Transterrestrial Musings

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This is sadly not surprising, though one wonders why Ansari didn't get this treatment. Back when Rutan won the X Prize and Sir Richard was gearing up his operation, there was lots of ink spilled in the British press wagging a finger at the prospect of all those rich folk spending money on sub orbital joy rides. One article actually hinted at the hope that one of Virgin Galactic's birds would crash and burn, taking with it a lot of the filthy rich.

Posted by MarkWhittington at April 8, 2007 12:27 PM

though one wonders why Ansari didn't get this treatment

Her gender is the only thing that obviously separates them. Ah - it wouldn't be something that trivial. Maybe his employment at Microsoft irritates Mr. Kim ...

Posted by Brian at April 8, 2007 01:46 PM

It's always interested me that these people talk as if that $20M, $200K, $50M for the yacht, etc, etc just vanishes instead of finding it's way back into the economy in the form of payroll, raw materials purchased (which translates into more payroll for folks further down the ladder), R&D, etc.

Posted by Fuloydo at April 8, 2007 02:23 PM

Read the comment I posted for the Nation article under "Space Duck."

Posted by Brian Swiderski at April 8, 2007 03:02 PM

Yeah, and the other major reasoning error is the failure to realize that the modern economy is demand-driven, hence what matters more to the general welfare is not what happens to the first recipient of Simonyi's money but the ultimate change in demand it creates.

So what demand does Simonyi create when he wants to spend an extra $100 on rocket ships or yachts or a really badass computer? Why, he creates jobs in high tech, jobs in R&D, demand for innovation and creativity that will boot American productivity over the long run.

What demand does he create if he gives $100 to an unemployed drug addict scraping by on skid row? At best a demand for McDonald's hamburgers and fries. At worst, a demand for crack and prison guards.

Now, I'm not saying rockets are the best possible place for Simonyi to increase the demand, but the failure to even consider this (most important) aspect of his spending is evidence that this journalist, like most, has the reasoning capacity of a chimp and the appreciation of a modern economy of a seven-year-old with a lemonade stand.

Posted by Carl Pham at April 8, 2007 03:03 PM

Oh, and one more thing: what's the clear and obvious proof that Charles Simonyi is a lot better than some lame Nation reporter at knowing where his spending will be most effective? Simonyi is rich.

That means he's good at knowing the difference between spending that is pretty much purely consumptive, where the value vanishes like water into sand, and spending that is more like investing, where the value acts more like fertilizer, catalyzing the creation of much more value (some of which is returned to the investor as incentive).

That means as a society we're much better off leaving the decision of where to spend his money to Simonyi than the fool at The Nation.

Posted by Carl Pham at April 8, 2007 03:07 PM

The real flaw here is that the "bards of capitalism sing the praises" because nobody gets rich by himself. Every rich guy mentioned made other people (in some cases thousands of people) rich and millions (or hundreds of millions) of people better off in the process of getting rich himself. Actual charitable donations are drops in the bucket in comparison.

Posted by Annoying Old Guy at April 8, 2007 03:17 PM

Space is uniquely fivolous in the eyes of many. Forget that if there was nothing that ostentatious and fivolous to buy, Simonyi would probably be worth $100 million less because he would take it easier (not to mention that the rest of the economy couldn't afford his product because they couldn't buy labor from people who enjoy the frivolous). We should take advantage of the predictability of the commentary and fund green credits (measured in the thousands of dollars for the $25 million flight) and save lives with defibrillators for every flight we send up.

Posted by Sam Dinkin at April 8, 2007 03:30 PM

I agree with you here, Carl. I think of your first comments more in terms of "moral hazard". Namely, when you help someone with certain things, then they are more likely to engage in risky activity that aggrevates the original problem. For example, "fighting AIDS". The author, Richard Kims refers to another polemic by a different writer at the Nation who quotes Mr. Kims:

As for science--fighting AIDS is science. "We can put a cowboy on Mars," quips my colleague Richard Kim, "or we can treat everyone on the planet with AIDS for the next generation. Three hundred billion dollars would pay for AIDS drugs at the generic prices cited in Bush's State of the Union address ($300 per year, per person) for all 40 million people with HIV for the next twenty-five years."

The thing that is ignored here is that subsidizing an expensive treatment for an otherwise lethal disease will help spread that disease. It may turn out to be even more destructive than providing no such funding at all. I see two problems. First, if the consequences aren't very dire, then people will engage in risky behavior like unprotected sex. This has already been observed in the US. Second, no one has solved the problem of getting people to consistently take their medication. Third, in Africa, AIDS is one of the big restraints on population (emigration is another). Just spending hundreds of billions without fixing the underlying problems (like poverty, lack of infrastructure, law, and government) means that there's a really good chance that there will be a mass die-off instead.

