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“Central planning didn’t work for Stalin or Mao, and it won’t work for an entrepreneur either”*…

 

Amazon central planning

 

Applying science to social problems has brought huge dividends in the past. Long before the invention of the silicon chip, medical and technological innovations had already made our lives far more comfortable – and longer. But history is also replete with disasters caused by the power of science and the zeal to improve the human condition.

For example, efforts to boost agricultural yields through scientific or technological augmentation in the context of collectivization in the Soviet Union or Tanzania backfired spectacularly. Sometimes, plans to remake cities through modern urban planning all but destroyed them. The political scientist James Scott has dubbed such efforts to transform others’ lives through science instances of “high modernism.”An ideology as dangerous as it is dogmatically overconfident, high modernism refuses to recognize that many human practices and behaviors have an inherent logic that is adapted to the complex environment in which they have evolved. When high modernists dismiss such practices in order to institute a more scientific and rational approach, they almost always fail.

Historically, high-modernist schemes have been most damaging in the hands of an authoritarian state seeking to transform a prostrate, weak society. In the case of Soviet collectivization, state authoritarianism originated from the self-proclaimed “leading role” of the Communist Party, and pursued its schemes in the absence of any organizations that could effectively resist them or provide protection to peasants crushed by them.

Yet authoritarianism is not solely the preserve of states. It can also originate from any claim to unbridled superior knowledge or ability. Consider contemporary efforts by corporations, entrepreneurs, and others who want to improve our world through digital technologies. Recent innovations have vastly increased productivity in manufacturing, improved communication, and enriched the lives of billions of people. But they could easily devolve into a high-modernist fiasco…

But this characteristically high-modernist path is not preordained. Instead of ignoring social context, those developing new technologies could actually learn something from the experiences and concerns of real people. The technologies themselves could be adaptive rather than hubristic, designed to empower society rather than silence it.Two forces are likely to push new technologies in this direction. The first is the market, which may act as a barrier against misguided top-down schemes. Once Soviet planners decided to collectivize agriculture, Ukrainian villagers could do little to stop them. Mass starvation ensued. Not so with today’s digital technologies, the success of which will depend on decisions made by billions of consumers and millions of businesses around the world (with the possible exception of those in China)…

That said, the power of the market constraint should not be exaggerated. There is no guarantee that the market will select the right technologies for widespread adoption, nor will it internalize the negative effects of some new applications. The fact that Facebook exists and collects information about its 2.5 billion active users in a market environment does not mean we can trust how it will use that data. The market certainly doesn’t guarantee that there won’t be unforeseen consequences from Facebook’s business model and underlying technologies.

For the market constraint to work, it must be bolstered by a second, more powerful check: democratic politics. Every state has a proper role to play in regulating economic activity and the use and spread of new technologies. Democratic politics often drives the demand for such regulation. It is also the best defense against the capture of state policies by rent-seeking businesses attempting to raise their market shares or profits.

Democracy also provides the best mechanism for airing diverse viewpoints and organizing resistance to costly or dangerous high-modernist schemes. By speaking out, we can slow down or even prevent the most pernicious applications of surveillance, monitoring, and digital manipulation. A democratic voice is precisely what was denied to Ukrainian and Tanzanian villagers confronted with collectivization schemes.But regular elections are not sufficient to prevent Big Tech from creating a high-modernist nightmare. Insofar as new technologies can thwart free speech and political compromise and deepen concentrations of power in government or the private sector, they can frustrate the workings of democratic politics itself, creating a vicious circle. If the tech world chooses the high-modernist path, it may ultimately damage our only reliable defense against its hubris: democratic oversight of how new technologies are developed and deployed. We as consumers, workers, and citizens should all be more cognizant of the threat, for we are the only ones who can stop it.

At the same time that science and technology have vastly improved human lives, they have also given certain visionaries the means to transform entire societies from above. Ominously, what was true of Soviet central planners is true of Big Tech today: namely, the assumption that society can be improved through pure “rationality.”  Daron Acemoglu— Professor of Economics at MIT,  and co-author (with James A. Robinson) of Why Nations Fail: The Origins of Power, Prosperity and Poverty and The Narrow Corridor: States, Societies, and the Fate of Liberty (forthcoming from Penguin Press in September 2019)– explains: “Big Tech’s Harvest of Sorrow?

