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Culture War Roundup for the week of July 8, 2024

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Until I started working with geniuses, I never really understood the laments you sometimes hear that go, what a pity it is that our brightest minds have all gone off to Wall Street. I thought, that can't really be the case right? But then I joined a quant trading firm, in a sort of supporting role, and suddenly I also find myself wondering, as I interact with certain people at the office: shouldn't you be uncovering the secrets of the universe or something?

It took a while to hit me. I think I spent my first few months constantly debating people on this or that, convinced I had something to teach them, at least in my little domain. After all, it isn't always immediately apparent when someone is far more intelligent than you. But time and again I would have these epiphanies: oh, he is right, he was right two weeks ago, and I should've just listened then, as it would have saved me two weeks of trouble, and now I have to rewrite this code, and he had foreseen all this, and all this time he's been gently, politely nudging me to understand, as with a child, never brashly asserting his superiority, which must have been obvious to him. And I would feel ashamed remembering all my impassioned but mistaken arguments. After a while I picked up a sort of epistemic helplessness: even if my intuitions disagreed completely with one of these people I knew to be brilliant, I would go along with them. Eventually I would understand.

I'll call one of these brilliant and competent people Mark. I hesitate to say "genius" but I wouldn't object if you used the word. If I had to guess, I'd say he's 4 standard deviations above the mean, but really it's kind of impossible to judge people much smarter than you I think. Anyway, at some point I noticed Mark never came in anymore; he always worked remotely. That isn't normal at my company, but I assumed he must have negotiated an arrangement with the director. Perks of being a star. Was he on some beach? I don't know. He was still on Slack, ready to explain some point about statistics whenever I messaged him occasionally.

One day the midwits of HR took it upon themselves to organize mandatory in-person harassment training for everyone. Up till now, the annual training had been online and easy enough to click through without too much thought. But now we were forced to sit and discuss various hypothetical scenarios aloud, under the guidance of a training facilitator. In one scenario, a black employee is offended when someone describes her as "articulate". I wanted to pull my hair out, listening to the facilitator explain to my genuinely confused Indian coworker why this description was problematic. It struck me that our baroque American woke social norms perhaps do more to exclude minorities than to include them, on net. In another scenario, an intern with they/them pronouns is misgendered by those around them. Our guided discussion of this scenario was absolutely farcical. No one managed to utter two sentences about this hypothetical scenario without also accidentally using the wrong pronouns (and amusingly it was always "she", never "he", that people accidentally said), prompting stifled giggles all around. Even the training facilitator slipped up and had to conclude by mumbling something about how “intent matters”. It was as if we all knew subconsciously that individuals such as the hypothetical intern had on some level deluded themselves. Overall, I was (and am) annoyed that HR had been permitted to waste the valuable time of these smart people in this silly way, since the company had otherwise been very no-nonsense. I supposed Mark was somehow exempt from this training.

Weeks later, Mark returns to the office, ending his long absence. Only now he's a she, and goes by Mary.

And now maybe some of you are rolling your eyes at this post: you’ve been duped into reading propaganda. But no, I don’t really know what I’m trying to say here. I’m just trying to reflect on my own perspective on trans people suddenly shifting based on this one person. It’s not that I’d never encountered trans people before, but in the past they were always of the annoying sort, the sort that you could dismiss as a self-deluded victim of a weird sort of social contagion. But I can’t see Mary as self-deluded. Self-delusion is the one thing those of her profession are good at avoiding. Can you tell she’s trans? I dunno, kind of? Is it autogynephilia? No clue. It feels a little impertinent to ponder, though that’s the sort of question that I might have said mattered a lot before. Somehow just witnessing one extremely competent and effective person I respect turn out to be trans made it “real” for me, especially after all the other times I deferred to her judgment.

(I recognize that not everyone worships mathematical talent like I do, and you may find my automatic deferral of judgment weird or even disqualifying of my opinion. I know there are brilliant mathematicians with stupid and wacky beliefs in other domains. I do think, though, that the intelligence of Mary and some of the other quants goes beyond the academic; trading real money tethers your beliefs to the real world. She is not some aloof ideas person. She was and is reasonable levels of well-adjusted, funny, and courteous, and unreasonable levels of good at cranking out code that makes millions of dollars. Make of this story what you will.)

Has my opinion changed on any concrete trans issue? I don’t know. If a random person insists on referring to Mary as a man, and I’m required to say that between the two of them one is a fool, I’d have to say that Mary is not the fool. I don’t know if she’d be very angry about it anyway; she’s a level-headed person. What about sex change therapy for children? Still seems bad. Maybe the main change is just that I feel like I should be less quick to judge people in general.

