The Entrepreneurial State

http://nyti.ms/1ggtR0u

THE OPINION PAGES
America’s Underappreciated Entrepreneur: The Federal Government
MARCH 23, 2014
Editorial Observer
By TERESA TRITCH
Imagine a world in which the United States government — not the private sector — is the economy’s indispensable entrepreneur, innovating at the frontiers of science and technology, able and willing to take risks and to persevere through uncertainty.
That is the world depicted in “The Entrepreneurial State,” a recent book by Mariana Mazzucato, an economist at the University of Sussex who specializes in innovation. And it is, in fact, the way the United States has operated since World War II. Through the National Institutes of Health, the Defense Advanced Research Projects Agency and other agencies and departments, the government has for decades gone beyond financing research and creating the conditions for innovation to occur; it has also envisioned the future, engaged in the riskiest experimentation and overseen the commercialization process.
Professor Mazzucato documents the leading role of the government in, for example, “all the technologies which make the iPhone smart,” including the Internet, wireless systems, global positioning, voice activation and touch-screen displays. That is not to detract from Apple’s role, but to put it into context. Without government, the technological revolution that has allowed iProducts to exist would not have happened.
Ditto the leading role of government in aviation and space technologies, pharmaceuticals and biotechnology, and more recently, in nanotechnology, which could be the next “general purpose” breakthrough, akin to electricity or computers.
The private sector never has been and never will be up to tasks like that. Even in the bygone heyday of Bell Labs, corporate investment was alongside, not in place of, government investment. Today, the scope, duration and cost of breakthrough

research is either beyond the private sector’s corporate and philanthropic resources or outside its profit model. A salient point in “The Entrepreneurial State,” amplified in a review by Martin Wolf, the chief economics commentator of The Financial Times, is that corporations today often spend surplus cash on share buybacks rather than on fundamental innovation.
In brief then, it is an essential role of the federal government — in the interest of tomorrow’s prosperity — to invest and engage in scientific and technological discovery. And it is a role the government has played well, until now. After rising steadily for decades, federal financing for research and development peaked in 2009, at $165.5 billion, bolstered by that year’s stimulus spending. It has since sunk to levels last seen almost a decade ago, falling to $133.7 billion this fiscal year.
That roughly $32 billion drop is even greater when adjusted for inflation, and it encompasses both defense- and nondefense fields, including health, energy, the environment, climate, technology and electronics. One key area, basic science, received about $40 billion in the peak year 2009. Since then, it has fallen, to $30 billion last year, one of the sharpest declines ever. The future does not look much brighter. Constrained by austerity-induced budget caps, the research and development budget recently proposed by President Obama for fiscal year 2015 was only $135.4 billion, the lowest request of his presidency. Chances for more money on top of the budget caps, as Mr. Obama has called for, are virtually nil. And given that Congress invariably enacts less than the president asks for, the trend is all downhill.
Worse, the direction is unlikely to reverse as long as prevailing rhetoric reinforces the notion of an inefficient government sector versus a dynamic private sector. To win budget battles going forward, Democratic policy makers and administration officials must also win the debate in favor of entrepreneurial government. The fact that they have not successfully made that case in recent years is a result of both implacable Republican opposition and their own tendencies to exalt the private sector while ignoring its many roots in public spending.
Correcting that misimpression is crucial to building and sustaining support for public involvement in science and technology. Equally important is developing ways to ensure that taxpayers share in private-sector profits that ensue from government efforts. Fair and adequate corporate taxation is the obvious way, but that is currently a political non-starter. Non-tax models also need to be considered — for instance, requiring recipients of federal grants to pay a portion of subsequent profits to the government or establishing a federally backed innovation fund that lets the government retain an equity stake in companies that use the fund.

The goal, as expressed by Professor Mazzucato, is not for taxpayer-provided research to spare the private sector from risks, but for government and the private sector to take risks together and enjoy the rewards as one.
Meet The New York Times’s Editorial Board »
A version of this editorial appears in print on March 24, 2014, on page A20 of the New York edition with the
headline: America’s Underappreciated Entrepreneur: The Federal Government.
© 2014 The New York Times Company 

Can government use big data to manage corporate behavior?

emerson

Our desires presage the capacities within us; they are harbingers of what we shall be able to accomplish. What we can do and want to do is projected in our imagination, quite outside ourselves, and into the future. We are attracted to what is already ours in secret. Thus passionate anticipation transforms what is indeed possible into dreamt-for reality."