In comparison, space tourism is straightforward. There's no complex, disfunctional behavior being funded by space tourists.

Posted by Karl Hallowell at April 8, 2007 04:24 PM

Mark: "This is sadly not surprising, though one wonders why Ansari didn't get this treatment."

Because she's a (rather attractive) symbol of Iranian feminism while Simonyi is just some funny-looking nerd who co-founded a despised corporation. Part of the same double standard is reflected in the relative apathy of space advocates, who treated Ansari's flight like a heroic adventure and those before and after as personally unremarkable.

But even she was a target of silly egalitarian criticism, although it was quickly shouted down in comments sections by legions of devoted fans and admirers. I guess the critics were just waiting for a target less inspiring to others.

Mark: "wagging a finger at the prospect of all those rich folk spending money on sub orbital joy rides."

See, this just doesn't make any sense from my liberal perspective. If their taxes are high enough to satisfy their responsibilities, who cares if they use the other 60% to buy whatever strikes their fancy? This is truly where the boundary between liberal and leftist becomes clear--"You are responsible" vs. "You are property."

Carl: "what's the clear and obvious proof that Charles Simonyi is a lot better than some lame Nation reporter at knowing where his spending will be most effective? Simonyi is rich."

Come on, Carl. That kind of statement is ignorant on a level rivaling the Nation author himself. If the answer to civilization's problems was plutocracy, Mexico would be utopia. There is exactly ONE bit of information suggested by someone getting (not *being*) rich, and that is that they figured out or accidentally discovered a way of making money for themselves. Simonyi followed his interests and ENDED UP rich, he didn't wake up one day in Hungary and decide that computer software was the gateway to wealth and global prosperity.

Annoying Old Guy: "The real flaw here is that the "bards of capitalism sing the praises" because nobody gets rich by himself."

There is, however, no guarantee that any local accumulation of wealth is of net benefit to society at large, or that its associated opportunity costs and externalities are superior to any given alternative. The only reason we choose to rely on the capitalist system is that it's beneficial IN AGGREGATE, not because every single person who accumulates wealth contributes to the economy on balance.

A.O.G.: "Actual charitable donations are drops in the bucket in comparison."

True, and so few charities are structured to maximize the impact of donations. The nonprofit sector should really begin to emulate the quasi-organic properties of economics, and look at how to create self-sustaining efforts based on the same types of institutional feedback. If they could somehow quantify and commoditize what they're trying to accomplish, then a form of marketplace whose purpose is not monetary profit could be created.

Posted by Brian Swiderski at April 8, 2007 04:43 PM

Read the comment I posted for the Nation article under "Space Duck."

Good but bombastic.

Posted by D Anghelone at April 8, 2007 04:50 PM

Pretty good reply, Brian. I still side with Carl, but you're sounding pretty reasonable here.

My take is that they already do. The mechanism of donation and advertising/marketing is definitely of the form you're looking for. My take is that the problem isn't with charities that don't understand economic principles and hence, fail to properly use donations, but rather that we're seeing the combined effect of donors will limited information about charities combined with the conflict of interest inherent with charity organizations who in general aren't audited. For example, one generally doesn't get funded by doing good work but rather through marketing and exposure in the news. So a number of organizations have evolved to be media-seeking at the expense of their other duties.

Posted by Karl Hallowell at April 8, 2007 05:03 PM

"Simonyi might have spent his money fighting AIDS, or building housing for Hurricane Katrina survivors, or providing clean water to developing nations, or mosquito netting and medicine for malaria patients, or musical instruments for needy, photogenic, musically-gifted inner city school children or...well, depressingly, the list goes on and on."

Maybe Mr. Kim has a point. Kim could have spent his money on charities that I support - assuming he donates at all - but he didn't. Shame on him! Obviously this proves that people of his economic level are selfish and self-centered.

/do I need to?

Posted by Barbara Skolaut at April 8, 2007 06:09 PM

Brian, I think your problem is you have a difficult time believing anyone is smarter than you, in any field. If you entertain that possibility, you may realize where you go wrong.

If the answer to civilization's problems was plutocracy, Mexico would be utopia.

Not quite. Mexican wealth derives largely from selling off oil, inherited land, or drug trafficking. Not much intelligence or creativity required.

What you'd really need to do, to see if "plutocracy" as you put it is good for everyone, is find the country with the largest number and variety of self-made billionaires. Why, that turns out to the United States! Next, you need to ask whether that country is also the best place in the world to live even if you're not wealthy, even if you're poor. (And remember, we need to measure "good to live in" not just in terms of whether life sucks when you're poor, but in terms of the probability that you can stop being poor by climbing up.)

