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James_Miller comments on Open Thread February 25 - March 3 - Less Wrong Discussion
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If you have a high IQ and are good at math go into finance. If you have a high IQ, strong social skills but are bad at math go into law. If you have a high IQ, a good memory but weak social and math skills become a medical doctor. If you have a low IQ but are attractive marry someone rich. If you have a very low IQ get on government benefits for some disability and work at an under-the-table job.
This seems awfully US centric.
Anyway, these advices aim at "higher middle class", not "rich bastard" category. Maybe apart from "marry someone rich".
Well, Western-developed-world-centric, true.
In dynamic economies (e.g. China) you probably would want to start a business. In stagnant and poor places your first priority should be to get out.
Going into finance or law can propel you into the "rich bastard" category.
Medical doctors are paid well in many places other than the US, though not as well as in the US. (For that matter, most other well-paid jobs are better paid in the US than anywhere else. Software development, law, senior management, etc.)
Also, though of course this was no part of the original question, medicine offers more confidence than most careers that your work is actually making the world a better place. (Which may not actually be the right question to ask, of course -- what matters is arguably the marginal effect, and if you're well paid and care enough about people in poor countries you may well be able to do more good by charitable donations than you ever could directly by your work. But it's a thing many people care about.)
More importantly, it seems that being a medical doctor can pay very large dividends both in donable dollars and in warm-fuzzies.
I think that's intended. Trying to achieve greater wealth generally involves much higher risk, and even if it offers a higher expected value in terms of money, the diminishing utility of wealth probably makes the expected utility of, say, creating a startup, lower than just pursuing a middle-class career that matches your skills.
Well, Wei Dai said “maximize the expected value of some function of your income”; which career achieves that will depend on whether the function is log(x), x, H(x - $40,000/year), exp(x/($1M/year)), or what.
I assumed it was referring to (part of) Wei Dai's utility function. What other functions could there be a point in applying?
Yes, but we don't know what Wei Dai's utility function is, and the answer to his question may depend on that.
Is this still true? Recently there have been reports about an oversupply of lawyers and scandals involving law schools fudging the statistics on the salaries of their graduates.
Salaries might be falling, but I doubt this is long term.
US law is a spectacularly bad choice at the moment. There is far to many law schools, and as a consequence, too many law graduates, the degree costs a fortune and employment prospects are outright bad. Do not do this.
Finance is an implicit bet that wallstreet will not get struck down by the wrath of the electorate just as you finish your education.
Honestly? If riches really is what you want, go into business for yourself. A startup, or at the low end just being a self-employed contractor has good returns and this is not likely to change. Programming, the trades, a good set of languages and an import-export business..
Well, as I understand it part of the issue is that a lot of the grunt work that used to require lots of lawyers to do, e.g., looking through piles of documents for relevant sections, can now be automated.
According to 80000 Hours, law is still one of the highest-earning careers.
Does anyone know if finance requires strong math and social skills? I assumed it did - social skills for creating connections, and math skills for actually doing to job.
And if you do have poor social skills, then practice! Social skills are really important. I'm still working on this.
This is some guesswork, but some other possible combinations:
Strong social skills, above average IQ - management?
Above average IQ, good math skills - accounting?
Rich parents, family business - take over said business eventually.
Middle class parents, fair amount of property, good location - rent.
Rich parents, strong social skills - network through their connections.
But are physically OK, play sports and/or enlist (US-centric).
The vast majority of people who play sports have fun and don't receive a dime for it. A majority of people who get something of monetary value out of playing sports get a college degree and nothing else.
I agree with the US army part though.
I think the US army is very physically dangerous, and furthermore might be considered a negative to world-welfare, depending on your politics.
I don't have good numbers, but it's likely less dangerous than you think it is. The vast majority of what an infantryman does falls into two categories - training, and waiting. And that's a boots on ground, rifle in hand category - there's a bunch of rear-echelon ratings as well.
I'm guessing that it's likely within an order of magnitude of danger as commuting to work. Likely safer than delivering pizzas. There's probably a lot of variance between specific job descriptions - a drone operator based in the continental US is going to have a lot less occupational risk than the guy doing explosive ordnance disposal.
How many people I'd be calmly killing every day? I'd have massive PTSD if I were a drone operator.