- Ralph Waldo Emerson

college cost

http://nyti.ms/1oBPI4p

THE OPINION PAGES | OP-ED CONTRIBUTOR
A Quick Way to Cut College Costs
By STEVE COHEN MARCH 20, 2014
COLLEGE admission notifications have begun to arrive. With every thrilling acceptance comes something far less welcome: the heart-stopping reality of what it all costs.
Tuition has risen almost 1,200 percent in the last 35 years, and the sticker price for many four-year private colleges and out-of-state public universities exceeds $250,000. Even at state universities, the average four-year cost for residents is more than $80,000 for tuition, room, board and expenses. But every college offers need- based financial aid, right? Well, sort of.
A college aid package can be made up of three elements: grants (sometimes called scholarships), loans and work-study programs. The biggest single source of aid is the federal government — but in the form of loans ($68 billion, 37 percent of all aid, in 2013). About 5 percent of aid comes from states and a large part from the college’s own resources. Much of the college’s contribution comes in the form of a discount from the school’s already inflated tuition, which, with a straight face, administrators call a grant.
When colleges compute their aid packages, they start with a student’s expected family contribution — that is, what the government expects a family to be able to contribute, not what the family expects. The E.F.C. is calculated by the federal government based on data submitted by the family on the Fafsa form (the Free Application for Federal Student Aid, which is mandatory if the student wants any sort of financial aid, even work-study jobs in the school cafeteria). The Fafsa’s complexity rivals that of a tax return, but it is less user friendly.
Weeks after submitting their Fafsa to the federal Department of Education, families are told what their expected contribution is. The formula itself is set by Congress. For most middle-class families, the number is shocking because it has little basis in real-life economics.

Consider a family of four, earning $100,000 in income and having $50,000 in

savings. The E.F.C. says that this family will contribute $17,375 each year to a child’s college expenses. A $100,000 income translates into take-home pay of about $6,311 monthly. An E.F.C. of $17,375 means the family must contribute about $1,500 a month — every month for four years. But cutting family expenses by 25 percent every month is unrealistic.
Alternatively, the family could use its savings. But that would deplete their $50,000 before the start of the child’s senior year, leaving nothing for the proverbial rainy day, or for the second child’s education.
Financial advisers familiar with the peculiarities of the college aid world say there isn’t much they can do to help once families receive their E.F.C. As Ian Welham, the founder of Complete College Planning Solutions, told me, “When families see their E.F.C. number for the first time, most parents ask, ‘Is this for four years?’ I have to tell them, ‘No, that’s just for one year.’ I also have to explain that the E.F.C. is the minimum a family is going to pay. In many cases, they’re asked to pay considerably more.”
When colleges craft a student’s financial aid package, the school deducts the E.F.C. from the sticker-price tuition, room, board and expenses to establish a family’s need. It then allocates federal money the child is eligible for, and only last does it dip into its own resources, if the school has money available.
Private colleges have more flexibility. Because some of the wealthiest schools, like Princeton, have basically eliminated loans entirely from their packages for middle-class families, it can be less costly to attend a private college with a higher sticker price than a state university with lower tuition. State schools have smaller endowments and less money for financial aid.
But what about the huge federal scholarship programs Congress regularly trumpets? Most are not available to middle-class families; only federally subsidized loans are. And at 3.86 percent subsidized interest rates — plus loan origination fees — federal education loans are available on less attractive terms than car loans.
The largest and best-known scholarship program is the $34 billion Pell Grant. But 95 percent of all Pell Grants go to families earning under $58,875 annually. For the 5 percent of middle-class families who do get Pell grants, the average award is $2,500.
Congress has done little to help middle-class families. Seventy-one percent of college students graduated last year with an average of $29,400 in debt. Estimates suggest that parents have taken on almost as much.
Meanwhile, lobbying expenditures by colleges, universities and higher- education organizations have totaled more than a half-billion dollars over the past