Oh dear! That country also turns out to be the United States, Brian! Apparently there is a correlation between a country that allows -- even encourages -- the acquisition of wealth by individuals and the well-being of everyone, even the poor. And you're about the last intellectual post-1991 to have to swallow that bitter pill...

There is exactly ONE bit of information suggested by someone getting (not *being*) rich, and that is that they figured out or accidentally discovered a way of making money for themselves.

No doubt. But Brian, have you noticed that it's not really possible to get rich all by yourself? It turns out you pretty much always have to organize some massive social project (e.g. a company employing thousands) and direct its operations such that it provides a useful product to tens of thousands, if not millions. That is, you have to make tens of thousands of other people a little richer and happier. (That is, after all, why they voluntarily pay you a cut of their increased wealth and happiness.) Care to speculate about which is larger, Simonyi's personal wealth or the wealth he's created, e.g. the sum of all the salaries Microsoft has paid to people working on Office, plus the economic value of the increased productivity for its millions of users over a few decades?

Simonyi followed his interests and ENDED UP rich, he didn't wake up one day in Hungary and decide that computer software was the gateway to wealth and global prosperity.

It doesn't matter why he did what he did, or even whether he did so on purpose or accidentally. Neither changes the value of what he did. If you accidentally say something pithy and wise here, it doesn't become stupid just because you didn't intend to.

Posted by Carl Pham at April 8, 2007 06:50 PM

Not quite. Mexican wealth derives largely from selling off oil, inherited land, or drug trafficking. Not much intelligence or creativity required.

Well actually ...

If you're going to make money selling oil you need enough intelligence to set a favorable deal. Don't manage your inherited wealth with skill and you won't retain much to pass on to your heirs.

Drug running might require the most smarts and creativity of this set - sure anyone can jam some drugs into your trunk and drive north but doing it often, acquiring wealth and avoiding John Law .. requires more than a modest dose of skill and smarts.

Posted by Brian Dunbar at April 9, 2007 12:59 AM

Because she's a (rather attractive) symbol of Iranian feminism while Simonyi is just some funny-looking nerd who co-founded a despised corporation

So she is a "deserving rich"? ;)

Posted by Ilya at April 9, 2007 07:25 AM

So she is a "deserving rich"? ;)

Posted by Ilya at April 9, 2007 07:25 AM

no...she is just a hottie...he isnt LOL

Robert

Posted by Robert G. Oler at April 9, 2007 07:34 AM

Brian's comment was good. He has one thing he does really, really well...the ...rest......

Posted by Mike Puckett at April 9, 2007 08:51 AM

Karl Hallowell: "in Africa, AIDS is one of the big restraints on population (emigration is another)"

AIDS depletes primarily the working-age, *productive* population. And it kils slowly, first making its victim an unproductive invalid, a drain on society. It makes the victim's children orphans - also a drain on society, and in later life often its enemies. It makes every problem of *survivors* worse. It strikes at Africa's future, not just at its present. It is an utterly unmitigated evil - in Africa more huge than anywhere else.

As for African emigration, it is hardly big enough
to be a "population restraint" (if that were needed!) But it is of course a Good Thing: emigrees remit money to the old country, some of them return with new skills, they become channels of cultural exchange, etc.

Posted by jjustwwondering at April 9, 2007 12:03 PM

Karl Hallowell: "in Africa, AIDS is one of the big restraints on population (emigration is another)"

Posted by jjustwwondering at April 9, 2007 12:04 PM

D Anghelone: "Good but bombastic."

Space advocacy tends to be. Not a lot of humble, laconic folks arguing for a human eternity.

Karl: "The mechanism of donation and advertising/marketing is definitely of the form you're looking for."

Marketing is an effective tactic, but what I mean is they should think about ways to simulate the profit function with non-monetary objectives. I.e., first to define what they want to accomplish as an ongoing rate of change in some quantity rather than a fixed goal, and then to create markets such that the degree of the rate of change in that quantity performs the same function as money in a profit-driven business.

Rather than just selling moral absolution to conscientious rich people, organizations should think hard about quantitatively defining what their mission is. If the goal is to fight poverty, then develop objective empirical criteria for what poverty is and then design a market that functions by rewarding deltas as if they were monetary profits. Naturally this would still have to be weighted by the value of money, so it might rather be dollar-weighted deltas (i.e. biggest bang for the buck). An organization whose beneficiaries start successful businesses with their help, for instance, could include the poverty-fighting value of the business in its numbers; likewise if beneficiaries started subsidiary charitable institutions.

