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Contrarian LW views and their economic implications
LW readers have unusual views on many subjects. Efficient Market Hypothesis notwithstanding, many of these are probably alien to most people in finance. So it's plausible they might have implications that are not yet fully integrated into current asset prices. And if you rightfully believe something that most people do not believe, you should be able to make money off that.
Here's an example for a different group. Feminists believe that women are paid less than men for no good economic reason. If this is the case, feminists should invest in companies that hire many women, and short those which hire few women, to take advantage of the cheaper labour costs. And I can think of examples for groups like Socialists, Neoreactionaries, etc. - cases where their positive beliefs have strong implications for economic predictions. But I struggle to think of such ones for LessWrong, which is why I am asking you. Can you think of any unusual LW-type beliefs that have strong economic implications (say over the next 1-3 years)?
Wei Dai has previously commented on a similar phenomena, but I'm interested in a wider class of phenomena.
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Comments (126)
These feel like stating the obvious, but maybe outside LW they wouldn't:
Maybe if you make a detailed scenario study of a world where all of these are true, you can find more indirect opportunities. All those drones should create a booming market for ultra-low power radar devices, for example. But that's hardly an LW specific idea. I think rationality mostly helps you reduce uncertainty about probabilities, but not necessarily into any particular direction. I suspect its main value might be that with greater certainty about how things that haven't happened yet will eventually turn out, you can more confidently think another step ahead and take opportunities that other people aren't sure will even arise.
Personally, I expect this "market" to remain irrational for longer than I expect anyone who bets against it to remain solvent.
It's hard to short universities :-)
I expect the market to bifurcate with the top tier maintaining its ability to commandeer outrageous prices, but the bottom tier either reinventing itself or going bust. Harvard is fine, a fifth-tier law school in South Dakota is in deep trouble.
You can short this one.
My first reaction on looking at the plot on the right, before reading the labels on the x axis, was ‘it looks like the impending doom is probably already priced in’.
These are very good suggestions; thank you for making them.
Is this a LW consensus? I know Thiel believes it, but if you follow a Caplan-style signalling model it's not clear we won't end up in a Peacock like race for more and more education.
There very little real consensus on LW. On most subject you do have a few people who are contrarian on LW. On the other hand many people on LW think that's the case.
Genetic engineering for intelligence will be a game changer. I don't know when it will start, but as soon as we can reliably produce children with, say, 130 or above IQs markets will anticipate higher future economic growth.
My initial reaction was
But then I actually worked it out in excel and the NPV triples. So thank you for the good suggestion!
Given the current political climate, I think it's likely that those children will be first born in non-Western countries.
My money's on China.
Given the theme of the thread I must ask: in what exact way? Chinese Stocks? Australian Commodities? Currencies? Short Taiwan?
我决定读中文. So technically I guess I invested my time, not money.
Good answer, one I hadn't thought of.
I hardly think that's a consensus view. The timelines simply don't match up. In the generational lead time it takes to develop genetic engineering for intelligence, we'll have the tools (medical nanotechnology) to do the same in any human.
I don't see why that would be true. The GWAS and embryo selection approach is basically atheoretical and can affect intelligence at all points in life: you take millions of variants, run a giant regression, and select embryos based on the regression score. You have no idea what each variant does, why it does it, when it does it, or how; all you know is that it seems to increase scores a little bit. And you can do this approach in the complete absence of any understanding of what a brain is or a neuron is.
We will? So the biologists will be able to reverse-engineer the thousands of relevant variants, figure out exactly why they work, and then we'll be given nearly-magical nanobots which don't come close to existing right now which will be able to implement each variant?
Even if we had those nanobots, why would you expect that to work? Aren't there lots of possible changes to intelligence which only work in a narrow developmental window and ideally start at conception? For example, iodine: giving people iodine as adults seems to do zilch for increasing intelligence (once a cretin, always a cretin). How would medical nanotechnology fix that?
I said generational lead time because each iteration takes... one generation. If such procedures were enacted today, the first kids won't be educated and having an impact in the workforce until ~25 years from now. I personally rate a better than 50% chance that molecular nanotechnology capabilities will arrive sooner than that.