five years — the eighth highest special-interest category attempting to influence Congress.
I’m not suggesting that students and their parents shouldn’t contribute. But burdening students with huge loans and parents with depleted savings is a bad policy that is driven, in part, by unrealistic E.F.C.s.
“The E.F.C. gives colleges ‘plausible deniability,’ ” said Scott Farber, president of A-List Education, a tutoring and education consulting company. “It allows them to say, ‘We didn’t set these family contribution figures; the government did.’ That artificially high E.F.C. is essentially creating an artificial price support for colleges.”
Since Congress controls the E.F.C. formula, it makes sense for political leaders who are serious about controlling college costs and student debt to start by making the E.F.C. more realistic. But tinkering with the E.F.C. formula won’t be sufficient because there are so many problems with it. For example, it doesn’t take into consideration geographic differences in cost-of-living, or the lack of liquidity in one’s home.
So let’s get serious instead. Congress and the president should drastically cut the E.F.C. — by around 75 percent, to reflect the fact that since 1980 tuition has risen at nearly five times the rate of the Consumer Price Index. Doing so would force colleges to construct financial aid packages without the artificial price supports of inflated contribution numbers — and make paying for college less agonizing.
Steve Cohen is a lawyer at Kramer, Dillof, Livingston & Moore in New York and a co-author of “Getting In.” A version of this op-ed appears in print on March 21, 2014, on page A29 of the New York edition with the
headline: A Quick Way to Cut College Costs.
© 2014 The New York Times Company 

Ideology in america

olitical“liberals”alsoknowthis.Liberalsattackconservativepoliticians,butusuallynottheirconservatism.Theywillcalltheiropponents foolsorextremistsandgoaftertheirstandsonspecificissues.Butthey willnotsay“myopponentisaconservative”asameansofdisparagement.Conservativesplayupthepositiveimplicationsofa“conservative” approachtopolitics,but“liberals”donotdothesame.Theresult,ifthe mainstreammediaaretransmittingtheseconflictedcues,isthatcitizens whogettheirnewsfromthemainstreampresswillbeexposedtotheterm “conservative”moreoftenthantheterm“liberal”andwillheartheterm inamorepositivelightwhentheydohearit
eterm“conservative”isheldinfargreateresteemthanthe term“liberal”(Jennings1992,Schiffer2000).Thisispartlyaresultof thenow-pejorativeconnotationoftheword“liberal”inpolitics,aswe describedinChapter4.If“liberal”istomeansupportfortheundeserving poor,thecounterculture,andthosewhoseektoattackmainstreamsocial institutionsandvalues,thenpoliticalliberalswanttostayfarawayfrom thelabel.Andtheydo. Butitismorethanjustthetarringoftheliberallabel.Conservatism, asageneralvalueandasawordtodescribeacourseofaction,ispopular.Wehavealreadyseenitspopularityinreligionanditsapproaches tofamilylifeandbehavior.Butitgoeswellbeyondthat:“Conservative”intheAmericanpublicconnotespositivevaluesandapproachesno matterwhatthetopic.Weapproveconservativehypotheses,approveof banksthattakeaconservativeapproachtohandlingourmoney,andlike ourcontractorstogiveusconservativeestimates.Evenwelloutsidethe realmofpolitics,“conservative”hascometomeanconventional,safe, mainstream,comfortable. Politicalconservativesrecognizethis.Asaresult,whenframingtheir worldviewtothemasspublic,conservativestalkagreatdealaboutideologicalandpoliticalsymbols,thevalueofideologicalconservatism,and thewayinwhichthisgeneralvaluewillbeappliedtotacklingpolitical problems,doinglittletoexplaintheimplicationsofthisconservatism
forpracticalpolitics(Zaller&Feldman1992,Jacoby2000).Conservativesboastabouttheirconservatism,treatingitasabadgeofhonor. Onewaytoboastaboutconservatism,ofcourse,istotalkinnegative termsaboutthe“liberal”label,andinsymbolictermsaboutwhata “liberal”approachtogovernmentwillimply(biggovernment,bureaucraticcontrol,privilegingtheundeservingandunconventionaloverthe hardworkingandmainstream),andthelike. Political“liberals”alsoknowthis.Liberalsattackconservativepoliticians,butusuallynottheirconservatism.Theywillcalltheiropponents foolsorextremistsandgoaftertheirstandsonspecificissues.Butthey willnotsay“myopponentisaconservative”asameansofdisparagement.Conservativesplayupthepositiveim
plicationsofa“conservative” approachtopolitics,but“liberals”donotdothesame.Theresult,ifthe mainstreammediaaretransmittingtheseconflictedcues,isthatcitizens whogettheirnewsfromthemainstreampresswillbeexposedtotheterm “conservative”moreoftenthantheterm“liberal”andwillheartheterm inamorepositivelightwhentheydohearit. P. 157

