Bottle deposits

On a recent business trip, a conversation arose with the locals  about the state’s beverage container deposit and refund policy, which is meant to encourage folks to recycle.

It’s also caused a cottage industry for people to collect containers in neighboring states that do not require deposits and transport them into the state to collect the deposit fee.

To solve this problem, the state wants drink makers to produce unique packages that will only be sold in that state.

Regulation begets regulation.  The deposit/refund scheme causes abuse, so more regulation comes along to fix the abuse.  This will likely result in more unintended consequences and more regulation and bureaucracy to fix those.  Few people question whether the whole scheme is worth it or not.

However, the locals recognized the special container fix would likely raise prices for beverages in the state as manufacturers have to separate batches of beverages made for that state and change their distribution processes to make sure only outlets in their state get those containers.  It may also result in less choice as smaller players may opt out of selling in that state.

I mentioned that my state has no such laws, yet people there seem to recycle just fine.  It made me wonder if anyone has studied whether a container deposit scheme results in any more recycling or if states and localities just adopt such schemes because they sound good.  Anybody know?

One more thing, even if the scheme produces more recycling, how would we know if it’s worth it or not?  Certainly, some folks will say we must conserve landfill space at all costs, but that’s easy to say when you don’t have to pay the costs.  I wonder if those same people would conserve landfill space if they were directly faced with the costs.

Failure

Here’s a nice article on failure on the Harvard Business Review website, called The Missing Market for Failure by Joshua Gans (thanks to Tim Harford‘s tweet).

I’m not sure a market for failure is nearly as important as simply gaining a better understanding that failure is necessary and normal and is not bad.

We live in a trial-and-error world.  We really don’t know if something will work until we try. It’s disappointing that we stigmatize failure so.

I think this goes back to Salman Khan’s insights on education in this post.   In school, we punish experimentation and failure.  I agree. That’s where the negative stigma on failure starts.  If you don’t ace a test at a specific snapshot in time, you’re deemed “slow kid” as Khan points out.

I’ve seen enough things that I thought would fail prove me wrong.  Enough so, that I try to keep an open mind and realize that what I think doesn’t matter much.  What matters is if it really works or not.

Even with the things that don’t work, I often find that the reasons for failure were reasons that nobody guessed upfront and we all learned valuable lessons in the process of trying.

We often look at successful people and assume they have a perfect record.  But that’s a rare (if non-existent) case.  What differentiates them the most from you and I is an ability to accept failure, learn from it, brush it off, laugh at it and move onto the next thing.

They don’t let it define them.  They treat failure as a feedback, plain and simple.

Washing machines are a great innovation

Thanks to Aaron McKenzie of The Idiots’ Collective for directing me to this 10 minute TED talk from Hans Rosling.

In it, Rosling uses his mix of entertaining presentation skills, easy-to-understand graphics and simplifying data analytics to tell us how washing machines opened markets for books  and why environmental activists should refrain from giving energy use advice to others.

In the comments of his post, McKenzie requests a laundry folder.  That would be nice.

I have wondered why we store our clothes across the home to be close to our beds and baths rather than close to our washers and dryers.  Or, why we don’t put our washer/dryer closer to where we store our clothes.

“The future of education”

As said by Bill Gates.  He might be right.

Thanks to Arnold Kling on EconLog for posting a link to this excellent TED video:

Here are some of my thoughts.

I’m glad to hear school teachers are trying to figure out how to use and integrate the Khan Academy videos into their programs.  I expected them to see Khan’s work as competition and try to use government to limit access to the site.

At the very least, I thought we’d hear criticism from the establishment that this guy is not a trained and credentialed educator or that he’s not an educational expert or that his videos don’t really work.  So far, I haven’t heard any of that.  It’s tough to argue with his results.

This is a black swan.

At about the 8th minute, Khan describes the traditional classroom:

…homework-lecture-homework-lecture-homework-snapshot exam.  And then whether you get a 70%, 80%, 90% or 95%, the class moves onto the next topic.

Even the 95% student, what’s that 5% that he missed?

