Seth’s blog

A recent EW Popwatch post compared several YouTube versions of Leonard Cohen’s Hallelujah, much like I did here. It’s like Leno and Letterman telling the same joke. We have an Instinct of Connoisseurship, Veblen would say.

The Sharper Image has gone bankrupt and will no longer honor gift cards. In the comments section of the Consumerist post about this, several people apparently fail to understand why gift cards exist:

Another reason why cash is a better gift than gift cards.

This is just a good example why you should never buy a gift card.

Did anyone ever NOT know that gift cards are stupid?

The real lesson here, as Consumerists know, is don’t buy gift cards. They are a bad deal even if the issuer doesn’t go bankrupt.

This is the low-rent version of the deadweight cost of Christmas idea, which I discussed earlier. At the risk of stating the obvious, the perfect gift shows you know a lot about the recipient; cash shows you know nothing. A gift card shows you know a little — where the person likes to shop. They are less wasteful but less gift-like than ordinary gifts, more wasteful and more gift-like than cash. Gifts are supposed to be wasteful. This is why they are nicely wrapped. (Curiously no commenter called gifts stupid, a scam, etc.) In evolutionary terms, gift-giving traditions evolved because they increased demand for seemingly “useless” stuff. Gifts that went unused and expensive wrappings weren’t actually useless; they helped artists and artisans make a living. They were research grants for material science.

From a excellent column by Tim Hartford:

Esther Duflo, a French economics professor at MIT, wondered whether there was anything that could be done about absentee teachers in rural India, which is a large problem for remote schoolhouses with a single teacher. Duflo and her colleague Rema Hanna took a sample of 120 schools in Rajasthan, chose 60 at random, and sent cameras to teachers in the chosen schools. The cameras had tamper-proof date and time stamps, and the teachers were asked to get a pupil to photograph the teacher with the class at the beginning and the end of each school day.

It was a simple idea, and it worked. Teacher absenteeism plummeted, as measured by random audits, and the class test scores improved markedly.

Another young economist, Ben Olken of Harvard, used a similar randomisation technique to work out whether corruption in Indonesian road-building projects was best fought top-down, using audits, or bottom-up, soliciting comments from local villagers about whether money was being embezzled. One challenge was to work out how much embezzlement was taking place. Olken enlisted engineers to take samples of the road’s structure and to estimate how much it should have cost to build; he compared that estimate with how much spending was claimed in the project’s accounts. The missing funds were a rough guide to the amount embezzled.

In contrast to Duflo’s results, Olken found that the bottom-up monitoring was not effective – it shifted the embezzlement from something the villagers cared about (wages) to something they did not (building materials). The threat of a guaranteed audit – a threat that was later carried out – was much more effective, reducing the estimates of missing funds by a third.

A chapter in The Theory of the Leisure Class by Thorstein Veblen is about academia and the tendency toward uselessness, which Veblen explained as a way of signalling that one doesn’t need to work. As a general rule at research universities, useful = low status. A few years ago, I had lunch with an engineering professor. By far the most useful thing to come out of the UC Berkeley Electrical Engineering Department in the last 20 years, he told me, was a circuit analysis program (SPICE). Used everywhere. A big contribution to the field. Who did it? I asked. He didn’t know. That’s how low-status it was — no professor wanted to be closely associated with it.

The curious thing about the two examples that Hartford describes is that they are happening at the same time. Is this a coincidence? Or is there an explanation?

Peter Pronovost’s research on ICU checklists is far more useful than one would expect from a medical school professor; likewise my self-experimentation about everyday problems (e.g., poor sleep) was far more useful than one would expect from a psychology professor. So perhaps there is some sort of larger discipline-spanning force at work.

The other shoe drops. A year ago Atul Gawande wrote in The New Yorker about the Apgar score, a low-tech measurement of newborn viability that led to vast improvements in obstetrics. That’s the “how to improve?” side of things. Now Gawande has written about something equally simple and powerful on the “here’s how to improve” side of medicine: the use of checklists to improve ICU treatment. The first article was called “The Score”; this one is called “The Checklist”.

Checklists are the idea of Peter Pronovost, an ICU doctor at Johns Hopkins Hospital. His first checklist, in 2001, was designed to prevent infections on tubes inserted into patients. Nurses made sure that doctors followed the checklist. It’s like the Ten Commandments: the top and bottom getting together to improve the behavior of people in the middle. Checklists involved the empowerment of nurses (bottom) by hospital administrators (top) to improve the performance of doctors (middle). No coincidence, I’m sure, that the Apgar score also involved female empowerment: Virginia Apgar was one of the first powerful women in medicine.

Pronovost told Gawande:

The tasks of medical science fall into three buckets. One is understanding disease biology. One is finding effective therapies. And one is insuring those therapies are delivered effectively. That third bucket has been almost totally ignored by research funders, government, and academia. It’s viewed as the art of medicine. That’s a mistake, a huge mistake. And from a taxpayer’s perspective it’s outrageous.

Not to mention a sick person’s perspective. I completely agree. Several years ago I heard an industrial designer give a talk to an interface design group. He said that new high-tech products go through three stages: (a) used only by gadgeteers and professional engineers (e.g., the first home computers); (b) used by experts (e.g., billing software for lawyers); and (c) mass market (e.g., cell phones). The discipline of engineering, he said, was good at designing for the first two stages but not the third.

The similarities suggest a common explanation. I think one reason goes back to Veblen: It is low status to do useful work. It may also have to do with male dominance of medical research and engineering. When balancing status versus usefulness, men may weigh status more highly.

More innovation in the delivery of medicine: house calls. No kidding. More about Peter Pronovost.

It is curious that both Thorstein Veblen and Tyler Cowen were/are economists. Judged by their interests, they might have been psychologists, sociologists, or anthropologists, especially the last. The Theory of the Leisure Class was pure anthropology. Tyler’s new book Discover Your Inner Economist is a blend of psychology and anthropology. Veblen wrote a whole book arguing what Tyler (rightly) takes as needing little support. “Cookbooks by famous chefs . . . seek to impress rather than respect our limits,” writes Tyler. Straight out of Theory of the Leisure Class except better written.

In book after book, Veblen criticized mainstream economics. The mainstream economists of his time liked to assume that everyone “maximized utility”; the point of Theory of the Leisure Class was how wrong this was — all that conspicuous waste and consumption and impracticality done to signal one’s wealth. Whereas Tyler’s theme is essentially the opposite: mainstream economic ideas, which now include Veblen’s, explain a lot about everyday life, such as which countries have the best restaurants. U. N. troops were “very good for the people who sell lobster,” a Haitian taxi driver told him.

Whereas Veblen expressed his dissatisfaction in the usual academic way — he wrote a book saying this is bad, that is bad (very creatively and thematically) — Tyler did something far less predictable and probably far more powerful: With Alex Tabarrok, he started a blog. The main theme of Marginal Revolution, as far as I can tell, is to praise stuff (usually academic economic stuff) that Tyler believes is or is likely to be under-appreciated. Greg Clark’s new book is an example. Stories teach values, and MR is a long-running serial with “recurring characters” (to quote Tyler). To criticize by creating is as old as Michaelangelo but requires a willingness to start small and deal with small things (such as a tiny restaurant) that doesn’t come easily to academics in prestigious positions.