Karl: "So a number of organizations have evolved to be media-seeking at the expense of their other duties."

Because it's the donor's emotions that have been commoditized rather than performance on the stated objective, which means the nonprofit sector is far less effective than it could be.

Carl: "Brian, I think your problem is you have a difficult time believing anyone is smarter than you, in any field."

I don't apologize for seeing the big picture. If I want to know how an internal combustion engine works, I can consult someone; if I want to know where a car is headed, I open my eyes and look.

Carl: "Not quite. Mexican wealth derives largely from selling off oil, inherited land, or drug trafficking. Not much intelligence or creativity required."

Then you acknowledge that being rich doesn't require superior judgment.

Carl: "What you'd really need to do, to see if "plutocracy" as you put it is good for everyone, is find the country with the largest number and variety of self-made billionaires."

Plutocracy has nothing to do with the number of wealthy people, only their power. So if your implied belief is correct, and the wealthy truly are better at judging what's best for the economy, then why are economies dictated by the wealthy overwhelmingly characterized by poverty?

Carl: "Next, you need to ask whether that country is also the best place in the world to live even if you're not wealthy, even if you're poor."

The United States is the absolute worst developed country at dealing with poverty, and the middle-class are denied basic expectations in return for an endless supply of worthless consumer products. If you don't play the game and use corporate America's usurious credit cards, you cannot get a home loan; you cannot get a car loan; you cannot get a business loan; you have to spend yourself blind on useless crap just for the privilege of paying them some more.

"Apparently there is a correlation between a country that allows -- even encourages -- the acquisition of wealth by individuals and the well-being of everyone, even the poor."

Uh, no. America's poorest wander the streets in tattered clothes, digging in trash cans for food, and sleeping in doorways and cardboard boxes before the cops kick them out. The working poor, who wouldn't even exist if libertarian ideology made any sense, live in crime-ridden sewers or trailer parks; send their children to schools bled dry of funding to pay for tax cuts; and have no health care other than visits to crowded emergency rooms full of trauma victims, losing hours of work time that would have paid for their dinner so an overworked med student hopped up on cocaine can barely glance at their child before sending them home with Robitussen.

Mike: "He has one thing he does really, really well"

Yes, spread wisdom and knowledge to those sorely lacking in either or both.

Posted by Brian Swderski at April 9, 2007 12:58 PM

Mike: "He has one thing he does really, really well"

Yes, spread wisdom and knowledge to those sorely lacking in either or both.

Here is some wisdom for you:

"A man's gotta know his limitations."

Inrternalize that and your stock will go up.

Posted by Mike Puckett at April 9, 2007 03:53 PM

"The United States is the absolute worst developed country at dealing with poverty"

Strange - if that were true - how eager poor
people from other countries are to come *here* and start at the very bottom, with all the additional disadvantages of language gap, cultural shock, and (often) an illegal status.

Posted by jjustwwondering at April 10, 2007 12:55 AM

Space advocacy tends to be. Not a lot of humble, laconic folks arguing for a human eternity.

And not any folk able to predict the near future.

You make yourself the Sean Hannity of this forum(?) with your presupposed arguments and prepackaged conclusions.

Posted by D Anghelone at April 10, 2007 05:24 AM

I agree with jjustwwondering. The US is clearly very capable when it comes to handing poverty.

Posted by Karl Hallowell at April 10, 2007 06:56 AM

Mike: "A man's gotta know his limitations."

A man also has to know the limitations of others, but I sometimes choose to be naive on that point.

jjustwwondering: "Strange - if that were true - how eager poor people from other countries are to come *here* and start at the very bottom"

How is that strange? They're eager to go anywhere better than where they live, and differences in social policy between the US and Sweden aren't exactly standard reading in Bangladesh.

jjustwwondering: "and (often) an illegal status."

Yes, it's easier to swim a river than an ocean.

Karl: "The US is clearly very capable when it comes to handing poverty."

The US barely handles poverty at all. Economic failure is considered synonymous with moral inferiority, poverty a reflection of inherent character flaws, and whatever suffering occurs as a result is therefore natural and acceptable.

The conservative and/or libertarian therefore, in Orwellian fashion, decides that we are "best" at dealing with poverty, since our political culture accepts the holy judgment of the marketplace that any given person is worthless. They view it as not only acceptable, but morally virtuous to maximize the terror and anxiety of those outside the investor class to whatever degree serves to increase profits, because profit stems from power and power is morality. Employees who lack the power to defend their interests are not human beings, they are consumables.

Posted by Brian Swiderski at April 10, 2007 02:07 PM

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