And what do you rate that each of an estimated 10,000 different genetic variants with different effects at different developmental windows will have been reverse-engineered by biologists/neurologists to the point where they can be safely applied to healthy humans and pass long-term clinical trials, especially given that the variants have to be found first and are applicable immediately to embryo selection if anyone wants to?
I think that's absurdly optimistic a view about the speed of applied medical therapies.
That's entirely not necessary when you have the tools to go in there and make targetted changes. In a post-human world, genetic code means very little.
We can make 'targetted changes' in adults' iodine levels. It doesn't do anything.
True, but if it were a consensus it would already be reflected in financial market prices.
Possibly, but this would give us even more economic growth.
You may as well test an idea before trading on it, e.g. gather data about gender composition of a company + profitability, run a simulation, and see if someone trading based on this idea could expect to make money. One idea I've had is reading the Glassdoor.com reviews of what it's like to work at a company and trading based on those... I'm not sure to what extent the smart money is already taking that info in to account or whether it would have any predictive validity.
Regarding the efficient market hypothesis:
It is mostly true for large, liquid markets, at times when you do not have any insider information.
The less liquid the particular market you are looking at, the less true it is. That is, if a $100 bill is lying on the ground in a place where people dont look very often, it very well could stay there for a while, and you might have found it first if you were looking.
And if you do have insider information, that is, you know about or understand something that most of the market participants do not understand, then you might very well discover opportunities to beat the market.
A concrete example of how markets are imperfect, and the efficient market hypothesis is not a 100% true rule:
On monday afternoon, Patrick Byrne, CEO of Overstock, gave a speech in Vegas in which he announced that Overstock was partnering with Counterparty (an altcoin), for their attempt to develop a blockchain stock market.
I saw this information very shortly after it happened, and I could have immediately gone and purchased some Counterparty. But I didnt.
One hour later, Counterparty was up 40%, and I thought: well, I shouldve bought! But I guess it is priced in now. After all, the efficient market hypothesis!
Six hours later Counterparty was up 150%. (This was an overshoot and it has since settled to being up about 100% from the announcement).
It took the market close to 6 hours to account for an announcement that was made at a conference, and was posted about all over reddit and bitcoin related sites. There were essentially a whole bunch of $100 bills lying around on the ground, and it took a number of hours and a whole lot of people looking at them before they were all picked up.
It is plausible that a few LessWrong readers have information which would let them create a portfolio which would, on average, perform better than the market. For the large majority of us, though, knowing about overconfidence bias and the law of large numbers should be enough to convince us that putting most of our savings in an index fund is a good idea.
Although everything in this comment seems correct, it also seems to be missing the point a bit. Not all investment is equity. Any of us might be in a position to notice an asset is considerably undervalued.
The old saw about two economists seeing a $50 on the ground and dismissing it as impossible since if it were, someone would have picked it up, is illustrative in this case. The underlying point is broadly correct, since you don't often see fifties lying in the street, but when you do actually see $50 in the street, you don't just leave it there. Sticking with this analogy, by my reading, the OP is suggesting that LW readers go down some unusual streets without a lot of foot traffic, where stray fifties might not have had the chance to be picked up.
You need to distinguish between (1) the beliefs people hold for social/political reasons and (2) the beliefs people hold for actually making decisions when important personal interests are at stake.
I doubt anyone seriously believes this in the second sense.
That said, my personal belief -- in the first sense -- is that we are moving more and more towards a "winner take all" economy. As an extreme example, if Google were to invent GAI, it could easily end up being far more valuable as a company than all other companies combined. Partly for this reason, I am invested in a market index fund on the theory that there is a pretty good chance that either (1) one of the 500 biggest companies will hit with the Next Big Thing; or (2) one of the same biggest companies will scoop up and acquire whatever startup comes up with the Next Big Thing.
I guess that's not a contrarian view, but there it is.
How would you tell?
Especially gives that higher percentage of women in leadership position at companies is correlated with more successful companies as the McKinsey data shows. McKinsey speaks about the value of diversity and not directly about the pay of individuals but it still seems pretty much on the mark.
