Handle predicts a shakedown

Sunday, November 26th, 2017

Handle predicts a shakedown, and Arnold Kling sees it as a very plausible scenario:

That is, the capitalists will try to purchase respectability and pay off potential critics that could create real trouble for their businesses by buying ‘indulgences’ in the form of funding donations for certain prominent anti-capitalists, conspicuously and prominently towing the party line in public on the most important ideological commitments, and hiring the right number of the right people for cushy sinecures. If they show they are reliable allies instead of potential threats or rivals, and put enough money where their mouths are, and use their platforms, technological savvy, and expertise to help progressives win elections (e.g. Eric Schmidt wearing his “Staff” badge at Clinton campaign HQ), then in exchange, they will be left alone, and maybe even get some special treatment, favorable coverage, and promotion instead of demonization.

The thing about this shakedown tactic, Kling adds, is that it is like paying ransom in a kidnapping:

It relieves your problem, but it increases the chances that there will be other victims. In the case of a shakedown by activists, giving them hush money relieves our problem but it hands the group more resources to go and shake down the next corporate victim.

Handle has much more to add:

One additional thing to keep in mind is that the overall sector is not merely rich and prestigious and full of big juicy targets, but that many of the most important companies are fundamentally media outlets that have the potential to play gatekeeper roles regarding information and to use that power to influence public opinions and perceptions, or, in the alternative, to bypass the common gatekeeping that is characteristic of the legacy media institutions, or even to become rivals using a different set of standards for information filtering.

So ACORN can shake Freddie down for some hush money, and the progressive elites will support that effort as benefiting one of their coalition’s clients, maybe holding their noses a little, but otherwise whether or not it happens is not a very important issue for them. See also the “predatory loans” settlements.

But Twitter, Google, and Facebook and now the way social informational social points are broadcast, spread, and establishes, and have all kinds of way to subtle or overtly promote or suppress and generally have “jurisdiciton” over who can say what over their platforms. And, currently, none of that power is constrained by statute or the First Amendment or threat of civil liability, which means that power over information can currently be used in ways that circumvent any of the restrictions on direct state action. Amazon and Netflix and the rest are also media institutions to the extent they produce their own content and decide which content to host or not, or in the case of Amazon which services or pages to host. And of course many of these companies recycle and repackage and deliver the content of legacy media institutions, and so can have an enormous effect not just on that industry but to shape the ideological window of accessed messages. Also, Bezos bought the Washington Post for good reason.

If everybody is having their worldview and daily passions mediated by a few private internet companies which are also fundamentally media institutions that “curate” access to all the other media instutions, then it is absolutely clear to progressive elites that these companies pose both the greatest potential threat and greatest potential opportunity in a generation to propagate their views, agenda, and aims. That makes it absolutely essential they be strongly encouraged to get fully on board with the program as soon as possible, and be made to stay on board.

Occasionally, one is going to have to hang (or threaten to hang) an admiral or two pour encourages les autres and to let everybody know who’s boss and who can bring down whom if one strays too far from the path. The obvious thing that makes every technological company liable for demonization and even legal destruction is discriminatory employment practices. Those companies really can’t do anything about that sword of Damocles hanging over their head, and so they will be playing ball to whatever extent necessary to keep it in the air, hoping they will earn the grace of some prosecutorial discretion by so doing.

Now, this permanent prosecutorial threat is a terrific way to launder state action and have ideological regulation enforcement outsourced to private entities that aren’t constrained by the First Amendment or other rules. If non-progressives don’t grasp the overall situation soon and do something about it, then their futures will not be very bright.

Elon Musk is not a robot sent from the future to save humanity

Wednesday, November 15th, 2017

Over the course of nine months of reporting, Neil Strauss determined that Elon Musk is not a robot sent from the future to save humanity, but he may be the most successful and important entrepreneur in the world:

It’s an easy case to make: He’s probably the only person who has started four billion-dollar companies — PayPal, Tesla, SpaceX and Solar City. But at his core, Musk is not a businessman or entrepreneur. He’s an engineer, inventor and, as he puts it, “technologist.”

Most of Strauss’s piece is about Musk’s broken relationships — with ex-wives, with his recent ex-girlfriend, and with his “ruthless” estranged father.

