with their political bent. Product brand preferences, he found, are established early in life and endure long after exposure to essentially identical, less expensive alternatives.

That's from the introduction to this interview of 2014 Clark Medal winner Matthew Gentzkow. This immediately caught my eye because it echoes some ideas I have (which is perhaps ironic considering one of those points is about the over-estimation of Internet echo chambers).

I think the Internet has expanded, on balance, the volume of ideas on all sides that most people are exposed to, offsetting the echo chamber effect. What should concern us is how people have reacted to that broadened exposure; instead of pushing people to the center, it has increased polarization. That may say more about how we receive ideas that threaten our worldviews and tribal affiliations than it does about the inherent nature of the internet. 

Like Gentzkow, I also believe the reason so much advertising targets young people, even though it's the adults that have money, is to lock in consumer preference for life. In that respect much of that advertising is more efficient than it appears.

Frankly, this interview contains so much high quality material I can excerpt all day and still barely make a dent, so do read the whole thing.

Good news for parents who, on occasion, let their kids watch a bit of TV just to get a respite from care-taking duties.

This reflects what I think is an important conceptual point—that took a while to really sink in for us—which is that you can’t talk about the effect of TV without thinking about what it’s crowding out. TV viewing is shifting time around. And, really, for any new technology, any change that is shifting the allocation of time, its effect is the effect of that technology relative to whatever you would have been doing otherwise. 
That has pretty important implications for this question because if you think about children of different backgrounds and what else they might be doing with their time, it’s easy to imagine that for some kids, watching television is a much richer source of input than a lot of what it might be crowding out. TV has lots of language; it exposes them to lots of different people and ideas. 
It’s also easy to imagine kids for whom it could be a lot worse than whatever else they would have been doing. Educated, wealthy parents or parents with a lot of time to invest in their kids might be taking them to museums and doing math problems with them and so forth. I think part of the reason so many people writing about this assume TV is bad is that they themselves are in the latter group.

We have a strong norm in America about the corrupting influence of TV on children. I'm not sure how it arose or where it came from, but I'd love to know the history of that meme.

Regardless, what it means is that TV is often underrated for its positive aspects. I saw a paper once, though I can't seem to track it down, that showed that the introduction of TV in different countries and societies correlated with a strong rise in equality for a variety of groups including women and minorities.

That's not so surprising when you consider just how efficient television is at transmitting cultural norms. Humans love stories, and in this age those stories travel most efficiently to more people when encoded in the form of television and film narratives.

On the other hand, TV has had a negative effect on political turnout.

On the other hand, TV isn’t just political information; it’s also a lot of entertainment. And in that research, I found that what seemed to be true is that the more important effect of TV is to substitute for—crowd out—a lot of other media like newspapers and radio that on net had more political content. Although there was some political content on TV, it was much smaller, and particularly much smaller for local or state level politics, which obviously the national TV networks are not going to cover. 
So, we see that when television is introduced, indeed, voter turnout starts to decline. We can use this variation across different places and see that that sharp drop in voter turnout coincides with the timing of when TV came in.

This reminds me of an idea I've written about before, that in this age of near infinite content, we now gravitate towards an information diet that is much more reflective of our daily preferences than in the past. Newspapers of old started with the front page and included editorially prescribed sections in equal volume: World, Business, Sports, Entertainment, Autos, and so on.

I was always skeptical those sections merited equal surface area, but it wasn't until readers could actually consume anything they wanted that we had a true view of their preferences. The internet is perhaps history's great lab on consumer choice, and what it shows is that most people generally only want small doses of the main entree of hard news, and a lot more appetizers and dessert: sports, entertainment, celebrity gossip, clickbait self-help, pornography. 

That's why the addition of The Ringer is valuable for Medium. There are only so many tech confessional pieces even the most ardent tech enthusiast can handle in the Silicon Valley bubble chamber; scatter a few copies of US Weekly on the coffee table, and hang a flatscreen TV tuned into ESPN, and more people will visit more often.