deologicalself-identificationis usuallyformedasareactiontobroad,generalmessagesandconcepts (Conover&Feldman1981),notasumofpolicypreferences.Exceptfor thepoliticallysophisticated,opinionsonspecificissuesareoftenformed inresponsetofeelingsabouttheworthofthespecificsocialgoalin question,notasafunctionofabroaderworldview(Jacoby1995) p.160

Mooney: the backfire effect and motivated learning

http://www.motherjones.com/blue-marble/2014/03/brendan-nyhan-backfire-effects-facts

Here Are 5 Infuriating Examples of Facts Making People Dumber

The notorious "backfire effect" has now been captured in multiple studies.

By Chris Mooney | Wed Mar. 5, 2014 3:00 AM GMT

---

Social Title: 

Here are 5 infuriating examples of facts making people dumber

Social Dek: 

The notorious "backfire effect" has now been captured in multiple studies.

On Monday, I reported on [1] the latest study to take a bite out of the idea of human rationality. In a paper[2] just published in Pediatrics, Brendan Nyhan of Dartmouth and his colleagues showed that presenting people with information confirming the safety of vaccines triggered a "backfire effect," in which people who already distrusted vaccines actually became less likely to say they would vaccinate their kids.
Unfortunately, this is hardly the only example of such a frustrating response being documented by researchers. Nyhan and his co-author Jason Reifler of the University of Exeter have captured several others, as have other researchers. Here are some examples:
1. Tax Cuts Increase Revenue? In a 2010 study [3], Nyhan and Reifler asked people to read a fake newspaper article containing a real quotation of George W. Bush, in which the former president asserted that his tax cuts "helped increase revenues to the Treasury." In some versions of the article, this false claim[4] was then debunked by economic evidence: A correction appended to the end of the article stated that in fact, the Bush tax cuts "were followed by an unprecedented three-year decline in nominal tax revenues, from $2 trillion in 2000 to $1.8 trillion in 2003." The study found that conservatives who read the correction were twice as likely to believe Bush's claim was true as were conservatives who did not read the correction.
2. Death Panels! Another notorious political falsehood is Sarah Palin's claim that Obamacare would create "death panels." To test whether they could undo the damage caused by this highly influential morsel of misinformation, Nyhan and his colleagues had study subjects read an article about the "death panels" claim, which in some cases ended with a factual correction [5] explaining that "nonpartisan health care experts have concluded that Palin is wrong." Among survey respondents who were very pro-Palin and who had a high level of political knowledge, the correction actually made them more likely to wrongly embrace the false "death panels" theory.
3. Obama is a Muslim! And if that's still not enough, yet another Nyhan and Reifler study [6] examined the persistence of the "President Obama is a Muslim" myth. In this case, respondents watched a video of President Obama denying that he is a Muslim or even stating affirmatively, "I am a Christian." Once again, the correction—uttered in this case by the president himself—often backfired in the study, making belief in the falsehood that Obama is a Muslim worse among certain study participants. What's more, the backfire effect was particularly notable when the researchers administering the study were white. When they were non-white, subjects were more willing to change their minds, an effect the researchers explained by noting that "social desirability concerns may affect how respondents behave when asked about sensitive topics." In other words, in the company of someone from a different race than their own, people tend to shift their responses based upon what they think that person's worldview might be.
4. The Alleged Iraq-Al Qaeda Link. In a 2009 study [7], Monica Prasad of Northwestern University and her colleagues directly challenged Republican partisans about their false belief that Iraq and Al Qaeda collaborated in the 9/11 attacks, a common charge during the Bush years. The so-called challenge interviews included citing the findings of the 9/11 Commission and even a statement by George W. Bush[8], asserting that his administration had "never said that the 9/11 attacks were orchestrated between Saddam and Al Qaeda." Despite these facts, only one out of 49 partisans changed his or her mind after the factual correction. Forty-one of the partisans "deflected" the information in a variety of ways, and 7 actually denied holding the belief in the first place (although they clearly had).
5. Global Warming. On the climate issue, there does not appear to be any study that clearly documents a backfire effect. However, in a 2011 study [9], researchers at American University and Ohio State found a closely related "boomerang effect." In the experiment, research subjects from upstate New York read news articles about how climate change might increase the spread of West Nile Virus, which were accompanied by the pictures of the faces of farmers who might be affected. But in one case, the people were said to be farmers in upstate New York (in other words, victims who were quite socially similar to the research subjects); in the other, they were described as farmers from either Georgia or from France (much more distant victims). The intent of the article was to raise concern about the health consequences of climate change, but when Republicans read the article about the more distant farmers, their support for action on climate change decreased, a pattern that was stronger as their Republican partisanship increased. (When Republicans read about the proximate, New York farmers, there was no boomerang effect, but they did not become more supportive of climate action either.)
Together, all of these studies support the theory of "motivated reasoning" [10]: The idea that our prior beliefs, commitments, and emotions drive our responses to new information, such that when we are faced with facts that deeply challenge these commitments, we fight back against them to defend our identities. So next time you feel the urge to argue back against some idiot on the Internet...pause, take a deep breath, and realize not only that arguing might not do any good, but that in fact, it might very well backfire.