Musk tries to do useful things:

Think of the other names that one associates with innovation this century: They’re people who built operating systems, devices, websites or social-media platforms. Even when it didn’t start out that way, the ideology in most cases soon became: How can I make my company the center of my users’ world? Consequently, social-media sites like Facebook and Twitter use a number of tricks to activate the addictive reward centers of a user’s brain.

If Musk’s employees suggested doing something like this, he’d probably look at them like they were crazy. This type of thinking doesn’t compute. “It’s really inconsistent to not be the way you want the world to be,” he says flatly, “and then through some means of trickery, operate according to one moral code while the rest of the world operates according to a different one. This is obviously not something that works. If everyone’s trying to trick everyone all the time, it’s a lot of noise and confusion. It’s better just to be straightforward and try to do useful things.”

He discusses building a permanent moon base, and further funding SpaceX by creating passenger rockets capable of traveling to any city in the world in less than an hour, a form of transport he calls “Earth-to-Earth.” I ask if there’s anything that he believes works that surprises people.

“I think being precise about the truth works. Truthful and precise. I try to tell people, ‘You don’t have to read between the lines with me. I’m saying the lines!’”

He enjoys the usual pop-culture geek favorites: The Onion, Rick and Morty, South Park, The Simpsons, and The Hitchhiker’s Guide to the Galaxy.

You probably can’t force the public to love you

Saturday, November 4th, 2017

Perhaps the best kind of advertising is the kind that doesn’t look like advertising, Steve Sailer suggests:

I’m biased, but I can’t help pointing out that lots of smart rich guys are investing more in opinion journalism than you might expect. For example, Amazon’s founder Jeff Bezos, who overtook Bill Gates as the world’s richest man last Friday, spent a quarter of a billion of his own money to buy The Washington Post in 2013.

Bezos claims it’s profitable, but profit and loss is hardly the point. His goal is to shape the climate of opinion in ways favorable to his interests, much as Mexican monopolist Carlos Slim bailed out The New York Times in 2009 with a $200 million infusion.

A bigger purpose is less to change minds than to rule out inconvenient ideas. For instance, Harvey Weinstein got away with decades of bad behavior by controlling the means of production of public sentiment.

You probably can’t force the public to love you, but you can spend money on journalists to make their readers sense that it’s just not done to hate you.

You might notice that you haven’t read a lot in the American press about how Slim made a bundle off charging impoverished illegal aliens exorbitant fees to speak with their loved ones back home in Mexico. Nor have you heard much about how Slim married himself into a genuine Fascist dynasty, the Gemayel clan, founders of the Lebanese Phalange party.

That’s not considered news. The American news media traditionally gets its guidance on what is fit to print from The New York Times, and the Times hasn’t been in a hurry to cause embarrassment to its largest individual shareholder.

Similarly, the U.S. media has in recent years been more interested in topics such as transgender rights than in former staples of debate, such as the need for anti-monopoly enforcement.

In Mexico, Slim was more or less synonymous with the Mexican state since the 1990s, when he offered a $25 million campaign contribution/kickback to the ruling party at the notorious “Billionaires Banquet.” But recently Slim had the misfortune to fall out with the latest presidente, who opened up the Mexican market to an American competitor, knocking tens of billions off Slim’s net worth.

Things could be worse for Slim. He is still the sixth-richest man in the world, in part because he hasn’t had these problems in the United States since investing in the Times eight years ago. Donald Trump always calls it “the failing New York Times,” but from the perspective of Slim, the newspaper is working quite well.

[...]

In summary, while Americans tend to believe they are natural-born advertising geniuses who could create commercials that would outcompete their opponents, the richest, smartest businessmen don’t believe in a fair fight. Instead, own a monopoly and then own a major chunk of the media to protect it.

It may (or may not) pay to advertise, but it pays to look like the news.

The greatest trick the advertisers ever pulled

Friday, November 3rd, 2017

We were just discussing whether advertising works, and now Steve Sailer wonders aloud, could advertising in general be over-advertised?

To paraphrase a Kevin Spacey movie:

The greatest trick the advertising platforms ever pulled was convincing the world that advertising works.

