The Oregon Brewers Festival as an Example of Status Hierarchy Gaming

Two friends recently attended the Oregon Brewers Festival, a favorite of beer lovers, and one of them complained along the following lines: "I'd really just like to try some good IPAs, and this is all weird experimental sh*t." I had noticed the same effect in the San Diego brew scene in the last few years. People can have their wasabi beer and horchata beer and though it's all fun in conception, a lot of it doesn't work in execution; but sometimes it does, and you get an innovation. At the same time, one wonders what drives "innovation" to the point where brewfest attendees are complaining that the brewers, rather than try to make the best (stout, lager, IPA, etc) that they can - they make psilocybin-kim chee beer with yeast exposed to Fukushima radiation (or something). Here I argue that this is in fact a symptom of a broader trend in modern culture and the U.S. in particular.

Note: I came up with kim chee beer off the top of my head, and then realized that if I thought of it that easily, it almost certainly already existed. So then I looked it up. Bingo.

It's hard to make even a marginal improvement on an established type of product, beer or otherwise, and that's true not just for beer but for all commodities, commercial, art, whatever. Why is this happening? 3 possibilities.

1) Brewers do this for rational commercial reasons. That is to say: everyone makes an IPA. No one else makes Fukushima kim chee beer, and people who buy it will remember that. In addition to the branding benefit, right away these brewers have a monopoly on this beer and therefore could seek rents, bestowed (at least temporarily) by a unique product rather than some other type of product protection. However people would have to make a regular habit of the Fukushima kim chee beer, and most of these aren't sustainable, so this mostly reduces to the kim chee beer as a loss-leader getting you to buy their IPA.

2) It's high status for brewers to be seen as making something novel, even if that novelty isn't a beer that people would drink more than once. Similarly I once got garlic ice cream and jalapeno ice cream. I never got it again, but I remember the place where I got both of these, and would go there again for ice cream.

3) Most interesting in terms of cultural criticism - people are (again) seeking high status by gaming the status hierarchy - that is, not by misrepresenting themselves, but by creating a whole NEW status hierarchy, or at least a sub-hierarchy. Consumers do this all the time, defining themselves in multiple overlapping status hierarchies usually based on what they consume (and how that defines their identities, because it's easy) vs what they produce.


The concern for #3 is that if brewers are so desperate to escape being not-#1 that they produce weird beer that no one drinks rather than make a just-as-good IPA (or not even quite as good as their neighbor, but still solid), then one wonders where else in the economy that quality of life and value-production is suffering due to the same effect.


I don't include "boredom" on the list above, because that would imply that these brewers have already mastered a standard type of beer, and I doubt that's the case.

Fixing the Clinical Trial System

This is cross-posted at my cognitive science blog.

The President's Council of Advisors on Science and Technology has released a report stating that our current clinical trials system is inefficient at producing new medicines for patients. No kidding! But it's at least a step forward for such a body to officially recognize that this innovation bottleneck exists. Here is one proposal for amending the system; it's not the only one, but this is a conversation that needs to be more prevalent.

Innovation and Education: A Reason for Slowing Growth?

A while back I argued that the increasing time to educate professionals able to create technical innovations (and therefore growth) could ultimate result in slowing economic growth. The Free Exchange blog at the Economist addresses this same argument. Curiously the piece also points out expensive San Francisco real estate and evidence for a face-to-face requirement for knowledge transfer (using patent metrics) - but these measures don't predict the future.

Expanding the FDA's Current Model to Other Industries?

Previously I asked whether it would be a good thing to have a software FDA - a central agency that made you go through a lengthy and incredibly expensive application process to determine if the code you'd just written was good enough and permissible to sell to the public. To most people, this sounds like a stupid idea - yet this is exactly what we have in medicine. The idea of course is to keep people safe, but there's a balance. Be too generous with approvals, and people will die from unsafe medicine.

This is why a former head of the FDA has suggested not doing away with the FDA entirely, but basing drug approvals on safety, and collecting data on efficacy after marketing.

This is no longer a thought experiment, although it's not software where we're seeing a proposed expansion of the FDA model. There is now a serious suggestion to have an FDA equivalent for financial products. Read more here.

Christine O'Donnell and Noam Chomsky: BFF

Here's a by-now famous quote about Delaware Senatorial candidate christine O'Donnell: "American scientific companies are cross-breeding humans and animals and coming up with mice with fully functioning human brains. So they're already into this experiment."