---

Source URL: http://www.motherjones.com/blue-marble/2014/03/brendan-nyhan-backfire-effects-facts

Links:
[1] http://www.motherjones.com/environment/2014/02/vaccine-denial-psychology-backfire-effect
[2] http://pediatrics.aappublications.org/content/early/2014/02/25/peds.2013-2365
[3] http://www.dartmouth.edu/~nyhan/nyhan-reifler.pdf
[4] http://www.cbpp.org/cms/?fa=view&id=507
[5] http://journals.lww.com/lww-medicalcare/Abstract/2013/02000/The_Hazards_of_Correcting_Myths_About_Health_Care.2.aspx\" target=
[6] http://www.dartmouth.edu/~nyhan/obama-muslim.pdf
[7] http://sociology.buffalo.edu/documents/hoffmansocinquiryarticle_000.pdf
[8] http://www.washingtonpost.com/wp-dyn/articles/A48970-2004Jun17.html
[9] http://climateshiftproject.org/wp-content/uploads/2011/08/HartNisbet2011_BoomerangeEffectsClimate_CommunicationResearch.pdf
[10] http://www.motherjones.com/politics/2011/03/denial-science-chris-mooney

Social Physics: How good ideas spread

Social physics: how good ideas spread-the lessons from a new science

Author: Alex Pentland

” Adam Smith himself understood that it is our social fabric and guides the invisible hand of the market and not just competition alone. In his book theory of moral sentiments he argued that it was human nature to exchange not only goods but also ideas assistance and favors out of sympathy. Furthermore, he thought that these social social exchanges guided capitalism to create solutions for the good of the community. Smith, though, live in an era or almost all the bourgeoise residents in the city knew each other and were constrained by social pressure to be good citizens. Without the obligations provided by strong social ties, capitalism often turns rapacious of politics turns poisonous.  In our new hyper connected world, most Thais are we and all too often the invisible hand no longer functions.” P. 3

Pentland here is suggesting that was social physics we can now describe and analyze ”the invisible hand”, and see why it works , how it works, how it can work better, and how it may become dysfunctional, and how that dysfunction can even threaten the collapse of marketplaces and social continuity.

Here's a great metaphor:

” We all sale in a stream of ideas, ideas that are the examples and stories of the peers who surround us; exposure to the stream shapes our habits and beliefs. We can resist the flow if we try, even choose to row to another stream, but most of our behavior issued by the ideas we are exposed to. The idea flow within the streams binds us together into a sort of collective intelligence one comprised of the shared learning of our peers.”

What is the relationship between reason and argument in this learning process?

