There are lots of ways for people to improve their own life and those of friends without this being massively massively profitable, though. Like, it seems like you’re conflating the coordination required to, say, start a discussion group, with the coordination required to run a tech empire. (I have talked to someone in the rationalist community recently who believes that starting a club is hard because of the social dynamics involved, including expected social discouragement for excluding people).
You can’t justifiably reason from “doing this at world-class competence is hard” to “you can’t get large gains by being moderately good at this instead of not trying at all”.
[EDIT: note that I’m including things like “having more illuminating intellectual discussions”, “being less afraid to communicate”, and “doing less bullshit work” in “improving one’s own life”, so these feed into other goals, not just personal ones; put on your own oxygen mask first, and all that]
Totally agree. In particular, I do think that solving small-scale coordination problems is one of the main ways that individuals can have high positive impact on their company/community, relative to effort expended. (I like to use an example from an online car dealership where I used to work: the salespeople had no idea what cars were listed or at what price, which caused a lot of friction when someone called in about a car. Our product manager eventually solved this with five minutes of effort: he asked our marketing guy to forward his daily car-ad spreadsheet to the sales team.)
That said, generalized efficient markets principle doesn’t go completely out the window the moment we zoom in from the whole-world-level. The bigger and more obvious the gain from some coordination problem, the more people have probably tried to solve it already, and the harder it’s likely to be. All the usual considerations of generalized efficiency still apply.
This still leaves the question of why coordination problems have unusually high returns (at the world-scale). Are there few people who are actually good at it? Is it a matter of value capture rather than value creation? Are people just bad at realizing coordination problems need to be solved? Different theories about the large-scale potentially have different predictions about the difficulty & reward of small-scale coordination problems.
Value capture. There are lots of valuable coordination things and valuable non-coordination things, but coordination things lead to network effects and natural monopolies that allow more efficient value capture. If you can become a coordination bottleneck you can often capture more than all of the value.
Also because those who can coordinate use that and other political skills to capture more of the value from people doing other more rationality-compatible useful things.
That was exactly what the little Zvi voice in the back of my head said. I’m not yet convinced. The “network effects → natural monopoly” argument is a strong one, but it still seems like coordination problems are the main economic bottleneck even when there isn’t value capture involved, especially in smaller-scale situations.
Some examples:
Academics who specialize in bridging between fields or sub-disciplines, e.g. biophysicists, mathematical chemists, synthetic biologists (usually from an engineering background), mathematicians who translate one sub-field’s jargon into another, etc.
Cross-department coordination within companies, e.g. car-ad spreadsheet example. People who work across specialized departments seem to have unusually high value relative to effort exerted.
There’s a book on tackling large coordination problems in government—they call them “wicked” problems. The opening chapter is the only interesting one. It’s written by Mike McConnell, the guy tasked with fixing up US intelligence after 9/11. Various agencies had all the pieces to stop the attacks, but multiple cross-agency coordination failures prevented them from acting in time.
McConnell also tells the story of the Goldwater-Nichols Act. After the invasion of Grenada, the complete coordination failure of the military was apparent. Each half of the island was controlled by a different branch, and in order to talk to each other, officers had to walk to the nearest payphone and get routed through one of the opposite branch offices on the US mainland, because their radios were incompatible. The Goldwater-Nichols Act reorganized things to fix this. It passed despite unanimous opposition by the service chiefs, it worked, and ten years later every single service chief testified before congress that it was the best thing to ever happen to the US military.
In all of these cases, there’s no clear natural monopoly and no obviously outsized value capture relative to value created. Rather, the “potential energy” is created by language barriers, intra-organization political coalitions, information silos, and communities with limited cross-talk.
That’s not to say value capture isn’t relevant to e.g. Google or Facebook. Obviously it is. But Google (and more debatably Facebook) still creates huge amounts of real value, regardless of how much it captures, and it does so with little “effort”—Google’s employee base is tiny relative to value created, and most of those employees don’t even work on search.
There is an argument to be made that I’m really talking about two qualitatively different cases here: coordination problems which involve breaking down cross-silo barriers, and coordination problems which involve building new markets. Maybe both of these are interesting on their own, but generalizing to all coordination problems goes too far? On the other hand, there are outside-view reasons to expect that coordination problems in general should get worse as the world modernizes—see From Personal to Prison Gangs.