That’s analogous to learning to ride a bicycle where I give you a lecture, give a bike to you for a couple weeks and then come back and evaluate you.  You can’t quite stop, you can’t make left turns.  You’re an 80% bicyclist.  I put a “C” stamp on your forehead and then I give you a unicycle.

You fast forward and you see smart students start to struggle because they have these Swiss cheese gaps that kept building.

That reminded me of my own experience. I was a reasonably good math student.  When I entered college I signed up to tutor algebra.  The rigor of the tutor training made me realize that I had Swiss cheese gaps in my skills, like Khan mentioned.  But, that training filled in those gaps and helped me considerably in other courses.  I remember thanking that rigorous tutor training out loud while taking a few exams in the weed-out physics courses.

Khan continues:

Our model is learn math the way you learn anything.  The way you learn to ride a bicycle. Stay on that bicycle.  Fall off that bicycle. Do it as long as necessary until you have mastery.

Next, Khan articulates amazingly well a problem I have recognized with our education model, but have struggled to explain it:

The traditional model penalizes you for experimentation and failure, but does not expect mastery [e.g. time to move onto next subject even if you only mastered 90% of the last one].

We encourage you to experiment.  We encourage you to fail.  But we do expect mastery.

That is excellent.

About 14 minutes in, Khan talks about the progress students make in his model vs. the traditional model.

When you go five days into it [learning a new subject], there are a group of kids who have raced ahead and a group of kids who are a little bit slower.

In the traditional model, you do the snapshot assessment.  You say these are the gifted kids and these are the slow kids.  You say things like maybe we should put them in different classes.

But, when you let every student work at their own pace, we see it over and over and over again, you see students who took a little bit extra time on one concept or the other, but once they get through that concept they just race ahead.

So the same kids you thought were slow six weeks ago, you now would think are gifted.

It makes you wonder if a lot of the labels that maybe many of us have benefited from were really just due to a coincidence of time.

What is fallacy?

In a conversation this evening, I mentioned that one motivation for this blog was to combat fallacy.  My counterpart said that I was the first person, besides himself, in years he has heard use that word.

That caused other conversations where I pointed out fallacies to flash through my mind.  I often receive bewildered looks when I say that word.   I assumed the looks reflected disagreement.  But, maybe they simply didn’t know what I meant and they didn’t want to ask.

I admit, before I became familiar with the term I would not have known.  I think the non-intuitive nature of the meaning of fallacy may be on par with economic rent.   Neither term is used enough in everyday language to have gained an intuitive understanding.

For example, most people intuitively know that profits can be made in capitalism.   They do not intuitively know that profits can also be made from economic rent.  Economic rent is such a blind spot, in fact, that most folks commonly mistake profits from economic rent as profits from capitalism.

They also mistake fallacy for legitimate argument.

So, what is a fallacy?

A fallacy is faulty reasoning where the conclusion doesn’t follow from the premises given.  A fallacy doesn’t necessarily say the conclusion is wrong, just that the conclusion can’t be made from the premises given.

Here’s an example of a fallacy:

It rained here today, so it will not rain tomorrow.

My premise is that it rained today.  My conclusion, based on that premise, is that it will not rain tomorrow.   But, rain today usually has no bearing on whether it will rain tomorrow.

Notice, my conclusion may be correct.  It may not rain tomorrow.  But most people will agree that the logic I used to arrive at my conclusion is not correct.

Fallacies come in many varieties.   There are common fallacies that you have probably heard of like ad hominem attacks or red herrings and many more.

Over the years, I have found the list of informal fallacies at the Nizkor Project website to be a handy and valuable resource for checking and re-checking to help me identify fallacy.

Being able to spot and identify fallacies is like the Jujitsu of discussion allowing you to make progress without having to state and defend a case of your own.  Simply pointing out incorrect reasoning turns the argument back on your discussion partner and causes them to rethink their logic.

Most important, it often focuses the discussion on the root cause of the disagreement — the faulty reasoning on which the conclusions are based.

G.E.’s business strategy

Profit from rent-seeking.

If you don’t get it, please read this post.

If you don’t believe me, please read this article.