Wednesday, 27 April 2016

Graph of the week: Immigration: perception vs reality

An interesting chart from the Economist about the perception and reality on the total number of Muslims in European countries. It's striking how big the overestimation gap is in the selected countries (do have in mind that these are the official figures; perhaps there are undocumented Muslim immigrants that increase the actual numbers, but I sincerely doubt that the real numbers are anywhere near the perception). 
The Economist
So why is there such a huge overestimation (between 3 to 8 times!) in Europe about the total number of Muslim population in their countries? In general, the anti-immigration sentiment rests on the same concept: that there are too many immigrants (many of which without any legal documents), "taking our jobs". The perception on the total number of minority immigrants in Western countries is very similar to this one from above. Their numbers are vastly overestimated. 

Perhaps the reason for this is that minority immigrants tend to cluster in specific areas, primarily due to the cultural and language barrier of their new environment. Plus there is the perception held by the majority of Westerners that Islamic values are not compatible with the West. This makes the indigenous population hostile to newcomers, particularly if coming from Islamic countries (example: the current refugee crisis). As a consequence this turns entire neighborhoods of large cities into minority group ghettos, that tend to be correlated with higher incidences of crime and are considered unwelcoming and dangerous areas to live in. 

The problem is actually cultural assimilation. Nothing is being done to assimilate the immigrants which are (in most cases) forced to start working in the grey economy, usually for their compatriots who came earlier. Greece has a particularly big problem in this department, as there is an entire underground market for undocumented workers. The immigrants get the low-paying jobs that aren't registered in the economy, and are getting paid over-the-counter. This is bad for both sides: the government doesn't get its tax revenues, while the workers are forced to work for scrap without any job benefits or security, all at the mercy of their local "landlords", or whatever we should call them. Naturally some of them will be encouraged to take up crime (or in the extreme case - terrorism). Failing to assimilate immigrants, in addition to causing social problems, is alienating an entire group of  people virtually preventing them from ever adapting to the Western style of life. Perhaps it's not entirely their fault for not being able to assimilate. It's just that they've never been given an opportunity to do so. After all, the motivation for emigrating to the West is to enjoy a better lifestyle, to get the opportunity they never had the chance to take back home. They didn't come to work for nothing and to be treated like slaves. They didn't come to cause violence. The closed environment they ended up in pushes them in that direction. In the end this is hurting the economy in more ways than one. In addition to unpaid taxes, the labor force doesn't really benefit from undocumented workers. 

So how should Western governments accommodate this? Scattering immigrants across the country or across different neighborhoods within a city, instead of letting them form clusters is one way of doing so. This is particularly applicable in the current European state of 'controlled' immigration (controlled in a sense that EU governments are documenting each immigrant and allocating them to a specific area). Another is to clamp down on tax evasion (and simplifying the tax code) which lowers the incentives to work in the grey economy, and as a consequence resort to crime and violence. None of these may be enough to assimilate new immigrants completely, however complete assimilation never does actually happen to first-generation immigrants. It's the second generation and beyond (the ones that are raised in the new environment) that become fully integrated into new culture. The reason why this isn't happening in many European countries isn't the impossibility of Muslim cultural assimilation, it's the specific clustering they amass to which never really presents any opportunity for the newcomers, making them think that being in the West is not that special after all. This fuels anger. On both sides actually. And hence the overestimated perception. 

Saturday, 23 April 2016

What I've been reading (vol. 5)

I'm running behind with the reviews (still keeping track with the book readings though), so I'll publish the next two in space of only a week. Today it will be Gladwell's three books: Outliers, Tipping Point, and Blink (in the order that I've read them), while for next time it will be Roth's Who Gets What, and Surowiecki's Wisdom of Crowds

Gladwell, Malcolm (2008) Outliers. The Story of Success. Little Brown

Of all his books, in my opinion, this one ranks top. In Outliers, his third book, Gladwell wants to redefine our understanding of success. The brilliant writer that he is, he takes us through a fascinating journey linking together the little bits and pieces into an overreaching yet slightly simplistic theory about luck, opportunity, hard work, intelligence, heritage, and cultural legacy, all of which are important factors that explain why some people succeed (and are thus considered "outliers").  