I think that's a good question. For one thing, you don't really see people starting businesses aimed at taking advantage of this supposed pay differential. You wouldn't even necessarily need to discriminate to do so, just offer wages low enough that it's primarily women who end up working for you in a traditionally male dominated field.
Where are inexpensive lawn care companies, exterminator companies, auto garages, etc. which make a killing by relying on female labor? You never see them. Even in trades which are more balanced, like law and medicine, you don't see it.
When a belief is floating around, and pretty much nobody is willing to bet their own money on it, it's reasonable to think that the belief falls into the first category, i.e. it's a belief people hold for social/political reasons.
Also, it's pretty obvious just from simple observation that female workers are less willing than men to take on work which is dirty, dangerous, risky or demanding, and more likely to absent themselves from work or even quit over child care issues. In my experience, people who complain about supposed wage gaps generally give short shrift to or even ignore these types of common sense observations. When people ignore common sense and obvious facts that contradict their beliefs, it's reasonable to conclude that those beliefs probably fall into the first category, i.e. those beliefs are held for social/political reasons.
In McKinsey you do see a top management consulting companies coaching companies to take advantage of the opportunity.
People can't effectively correct for the hindsight bias if you tell them to correct for it. The same thing is likely true for a lot of people inherent sexism. They might think that they are accurately assessing the skills of woman but are blinded by their own sexism.
In law it's important that the client judges the lawyer as high status. A law firm might hire based on the advantages the get because their clients prefer to be represented by males.
Would you mind quoting McKinsey where they urge companies to do this? Also, what percentage of entry level McKinsey consultants are female? If McKinsey practices what you seem to claim that it preaches, I would expect it to be at least 80 or 90%.
I doubt that's true, but assuming it is, it only supports my position -- it's for social/political reasons that people adhere to the belief that women are underpaid; when they make decisions which have a big impact on their own interests, they are sexist (by hypothesis).
Anything is possible, but you see balanced hiring even in low end insurance defense law firms which just crank out billable hours. In any event, when you look at industries where status isn't very important, for example messenger services where people just want the package delivered, you still see male domination.
By the way, do you agree with me that it's pretty obvious just from simple observation that female workers are less willing than men to take on work which is dirty, dangerous, risky or demanding, and more likely to absent themselves from work or even quit over child care issues? And do you agree that people who complain about pay gaps tend to manifest little attention to this very important fact? If so, what do you think is going on in their heads?
Selling status is a huge part of the consulting business, especially for a company like McKinsey. I find it quite likely that women are less effective (in most modern-day business social environments) at producing the sort of status signals that McKinsey sells, even if they are equally effective at less status-driven tasks, such as writing software or delivering packages.
Based on my knowledge of the industry, I would guess that 60-70% of entry-level consultants and 80-90% of partners at McKinsey are male.
I agree with this, particularly if "effective" includes "interested." But the interesting question is what McKinsey thinks about all this.
I would probably agree with this too. And that a lot of the women in these numbers receive special incentives like less demanding schedules. But again, the interesting question is what McKinsey thinks about this. What would they say if they were accused of discrimination?
Edit: For kicks I looked at the McKinsey web site for the city where I am located (New York). The site lists some 25 senior managers. Based on the photographs, 4 of the 25 are female. So it looks like your estimate was right on the money.
http://www.mckinsey.com/global_locations/north_america/northeast/en/our_people
Again the question: How would McKinsey respond to the observation that 84% of its senior management in New York is male?
The alief vs. belief distinction might be useful here.
And Moldbug::Optimates are less willing than Moldbug::Helots to take on work which is dirty, dangerous, risky or demanding, and yet the latter are usually paid less.
Can you point to a definition of "Moldbug::Optimates" and "Moldbug::Helots"?
“Castes of the United States” on Unqualified Reservations (unlike most posts on that blog, this one isn't very long).
(There are similar groups here in Western Europe too, but most Helots here come from North Africa and Eastern Europe; also, Brahmins tend to be unwilling to do dirty, dangerous, etc. work too.)
Thank you. From reading your definitions, I gather that "optimates" tend to be born into money and status and tend to be very well connected. I agree that these people, regardless of gender, tend to shy away from jobs which are dirty, demanding or dangerous but due to their wealth and connections tend to be very well compensated anyway.