One unsettling possibility is that most everybody wants to be tricked into believing in the power of advertising. After all, we get shown all sorts of interesting things for free or low cost that we’d have to pay for if it weren’t a truism among hardheaded businesspeople that Advertising Pays.

I worked in marketing research for eighteen years in the late 20th century and helped write a couple of white papers on whether our internal data showed that paying for more television commercials would sell more supermarket products.

The firm I worked at had constructed the finest test-marketing laboratory in history.

(Even after a third of a century, I want to maintain a certain level of obscurity, so I’ll call the service BehaviorCheck.)

In the first half of the 1980s, BehaviorCheck was wildly successful at being hired by blue-chip makers of consumer packaged goods, such as, I’ll call it, G&Z.

When launched in 1980, BehaviorCheck was a science-fiction wish-fulfillment fantasy for marketers.

Brand managers had always dreamed of proving to their CEOs that if only they’d be given a bigger budget, their brilliant ads would move more product. And now BehaviorCheck was here to provide scientific proof about just how persuasive their ads were if only they were given a larger budget.

A BehaviorCheck test market was run in one or more of the eight small cities where our firm had bought newfangled laser checkout scanners for all eight to twelve supermarkets in town. In return, the grocers had their checkers scan the barcode ID cards of a couple thousand families we had recruited to share with us scanner records of all items they purchased. We then manipulated which commercials they saw on cable television.

In a typical test, G&Z would hire us for a year to show double the normal national level of ads for, say, Crust toothpaste to a test group of 2,500 households, and the regular level of ads to a control group matched for exactly equal toothpaste buying over the previous year.

But in the second half of the 1980s, clients started to complain that very few of our tests showed that increasing TV advertising by 50 or 100 percent would move the needle on sales at all.

In response, we did a couple of meta-studies summarizing hundreds of test markets we’d run.

Occasionally, we found, higher advertising did pay off, especially if you had news to share, such as that your chemists had actually invented a better ingredient. Dave Barry joked in 1988 about one new version of a product that really did benefit from higher ad spending:

The Toothpaste Manufacturers Association, which each year holds a contest to come up with a new repulsive dental substance for Americans to worry about (previous winners: “tartar” and “plaque”) announce that this year’s winner is: “scuzz.”

If you really had invented a scuzz-fighting toothpaste, it could definitely be worth your while to invest in alerting consumers about the menace of scuzz.

On the other hand, if you didn’t have any news to tell consumers, we didn’t find much evidence that you could cajole them into buying more just through the awesomeness of your advertising.

This is not to say that good advertising couldn’t help a new brand, but there tended to be diminishing returns once an identity was established.

For example, we did a long-running test for one famous product that had used the same slogan for so many years that the character who said the catchphrase was as identifiable to the public as Jimmy Carter.

While the control cell saw the standard level of advertising, one cell saw more and another cell saw less. There were no differences in sales among the three cells.

As the evidence piled up, I recommended to G&Z that they pay us to test cutting their advertising budgets. They could start perpetual tests with us to see if reducing ad spending hurt their products’ sales. If it hadn’t after two years, they could cut their commercials nationally. If in later years our forerunner tests picked up a long-term downturn, they could boost advertising nationally back to the original levels before any harm was done.

For $5 million in testing, they might be able to save $50 million (or even $500 million) in advertising. (G&Z currently spends about $7 billion per year on advertising in total.)

This logic seemed unassailable to me. But my contacts at G&Z explained that no brand manager had ever gotten promoted by cutting his ad budget. G&Z believed in advertising. To consider reducing commercials was heresy.

In short, Americans like to advertise.

Our assumption that somebody must have proved that advertising works is reassuring even if nobody can remember the exact details.

We’ll all end up with extended warranties and after-market undercoating

Thursday, October 26th, 2017

We are witnessing the collision of two megatrends that have permeated our daily lives — the widespread use of video, and persuasion:

The appeal of Khan Academy is immediately obvious to anyone who has encountered barriers in learning, like taking a college class taught by a graduate teaching assistant for whom English was a second language. The website has helped my children for years.

But there are other messages that people want to put in front of us, many aimed at separating us from our cash.

