jacobion

> if the placebo effect is something that you can scientifically demonstrate, how would you arrange a control group?

Easy, just don't give the control group any medicine. Give the other group a placebo. If outcomes are better for the second group, it's evidence that placebos work, just as clearly as the usual trial provides evidence that medicines work.

Wasn't the someone who dismissed Dropbox when they first launched Steve Jobs?

Arguably one reason those two businesses were successful in areas with entrenched players and business practices was because they handle the money. If AirBnB was asking either travelers or hosts to pay $X to be on a recommendation site, probably very few people would. There's always a cheaper competitor when you're selling information. Because you book through AirBnB, for a service which is relatively expensive, they can skim off quite a lot of money in an opaque way.

The Law of Large Numbers is an actual math theorem. The Law of Averages is a non-technical name for various informal reasoning strategies, some fallacious (like the gamblers fallacy), but mostly just types of estimation that are justified by more formal probability theory.

Yes, this is a problem that a heavily regulated free market actually solved pretty well.

I go to my local grocery store and look at the painkillers they have. There are generic aspirin and Tylenol available for a price almost anyone can afford. There are branded versions which are still reasonably priced. There are reasonable variations such as with caffeine or with decongestant, again priced perfectly fairly. If you want to pay $2 extra for awesome marketing you can. In some stores you might find a 'natural' remedy - essentially a placebo, again priced ok.

Everything on sale is basically safe. Nothing has a business model that relies on addiction. Nothing costs hundreds of dollars. Nothing is adulterated or counterfeit. It's easy to get information about everything available. The vast majority people would be able to choose something to match their own needs (for example, they might be allergic to aspirin, or need to avoid Tylenol because of a kidney condition).

If you bought the worst painkiller on sale in the store, it would be fairly effective and not too expensive. The experience in most stores in large parts of the world would be very similar.

Also, people feel differently about different treatments, for particular reasons. If your mom always took one brand of Tylenol when she had a cold, taking it might reassure you more than the theoretically optimal painkiller. Customers were quite happy to pay more for the exact same Ibuprofen labelled with 'Back Pain' or 'Period Pain', because they felt it worked.

If you think about it, the author's desire to choose 'the scientifically proven to be the most effective' is just another example of such a superstition. If you could convince him that a particular medication was the winner in the meta-analysis, he would probably objectively feel better, even if it wasn't actually true.

Then for you, a meta-analysis would be even more useless, as your own experience is much more valuable.

Isn't there a social benefit in letting the 10% (or whatever) of people that believe in them get a safe and effective placebo, for many conditions where that's all that's needed?

Yes, for headaches no one wants to read a meta-analysis, they just want to buy something quickly and feel slightly better.

On the other hand, for depression medication, they don't want their doctor to look at an online tool and choose the most effective antidepressant. They want their doctor to look at THEM and say "hmm, we'll try you on X but if it doesn't help with the intrusive thoughts we'll maybe switch it out to Y and up the dosage of Z". Or they want to tell the doctor what they think they want to be prescribed. They are paying big bucks to see a psychiatrist. Most of them are not on a self-optimization trip, they just want to feel better, and also feel like someone takes an interest in how they are getting on. Using a snazzy tool would probably lead to the patient being less satisfied with the doctor's service, even if they have slightly better outcomes by whatever questionable metric is in the study.

But doesn't a large majority of 'social services' spending go to retirement incomes? Obviously that is important, but discretionary spending on, for example, taking care of children, is much smaller.

So maybe the problem is a broken political system which serves the interests of only one group of people, rather than high or low interest rates?

Why do low interest rates cause high rents? High house prices sure, but why does it affect rents?

You prefer to live in Copenhagen than the part of Europe you come from, for the higher salaries among other reasons. Probably lots of other people share your preference. Doesn't this suffice to explain why rents are much higher in Copenhagen than in your home region?

'artificially low'

What do you think the natural rate of interest should be? Why?

I think there might be two things going on here: one is a rise in various forms of social inequality, between generations, between people living in tier one cities and smaller cities or towns, between workers in certain industries and the rest. I tend to think this is bad, but I don't think it's related to interest rates.

The other is the culmination of a fifty-year process set in motion when Western economies went from gold-backed currency to fiat currency, and then from political control of currency to independent Central Banks. During this period both inflation and interest rate have moved monotonically downwards, essentially both to zero.

What if you assume that this state of affairs is strange because new, but perfectly benign, and will last indefinitely? It's absolutely true that those people who bought housing and other assets when rates were 10% have profited from a huge windfall. However, it's a one-off windfall. They simply got a discount, because 20/30/40 years ago, borrowing long term to pay cash was hugely burdensome. Today's homebuyers will buy assets at prices which reflect low interest rates, and they will pay low interest rates on their loans. As young workers, they might actually be better off in the long run. In a long term regime of zero rates, more of society's wealth is going to producers (and risk-takers), less is going to people who just hoard cash.

You might think it's nice for society to do something to correct this one-off inequality. Maybe so, but it's not fundamentally different to the other inequalities which exist. In particular, it's unclear why either artificially raising rates or artificially raising inflation are the solution. Neither of these are particularly effective in helping people who have got the short end of the stick. Both benefit some groups of rich people and some groups of poor people, and harm some other groups. There are much better solutions which can be pursued by governments directly without political interference in currencies.

Of course the type of person (job, family status, education level) who could buy a house in Berlin or London in the 1990's could not buy that same house today. You can either say 'too bad, you were out competed', or you can try to do something about it: pay teachers and social workers more, build more houses, make smaller cities more desirable to live in, provide better training and career opportunities etc. Blaming this on the dubious idea that cash in the bank should accrue 8% interest per year lets governments off the hook for actually solving the problems, and just advocates a different set of inequalities and broken incentives.

I brought up the past model to show that apprenticeships in the past worked for a specific reason. Various models of apprenticeship/training/education fail today, because we have rejected what made them work in the past. We don't want / can't have a system where young people are completely under the control of an apprentice master for several years, unable to change jobs or live where they want. This is probably a good thing. But without it, the idea of apprenticeships makes little sense.