(Actually that's not totally true, I would guess that a non-insignificant percentage end up in demanding jobs and that group is predominantly men.)
But does any of this contradict anything I have said?
The fact is, I sometimes see Dark Enlightenment types making the point that men do a disproportionate fraction of the Real®™© work whereas women mostly do bureaucratic busywork, and therefore yay men, boo feminism, without seeming to notice that the same thing applies to immigrants and therefore yay immigration, boo borders.
OTOH I'm not sure I've actually ever seen the same person making that argument and also oppose immigration (unless you count trolls like James A. Donald), so maybe I'm committing the Muhammad Wang fallacy as a result of the outgroup homogeneity bias.
(BTW, in my country, people whining that immigrants are stealing their children's jobs when there's no way their children would be willing to do the kind of jobs immigrants tend to do for the kind of pay immigrants tend to accept are so common that Poe's law applies to them. And here in Europe, thanks to (among other things) cheap tuitions, you don't need to be an Optimate for your children to be a tenured student.)
Well, these days a lot of the former aren't paid at all and are living in their parents' basement.
Deciding that your hiring manager suffer under a bias that makes them discount the expertise of women alone isn't enough to hire more capable women.
You confuse two issues: (1) Do people really believe that women are underpaid. (2) Are women underpaid.
In this discussion I argue for (1) and in general I'm agnostic about (2).
I don't see anything in that quote which makes the "save money by hiring women" argument. Indeed, if that were the argument, it would not be limited to "senior management roles." So it seems that the McKinsey study does not contradict my position.
Incidentally, if you had to bet, would you guess that McKinsey entry level consultants are primarily female? I would guess that they are not. What do you think?
Also, do you agree that, at a minimum, non-status-oriented businesses seem like messenger services, pest control companies, and auto garages don't seem to act as if they believe that women are underpaid?
No, you did not read my argument carefully. My point is that that those who argue that women are underpaid have a tendency to ignore clear, simple, common sense evidence against their position. That's a red flag that they are adhering to their beliefs for social/political reasons.
Last, do you agree that if people make personal economic decisions act out of sexism of which they are unaware, then regardless of whether that sexism is economically rational, one could say that probably they do not believe women are underpaid in the second sense I described?
I can believe that most humans are victims to the hindsight bias and still fail to correct against the bias. The mental bias literature frequently demonstrates that knowing about a mental bias isn't enough to avoid it.
I would say that a person can believe that most people suffer from hindsight bias in the second sense you described and still fail to correct for hindsight bias.
Umm, does that mean yes or no?
Also, why do you keep ignoring my question about entry-level McKinsey consultants? I'm willing to bet a modest sum that McKinsey is NOT choosing to reap the supposed cost savings from hiring primarily women.
Also, do you agree that your quote from the McKinsey study is NOT arguing to "save money by hiring women"?
Again, does this mean yes or no?
A big company can't simply have a stated policy: "We hire primarily women or we hire primarily men." A CEO can tell the HR department. There's a bias that makes you undervalue women, please correct for that bias.
A would consider a CEO who does such a thing to be honestly holding the belief that women are generally underpaid. On the other hand that doesn't mean that you see the company having 90% women as entry-level positions.
While I don't think McKinsey hires primarily women I do think that they have processes in place to increase the number of women they are hiring.
Would be interested to dig into the details of this. Do you have a reference?
Edit: never mind, saw this in your other comment.
Invest in Quixey when they go in for the next round of funding, perhaps.
Interesting idea. Presumably one would have to be an accredited investor to do so?
Yes, I think so. Something I won't be able to do as a non-US investor.
I suspect that the effect, if real, is likely small enough to be masked by confounders, like CEO competence, market conditions, various other biases of the executives and the board,random chance etc. I wonder if any statistics exist on the matter.
Given that MIRI and CFAR are still struggling to get enough funding despite presumably employing the most LW-rational people in the world, I severely doubt that LW rationality has "strong economic implications".
Regarding statistics: http://thinkprogress.org/economy/2014/07/08/3457859/women-ceos-beat-stock-market/ links to quite some.
