The Essential Difference: male and female brains and the truth about autism by Simon Baron-Cohen
Another book on the holiday list. Why was I interested in this? Recently Asperger's Syndrome (AS), a form of high-functioning autism, has become the chic condition of choice for geeks worldwide. Yes, kids who in the old days were simply math or computer nerds are now self-identified (often with pride!) as having AS. Silicon Valley is full of these people. The rest of us are mere "neurotypicals" :-)
Baron-Cohen is head of the Autism Research Centre at Cambridge, and a professor of psychology. He claims that male brains tend to be better at "Systematizing" (organizing or analyzing things which exhibit order), while female brains are better at "Empathizing" (understanding what others are thinking or feeling). A fair amount of experimental data (pretty convincing) is presented, which supports the claim that the distributions of S-ability and E-ability are different in the male and female populations. (Incidentally, the effect of testosterone on brain development is well known, leading to significant variations in the actual sizes of various areas of the brain between males and females.) Baron-Cohen also gives plausible evolutionary arguments for how this came to be - a bit better than the "girls were selected to be good mommies, boys to be good hunters" story, but you get the idea.
The novel part of his theory is that the autistic mind is an example of an extreme male mind - one that is obsessed with systematizing and very bad at empathizing. In a particularly amusing chapter he profiles a famous mathematician (Fields medalist) and some physicists (Dirac, Newton and Einstein) who he claims likely have or had AS. He even quotes a female physicist working at CERN saying that her male colleagues lack social skills and are arrogant obsessives :-) Well, what can I say, it is all true. But it doesn't mean we all have AS...
Not to be missed are the fun tests at the back of the book, which measure your S and E quotients!
So, the British have discovered women; some British and some women :)
ReplyDeleteThe Economists' Voice
ReplyDeleteConfusions about Social Security
Paul Krugman - Princeton University
Rates of Return on Private Accounts
Privatizers believe that privatization can improve the government's long-term finances without requiring any sacrifice by anyone — no new taxes, no net benefit cuts (guaranteed benefits will be cut, but people will make it up with the returns on their accounts.) How is this possible?
The answer is that they assume that stocks, which will make up part of those private accounts, will yield a much higher return than bonds, with minimal longterm
risk.
Now it's true that in the past stocks have yielded a very good return, around 7 percent in real terms — more than enough to compensate for additional risk. But a weird thing has happened in the debate: proposals by erstwhile serious economists such as Martin Feldstein appear to be based on the assertion that it's a sort of
economic law that stocks will always yield a much higher rate of return than bonds. They seem to treat that 7 percent rate of return as if it were a natural
constant, like the speed of light.
What ordinary economics tells us is just the opposite: if there is a natural law here, it's that easy returns get competed away, and there's no such thing as a free
lunch. If, as Jeremy Siegel tells us, stocks have yielded a high rate of return with relatively little risk for long-run investors, that doesn't tell us that they will always do so in the future. It tells us that in the past stocks were underpriced. And we can expect the market to correct that.
In fact, a major correction has already taken place. Historically, the priceearnings ratio averaged about 14. Now, it's about 20. Siegel tells us that the real rate of return tends to be equal to the inverse of the price-earnings ratio, which makes a lot of sense.* More generally, if people are paying more for an asset, the
rate of return is lower. So now that a typical price- earnings ratio is 20, a good estimate of the real rate of return on stocks in the future is 5 percent, not 7
percent.
* For those who want to know: suppose that the economy is in steady-state growth, with both the rental rate on capital and Tobin's q constant. Then the rate of return on stocks is equal to the earnings-price ratio. Obviously that's an oversimplification, but it looks pretty good as a rule of thumb.
Here's another way to arrive at the same result. Suppose that dividends are 3 percent of stock prices, and that the economy grows at 3 percent (enough, by the
way, to make the trust fund more or less perpetual.) Not all of that 3 percent growth accrues to existing firms; the Dow of today is a very different set of firms
than the Dow of 50 years ago. So at best, 3 percent economic growth is 2 percent growth for the set of existing firms; add to dividend yield, and we've got 5
percent again.
That's still not bad, you may say. But now let's do the arithmetic of private accounts.
These accounts won't be 100 percent in stocks; more like 60 percent. With a 2 percent real rate on bonds, we're down to 3.8 percent.