My co-authors, Bart and JP, along with Sanjay Dhar, another co-author of theirs, had written a really important paper in the Journal of Political Economy a couple of years earlier that documented huge differences across U.S. cities in which brands are popular. They showed that that actually is correlated with the timing of which brands were introduced first in those cities, even though all of those introductions happened, for the most part, 50 or 100 years ago and few people remember a time when you couldn’t buy both. Say, for example, that we have two brands that have both been in a particular city for 50 years. If one was introduced 70 years ago and the other 50 years ago, you can predict that the one that’s been there for 70 years is going to have a much bigger market share.

We often think of first-mover advantage in sectors with network effects, perhaps none more clearly so than in messaging, with the odd geographically clustered favorites around the world. What Gentzkow notes here is that first-mover advantage can apply in consumer packaged goods, too. 

It's not that surprising, though I point it out for those who are always questioning why brands target unemployed millennials or kids without any income with advertising. Think about the loyalty fans have to sports teams from their childhood hometowns, long after they've moved elsewhere.

Our research results push back on that and say that, at least in this particular context, ownership is not really the key driver of slant and, in fact, a lot of the driver is actually coming from consumer demand. Not only does that say that you might not need to be as worried about ownership, but it also says that the welfare implications of this are a little more complicated because now consumers are getting what they want. 
We might think from a political, democratic point of view that it would be better if the public got different, more diverse information. But there’s going to be a welfare trade-off because we would be giving them content they would prefer less. If we want to give people diverse content that we think is good for democracy, then we have to get them to actually read, watch or consume it. And, you know, giving a bunch of people in conservative places some liberal newspaper—well, our results would suggest they’re not going to read it. So, that seems to have important implications for policy. 
But it comes with a really important caveat. The finding that ownership doesn’t matter in terms of a newspaper’s political slant is not a universal result. It doesn’t apply everywhere. It’s a statement about newspaper markets in the United States—a highly commercialized, relatively competitive setting, and a place where the political returns to manipulating the average content of a newspaper might not be all that big.

The chicken and egg question: did Fox News come along and satisfy a market need that conservatives weren't aware of, or did the market need summon Fox News out of nothingness?

If the filter bubble is not the internet's creation, but inherent to human nature, that argues for a much different solution than just exposing people to more ideas. Perhaps it's how the ideas are framed? How people are educated? Do we need to instill different mental models?

I'm fairly certain that taking an angry Trump supporter, cuffing them in a chair, locking their eyes open like Alex undergoing the Ludovico technique in A Clockwork Orange, and forcing them to watch Rachel Maddow for days on end isn't going to have the salutary effect one might suppose (and neither would force feeding a liberal Fox News).

The expanding Overton window

The ‘Overton window’ is a term from political science meaning the acceptable range of political thought in a culture at a given moment. It was the creation of Joseph Overton, a think-tank intellectual based in Michigan, who died in 2003 at 43 after a solo plane accident. His crucial insight, one which both emerged from and was central to the work of the think tank Right, was that the window of acceptability can be moved. An idea can start far outside the political mainstream – flat taxes, abolish the IRS, more guns in schools, building a beautiful wall and making Mexico pay – but once it has been stated and argued for, framed and restated, it becomes thinkable. It crosses over from the fringe of right-wing think-tankery to journalistic fellow-travellers; then it crosses over to the fringe of electoral politics; then it becomes a thing people start seriously advocating as a possible policy. The window has moved, and rough beasts come slouching through it to be born.

John Lanchester on the roots of Brexit, emphasis mine. The echoes in the rise of Trump in the U.S. are hard to miss.

Kipling asked a good question: ‘What do they know of England who only England know?’ But there’s a variation which, today, might be more relevant: ‘What do they know of the UK who only London know?’ The answer to both questions turns out to be the same: ‘Not nearly enough.’ England is so small, geographically, that it is easy to forget that it is also surprisingly big. There is no rich country of equivalent size that is more densely populated. The only country which has both more people than England and more people per square kilometre is Bangladesh. What this means, experientially, is that there is a kind of denseness to England and to Englishness; England is both very similar to itself and significantly different when you move ten miles down the road.