The economic implications of reading LW should be put somehow on the census. Human resources is something the rationality cluster has a lot. Imagine people being paid for insights they put here.
Isn't nearly any organisation struggling at attracting more resources?
Not really. Many large well managed corporates literally have more cash than they know what to do with. If you look at cash and very liquid short term cash like debt instruments as a percentage of total corporate value it's as high as it's ever been.
True, but "resources" is much more than cash. I think the bottleneck resource for large well-managed corporations is finding enough smart talented motivated people who get shit done.
I think actually it was higher in the '50s. Corporates had extremely conservative balance sheets in those days, with lots of treasuries. But we're certainly at high levels by the standards of the past 40 years.
A related thing that came up in a discussion recently:
When I first found out about Bitcoin (~2010) I thought it was exceedingly clever and technically interesting, but then I put on my Monetary Theory goggles and concluded that as a currency it was subject to deflationary pressures, with a long-term trend towards appreciation. I then took off my Monetary Theory goggles and, I dunno, made a sandwich or something, when what I should have been doing was buying a quantity of Bitcoin below a certain regret-threshold face-value. I now consider this an object lesson in taking ideas seriously.
What was the lesson?
The Big Theory only told you about the long-term behavior of the currency. Four years is not the long term! It applies just as much today as it did four years ago. What has happened in the interim, the thing you regret, has nothing to do with that Idea and everything to more people hearing about bitcoin, and maybe a bit to do with black markets. The only lesson I can draw from this is that if you think something is clever and technically interesting, other people might, too, which seems to be opposite from the lesson you draw.
You're right. It does apply just as much today as it did four years ago, but the buy-in hurts a lot more.
The lesson is to not interpret my beliefs as some abstract, god's-eye-view observation with no real-world consequences. Instead of answering the question "should I buy some Bitcoin?", I answered the question "is Bitcoin the flawless transcendental currency that its proponents claim it to be?" and let that guide my decision on whether to buy Bitcoin.
I obviously have this irrational in-hindsight regret of not whimsically buying a massive pile of Bitcoin in 2010, then selling them in early 2014 and rolling around in a big pile of cash, but I didn't have any good reason to do that. A more pertinent regret about my past actions is that I had a good reason to buy dirt-cheap Bitcoin when they were dirt-cheap by my own material standards, rather than simply dirt-cheap by the standards of history. I didn't act on that good reason and I should have. Even if the currency crashes into oblivion tomorrow, I'll maintain I should have.
Usually the beliefs are impossible to put into practice because of legal constraints like rules against discrimination.
Off the top of my head:
That's true of some of the beliefs yes, but not of all. For example, many socialists believe (or at least used to believe) that large organizations (states) could efficiently allocate resources across a wide range of industries, without making much use of market prices. If you believed that, you might like to invest in conglomerates (which many investors dislike because they think conglomerates are bad at capital allocation across industries) and vertically integrated firms (which make less use of market prices of intermediate goods than non-vertically integrated firms).
Thanks for the direct suggestion! The former would have direct relevance for venture capitalists.
I am astonished that after 105 comments, cryonics had not yet been mentioned. Very long term investments with compound interest plus a cryonics policy that works seem like a pretty simple formula for acquiring enormous absolute (and potentially even relative) wealth.
According to gwern,
Thanks for including that. This suggests the idea that you could profit off of looking for places where discrimination is greatest and going against the trend. This seems socially valuable too (assuming you're not capturing all of the gains for yourself, which you probably wouldn't be). Gwern, if you're reading this, do you remember which company this was?
ETA: Found some references:
It Pays to Hire Women in Countries That Won’t (HBS)
Profiting from sexism (Economist)
Not offhand. I believe I read it in the K-blogosphere, a mention of a legal firm or something white-collar like that which made a point of hiring women because South Korea is extremely sexist. I probably excerpted it to my Evernotes, but it'd be buried in thousands of other clippings mentioning Korea.
Oh, once I found the linked articles I assumed what you'd read was about the same study. Do you think it was something independent of that?
Yes, those two were anecdotes, not studies. I wouldn't be surprised in the least bit if there were studies pointing the same way, though, but I've never looked: the point is obvious enough that it doesn't really need to be argued for.