Then there are management fees. In Britain, they're about 1.1 percent. So now we're down to 2.7 percent on personal accounts — barely above the implicit return on Social Security right now, but with lots of added risk. Except for Wall Street firms collecting fees, this is a formula to make everyone worse off.
Privatizers say that they'll keep fees very low by restricting choice to a few index funds. Two points.
First, I don't believe it. In the December 21 New York Times story on the subject, there was a crucial giveaway: "At first, individuals would be offered a limited range of investment vehicles, mostly low-cost indexed funds. After a time, account holders would be given the option to upgrade to actively managed funds,
which would invest in a more diverse range of assets with higher risk and potentially larger fees." (My emphasis.)
At first? Hmm. So the low-fee thing wouldn't be a permanent commitment. Within months, not years, the agitation to allow "choice" would begin. And the British experience shows that this would quickly lead to substantial dissipation on management fees.
Second point: if you're requiring that private accounts be invested in index funds chosen by government officials, what's the point of calling them private
accounts? We're back where we were above, with the trust fund investing in the market via an index.
Now I know that the privatizers have one more trick up their sleeve: they claim that because these are called private accounts, the mass of account holders will rise up and cry foul if the government tries to politicize investments. Just like large numbers of small stockholders police governance problems at corporations,
right? (That's a joke, by the way.)
If we are going to invest Social Security funds in stocks, keeping those investments as part of a government-run trust fund protects against a much clearer political economy danger than politicization of investments: the risk that Wall Street lobbyists will turn this into a giant fee-generating scheme.
To sum up: claims that stocks will always yield high, low-risk returns are just bad economics. And tens of millions of small private accounts are a bad way to take
advantage of whatever the stock market does have to offer. There is no free lunch, and certainly not from private accounts.
Now, wouldn't you rather read some Margaret Atwood :)? Women's brains indeed. But, I still like you...
ReplyDeleteAnne
http://www.pimco.com/LeftNav/Late+Breaking+Commentary/IO/2005/IO_Jan_05.htm
ReplyDeleteInvestment Outlook
Bill Gross | January 2005
2005 will witness a changing environment in some ways – slower global growth, somewhat higher short-term rates – but the dominant moneymaking themes in the bond market should be the following: 1) The Fed stays relatively low, 2) China revalues its currency, 3) Spread product underperforms, 4) Europe remains sick, and 5) Cash is Prince.
Anne
An exercise you may well like:
ReplyDeletehttp://www.nytimes.com/2005/01/04/science/04edgehed.html?pagewanted=all&position=
God (or Not), Physics and, of Course, Love: Scientists Take a Leap
What do you believe is true even though you cannot prove it?"
This was the question posed to scientists, futurists and other creative thinkers by John Brockman, a literary agent and publisher of Edge, a Web site devoted to science. The site asks a new question at the end of each year. Here are excerpts from the responses, to be posted Tuesday at www.edge.org.
Roger Schank
Psychologist and computer scientist; author, "Designing World-Class E-Learning"
Irrational choices.
I do not believe that people are capable of rational thought when it comes to making decisions in their own lives. People believe they are behaving rationally and have thought things out, of course, but when major decisions are made - who to marry, where to live, what career to pursue, what college to attend, people's minds simply cannot cope with the complexity. When they try to rationally analyze potential options, their unconscious, emotional thoughts take over and make the choice for them.
Richard Dawkins
Evolutionary biologist, Oxford University; author, "The Ancestor's Tale"
I believe, but I cannot prove, that all life, all intelligence, all creativity and all "design" anywhere in the universe, is the direct or indirect product of Darwinian natural selection. It follows that design comes late in the universe, after a period of Darwinian evolution. Design cannot precede evolution and therefore cannot underlie the universe.
Judith Rich Harris
Writer and developmental psychologist; author, "The Nurture Assumption"
I believe, though I cannot prove it, that three - not two - selection processes were involved in human evolution.
The first two are familiar: natural selection, which selects for fitness, and sexual selection, which selects for sexiness.
The third process selects for beauty, but not sexual beauty - not adult beauty. The ones doing the selecting weren't potential mates: they were parents. Parental selection, I call it.
Anne
Would someone please send Baron-Cohen a couple of books by Carl Jung and Myers-Briggs?
ReplyDeleteA complementary addition to Baron-Cohen's theory is that autism is a result of evolutionary conditions related to social structure and matrifocal culture.
ReplyDeleteVisit http://www.neoteny.org/?cat=7. Autistic males don't display a too-male mind, but a mind that is not patrifocal.