According to recent research in cognitive science, human beings have basically 2 ways of thinking a fast way and a slow way, a more automatic intuitive way and a more deliberative rational way of thinking believing in analyzing. The fast thinking aspects of online intuitive ones are basically habits and intuitions that we learn by associating ideas from our experiences and those we've learned by observing other people. The slow mode uses more rational mechanisms that combine our beliefs into logical patterns whereby we can make inferences and reach new conclusions. p. 56

” many scientists believe that the vast majority of our daily behavior is due to fast thinking—we literally don't have the time to think things through using slow thinking.” P. 57

Most people intuitive judgments or fast thinking tend to be more on truest and cooperative the decisions made for deliberative rational fast thinking. For example the reactions of spectators at the Boston Marathon bombings. Pentland argues that this "fast thinking core of human nature" is essential for building and maintaining strong communities.

“My experiments suggested that continual exploratory behavior pumas is a quick learning process that is guided by apparent popularity among peers. In contrast, adoption of habits and preferences is a slow process that requires repeated exposure and perceptual validation within a community of peers. Our social world consists of the rush and excitement of new ideas harvested through exploration, and then the quieter and slower process of engaging with peers in order to winnow through these ideas, to determine which should be converted into personal habits and social norms.” P. 58

“The goal of this book is to develop a social physics that extends economic and political thinking by including not only competitive forces, but also exchanges of ideas information, social pressure, and social status in order to more fully explain human behavior. To accomplish this we will have to explain not only how social interactions affect individual goals and decisions but, more important, how the social effects produce Adam Smith's otherwise mysterious invisible hand.” P. 4

“This focus on the floor of ideas is why I chose the name 'social physics'. Just as the role of traditional physics is to understand how the flow of energy translates into changes in motion, social physics seeks to understand how the flow of ideas and information translates into changes in behavior.” p.5

“The social physics is just, as mathematics, it is usually restricted to specifically trained experts. I believe that open impact also depends upon whether it provides people—for example, government and industry leaders, academics, and average citizens—a language that is better than the old vocabulary of markets and classes capital and production. Words such as “markets,” “political classes,” and “social movements” shape our thinking about the world. They're useful, of course, but they also represent overly simplistic thinking; they therefore limit our ability to think clearly and effectively. In this book will put forward a new set of concepts which I believe we can more accurately discuss our world and plan the future.” Page 8

“The engine that drives social physics is big data: the newly ubiquitous digital data now available about all aspects of human life. Social physics functions by analyzing patterns of human experience and idea exchange within the digital breadcrumbs you all leave behind as we move through the world–call records, credit card transactions, and GPS location fixes, among others. These data tell the story of everyday life for recording with each of us has chosen to do. And this is very different from what is put on Facebook; postings on Facebook or would people choose to tell each other, edited according to the standards of the day. Who we actually are is more accurately determined by where we spent our time in which things we buy not just by what we say we do. The process of analyzing the patterns within these digital breadcrumbs is called reality mining, and through it we can tell an enormous amount about who individuals are”. Page 8-9

“The scientific method used in social physics is different from that used in most social sciences, because it principally relies on “ living laboratories”. Page 9

“Just as when Dutch lens makers created the 1st practical lenses and thus enabled researchers to build the 1st microscopes and telescopes, my research lab and I have created tools that collect all the digital breadcrumbs from entire community, enabling us to build some of the 1st practical “socio-scopes.” These new tools give a view of life in all its complex and—and are the future of social science. Just as the microscope and telescope revolutionized the study of biology and astronomy, socio-scopes and living labs will revolutionize the study of human behavior.” Page 10

“… This new approach is similar to economics, because of it's quantitative, predictive character.  Indeed, much of the language used in this book draws economics. Rather than study how economic agents work out economies function, social physics seeks to understand how the flow of ideas turns into behaviors and action. Put another way, social physics is about how human behavior is driven by the exchange of ideas—how people cooperate to discover, select, and learn strategies and coordinate their actions—rather than how markets are driven by the exchange of money.” Page 16

“Social physics also shares some surface resemblance to other academic domains, such as the cognitive sciences. The contrast between most, science and social physics is quite important, however. Rather than focusing on individual thoughts and emotions, social physics offices on social learning is the major driver of habits and norms. A fundamental assumption is that learning from examples of the people's behavior (and the relevant contextual features) is the major and likely, mechanism of behavior change in humans.” Page 16 

“Our society has already begun a great journey that will rival revolutions such as printing and the Internet. For the 1st time, we will have the data required to really know ourselves and understand how society evolves. By better understanding of yourself we can potentially build a world without fear or financial crashes in which infectious diseases quickly detected and stopped, which energy,water, and other resources are no longer wasted, and in which governments are part of the solution rather than part of the problem.' Page 19

