Category: Miscellaneous

What makes gambling wrong but insurance right? – BBC News

Gamblers and insurers both place bets on the future, so how do they compare?

Legally and culturally, there is a clear distinction between gambling and insurance. Economically the difference is less visible. Both gambler and insurer agree that money will change hands depending on what transpires in some unknowable future.

Risk-sharing mutual aid societies are now among the largest and best-funded organisations on the planet – we call them “governments”.

Source: What makes gambling wrong but insurance right? – BBC News

 
The position of the risk takers and the potential outcomes of the bet are what matter and differentiate the two. Insurance serves to share reduced risk whereas gambling serves to increase it.

The reason this matters is because there is a discontinuity in outcomes when the loser loses so much that they are unable to pay their debts (financial, contractual, societal, etc.) and these losses spill over to other people and the rest of society. If someone gets so sick or wounded that they cannot pay their medical bills (the cost of their physical rehabilitation), then not only is the person bankrupt but the hospital’s ability to provide services to others is impacted negatively.

When a gambler bets at a casino, the gambler is increasing their ceiling of possible outcomes while lowering the floor and the average (because the odds are in favor of the house or else they’d go broke). When someone buys insurance, the insured individual is raising their floor of possible outcomes while lowering the ceiling and the average (because the odds are in favor of the underwriter or else they’d go broke).

People with higher floors of possible outcomes can tolerate more risk. Society historically has benefited substantially when this risk is well managed (e.g. due to trading ships possibly getting lost at sea or an experiment failing).

Insurance can also be seen as the abstraction of shared risk (as the article points out). Two merchants could each swap half their goods with the other’s ship to hedge their risk against a single ship sinking. Or one merchant could financially back the other by paying for half the cost, taking half the losses, and receiving half the profit from a single ship. Or an underwriter could issue insurance based on the statistical likelihood of the single ship sinking. It is more abstract, but the desired outcome is the same — someone else is sharing in your life or endeavour, helping you weather setbacks and worse.

Insurance is about protecting your floor of outcomes and those of the people who depend upon you; it’s about avoiding the worst.

Wonky Thoughts: The Scientific Method, Redefined

The process of objective reasoning is essential not only to science, but to most other aspects of civilization, including government, law, economics, journalism, education and medicine.

The premise is that objective truth exists, and that it is accessible by everyone. The scientific method is the process by which we analyze the world around us to illuminate objective truth for ourselves and others.

Explanations matter. Equations without explanations are empty, and their predictions limited.

A good explanation:

  • Must define a process which changes some aspect of reality.
  • The process must be observed in action.
  • The process must be measured and quantified.
  • The explanation must reconcile theory and observation.
  • The work must meet the standards of objectivity listed above as ancillary elements of the scientific method.
  • The explanation must be verified through successful prediction of experimental results or observations of real-world changes.
  • The explanation will often explain other phenomena in areas unrelated to the initial inquiry.

Source: Wonky Thoughts: The Scientific Method, Redefined

Quit Social Media. Your Career May Depend on It. – NYTimes.com

Our increasing addiction to the constant stimulus of updates, likes and posts is damaging our ability to concentrate deeply and focus on work that matters.

In a capitalist economy, the market rewards things that are rare and valuable. Social media use is decidedly not rare or valuable.

Professional success is hard, but it’s not complicated. The foundation to achievement and fulfillment, almost without exception, requires that you hone a useful craft and then apply it to things that people care about.

the ability to concentrate without distraction on hard tasks is becoming increasingly valuable in an increasingly complicated economy. Social media weakens this skill because it’s engineered to be addictive.

The idea of purposefully introducing into my life a service designed to fragment my attention is as scary to me as the idea of smoking would be to an endurance athlete, and it should be to you if you’re serious about creating things that matter.

A dedication to cultivating your social media brand is a fundamentally passive approach to professional advancement. It diverts your time and attention away from producing work that matters and toward convincing the world that you matter.

Source: Quit Social Media. Your Career May Depend on It. – NYTimes.com

A Powerful Russian Weapon: The Spread of False Stories – The New York Times

Using both conventional media and covert channels, the Kremlin relies on disinformation to create doubt, fear and discord in Europe and the United States.

Moscow’s targeting of the West with disinformation dates to a Cold War program the Soviets called “active measures.” … the ideological component has evaporated, but the goal of weakening adversaries remains.

Source: A Powerful Russian Weapon: The Spread of False Stories – The New York Times