Although this is far from a scientific treatise, the author occasionally calls upon scientific evidence, and constructs his arguments so convincingly that you might as well think that all of it is actually backed by experimental evidence. It’s not, but in this book, it doesn’t even matter. The narrative is simply that good. The point, from what I understood, is not to provide a comprehensive scientific study, but rather to offer some food for thought. It’s mostly about observing patterns. What excites me about the book’s narrative is the fact that the author moves away from the standard survivorship bias, in which successful people are thought to be successful because of their competence, skills, or ability. That certainly has made the difference, but, to put it in mathematical terms, skills, intelligence, or competence are necessary, but not sufficient conditions for success.

Gladwell tries to paint the picture of what are the sufficient conditions. What is it that makes the successful people differ from the rest? A whole range of things, actually. From their upbringing (family and cultural heritage), to how long they’ve nurtured their skill-set (the famous 10,000-hour rule - the amount of time that takes you to become an expert at something - quite a controversial hypothesis actually, see here, here, here, here and here), to the very date and year they were born in (and thus exposed to the specific conditions that made them rich). Satisfying just one of these factors is not enough. Many people come from the same cultural upbringing, many work hard, many were born into the same generation, went to the same school, university, or hung out with people like Bill Gates or Steve Jobs, but only a few actually succeeded. In the end, it comes down to the specific and diligent combination of all these factors, and yet this still doesn’t necessarily have to be enough. Finding oneself at the right place at the right time is much more crucial than we would think. 

And that is, in my opinion, the greatest contribution of this book. Just like Taleb’s Fooled by Randomness (there are a lot of differences between the two, in style, approach, and the message they convey, but they both offer a similar line of reasoning), it shows us that luck is crucial and that success can actually be purely random. Out of a sample of 7 billion people, some of us are bound to be rock stars, presidents and world leaders, Hollywood actors, super-rich businessmen, state-of-the-art athletes, stellar scientists, etc. It’s exactly what the law of really large numbers tells us. The fact that being a brilliant scientist, super successful businessman, admired world leader, or a brilliant athlete is so difficult given the enormous competition, and the fact that there are only so few of such extraordinary people throughout history, by the law of really large numbers there must be individuals that will satisfy those conditions. In other words, outliers are a natural occurrence, they will always exist.

And if you might think that your success wasn’t random, that it was purely due to your hard work, fast-paced thinking, high intelligence, unique competence and skillfulness, you are wrong. Surely all those things helped (they were the sufficient conditions), but there is a multitude of invisible factors that you simply aren’t (or even cannot) be aware of that gave you the opportunity to use your unique ability and build yourself into what you are today. 

Opportunity is the theme of the first part of the book. It tells us that extraordinary individuals need an opportunity to succeed, and that the difference between them and the rest is that they take their opportunities. Here is where ability and quick thinking matters – the fact that you’ve recognized an opportunity once it presented itself to you. Many are faced with an opportunity, many come from a nurturing environment and favorable family background, but only a few really exploit it to the limit. It works in the other direction as well; many very intelligent, very competent, and very skillful individuals never get the proper opportunity. Their hard work will get them their rewards, they are able to achieve a decent living standard in most cases, but they won’t become the stellar success they ought to have been. A great example that Gladwell uses in this case is the experimental study done by Lewis Terman. In 1921 Terman gave IQ tests to students in California’s elementary schools with an aim to find the true geniuses. Out of 250,000 students he recognized 1470 children with an IQ greater than 140 (confirmed by three separate tests, each new test only being given to the group of top performers). Over the rest of his life Terman tracked his geniuses to see how they will succeed in life. The point was to answer whether or not high IQ is a prerequisite for success. It turns out – it’s not. Yes, some of them turned out to be successful (some became authors, some judges, some university professors, businessmen, politicians, etc.), but not nearly as much as Terman had hoped. No one won a Nobel Prize (two students that later on won the Prize were rejected in the screening process; their IQs weren’t high enough), no one became President, no one reached national prominence in the way they were “supposed to”. 

In fact the positive relationship between IQ and success only works up until a certain point – for about 120 (enough to get you through a competitive graduate degree). In other words, the difference between the IQ of 120 and 100 is much bigger than the difference between 140 and 180 for example. Sure the person with IQ of 180 is smarter than a person with 140, but not that smarter. Gladwell gives a good additional example: height and basketball players. Being tall doesn’t guarantee that you will be a good basketball player. But it can help. The same is with high IQ. It can help, but it does not guarantee success. All it takes is to be smart enough to be successful (Gladwell also cites the university degrees of Nobel Prize winners in Medicine and Chemistry – although the list does contain the usual Ivy League suspects, there are many mediocre universities on the list as well). 