From what I've read, a couple of the issues for drone pilots is that they've been killing people who they've been watching for a while, and that they feel personal responsibility if they fail to protect American soldiers.
Well, I don't have statistics about that, but accounts from WWII bomber crews suggest otherwise.
Maybe they were just really good at screening out applicants who would have been likely to get PTSD.
AFAIK, people only started understanding PTSD after Vietnam and it wasn't even called that until the 1980s, so possibly not.
By a strange coincidence (unless you saw it and thus had it on your mind) today's SMBC is about exactly this.
Up until the US gets involved in something resembling a symmetrical war. Of course in that case it's possible no job will be safe.
In the year 1940, working as an enlisted member of the army supply chain was probably safer than not being in the army whatsoever - regular Joes got drafted.
Besides which, the geographical situation of the US means that a symmetrical war is largely going to be an air/sea sort of deal. Canada's effectively part of the US in economic and mutual-defense terms, and Mexico isn't much help either. Mexico doesn't have the geographical and industrial resources to go toe-to-toe with the US on their own, the border is a bunch of hostile desert, and getting supplies into Mexico past the US navy and air force is problematic.
Yes, and in particular it'll involve enemy drones. Drone operators are likely to be specifically targeted.
That makes them safer, ironically. If your command knows that you're likely to be targeted and your contributions are important to the war effort, they'll take efforts to protect you. Stuff you down a really deep hole and pipe in data and logistical support. They probably won't let you leave, either, which means you can't get unlucky and eat a drone strike while you're enjoying a day in the park.
You're at elevated risk of being caught in nuclear or orbital kinetic bombardment, though... but if the war gets to that stage your goose is cooked regardless of what job you have.
Another bonus of enlisting: basic skills will be drilled into so thoroughly they will be fully into your System I allowing you extra executive function (thereby causing you to punch above your weight in terms of intelligence). Although, there is some ethical risk involved.
Evidence?
I'm not sure I would count that as “your income”, though in jurisdictions with easy divorces and large alimony it might be as good for all practical purposes.
Is finance higher E(money) than, say, a startup?
I would guess yes given the high startup failure rate.
There's a high failure rate in finance, too - it's just hidden in the "up or out" culture. It's a very winner-takes-all kind of place, from what I've heard.
Finance is diverse.
If you want to be a portfolio manager who makes, say, macro bets, yes, it's very much up or out. But if you want to be a quant polishing fixed income risk management models in some bank, it's a pretty standard corporate job.
Startups are shockingly diverse too. And despite the super-high failure rates I hear about, the group of friends I've been tracking the past 5 years or so seem to be doing pretty darn well, despite some of them having failures indeed.
I strongly suspect the degree of failure in startups correlates inversely with rationality skills (as it should) so rationalists should not be placing themselves on the same reference category as everyone else. Execution skills matter a lot too, but doing a startup has worked miracles for my motivation too.
Not from the expected-income point of view (we're not considering car dealerships and franchise eateries startups, right?).
Oh, dear. "I'm so smart that normal rules don't apply to me". What could possibly go wrong..?
Well Paul Graham has built quite a successful incubator apparently largely based on his ability to predict success of start-ups based on a half-hour interview.
Besides what gwern said, Paul Graham is a successful VC. The expected income of VCs is very different from the expected income of startup founders.
My point is that this is evidence that start-up success depends on ability more than luck.
I'm not sure how much the interviews add compared to the Y Combinator model of investing in a lot of startups very early on at unusually favorable terms, integrating with Hacker News, and building a YC community with alumni & new angels. (As far as the latter goes, you can ask AngryParsley why he went into YC for Floobits: it wasn't because he needed their cash.)
This isn't "I'm smart and rules don't apply". Smartness alone doesn't help.
But, to put it this way, if rationality training doesn't help improve your startup's odds of success, then there's something wrong with the rationality training.
To be more precise, in my experience, a lot of startup failure is due to downright stupidity, or just ignoring the obvious.
Also, anecdotally, running a startup has been the absolute best on-the-job rationality training I've ever had.
Shockingly, successful entrepreneurs I've worked with score high on my rationality test, which consists of how often they say things that are uncontested red flags, and how well-reasoned their suggested courses of action are. In particular, one of our investors is the closest approximation to a bayesian superintelligence I've ever met. I can feed him data & news from the past week, and almost hear the weighting of various outcomes shift in his predictions and recommendations.