I recently bought my younger daughter a used car. Her current ride, a Ford F150 4×4, had developed rust, which never ends well. So we quickly found a replacement. (Yes, it’s another F150 4×4, but it’s what she likes.)

I wrote a check for the difference between vehicles, but still had to sit down with the dealer’s finance manager.

At one point my daughter asked about the thick, black device that he seemed to be using as a desktop. He told us it was a computer monitor and cost $18,000, and that a third-party sold it to the dealership, not the parent company automaker.

When operational, it will display the different things consumers can add to their car purchases, like warranties and dealer add-ons.

I thought about this, and asked if the display simply showed documents, or video? He answered the latter, and that all buyers will be required to watch it.

Bingo.

Now I knew several things.

The dealership had contracted with a third-party to provide a presentation for each after-market possibility, like warranties, that had the highest probability of success. There’s no doubt that such video presentations, like candidate Trump’s election musings and the videos on Khan Academy, are full of the persuasive language described by Scott Adams.

I’m also certain that this language has been tested in focus groups and used in beta-test situations nationwide to prove its effectiveness. Why else would a dealership shell out almost $20,000 for a display system that will do the same thing the finance manager is supposed to do?

I explained to my daughter that the point of the system was to guarantee that the selling process had the highest chance of success, and to ensure that it wasn’t left to the skill level and whims of each finance officer.

I also told her the eventual goal was to cut headcount, which reduced payroll. I said all of this as we sat with the finance manager filling out forms.

He assured me there was no way to get rid of finance people. The dealership was much too busy.

Those were famous last words from a guy who never presented me the option of an extended warranty on a used vehicle.

That screen, and those videos, are intended to replace him and persuade me.

Technology is bringing the best sales techniques to every situation.

As consumers, if we don’t continually educate ourselves on what we need and what we can decline, we don’t stand a chance.

Meaning we’ll all end up with extended warranties and after-market undercoating.

Give support and encouragement to competent people who have ideas they want to try out

Wednesday, October 18th, 2017

Techniques of Systems Analysis reminds the Systems Analyst to take technical estimates for complicated systems with some skepticism if not cynicism:

The best that can be done is to push the state of the art in a whole series of component fields, give support and encouragement to competent people who have ideas they want to try out, be on the alert to extract by-product and bonus values and, most important of all, examine the programs as a whole to see if they are complete. The Systems Analyst should especially concentrate on the last two things. After all, almost everyone else is tied up with either specific projects, administration, budget crises, or congressional investigations. In some cases, he is just about the only Indian who can spend full time looking at the broader aspects of a program. What is also important, he often has a full-time and technically competent group of associates to help him look.

Nobody should object to buying insurance even if he doesn’t have a fire

Monday, October 16th, 2017

Development projects provide options, Techniques of Systems Analysis emphasizes:

We often hear statements that the major reason for doing a Systems Analysis is that development programs are so expensive and it is crucial that none of them be wasted; therefore, all development programs should be tied into a system, designed as a whole. Nothing could be more wrong. Development people have a saying, “It may or may not be a mistake to develop something which is not procured, but it is always a mistake to procure something which is not developed.”

The most important thing the Department of Defense can do is see to it that we maintain a great deal of flexibility in our capability and have available a great variety of on-the-shelf items to meet a variety of contingencies. This ordinarily means that many of our development projects will never reach the stage of large-scale procurement. This may create very difficult relations with both Congress and the public. The problem has to be faced directly and preferably adroitly, but it is a mistake to cut back on potentially valuable development programs just to prevent possible criticism in the event they do nut turn out to be needed. Nobody should object to buying insurance even if he doesn’t have a fire.

What would this look like if it were easy?

Thursday, October 12th, 2017

What would this look like if it were easy?, Tim Ferriss likes to ask:

It’s easy to convince yourself that things need to be hard, that if you’re not redlining, you’re not trying hard enough. This leads us to look for paths of most resistance, creating unnecessary hardship in the process.

But what happens if we frame things in terms of elegance instead of strain? In doing so, we sometimes find incredible results with ease instead of stress. Sometimes, we “solve” the problem by simply rewording it.

