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on the power of proprietary information

Lots of great articles in the October 13, 2014 New Yorker, all connected by the common theme of knowledge is power. Who knows what and when gives one a considerable edge. Nothing surprising, but reading about it from several perspectives reveals just how true the old saying is.

The first major article, Embrace the Irony, is about Lawrence Lessig’s quest to reform campaign finance. Not information, per se, but access is power, and asymmetrical access has about the same result as asymmetrical information. I didn’t really like this article, though; it seems to bounce around quite a bit.

Who cooks your Chinese food? Possibly (probably?) an underground worker from The Kitchen Network. There’s a lot more anecdote here than data, but the way the network operates is crazy. Pay a “work agency” some money and get a bus number and a phone number. Get on the bus, get off in the middle of nowhere, call the number, boss picks you up. You know nothing about the job before then, not even the name of the restaurant. The workers generally don’t know English, and so they are dependent on their handlers to help make arrangements and navigate the world. It’s not in the bosses’ interest to educate their workers, and even the workers don’t seem interested in helping each other, preferring to keep whatever knowledge they have to themselves.

The centerpiece article is The Empire of Edge. It’s too much to summarize the full doings, but insider trading is the epitome of exploiting the power of proprietary information. Of course, SAC claims their “edge” comes from public but overlooked information, or at least information that’s not technically secret, though the lines get blurry fast. I did love the part where after getting caught forging his transcript, Martoma sent a backdated email withdrawing his application, and then “proved” the email was legit with a report from his own computer forensics company. Controlling the flow of information is nothing when you can just create it out of thin air. Perhaps more incredulous is the story that Cohen never read an email, but nevertheless dumped tens of millions of Dell stock shortly after. Even believing the explanation that the decision was independent, if I were in a position to be receiving emails containing actionable information worth millions of dollars, you can bet I’d be reading every damn one. Twice. The ending is also fascinating, especially the not quite independent interview with Rosemary while Martoma waited outside, where the two would confer. “It was a discomiting interview scenario, with Martoma lurking in the wings like Polonius.” I guess since she was double checking her version of the story with her husband, it must be accurate, right?

Apparently you can get paid for dumpster diving. At least in Egypt, anyway, where Tales of the Trash takes place. Freelance garbage men take your trash away, but then resell or reuse whatever components of it they can. This obviously means they know a lot about the various residents, although sex seems to be a particular interesting topic to the zabal in the story. But then things are reversed when his wife separates from him and sends him angry texts. Because he is illiterate, he is forced to ask another man to read the texts to him, publicly shaming him, something his wife knows and is counting on.

The Planning Machine goes back to the origins of big data and Chile’s experiments (shortly before Pinochet) with computer guided central planning. Moving on to the fact that Walmart always sells lots of Pop-Tarts before a hurricane, the article states “the company knows it’s better to restock its shelves than to ask why.” A controversial position, I think. Sometimes true. Maybe customers really want something else, but settle for Pop-Tarts (which seem an unlikely choice in the face of an impending hurricane), but maybe people are just crazy and make irrational purchasing decisions and it’s better to stock what they buy without trying to overcalculate what they logically need. Also sometimes dangerous. Tim O’Reilly is cited as an advocate for “algorithmic regulation” which sounds a lot like racial profiling. Just run a naive Bayesian classifier on the set of known criminals, and that tells you who future criminals will be, so have the police pay extra attention to them. What could go wrong? To be fair, that’s obviously not the example given, but if we’re going to use statistics to tell government regulators where to look, why not do the same for police? There’s a funny anecdote from the early days of the Chile program, when Project Cybersyn warned that a factory would run out of coal. The factory managed had noticed several days earlier and already contacted the coal mine to solve the problem. Sounds a lot like the early warning advice I get from my phone.

There’s some weird short story, Scheherazade by Haruki Murakami, which is like a modern day Arabian Nights combined with some unexplained locked in elements from Old Boy.

There’s also a glowing review of the sixth season of The Good Wife, though I accidentally read straight through the background recap of earlier seasons to some major spoiler for season five. I suppose that’s fair, it’s no longer the current season, but for anybody who doesn’t watch TV live, the previous season frequently doesn’t become available until the next one starts airing. A two season lag on spoilers would seem reasonable. Keep your cursed information away from me! I previously praised the show.

Posted 09 Oct 2014 20:35 by tedu Updated: 09 Oct 2014 20:35