Related: this Clay Shirky Tweetstorm to his white liberal friends. Forget the internet filter bubble, if it even exists. Far more dangerous is the geographic filter bubble.

When geography is destiny, inequality is a given, but in certain countries the effect has amplified.

To be born in many places in Britain is to suffer an irreversible lifelong defeat – a truncation of opportunity, of education, of access to power, of life expectancy. The people who grow up in these places come from a cultural background which equipped them for reasonably well-paid manual labour, un- and semi- and skilled. Children left school as soon as they could and went to work in the same industries that had employed their parents. The academically able kids used to go to grammar school and be educated into the middle class. All that has now gone, the jobs and the grammar schools, and the vista instead is a landscape where there is often work – there are pockets of unemployment, but in general there’s no shortage of jobs and the labour force participation rate is the highest it has ever been, a full 15 points higher than in the US – but it’s unsatisfying, insecure and low-paid. This new work doesn’t do what the old work did: it doesn’t offer a sense of identity or community or self-worth. The word ‘precarious’ has as its underlying sense ‘depending on the favour of another person’. Somebody can take away the things you have whenever they feel like it. The precariat, as the new class is called, might not know the etymology, but it doesn’t need to: the reality is all too familiar.

This is amazing:

The white working class is correct to feel abandoned: it has been. No political party has anything to offer it except varying levels of benefits. The people in the rich parts of the country pay the taxes which support the poor parts. If I had to pick a single fact which has played no role in political discourse but which sums up the current position of the UK, it would be that most people in the UK receive more from the state, in direct cash transfers and in benefits such as health and education, than they contribute to it. The numbers are eerily similar to the referendum outcome: 48 per cent net contributors, 52 per cent net recipients. It’s a system bitterly resented both by the beneficiaries and by the suppliers of the largesse.

So much of communicating well is knowing your audience. Some of this is selection bias, of course, but Trump is the last man standing in the GOP because he is the voice of some large segment of America. When he preens and smirks, punctuating his misogyny and racism with finger jabs and thumbs up gestures, he wraps his hands around the id of the angry white working class and squeezes, like a cardiac surgeon pumping a human heart.

Electing one person, or three thousand?

Interview with the Wall Street Journal's Bret Stephens:

And if you’re obliged to make the choice upon pondering that, who would the choice be?

BS: Well, you’re asking me the same question twice. My answer is the same. The only person who counts in the administration is the president of the United States, Hugh. That’s the only person who counts. When George W. Bush decided to save the American position in Iraq by going against the advice of all of his wise men, of Jim Baker and the whole Iraq Study Group, and 90% of his administration, that was George W. Bush’s decision. So we have to bear in mind that this isn’t an administration we’re electing. It’s a person that we are electing. Who knows better than you what it means to have a commander-in-chief who lived his entire life, who lived throughout the entire Cold War, and doesn’t know what the nuclear triad is? It’s absolutely astonishing. And so it’s terrific to have Joe Dunford and you know, perhaps John Bolton and other people in positions of trust. But you have to have a president who bothered over the last 70 years to gain a cursory understanding of how the world works. And on so many issues, Hugh, on so many issues, I know not all of the issue, but on so many issues, this guy is just the antithesis of what I’d want a Republican president to be on foreign policy. When it comes to trade, when it comes to standing up to countries like North Korea, when it comes to standing up to guys like Vladimir Putin, Donald Trump is not a conservative. If you put…

HH: Bret, you don’t have to, I agree with you on all of that. I know the critique. Nevertheless, what about my argument that civilians owe people who are fighting the war the best of the two candidates for commander-in-chief. We don’t have the option to be conscientious objectors in the one part of the war that is part of our job, which is to pick a commander-in-chief.

BS: Listen, I think that for the United States, Hillary Clinton, as awful as I find her, is a survivable event. I’m not so sure about Donald Trump.

I've nothing to add here on Trump, but the idea of whether you're electing 3,000 people or 1 is a relevant question here as it is elsewhere (think about hiring a director, electing a CEO, etc.). Also worth asking if you're trying to hire the 1 person or one of the 3,000.