Did you miss this (from the HBS link)?
"Employing women who are excluded by their own countries' labor markets is a growing trend for firms with international branch offices, says Harvard Business School professor Jordan Siegel. He discusses the issue in a new study titled "Multinational Firms, Labor Market Discrimination, and the Capture of Competitive Advantage by Exploiting the Social Divide", which he co-wrote with Lynn Pyun of MIT and B.Y. Cheon of Hanshin University and the Korea Labor Institute."
Edit: Oh, or did you mean that what you'd read before was just anecdotes?
That. http://www.hbs.edu/faculty/Publication%20Files/11-011_512c2b3a-2df5-41f9-a4ec-99af4716ba5f.pdf sounds interesting though.
Yup - exactly.
Note though that Greenspan did this a very long time ago. It's plausible that the feminists were right and the market was inefficient decades ago, but they are wrong and the market is efficient contemporaneously.
106 comments so far and the word "artificial" (as in "artificial general intelligence", AI, or AGI) hasn't come up!?
As near as I can tell, if someone gets AGI to really work properly (and get even a not-very-explodey sort of intelligence explosion, just exponential curves with double times of months or years), it is likely, in the span of years to decades, to become worth more than the entire present value of the economy of the planet. How can this not be an investment opportunity?
Also I appreciate the way you incremented the count, and expressed implicit minor surprise that your previous comment did not mention AGI!
Perhaps it is in part due to my suggestion of a 1-3 year time horizon. But it is plausible that it could be discovered in 1-3 years.
Do you have suggestions on how one would invest on this thesis? (Invest in land and commodities? Or Google???)
For what it is worth, I started working at Google about five months ago and am legally classified (as are all of Google's full time software engineers) as an "insider". Thus: no comment :-P
McKinsey did find that companies with a higher percentage of female outperform their competitors. But it could simply be that more forward thinking companies hire more woman. It's difficult to estimate to what extend those factors are currently priced into stock values.
If the leadership of companies would learn CFAR style skills those companies would perform better.
Experts who get feedback on the prediction they make perform better so companies should put structures into place where their leadership makes data based decisions and get's feedback. You can pay out bonuses by giving employees chips for the internal prediction market of the company.
I mentioned this elsewhere in the thread, but I thought I would point out here that I checked the McKinsey web site for the city where I work -- New York. It seems that 84% of the senior managers in New York are men.
http://www.mckinsey.com/global_locations/north_america/northeast/en/our_people
I also checked their web site for California, it seems that roughly 80% of the senior managers are men:
http://www.mckinsey.com/global_locations/north_america/west_coast/en/our_people
Ditto for the Southern office:
http://www.mckinsey.com/global_locations/north_america/southern/en/our_people
Bitcoin has been the answer to this question for the past 5 years and it is still the answer. It is the biggest disruption to the monetary system since we moved from bartering to using currency, and it is still in its infancy.
Oh dear <deity>, this sounds exactly like a penny-stock scam X-/
"RIGHT NOW" (in all caps, no less), "an amazing time to get in", "strong possibility", "can get in close to the bottom"....
Plenty of people on less wrong have heard about bitcoin for years now, and most probably have done nothing about it, and feel like they missed the boat.
Maybe people should think about taking it seriously for a bit, and actually consider whether it is a worthwhile investment.
I think it is far better for us as a community, ad for our collective ability to support effective altruism and the causes we believe in, if a lot of people here this advice at a time when bitcoin is relatively low, than that they get interested at a peak when all of the media is talking about it.
Same is true for Microsoft, and Apple, and Google stock, for example -- a lot of people feel they missed the boat on those. Funny how the wish of having bought AAPL at the bottom sticks in the mind, while the memory of people bankrupted by the dot-com crash, for example, doesn't. You could almost think that there was some... bias there?
Sure. Care to make a case for it? With numbers, please. Most of bitcoin promotion that I see is generally based on the greater fool theory.
Here were the numbers that I used to decide to buy up until the spring of 2013 and start selling last fall.