There are lots of ways for people to improve their own life and those of friends without this being massively massively profitable, though. Like, it seems like you’re conflating the coordination required to, say, start a discussion group, with the coordination required to run a tech empire. (I have talked to someone in the rationalist community recently who believes that starting a club is hard because of the social dynamics involved, including expected social discouragement for excluding people).
You can’t justifiably reason from “doing this at world-class competence is hard” to “you can’t get large gains by being moderately good at this instead of not trying at all”.
[EDIT: note that I’m including things like “having more illuminating intellectual discussions”, “being less afraid to communicate”, and “doing less bullshit work” in “improving one’s own life”, so these feed into other goals, not just personal ones; put on your own oxygen mask first, and all that]
Totally agree. In particular, I do think that solving small-scale coordination problems is one of the main ways that individuals can have high positive impact on their company/community, relative to effort expended. (I like to use an example from an online car dealership where I used to work: the salespeople had no idea what cars were listed or at what price, which caused a lot of friction when someone called in about a car. Our product manager eventually solved this with five minutes of effort: he asked our marketing guy to forward his daily car-ad spreadsheet to the sales team.)
That said, generalized efficient markets principle doesn’t go completely out the window the moment we zoom in from the whole-world-level. The bigger and more obvious the gain from some coordination problem, the more people have probably tried to solve it already, and the harder it’s likely to be. All the usual considerations of generalized efficiency still apply.
This still leaves the question of why coordination problems have unusually high returns (at the world-scale). Are there few people who are actually good at it? Is it a matter of value capture rather than value creation? Are people just bad at realizing coordination problems need to be solved? Different theories about the large-scale potentially have different predictions about the difficulty & reward of small-scale coordination problems.
Value capture. There are lots of valuable coordination things and valuable non-coordination things, but coordination things lead to network effects and natural monopolies that allow more efficient value capture. If you can become a coordination bottleneck you can often capture more than all of the value.
Also because those who can coordinate use that and other political skills to capture more of the value from people doing other more rationality-compatible useful things.
That was exactly what the little Zvi voice in the back of my head said. I’m not yet convinced. The “network effects → natural monopoly” argument is a strong one, but it still seems like coordination problems are the main economic bottleneck even when there isn’t value capture involved, especially in smaller-scale situations.
Some examples:
Academics who specialize in bridging between fields or sub-disciplines, e.g. biophysicists, mathematical chemists, synthetic biologists (usually from an engineering background), mathematicians who translate one sub-field’s jargon into another, etc.
Cross-department coordination within companies, e.g. car-ad spreadsheet example. People who work across specialized departments seem to have unusually high value relative to effort exerted.
There’s a book on tackling large coordination problems in government—they call them “wicked” problems. The opening chapter is the only interesting one. It’s written by Mike McConnell, the guy tasked with fixing up US intelligence after 9/11. Various agencies had all the pieces to stop the attacks, but multiple cross-agency coordination failures prevented them from acting in time.
McConnell also tells the story of the Goldwater-Nichols Act. After the invasion of Grenada, the complete coordination failure of the military was apparent. Each half of the island was controlled by a different branch, and in order to talk to each other, officers had to walk to the nearest payphone and get routed through one of the opposite branch offices on the US mainland, because their radios were incompatible. The Goldwater-Nichols Act reorganized things to fix this. It passed despite unanimous opposition by the service chiefs, it worked, and ten years later every single service chief testified before congress that it was the best thing to ever happen to the US military.
In all of these cases, there’s no clear natural monopoly and no obviously outsized value capture relative to value created. Rather, the “potential energy” is created by language barriers, intra-organization political coalitions, information silos, and communities with limited cross-talk.
That’s not to say value capture isn’t relevant to e.g. Google or Facebook. Obviously it is. But Google (and more debatably Facebook) still creates huge amounts of real value, regardless of how much it captures, and it does so with little “effort”—Google’s employee base is tiny relative to value created, and most of those employees don’t even work on search.
There is an argument to be made that I’m really talking about two qualitatively different cases here: coordination problems which involve breaking down cross-silo barriers, and coordination problems which involve building new markets. Maybe both of these are interesting on their own, but generalizing to all coordination problems goes too far? On the other hand, there are outside-view reasons to expect that coordination problems in general should get worse as the world modernizes—see From Personal to Prison Gangs.