So, Tim “easily” wrote his next book, Tribe of Mentors, by sending his usual questions (and a few new ones) to a list of dream interviewees:

After hitting “send” dozens of times, I clasped my hands to my chest with excitement and bated breath, to which the universe replied with… silence. Crickets.

For 12 to 24 hours, nothing. Not a creature was stirring, not even a mouse. And then, there was a faint trickle through the ether. A whisper of curiosity and a handful of clarifying questions. Some polite declines followed, and then came the torrent.

Nearly all of the people I reached out to are busy beyond belief, and I expected short, rushed responses from a few of them, if I got any at all. Instead, what I got back were some of the most thoughtful answers I’d ever received, whether on paper, in person, or otherwise. In the end, there were more than 100 respondents.

Granted, the “easy” path took thousands of back-and-forth emails and Twitter direct messages, hundreds of phone calls, many marathons at a treadmill desk, and more than a few late-night bottles of wine, but . . . it worked. Did it always work? No. I didn’t get the Dalai Lama (this time), and at least half of the people on my list didn’t respond or declined the invitation. But it worked enough to matter, and that’s what matters.

In cases where the outreach worked, the questions did the heavy lifting.

[...]

The older I get, the more time I spend — as a percentage of each day — on crafting better questions. In my experience, going from 1x to 10x, from 10x to 100x, and from 100x to (when Lady Luck really smiles) 1000x returns in various areas has been a product of better questions. John Dewey’s dictum that “a problem well put is half-solved” applies.

Life punishes the vague wish and rewards the specific ask. Conscious thinking is largely asking and answering questions in your own head, after all. If you want confusion and heartache, ask vague questions. If you want uncommon clarity and results, ask uncommonly clear questions.

Fortunately, this is a skill you can develop. No book can give you all of the answers, but this book can train you to ask better questions. Milan Kundera, author of The Unbearable Lightness of Being, has said that “The stupidity of people comes from having an answer for everything. The wisdom of the novel comes from having a question for everything.” Substitute “master learner” for “novel,” and you have my philosophy of life. Often, all that stands between you and what you want is a better set of questions.

A close examination makes the precise imprecise

Tuesday, October 10th, 2017

Techniques of Systems Analysis notes that there are almost always large uncertainties when it comes to costs:

At first sight, costs look like a pretty concrete thing. You just grab an accountant and put him to work. However, as always, a close examination makes the precise imprecise. As we will explain later, when we talk about time-phasing, there is a real ambiguity in deciding the dollar cost of a system. Roughly speaking, this occurs because a military system is not bought at one instant of time by going into a department store and ordering it. It has to be built up over the past years and it is expect to have a continuous existence in the future. Under such circumstances one must always ask himself what it costs to use facilities which are already owned, and what will be the salvage value of any expenditures made this year in future years. Also, if one is procuring or developing a new system, he may have had no experience on which to base cost estimate.s It is surprising, in practice, how inaccurate even careful estimates of the costs of new systems have proved to be. Careless estimates tend to be out of this world.

There is another ambiguity in costs which the Analyst generally ignores but with which the policy make is sometimes concerned. Some dollars are harder to come by than others. Research and Development funds, for example, are ordinarily tighter than procurement funds. In the U.S., expensive gadgets are often easier to buy than high grade, but relatively low cost, people. Public works funds, for obvious reasons, are often easy to get and, of course, traditional expenditures are almost always easier to justify than new ones.

Finally, there are many costs which are not usually measured in dollars, such as crew lives, dislocations, political effects, etc.

Psychology beats business training

Thursday, September 28th, 2017

Francisco Campos and his fellow researchers chose to monitor 1,500 people running small businesses in Togo in West Africa and gave them two different sorts of training:

The typical firm had three employees and profits of 94,512 CFA francs ($173) a month. Only about a third kept books, and less than one in 20 had a written budget.

[...]

As they report in Science, the researchers split the businesses into three groups of 500. One group served as the control. Another received a conventional business training in subjects such as accounting and financial management, marketing and human resources. They were also given tips on how to formalise a business. The syllabus came from a course called Business Edge, developed by the International Finance Corporation.

The final group was given a course inspired by psychological research, designed to teach personal initiative — things like setting goals, dealing with feedback and persistence in the face of setbacks, all of which are thought to be useful traits in a business owner. The researchers then followed their subjects’ fortunes for the next two-and-a-half years (the experiment began in 2014).

