No, this is one of the greatest arguments for small government or no government. People are more rational when the cost to them of being irrational is larger. Voting for good policies is a public good. When a voter is one among three hundred millions of citizens, only 1/300,000,000 (on average) of the benefits of the vote befall the individual voter. This gigantic externality means that the democratic market will severely underproduce votes for good policies. Simultaneously, social desirability bias means that voters have a strong incentive to believe in policies that are harmful to them but that make them look good to other people. Since the cost to them of being wrong about politics is so small and the benefit large, voters have gravely irrational beliefs. This conclusion is consistent with the results from social science that show that voters are ignorant about politics and with the widespread agreement with protectionist tariffs, price controls, restrictions on immigration, and many other policies that cause great economic harm.
“Suppose you’re on a game show, and you’re given the choice of three doors: Behind one door is a car; behind the others, goats. You pick a door, say No. 1, and the host, who knows what’s behind the doors, opens another door, say No. 3, which has a goat. He then says to you, ‘Do you want to pick door No. 2?’ Is it to your advantage to switch your choice?”
Let A be the event that the car is behind door 1, B that the car is behind door 2, and C that the car is behind door 3. Let E be the event that the host opens door 3. We assume that the car is initially equally likely to be behind each door and that the host opens a door with a goat at random, never opening the door we picked.
Since A, B, and C are exhaustive and mutually exhaustive propositions, we can calculate the marginal probability of E by using the law of total probability:
P(E) = P(E ∧ A) + P(E ∧ B) + P(E ∧ C).
Bayesians like to define joint probability from conditional probability instead of the reverse; that is, define P(A ∧ B) as P(A | B) P(B) instead of P(A | B) as P(A ∧ B) / P(B).
So P(E ∧ A) = P(E | A) P(A). P(E | A) is 1/2 because we picked door 1, the car is behind door 1, and the host chooses at random a door that has a goat, of which there are two: 2 and 3. P(A) is 1/3. Therefore P(E ∧ A) is 1/2 × 1/3 = 1/6.
Similarly, P(E ∧ B) = P(E | B) P(B). P(E | B) is 1 because we picked door 1 so the host will not open door 1 and we assume the car is behind door 2 so the host will not open door 2, leaving only door 3 to be opened. P(B) is 1/3. Therefore P(E ∧ B) is 1 × 1/3 = 1/3.
P(E ∧ C) = P(E | C) P(C). P(E | C) is 0 because the host will never open the door the car is behind. P(C) is 1/3. Therefore P(E ∧ C) is 0 × 1/3 = 0.
So P(E) = 1/6 + 1/3 + 0 = 1/2. We know that the host opened door 3 (this is E), so the car cannot be behind door 3. How likely is it to be behind door 1? By Bayes’ theorem,
P(A | E) = P(E | A) P(A) / P(E).
We said earlier that P(E | A) is 1/2, P(A) is 1/3, and P(E) is 1/2. So P(A | E) = (1/2 × 1/3) / (1/2) = 1/3.
Given E, the car must be behind door 1 or door 2 since the host opened door 3. Therefore the sum of P(A | E) and P(B | E) must be 1. P(A | E) is 1/3, so P(B | E) is 2/3. The car is more likely to be behind door 2 than door 1. We initially picked door 1, so, if we want the car, we should switch.
Bayes’ theorem says no such thing. Your friend is wrong, but please do not let this reflect badly on the Bayesian interpretation of probability in general—it has nothing to do with this.
Live a modern life, comfortable by modern standards? You’re right about that. But people in the past lived in worse conditions that were considered modern and comfortable then and credit ratings, by making the market for loans more efficient than it was before (however bad it may still be, it’s better than what it replaced), contributed to the improvements. You want to have your cake and eat it too, and it would be nice if that was possible but it is not because nobody is going to give you cheap loans if it comes with too much risk.
The institutions give you cheap loans in exchange. This has opportunity costs. Giving you cheap loans is not free for these institutions. They could be investing their money elsewhere instead. They would do so if it wasn’t for the fact that having this information about you reduces the risk just enough that they prefer giving you the cheap loans to investing their money elsewhere. People who are offered these terms are offered a fair deal that is a win for both parties and that they are offered a fair deal is exactly the reason they accept it.