In short,
I do understand this sounds self-serving, but I also try to avoid the sin of underconfidence. In my experience, quality of thinking between rationalists and the average person tends to be similar to quality of conversation here versus on YouTube. The problem is when rationalists bite off more than they can chew in terms of goals, but that's a separate problem.
What you say sounds intuitive to me at first, but as of now I would say that rationality training may boost start up success rates up just a little.
Here is some reasons why rationality might not matter that much:
People tend to be a bit more rational when it counts, like making money. So having correct beliefs about many things doesn't really give you an edge because the other guy is also pretty rational for business stuff.
self-delusion, psychopathy, irrationality, corruption, arrogance, and raw driven determination, have good if not better anecdotal evidence of boosting success than rationality training I think.
Well, at this point we're weighing anecdotes, but..
Yes! They do tend to push their rationality to the limit. Hypothesis: knowing more about rationality can help push up the limit of how rational one can be.
Yes! It's not about rationality alone. Persistent determination is quite possibly more important than rationality and intelligence put together. But I posit that rationality is a multiplier, and also tends to filter out the most destructive outcomes.
In general, I'd love to see some data on this, but I'm not holding my breath.
I agree that a more rational person has a greater chance, ceteris paribus. Question is, how much greater.
A part of the outcome is luck; I don't know how big part. Also, the rationality training may improve your skills, but just to some degree.
(Data point: myself. I believe I am acting more rationally after CFAR minicamp than before, and it seems to be reflected by better outcomes in life, but there is still a lot of stupid things I do. So maybe my probability of running a successful startup has increased from 1% to 3%.)
I question the stats that says 1% success rate for startups. I will need to see the reference, but one I had access to basically said "1% matches or exceeds projections shown to investors" or some such. Funnily enough, by that metric Facebook is a failure (they missed the goal they set in the convertible note signed with Peter Thiel). If run decently, I would expect double digit success rates, for a more reasonable measure of success. If a driven, creative rationalist is running a company, I would expect a very high degree of success.
Another thing much more common in rationalists than the common population is the ability to actively solicit feedback, reflect and self-modify. This is surprisingly rare. And incredibly vital in a startup.
Success at startups is not about not doing stupid things. I've made many MANY mistakes. It's about not doing things stupid enough to kill your company. Surprisingly, the business world has a lot of tolerance for error, as long as you avoid the truly bad ones.
What kind of social skills does that require? My impression is that this is the modern equivalent of court astrologer and requires some similar skills, i.e., cold reading.
Not much -- the usual ones for holding a corporate job (wear business casual, look neat, don't smell, don't be a weirdo). Quants are expected to be nerdy/geeky.
Not at all. Finance has the advantage of providing rapid and unambiguous feedback for your actions.
If you're trading yes, although the feedback is extremely noisy. If you're designing models not so much. Incidentally a lot of the quants I know are also good at doing Tarot readings, whether they believe the cards have power or not.
That very much depends on what kind of strategy you're trading. For example, HFT doesn't have problems with noise.
Yes, so much. Your model has to work well on historical data and if it makes it to production, it will have performance metrics that it will have to meet.
The other thing to keep in mind about failure rates is where you end up if you fail - what other careers you can go into with the same education. (In the case of startups, you can keep trying more startups, and you're more likely to succeed on the second or third than you were on the first. I don't know how it is in finance.)
I think a higher startup failure rate implies E(startup) > E(finance) since most people want risk-adjusted return
Not necessarily because of different barriers to entry.
In this context, what constitutes a "high IQ"?
Depends on how high you are aiming for. For a good investment banking position you need a high enough IQ to either get into a top 10 school or be in the top 10% of a school such as Smith College.
It's obvious how you get into law or medicine, but how does going into finance work?
For students at Smith College the normal path is you get very high grades and take some math-heavy courses, get a summer internship with an investment bank after your junior year of college which results in a full time job offer, then after 2-5 years you get an MBA and then get a more senior position at an investment bank.
Oh. Any way for people who've already graduated from college to get in, or is it too late at that point?
An MBA or masters degree in finance would probably help. I don't have much knowledge of more direct paths.