I sold more than half of my holdings last fall/winter, but I'm still holding a bunch while I wait for the Winklevoss twins to get their ETF approved and for enough exchanges to be set up around the world to enable the remittance use case to really take off (once neither the sender nor the receiver needs to hold BTC).
Once those things either happen or seem like they're not going to happen, I plan to sell a large portion of what I have left and then keep a bit in reserve just in case one of the truly crazy scenarios referenced in that reddit comment comes to pass.
Labor costs are already reported, and if it was known that a company was particularly efficient in the labor market, that'd already be factored into its price and performance expectations, regardless of the cause.
http://thinkprogress.org/economy/2014/07/08/3457859/women-ceos-beat-stock-market/
Market rationality isn't. The fact that if you made an index fund of only female-lead companies it would beat the pants out of the market has been been known for a really long time and still hasn't been arbitraged away. 30 years or so of traders just leaving money on the sidewalk because of testosterone poisoning. Traders are under much greater pressure to not do this than the average employer, so, no, it's perfectly possible that "hire women until you are at risk of being sued for gender discrimination due to your 93 to 1 ratio of females to males, pocket wage savings" would be a winning business strategy. ..
Except, near as I can tell, wages are pretty darn causative of productivity. Yes, causative. Not correlated. Pay people more, and management will find ways for them to produce more. Pay people peanuts, and suddenly, "Go sweep the warehouse with a broom" doesn't seem like a stupid waste of employee time.... This isn't what is in your economics 101 text book? Well, consider where the industrial revolution took of, and what was special about that time and place. It wasnt coal or literacy of technical expertise. China had that in abundance for thousands of years. It was all that and high wages So women who are paid 80% of what a man is, might do 80% of the work, but this is pretty darn likely to be down to the pay, rather than the chromosomes. Or maybe they do 120% of the work and don't get hired anyway. Certainly, this holds in some fields.
I don't believe that, and you lay out exactly why one should not believe this claim for an instant: you seriously think that in the the $2.4 trillion+ hedge fund industry - stuffed full of the smartest hungriest slimiest most ambitious money-hungry people, men and women who would sell their own grandfather if that would provide collateral for a juicy short, who would encourage their employees to break the law and throw them to the wolves if they get caught, who are worse friends than sharks because at least sharks' bellies can get full - that this entire industry would uniformly pass up almost doubling their return through a dead-simple legal strategy which would be discovered by their machine-learning algorithms even if they were blind to it - out of sexism? (How many Wall Street traders even know the gender of the CEOs whose associated hieroglyphics flash across their screens?) I have to say, you seem to have a much higher opinion of the moral principles of Wall Street than I do.
Having established that you are making an extraordinary claim which requires extraordinary evidence, let's take a look at your evidence.
A link to a piece whose opening centerpiece is link to an informal analysis ('Source: interactive data') in Fortune magazine in July 2014, which mention that there are now 27 female CEOs in the Fortune 1000 and that 'during their tenure' they had returns of 103% vs 70%. Problems with your claim I can spot just from the Fortune writeup (although calling an infographic a writeup is a bit generous):
Academic papers regularly try to find and show violations of EMH, but the more careful a paper is, the smaller the violations become, so they typically find only small ones and are often still false positives due to any one of the reasons I give above and there are far more ways to go wrong than that. A full-blown paper which takes countermeasures against all the problems I mention may have begun to earn some reasonable probability of being correct. It's a hard topic with many traps for the unwary, and some listoids or graphicles isn't going to cut the mustard. One can safely predict that any research showing excess returns to female CEOs will either turn in meaninglessly small effects which could be due to minor methodological issues or the effect will quickly shrink to zero when tested out of sample and especially after the paper is published... (I particularly like the bogus results caused by the database company providing the data retroactively editing the database to remove low-performers. Which is relevant here, now that I think about it.)
And why could English companies pay so much to workers? Because of high productivity. Maybe you should go reread Clark's papers. Not that one can attribute the IR to simply 'high wages', which is a consequence, not a cause...
Good point.
On the other hand, the 'true', underlying normalised cost structure of a business is often unclear. If a business had a lower wage cost, and higher costs due to transient factors, you could bet that those transient factors would mean revert. But this is perhaps a relatively minor factor.