I wasn’t there when Mary walked into the office for the first time as a woman. I don’t think anyone made a fuss over it or anything, and now everyone respects her new name and pronouns, but it still makes me anxious just imagining what it must have been like. Surely a measure of bravery was required, probably more than I’ve ever mustered on any occasion. What compelled her to do this? On a visceral level, it still doesn’t make sense to me, and I can still make it gross if I want to, just by thinking about it. But why do that? I’m inclined to defer to her, whether or not I understand.

I do wish she'd go and pursue science though.

Maybe I'm going on a tangent to your interesting culture war anecdote, but since you touched on it, there is a problem that has been bugging me lately: is there any way we as a society can discourage our best and brightest from going into rent-seeking professions?

I used to be a quant trader. I left because I was bothered by the pervading sense that what we were doing created nothing of value for society or the world, and by the moral decay it seemed to create in the environments I was working in.

Almost by definition, quant trading will never generate any significant positive externalities for anyone, since most of what you are doing is seeking to exploit temporary inefficiencies. And it generates a significant negative externality by draining talent and capital that could otherwise be employed productively.

So why don't we ban quant/algorithmic trading? Or regulate and tax it heavily? This is what governments usually try to do when an industry is generating negative externalities.

I can make a few good arguments not to ban it outright:

  • There are well-known benefits to having stable, liquid capital markets in terms of attracting investment to an economy.
  • The markets for capital and labour should be efficient, as long as we ensure competition in the industry. Sooner or later, these salaries should come down to Earth and the talent will go someone it's needed more.
  • All of the negative consequences of quant trading seem to be higher-order impacts. There's no immediate, visible negative consequences produced from this activity, like say, tailing ponds or child amputations.
  • It's difficult to even define what it is exactly. When is it "quantitative" or "algorithmic" vs. "fundamental" or "gut-based" (and are the right-hand terms even more virtuous somehow?)? Maybe you just want to ban noise trading or scalping, but even those could be difficult to differentiate those from other activities such as market-making or longer-term investing.

A lot of the same considerations apply to other lucrative bullshit industries that are currently sucking up talent such as cryptocurrencies, internet advertising, social media, or video games. I think these are all terrible things and if it were between having them or not, the world would be better off without them, unquestionably. But I don't think it's a good idea to ban them, and politically, this is never going to happen.

Taxing these industries could be more practical. A well-considered tax could offset some of the negative externalities and shrink the number of seats available, forcing many would-be quant traders or social media engineers to venture out into the productive part of the economy instead. But there are still practical and political considerations that will prevent this from happening in our world.

So what else can be done? Since the government isn't going to do much to fix things, maybe the solution lies with individuals instead. As in, what would make me our best and brightest go against financial incentives and actively choose not to be quant traders?

To imagine what this solution might be, we can look at the petroleum industry. Years ago, many of our best and brightest engineers used to flock to oil & gas. Dating myself a bit, but when I went to school, chemical engineering was known to be a lucrative option. But then in the last decade or so, besides a correction to the price of oil, working in oil & gas became possibly literally the least cool thing you could do. The younger generations have experienced a major moral awakening, and decided that they wanted to be on the right side of history when it comes to the climate crisis.

Could finance have its moment like this as well? Certainly, back in 2010/2011 it looked possible with the Occupy movement. And of course, anti-capitalist sentiment amongst youth has been rising lately, especially ever since they got their hands on TikTok (what a strange coincidence). I would never rule out change due to negative backlash from an economically alienated, ill-informed mob.

But what I would really like to see is a positive change in the mindset of the elite itself. As someone who is arguably part of this elite, I would put forth the following ethical argument:

  1. The world has very pressing issues that we need social, cultural, political, and technological solutions for.
  2. These issues require members of the elite to devote themselves to solving them. Most non-members of the elite will not be able to do so, since they are just scraping out an economic existence as it is.
  3. Therefore, as the intellectual elite, we have a moral responsibility to solve these issues for the benefit of all (elite and non-elite).

To me, this is the core of a belief system, or possibly even a religion. Speaking as an atheist, I think maybe at least part of the reason that these industries exist in their current form and the world is so screwed up today in our post-modern areligious world is that we've lost a bit of the moral anchor that religion used to provide us. So maybe what it takes to save us is actually a new kind of religion.

I just wanted to say thanks for these interesting thoughts - I'd hoped to see more discussion about the misallocation of talent especially since I don't know what to think myself. It seems unlikely people are going to engage on this topic anymore - too bad about the timing.