There is no externality here because the costs fall entirely on the person who takes the decision. People, myself and quite possibly yourself included, really do want to sign up with 30 marketing companies to save 5% on a car.
Equifax has an incentive not to get things wrong because their customers care about having accurate information. Nationalizing credit ratings would remove this incentive. That Equifax still gets things wrong does not imply that things would not be even more wrong if it was nationalized.
That's where you make a mistake. Whatever the reason, the Wikipedia articles on the g factor, the intelligence quotient and Cattell–Horn–Carroll theory represent better what is widely accepted in the field than any other source. This somehow also turns out to be true for other academic fields.
Anyway, when source A says explicitly that source B is wrong but source B makes no such claim about source A, you should usually believe source A. But in this case you can know that the study is right by just learning for yourself what does happen to be widely accepted in the field and why it is widely accepted.
I cannot find much valuable content on deletionpedia.org in general and nothing interesting about clocks. If you know about articles with valuable information that were lost, you can ask an administrator to give you the page's text. Full edit history for all deleted pages is kept and more than a hundred administrators are happy to give it to you, it's just not publicly viewable because it can contain copyright violations, personal information, and so on.
Yes, at least in the sense of succeeding the article talks about. India is the third country in the world by GDP at purchasing power parity, which is consistent with its population being second largest.
Rather mostly China succeeded because it had a population larger than any other country. Production depends primarily on resources and human labor is one of the most valuable resources. It is no surprise that population count is strongly correlated with nominal GDP.
This should be completely obvious.
It also refutes the author’s argument. Why has a market economy directed by a Communist state become the world’s second-largest?! Would Friedman find it hard to explain why China, run by a Communist Party, has emerged as central to the global capitalist economy!? China has 19% of the world population but roughly 10% of the world GDP. It is 79th in GDP per capita at purchasing power parity. We should not evaluate a country’s economic policies by looking at its nominal GDP without also looking at its population—this is nothing Friedman would have difficulty explaining.
Many are not, indeed. But if you care about the truth, you should argue against the best arguments of the strongest advocates. You have to challenge the arguments in the chapter on international trade of Tyler Cowen and Alex Tabarrok’s Modern Principles of Economics, and you have to refute the central point. The New York Times and Hacker News do not require that much.
Do they consume as much as half the world? If the money is invested, where's the problem? Wealth inequality only matters for the well-being of the poor insofar as it affects consumption inequality. Why not talk about how much more they consume than everyone else instead of how much more wealth they have? Because talking about wealth makes for better rhetoric: wealth is understood as an indicator of social status and Oxfam doesn't think the very rich should have that much social status. It has nothing to do with the economic well-being of the poor.
You are entirely right. But if we admit that education’s purpose is mostly signaling (without denying that some parts of it do have uses for some students), we can’t justify spending so much on it. From the introduction:
“At this point, one could object, ‘Though education teaches few practical skills, that hardly makes it wasteful. By your own admission, education serves a vital function: certifying the quality of labor. That’s useful, isn’t it?’ Indeed. However, this is a dangerous admission for the champion of education. If education merely certifies labor quality, society would be better off if we all got less. Think about it like this: A college degree now puts you in the top third of the education distribution, so employers who seek a top-third worker require this credential. Now imagine everyone with one fewer degree. In this world, employers in need of a top-third worker would require only a high school diploma. The quality of labor would be certified about as accurately as now—at a cost savings of four years of school per person.
[…]
Suppose you agree society would benefit if average education declined. Is this achievable? Verily. Government heavily subsidizes education. In 2011, U.S. federal, state, and local governments spent almost a trillion dollars on it. The simplest way to get less education, then, is to cut the subsidies. This would not eliminate wasteful signaling, but at least government would pour less gasoline on the fire.
The thought of education cuts horrifies most people because ‘we all benefit from education.’ I maintain their horror rests on what logicians call a fallacy of composition—the belief that what is true for a part must also be true for the whole. The classic example: You want a better view at a concert. What can you do? Stand up. Individually, standing works. What happens, though, if everyone copies you? Can everyone see better by standing? No way.”