Not surprisingly, the patterns of success from the group of Terman’s geniuses had much more to do with family background and the different opportunities these kids received than their IQ. If the sample is divided into three key groups based on the levels of their career success, this becomes evident. The best performing geniuses benefited heavily from family background. They all came from middle and upper class families with highly educated parents. The worst performing group came from poorer families with a lack of education. These super smart kids were simply unlucky to be born in a different environment. The reason why their environment is so constraining to success is an entirely different topic that the book only briefly touches upon. The social mobility debate has a lot more to say about why this happens, why the poor get disenfranchised because they are poor. But the book does get you thinking about this, that’s for sure. 

There are many more different stories in the book, from Jewish garment manufacturers turning into lawyers and doctors, to why Southerners have a short fuse, to Korean pilots, Asian math whizzes (this one is particularly interesting, and has a lot to do with our perception of hard work), and how our education system is shaping the opportunities for us. I’ll leave it to the reader to uncover many of these on his/her own.

Gladwell, Malcolm: The Tipping Point: How Little Things Can Make a Big Difference (2000)
& Blink: The Power of Thinking Without Thinking (2005), both by Little Brown

The following two I’ll present briefly and jointly. They are both compelling pieces of non-fiction literature, but I found the Outlier book much more applicable to the stuff that I'm interested in. 

In Tipping Point, Gladwell talks about social epidemics. How and why do some ideas, trends and social movements spread so quickly (in Internet lingo we would say “go viral”) and transcend into global phenomena with far reaching and paradigm shifting consequences. According to Gladwell all of this happens with a small, almost trivial change, he calls the tipping point. Just like a massive wildfire can be triggered with a simple match in a dry forest, or just like any epidemic rests upon the ambiguity of patient zero, so can ideas and cultural patterns spread quickly. He seems to suggest that change doesn’t crawl up to us slowly and without notice, it happens in small but sharp steps which he attributes to a tipping point, the start of it all. 

Gladwell recognizes three basic rules of such epidemics. The law of the few, the stickiness factor, and the power of context. So basically, for an idea to spread you first need three types of people: the connectors (the “network hubs” who spread the story quickly onto their group), the mavens (the knowledge-accumulating information specialists who start the word of mouth epidemics purely due to their unique exposure to information), or the salesmen (you’ve guessed it – the persuaders). In addition to having (or being) one of these types of people, you still need other factors to transfer the message across. The stickiness factor – the specific content that makes the message interesting (or important), and, most importantly, context (we are highly sensitive to our environment and react accordingly). Context is what makes the whole thing hard to stage or predict. Virality doesn’t really have a formula (try making a youtube video that becomes a viral hit). But to be fair, Gladwell wrote this back in 1999, so before the viral online revolutions. Therefore, in today’s times, recognizing the actual tipping point in order to influence and predict trends is virtually impossible. Even if you have fulfilled all three "rules" of social epidemics. 

In Blink, another pop-psychology bestseller, it’s all about how fast and based on what information we make our judgments and decisions (how we "thin-slice", i.e. use limited info to construct conclusions). This one is his weakest effort, I feel. Not because the stories are bad, or the narrative is boring. It’s just that he puts a too strong emphasis on the benefits of our intuitive thinking. Psychologists like Daniel Kahneman have clearly proven how our intuitive thinking (System 1) can get us into trouble. Sure, it’s good most of the time, but in certain other times, it fails completely forcing us to undertake some really poor decisions. 

And this comes amid Gladwell’s very own examples of how making quick decisions can turn out bad. So on one hand we are facing examples of when rapid decision-making (in 2 seconds) beats dwelling over something for long periods of time whilst examining the many options at our disposal, but on the other hand, rash decisions aren’t really superior to deliberate thinking. It seems a bit contradictory at certain points, and it seems to lack certain coherence to the argument he’s trying to make. In my opinion investing time to read Kahneman’s book is much better to understand how we think. Read Blink after that one. You’ll recognize the flaws in the arguments, avoid confusion, and enjoy some other interesting examples. 

Finally, just like in Outliers, in both of these books most of Gladwell's conclusions aren’t really backed by scientific evidence (e.g. the decrease in the New York crime rate), just his own wit and engaging thinking. He tells good stories, and sure, he sometimes picks the anecdotal evidence to support his arguments, and his conclusions are often far-fetched, but they’re still interesting enough to think about them, and from an entirely different angle. This alone makes the books a worthwhile reading. They make you think.