You don't have to be a biotechnology expert to sense that Ms. O'Donnell is perhaps not the best informed on these issues. Which is unfortunate, if you want a well-informed pro-business, pro-enterprise candidate. Until recently, in the U.S. the Republican Party filled this role. Unfortunately, barely two decades after the Reagan administration, its candidates are now much more interested in scoring populist points through fear than in defending American innovation. The GOP has candidates who frankly are starting to sound like the radical left. For years Noam Chomsky has been claiming that the American biomedical industry was evil because it did no real research, socializing risk and privatizing profit, a claim that the briefest contact with reality will immediately explode. But here comes Christine O'Donnell, parroting a similar line: that the biomedical industry is evil for doing the wrong kind of research. We're left wondering exactly what kind of research Commissar O'Donnell's scientific politburo would be willing to approve. Is this woman pro free-market or not? This is no time to be sitting on the fence, Christine. American industry has enough enemies without you piling on.

As you might expect, the kind of technical illiteracy that would lead someone to vote for O'Donnell and think they're improving America's business edge has more immediate and profound implications:

"...colleges in Russia, China, and even Iran [are] churning out an order of magnitude more programmers than universities in the US. It is only a matter of time...a generation at most - until our military loses its digital superiority." (From Douglas Rushkoff writing about digital illiteracy.)

If Christine O'Donnell wants to improve America, she should be doing everything she can to help "scientific companies".

A Different Model for Biomedical Risk and Innovation

One of the interesting things about the FDA as a government agency is that it largely seems to be trusted by Americans, and respected (if grudgingly) by the industry it regulates - possibly because its domain, medical science, is an area which requires non-fakeable technical expertise. Its "strange" respectability is highlighted in this book review.

J.S. Mill pointed out in On Liberty that medicine was a market ripe for failure, because most consumers of medicine are not in a position to evaluate its safety and efficacy. His observation presaged the problems that triggered the creation of the FDA (or its ancestor) in the early twentieth century: too many kids were dying from liver failure, brought on by the alcohol and ethylene glycol (antifreeze) that America's own witch doctors were using to sweeten their literal snake oil.

The drawbacks of having a central agency responsible for allowing the marketing of new drugs are several. First, like any agency, FDA is not immune to politics: for example, post-TGN-1412, scrutiny of any cytokine-interacting antibody increased to an almost paranoid degree (in corporatese this is known as a CYA). Perhaps more sinister on this count, it is often the case that a compound which receives marketing approval in its home market (where its developer is headquartered) does not receive it overseas (case in point, Paris-HQ'd Sanofi-Aventis and their weight-loss drug rimonabant, approved in Europe with a few side effects, and rejected in the U.S. for those same side effects. Coincidence?) Furthermore, all government agencies have limited resources, subject to the vagaries of central planning and economic swings. The decade began with an ominous trend in increasing approval times; this is the metric that individual biomedical companies care about. Much more alarming was the trend of decreasing numbers of new chemical or biological entities being submitted per year. This is the best index of overall biomedical innovation in a market and is affected not just by the agency but by the greater R&D environment of the industry - which of course, anticipates increasing conservatism in the agency that makes or breaks it, since you don't spend hundreds of millions chasing a compound that can't be legally marketed. Fortunately the NCE and NBE numbers are turning around; in 2009 there were 9 NCEs and 13 NBEs, compared to 1 NCE at one point in the mid-2000s.

It's important to point out that FDA approves drugs for a specific indication, not just for general sale, but that physicians are still allowed to prescribe them off-label. This creates strange pressures. First, the temptation for companies to actively market off-label is great. It's highly illegal, and highly lucrative (recent off-label marketing settlements in the last few years easily reach a half billion or more). More important is that this creates dangers for patients. Physicians have the authority to prescribe off-label at their discretion, and they often do, particularly with psychoactive drugs. While the companies that develop the drugs are obligated to produce general safety information, there are under no such obligations to produce safety information (much less efficacy) for off-label populations that physicians end up prescribing to, though they're stupid if they don't explore this as a potential new revenue source.

The point is this. By having an agency with such a structure - that approves drugs for specific indications - we create these pressures and these false senses of security (that off-label use is as well-characterized as the labeled indication). An agency that approved a drug only for safety, but not for efficacy, might be more beneficial to everyone. In other words, the FDA would require the company to label their drug as not harmful within certain dosing parameters, and contraindicated with certain other medicines. Since we're already trusting physicians to read NEJM and prescribe the drug on that basis, isn't this a far more efficient way to get drugs on the markets to patients who need it, without compromising safety? This discussion is a non-starter in the current administration but perhaps in a vigorous developing economy with a sense for social experimentation, we might see whether this would provide a greater good for a greater number; that is, increase innovation speed without increasing risk to patients. With ongoing drug research, overconservatism and the slowing of innovation is absolutely an ethical problem, because we can't forget the patients who haven't yet gotten sick.