An earlier, smaller trial in Uganda had suggested that the psychological training was likely to work well. It did: monthly sales rose by 17% compared with the control group, while profits were up by 30%. It also boosted innovation: recipients came up with more new products than the control group. That suggests that entrepreneurship, or at least some mental habits useful for it, can indeed be taught. More surprising was how poorly the conventional training performed: as far as the researchers could tell, it had no effect at all.

Surveillance capitalism fuels the Internet

Sunday, September 17th, 2017

In case you didn’t notice, Bruce Schneier reminds us, you’re not Equifax’s customer:

You’re its product.

This happened because your personal information is valuable, and Equifax is in the business of selling it. The company is much more than a credit reporting agency. It’s a data broker. It collects information about all of us, analyzes it all, and then sells those insights.

Its customers are people and organizations who want to buy information: banks looking to lend you money, landlords deciding whether to rent you an apartment, employers deciding whether to hire you, companies trying to figure out whether you’d be a profitable customer — everyone who wants to sell you something, even governments.

It’s not just Equifax. It might be one of the biggest, but there are 2,500 to 4,000 other data brokers that are collecting, storing, and selling information about you — almost all of them companies you’ve never heard of and have no business relationship with.

Surveillance capitalism fuels the Internet, and sometimes it seems that everyone is spying on you. You’re secretly tracked on pretty much every commercial website you visit. Facebook is the largest surveillance organization mankind has created; collecting data on you is its business model. I don’t have a Facebook account, but Facebook still keeps a surprisingly complete dossier on me and my associations — just in case I ever decide to join.

I also don’t have a Gmail account, because I don’t want Google storing my e-mail. But my guess is that it has about half of my e-mail anyway, because so many people I correspond with have accounts. I can’t even avoid it by choosing not to write to gmail.com addresses, because I have no way of knowing if newperson@company.com is hosted at Gmail.

And again, many companies that track us do so in secret, without our knowledge and consent. And most of the time we can’t opt out. Sometimes it’s a company like Equifax that doesn’t answer to us in any way. Sometimes it’s a company like Facebook, which is effectively a monopoly because of its sheer size. And sometimes it’s our cell phone provider. All of them have decided to track us and not compete by offering consumers privacy. Sure, you can tell people not to have an e-mail account or cell phone, but that’s not a realistic option for most people living in 21st-century America.

The companies that collect and sell our data don’t need to keep it secure in order to maintain their market share. They don’t have to answer to us, their products. They know it’s more profitable to save money on security and weather the occasional bout of bad press after a data loss. Yes, we are the ones who suffer when criminals get our data, or when our private information is exposed to the public, but ultimately why should Equifax care?

Yes, it’s a huge black eye for the company — this week. Soon, another company will have suffered a massive data breach and few will remember Equifax’s problem. Does anyone remember last year when Yahoo admitted that it exposed personal information of a billion users in 2013 and another half billion in 2014?

The Occupy Wall Street protesters and the bankers share a common delusion

Friday, August 18th, 2017

Eric Weinstein explains the crisis of late capitalism:

I believe that market capitalism, as we’ve come to understand it, was actually tied to a particular period of time where certain coincidences were present. There’s a coincidence between the marginal product of one’s labor and one’s marginal needs to consume at a socially appropriate level. There’s also the match between an economy mostly consisting of private goods and services that can be taxed to pay for the minority of public goods and services, where the market price of those public goods would be far below the collective value of those goods.

Beyond that, there’s also a coincidence between the ability to train briefly in one’s youth so as to acquire a reliable skill that can be repeated consistently with small variance throughout a lifetime, leading to what we’ve typically called a career or profession, and I believe that many of those coincidences are now breaking, because they were actually never tied together by any fundamental law.

Weinstein shares this anecdote about class warfare:

I reached a bizarre stage of my life in which I am equally likely to fly either economy or private. As such, I have a unique lens on this question. A friend of mine said to me, “The modern airport is the perfect metaphor for the class warfare to come.” And I asked, “How do you see it that way?” He said, “The rich in first and business class are seated first so that the poor may be paraded past them into economy to note their privilege.” I said, “I think the metaphor is better than you give it credit for, because those people in first and business are actually the fake rich. The real rich are in another terminal or in another airport altogether.”

