Upside decay (2020)

I agree with your assessment of the main points of this article.

However, when I read the post, it felt very disconnected. He presents his model of upside decay... and then, a GDP graph? Ok... let's see how this is relevant... Ummm... it's not really.

The problem is, I'm sympathetic to some of the drive underlying his points I think, they're just too diffuse and unconnected for me to appreciate in this article.

From top to bottom:

1. what evidence is there GDP growth is predicated upon a few large bursts of progress rather than steady iteration (I think this is likely, but it's asserted without evidence).

2. We've established that we're talking about upside decay, so why are we switching to comparing 0.5 ^ 5 vs. 0.3 ^ 5? (you can argue that he's integrating the side of the normal distribution above 0 for the non-upside-decay and upside-decay case, but why? it doesn't fit with the argument being made, why are we arguing that this model fits what we're trying to look at?).

3. So now we introduce "weak ties" and how they regulate upside-decay. Why? It's presented with no evidence or argument.

e.t.c.

I feel like my comment has come off negative, though I don't particularly want it to. I think there's some interesting stuff here, I just don't think it's particularly well grounded.

The distinction of cultures into "virtuous" and "unvirtuous" is meaningless. China hasn't achieved a miracle by being "virtuous", they achieved it by working very hard and accepting outside investment. Their strategic and social policies have been not consistent, but they have been driven from a consistent culture (the internals of the Communist Party) for decades.

They not only can, but probably already have, gotten away with cultural genocide in Tibet. Nobody did anything about it. Ripping up the Sino-British declaration is a non-event in global politics.

This isn't a case of "well they were virtuous in 1990 and abandoned virtue in 2020". Ditto America or the Europeans. Virtue is that the winners of the big wars get to decide what crimes will be highlighted and what will be ignored - until they lose a war. Realpolitik is a more powerful and explanatory lens to explain all the manoeuvrings than whatever this 'virtuous culture' concept is meant to represent.

Anyone can put together a "virtuous" or "unvirtuous" list of 20 dot points for any country with more than 100 million people. 100 million is a lot of people. There is a lot going on.

Thanks for sharing the article. He has a nice way of framing things:

> My conclusion: Management is the most noble of professions if it’s practiced well. No other occupation offers as many ways to help others learn and grow, take responsibility and be recognized for achievement, and contribute to the success of a team.

I'd be very interested in actual data that compares virtuous and unvirtuous cultures, out of curiosity of course!

>The reduction in area under the curve (the orange part) represents the loss of positive outcomes. The total loss is small, but it’s concentrated in the tail of the curve where the extreme successes happen. This is upside decay and it’s catastrophic.

"Loss of positive outcomes" is the definition. That is, rare but really good outcomes become rarer.

The diagram at the beginning of the article illustrates it pretty clearly to me. I had never heard of upside decay before this article, and as soon as I saw the diagram I understood the meaning (but not the cause).

I am highly sceptical of the idea that standardized testing is truly meritocratic. There's a recent KnowingBetter video that goes into detail on how it can be viewed as a segregation tool and how that idea of "we are educationally disarming ourselves" started with Reagan and Ayn Rand, but that would veer too much into politics, so I'll make my own argument: the fact that you benefit from private tutoring, having a good learning environment, a culture of academic expectations etc. will make rich kids and kids that are pushed into studying more by their parents much more likely to do well on standardized tests. It won'tnecessarily transfer though. So by focusing on standardised testing, you filter out poor people (which still just happen to be overproportionally PoC in the US...) while optimising for people who can do at standardised tests, not necessarily those who'll do well in research.

And given the number of diagnosed AD(H) and dyslexic people I've encountered in my higher education who only pass their exams because of accomodation of specialised needs but who are brilliant at their roles now... I'll rather take diversity I think than trust some government to codify what "intelligence" and "merit" means.

It's one thing to play catch up and invest against a technology tree that has already been mapped by more advanced competitors. It's quite another to have to fund exploration. Governments have not proven adept at funding technology advances in peacetime compared to private industry.

There’s a very strong counter argument.

First, exams like Gao Kao, Bac, SAT are indeed “meritocratic” in that they tend to predict success…because success” tends to mean “does well in this exam” rather than later outcome; to the degree they predict later outcome they reflect a pre existing network, wealth, etc on the part of the students.

Now knowing how to speak with people and having some informal network support can make things run smoothly and even in some cases “better” — I think there’s little argument to that.

The problem with these pre-existing networks is that they become intellectually and socially inbred (in the US just look for example at the networks that led to the viet nam war, or the crowned heads of Europe, or the churning (over the centuries) dynasties of China).

A society built on hybrid vigour is likely to be more resilient and capable than one built on the “fitness” of legacy-based entrants. The latter is a flawed definition of “merit”.

I also think this “upside decay” idea has some weight as an argument for some kind of economic reform. There are many would-be entrepreneurs whose potential remains untapped because the low odds of an extreme upside aren’t worth the high odds of a (relatively low-cost) downside to them as an individual, even if those odds are attractive to the society when scaled across many individuals.

I don’t see any way to overcome that discrepancy between the individual and the society except by guaranteeing the individual some acceptable standard of living even when they fail. VC tries to do this, but only for ideas tied to specific economic sectors. Lambda school did something that’s halfway there (cover basic expenses, but only for schooling — not for business ventures). Basic income is the broadest idea that helps free entrepreneurs to pursue more frictionlessly these ideas that society benefits from without worry of the cost of failure, yet I hardly ever see people frame it that way.

Agreed but I felt like the difficulties with rising health care, housing, & other costs across much of the world, coupled with an increased difficulty forming new enterprises is a gate worldwide that makes upside growth increasingly difficult. Liu talked about China but the message felt ultra applicable to the parts of the world that I know better.

Being reminded of an ongoing genocide makes some people upset. Those people might choose to avoid reading about it.