“Social physics assumes that human societies are mostly made up of exchanges between individuals instead of describing society is composed of classes or markets.” Page 21

“Creativity is just connecting things. When you ask creative people probably did something, they feel little guilty, because they didn't really do it, they just saw something. It seems obvious to them after a while. That's because they were able to connect experiences they've had to synthesize new things.” Steve Jobs page 26

“The most consistently creative and insightful people are explorers. They spend an enormous amount of time seeking out new people and different ideas, without necessarily trying very hard to find “best” people or “best” ideas. Instead, they seek out people with different views and different ideas.” Page 26

“The most productive people are constantly developing and testing a new story, adding newly discovered I used to the story in trying it out on everyone they meet.” Page 27 

"...this exploration process is fundamentally a search of one social network..” Page 27

“It seems that the key to harvesting ideas that lead to great decisions is to learn from the successes and failures of others to make sure that opportunities of this sort of social learning are sufficiently diverse"

What can a single individual due to the increased rate of idea flow in their part of their social network? …*Producers engaged in preparatory exploration that is the develop dependable two-way streets of experts ahead of time, setting up a relationship that will later help the star producer complete critical tasks. Moreover, the stars and networks different from typical workers networks in 2 important respects. 1st, they maintain stronger engagement with the people in their networks, so these people responded more quickly and helpfully. As a result, the stars rarely spend time spinning their wheels going down blind alleys. Page 35

2nd, star performers networks were also more diverse. Average performer saw the world only from the standpoint of their job, in Pushing the same points. Stars on the other hand, had people in the networks with a more diverse set of work rules, so they could adopt the perspectives of customers, competitors, and managers. Because they could see the situation from a variety of viewpoints, they could develop better solutions to problems. Page 35

“What we found was that individuals who adopted an energetic, and gauging interaction style that create more interactive conversations ended up being more important to idea flow in the social network.… the most productive people in the world... are continually engaging with others in order to harvest new ideas, and this exploratory behavior creates better idea flow.”

“… Social learning only improves decision-making people have different individual information. So in situations when the outside information sources (for example, magazines, TV, radio) have become too similar, then groupthink becomes a real danger.” Page 36 and 37

“In summary, people act like idea processing machines combining individual thinking and social learning from the experiences of of others. Success depends greatly on the quality of your exploration and that in turn relies on the diversity and independence of your information and ideas sources.” Page 41 

Idea flow: chapter 3

“… We think that each stream of ideas is a swarm or collective intelligence, flowing through time with all the humans and learning from each other's experiences in order to jointly discover the patterns of preferences and habits of action that best suit the surrounding physical and social environment.” Page 46

This is counter to the way most modern Westerners understand themselves, which is as rational individuals, people who know what they want and who decide for themselves what actions to take in order to accomplish their goals. Could it be that our preferences and methods of action, the very things that define rationality, come from our community as much as from within ourselves? Page 46

Preferences: “… The amount of exposure to people possessing similar opinions accurately predicted both the students level of interest in the presidential race and their liberal conservative balance. This collective opinion affect was very clear: more exposure to similar views make the students more extreem in their own views. Page 50

“… We can consciously reason about which flow of ideas you want to swim in, but then exposure to those ideas will work to shape our habits and beliefs subconsciously. Page 51

“… 4 political views, shifted exposure to a different flow of ideas spending more time with a crowd that filled, will anyway that hardened beliefs and habits.” Page 51

“… Learning from surrounding example behaviors is much more efficient than learning solely from our own experiences. Mathematical models of learning in complex environments suggested the best strategy for learning to spend 90% of our efforts on exploration, that is finding and copying others who appear to be doing well. The remaining 10% should be spent on individual experimentation and thinking things through. “Pay 54

“In the end of the 1700s, philosophers began to declare that humans were rational individual. People were flattered by being recognizes individuals, and by being called rational, and the idea soon will wormed its way into the belief systems o nearly everyone in upper-class Western society. Despite resistance from church and state, this idea of rational individuality replace the assumption that truth only came from God and King. Over time, the ideas of rationality individualism change the entire belief system of Western intellectual society, and today it is doing the same to the belief systems of other cultures.