The Occupy Wall Street protesters and the bankers share a common delusion, he says:

Both of them believe the bankers are more powerful in the story than they actually are. The real problem, which our society has yet to face up to, is that sometime around 1970, we ended several periods of legitimate exponential growth in science, technology, and economics. Since that time, we have struggled with the fact that almost all of our institutions that thrived during the post-World War II period of growth have embedded growth hypotheses into their very foundation.

That means that all of those institutions, whether they’re law firms or universities or the military, have to reckon with steady state [meaning an economy with mild fluctuations in growth and productivity] by admitting that growth cannot be sustained, by running a Ponzi scheme, or by attempting to cannibalize others to achieve a kind of fake growth to keep those particular institutions running. This is the big story that nobody reports. We have a system-wide problem with embedded growth hypotheses that is turning us all into scoundrels and liars.

Let’s say, for example, that I have a growing law firm in which there are five associates at any given time supporting every partner, and those associates hope to become partners so that they can hire five associates in turn. That formula of hierarchical labor works well while the law firm is growing, but as soon as the law firm hits steady state, each partner can really only have one associate, who must wait many years before becoming partner for that partner to retire. That economic model doesn’t work, because the long hours and decreased pay that one is willing to accept at an entry-level position is predicated on taking over a higher-lever position in short order. That’s repeated with professors and their graduate students. It’s often repeated in military hierarchies.

It takes place just about everywhere, and when exponential growth ran out, each of these institutions had to find some way of either owning up to a new business model or continuing the old one with smoke mirrors and the cannibalization of someone else’s source of income.

Then there’s the Wile E. Coyote effect — as long as Wile E. Coyote doesn’t look down, he’s suspended in air, even if he has just run off a cliff:

But the great danger is understanding that everything is flipped. During the 2008 crisis, many commentators said the markets have suddenly gone crazy, and it was exactly the reverse. The so-called great moderation that was pushed by Alan Greenspan, Timothy Geithner, and others was in fact a kind of madness, and the 2008 crisis represented a rare break in the insanity, where the market suddenly woke up to see what was actually going on. So the acute danger is not madness but sanity.

The problem is that prolonged madness simply compounds the disaster to come when sanity finally sets in.

SciFutures offers “corporate visioning”

Wednesday, August 16th, 2017

Hoping to distract himself from the boredom of his day job as the president of a market-research company, Ari Popper enrolled in a course on science-fiction writing at UCLA:

“It was, like, the best ten weeks of my life,” Popper told me recently. “But I knew I wasn’t going to pay the bills as a science-fiction writer.” Still, the course gave him an idea: since businesses often spend money trying to predict how the world will change, and since speculative fiction already traffics in such predictions, perhaps one could be put in service of the other — corporate consulting through sci-fi narratives. Soon, Popper quit his job, moved to a smaller house, and launched his own firm, SciFutures. Today, his network of a hundred or so authors writes customized stories for the likes of Visa, Ford, Pepsi, Samsung, and nato. Popper calls their work “corporate visioning.”

A company that monetizes literary imagination might itself seem like a dystopian scenario worthy of Philip K. Dick. “There can be a little tension,” Trina Phillips, a full-time writer and editor at SciFutures, acknowledged. The authors’ stories, she added, which range in length from a few hundred to several thousand words, are “not just marketing pieces, but sometimes we have to pull back or adjust to accommodate a brand.” She and Popper have found that clients generally prefer happy endings, though unhappy ones are permissible if the author also proposes a clear business strategy for avoiding them. Rarely is there room for off-topic subplots or tangential characters.

[...]

One of SciFutures’s more prominent contributors is Ken Liu, a Hugo Award-winning author and the translator of the popular Chinese science-fiction novel “The Three-Body Problem.” Liu told me that he relishes the level of influence that the firm offers. “As a freelancing gig, it’s not much money,” he said; typically, stories pay a few hundred dollars. “But you have the chance to shape and impact the development of a technology that matters to you. At a minimum, you know that your story will be read by an executive, somebody who’s actually able to decide whether to invest money and develop a product.” Liu dismissed the notion that writing science fiction for corporate clients compromised something essential about the genre. “I’m not a big fan of this vision of the artist as some independent, amazing force for good,” he said. “Everybody writes in a context for an audience.”

The audience that gives SciFutures writers the most freedom to imagine negative outcomes is, not surprisingly, the military. “Those stories can be grittier,” Phillips said. “They already do a lot of worst-case-scenario planning.” Last year, she and her colleagues produced thirteen stories that were read and discussed in a workshop for forty senior officials from a range of nato member countries. One involves a “smart gun” that gets hacked, nearly causing a massacre of civilians. Another, told from the perspective of a twelve-year-old girl in Uruguay, describes a group of child soldiers around the world who shoot targets through an online gaming site without realizing that the game is real: they are operating drones and other remote weapons that kill enemies of the Russian government. (Readers familiar with Orson Scott Card’s novel “Ender’s Game,” from 1985, may notice some similarities.) A third story follows a member of a Chinese “Fear Battalion,” a group of soldiers who have been genetically modified to emit a pheromone that induces terror in anyone who smells it.

As a woman in tech, Megan McArdle realized: these are not my people

Tuesday, August 15th, 2017

Until the age of 26, Megan McArdle was employed as a technology consultant by a small firm that served the financial industry, where she realized something:

I built servers and workstations, mostly for banks, and in a happy foreshadowing of my future writing for Bloomberg View, I installed some of the first PC-based Bloomberg terminals for a Japanese firm’s office in New York.

Finance back then was heavily male, as it is now. And technology, the same. At the intersection of the two … well, I can count on one hand all the women I worked with directly during almost four years of consulting.

It was very male-centric. I heard about client outings, involving strippers, to which I was obviously not invited. And the sexual harassment (entirely from clients, not colleagues), could be spectacular.

Which has nothing to do with why I left. This will make me sound a bit dim, but at the time, it never occurred to me that being a female in this bro ecosystem might impinge my ultimate career prospects. Nor did I miss having women in the room. I liked working with the bros just fine. And the sexual harassment, while annoying, was just that: annoying. I cannot recall that it ever affected my work, nor that I lost any sleep over it.

No, the reason I left is that I came into work one Monday morning and joined the guys at our work table, and one of them said “What did you do this weekend?”

I was in the throes of a brief, doomed romance. I had attended a concert that Saturday night. I answered the question with an account of both. The guys stared blankly. Then silence. Then one of them said: “I built a fiber-channel network in my basement,” and our co-workers fell all over themselves asking him to describe every step in loving detail.

At that moment I realized that fundamentally, these are not my people. I liked the work. But I was never going to like it enough to blow a weekend doing more of it for free. Which meant that I was never going to be as good at that job as the guys around me.

If parents really want to give their kids a movie night, they’ll pay

Sunday, August 13th, 2017

Virginia Postrel recently went to see Atomic BLonde, and someone brought two kids to the very R-rated movie:

Its fight scenes are lethal and bloody. “Character is choked with a garrote, very visible and intense, lasts for a :30-:60 seconds,” is one note from IMDB’s parents guide. The only respite from the mayhem is a lesbian love scene.

[...]

Like most U.S. theaters, AMC bars kids under 6 from R-rated movies after 6:00 p.m. “Since implementing this policy, guest complaints concerning noise in the theatres have decreased significantly,” a spokeswoman told me by email. Our 7:15 showing was covered by the rule — and demonstrated its flaws.

The first is that children under 6 don’t have driver’s licenses. If the parents say the kids qualify for admission, the theater has to take their word for it. Unless a child is so disruptive that the rest of the audience complains, it’s easy enough to break the rule. Maybe the kids near us were 6, maybe not.

The second is that the mere presence of children too young to understand a movie disturbs other audience members.

[...]

Instead of charging children $3.00 less than adults at R-rated movies, charge them $5.00 more. If parents really want to give their kids a movie night, they’ll pay. But if they just don’t want to pay a babysitter, they’ll stay home and let everyone else enjoy the show.

I still remember someone bringing little kids to the matinée of Gladiator years ago. Not cool.