“… We are now coming to realize that human behavior is determined as much by social context as by rational thinking or individual desires. Rationality, as the term is used by economists, means that we know what we want and have to get. But I think that my research shows that both people's desires and their decisions about how to act our often, and perhaps typically, dominated by social network effects.

Recently, economists have moved toward the idea of bounded rationality, which means that we have biases and cognitive limitations that prevent us from realizing full rationality. The dependence on social interactions, however is not simply a bias or a cognitive limitation.… Social learning is an important method of enhancing individual decision-making. Similarly, we will see in the next chapter that social influences central to constructing the social norms that enable cooperative behavior. Our ability to survive and prosper is due to social learning in social influence at least as much as it is due individual rationality.

These data tell us that what we want and value, as well as how we choose to act or to obtain our desires, are a  constantly evolving property of interactions with other people. Our desires and practices are mostly based on what our peer community agrees is valuable rather than our individual biological drives or inborn morals.”

"Our ancestors understood that our culture and the habits of our society are social contracts, and that both depend primarily upon social learning. As a result, most of our public beliefs and habits are learned by observing the attitudes, actions, and outcomes of peers, rather than by logic or argument. Learning and reinforcing the social contract is what enables a group of people to ordinate their actions effectively.  " Page 61

"Even though today's society tends to glorify the individual, the vast majority of our decisions are shaped by common sense, the habits and beliefs we have in common with our peers, and these habits are shaped by interactions with other people. We learn common sense almost automatically, by observing and copying the common behaviors of your peers. It is through these collective preference and decision mechanisms that we come to automatically behave politely at parties, respectfully at work, and passively in public transit. It is the idea flow within a community that builds the intelligence that makes it successful." Page 61

Chapter 4: engagement: How can we all work together.

And Bob Kelly's Bell Stars study, in which you look at the difference between average and star performers within Bell laboratories, preachers found that the star performers incurred for workgroups to be a in exactly this sort of social voting manner. Average performers thought teamwork meant doing their part on the team. Star performers, however, saw things differently: they pushed everyone on the team toward joint ownership of goal setting, group commitments, work activities, schedules, and group accomplishments. Star performers promoted that is, synchronized, uniform idea flow within the team by making everyone feel a part of it, and try to reach a sufficient consensus so that everyone would willingly go along with new ideas. Page 63

Synchronization and uniformity of idea flow within a group is critical: when overwhelming majority seem ready to adopt a new idea, this convinces even the skeptics to go along. A surprising finding is that when people are working together doing the same thing in synchrony with others—e.g., rowing together, dancing together—our bodies release endorphins, natural opiates that give a pleasant high every war for working together. [ritual]

Social pressure: "there is growing evidence of the power of engagement—direct, strong, positive interactions between people–is vital to promoting trustworthy, cooperative behavior." Page 65

“Standard economic incentives miss the mark because they frame people as individual, rational actors rather than as social creatures influenced by social ties.… By providing incentives aimed at people social networks rather than economic incentives information packets that are aimed at changing the behavior of individual people.” Page 66

Rather than to use individual market incentives or to provide additional information the social physics approach to getting everyone to cooperate is to use social network incentives rather than to use individual market incentives or to provide additional information. That is, we focus on changing the connections between people rather than focusing on getting people individually to change their behavior."

Conclusion: “engagement—repeating cooperative interactions—builds trust and increases the value of a relationship, which lays the groundwork for the social pressure needed to establish cooperative behaviors. In other words, engagement builds culture. Page 74

“Adam Smith argued that the social fabric created by the exchange of goods, ideas, gifts, and favors guided capitalism to create solutions for the good of the community.… Communities are made of social ties, and without the constraint of social pressure provided by social ties, capitalism can become predatory. Social physics tells us that we must include not only economic exchanges, but also exchanges of information, ideas, and the creation of social norms in order to more fully explain human behavior.” Page 75

“Adam Smith's description of "good” capitalism outlined an ideal situation. He could imagine of social engagement almost always balanced economic forces, because he lived in a smaller world: bourgeois residents in the city were more likely to know each other and constrained by similar social norms and pressure to be good citizens. But his was also in Europe in which the poor were invisible and the lack of engagement between the rich and poor removed the social constraints on exchanges between these groups. Famously, this gave rise to the horrors and abuses of the 1st industrial age. p76