[Illustration above from “The Singular Pursuit of Comrade Bezos,” also worth a read.]

* Michael Bloomberg

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As we rethink “reason,” we might recall that it was on this date in 1894 (one year before Marconi’s first demo) that distinguished physicist Oliver Lodge achieved the first successful radio transmission of information via Morse Code in a presentation to the British Association for the Advancement of Science at a meeting in Oxford.  He sent a message about 50 meters from the old Clarendon Laboratory to the lecture theater of the University Museum.

Lodge continued to develop his approach, and patented several elements of it… running into intellectual property disputes with Marconi.  Finally, in 1912, Lodge, at heart an academic, sold his patents to the more determinedly-commercial Marconi.

220px-Oliver_Joseph_Lodge3 source

 

Written by LW

August 14, 2019 at 1:01 am

“Of course our lives are regulated. When you come to a stop sign, you stop; if you want to go fishing, you get a license; if you want to shoot ducks, you can shoot only three ducks. The alternative is dead bodies at the intersection, no fish, and no ducks. OK?”*…

 

Regulation

 

After a characteristically-clear explanation of the ways in which the “monopoly practice” concerns around Google, Amazon, and the other on-line giants are different from those the U.S. has traditionally tried to manage– they limit/manage choice– the ever-illuminating Tim O’Reilly argues for a fresh approach to anti-trust:

So how are we therefore best to decide if these Big Tech platforms need to be regulated?

In one famous exchange, Bill Gates, the founder and former CEO of Microsoft, told Chamath Palihapitiya, the one-time head of the Facebook platform:

“This isn’t a platform. A platform is when the economic value of everybody that uses it, exceeds the value of the company that creates it. Then it’s a platform.”

Given this understanding of the role of a platform, regulators should be looking to measure whether companies like Amazon or Google are continuing to provide opportunity for their ecosystem of suppliers, or if they’re increasing their own returns at the expense of that ecosystem.

Rather than just asking whether consumers benefit in the short term from the companies’ actions, regulators should be looking at the long-term health of the marketplace of suppliers—they are the real source of that consumer benefit, not the platforms alone. Have Amazon, Apple, or Google

earned

their profits, or are they coming from monopolistic rents?

How might we know whether a company operating an algorithmically managed marketplace is extracting rents rather than simply taking a reasonable cut for the services it provides? The first sign may not be that it is raising prices for consumers, but that it is taking a larger percentage from its suppliers, or competing unfairly with them.

Before antitrust authorities look to remedies like breaking up these companies, a good first step would be to require disclosure of information about the growth and health of the supply side of their marketplaces. The statistics about the growth of its third-party marketplace that Bezos trumpeted in his shareholder letter tell only half the story. The questions to ask are who profits, by how much, and how that allocation of rewards is changing over time…

Data is the currency of these companies. It should also be the currency of those looking to regulate them. You cannot regulate what you don’t understand. The algorithms that these companies use may be defended as trade secrets, but their outcomes should be open to inspection.

An important read: “Antitrust regulators are using the wrong tools to break up Big Tech.”

* Molly Ivins

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As we bust trusts, we might recall that it was on this date in 1974 that the Supreme Court handed down its unanimous decision in United States v. Nixon, ordering him to deliver tape recordings and other subpoenaed materials to a federal district court.  Special prosecutor Leon Jaworski had subpoenaed the tapes as part of on-going impeachment proceedings; the White House had sued to quash; and the decision is widely viewed as a crucial precedent limiting the power of any U.S. president to claim executive privilege.

nixon_sony source

 

 

Written by LW

July 24, 2019 at 1:01 am

“There is no business like show business. There is also no business like certified public accounting, but that doesn’t rhyme as well.”*…

 

Pacioli

Portrait of Luca Bartolomeo de Pacioli, attributed to Jacopo de’ Barbari

 

Modern capitalism began among the European merchant families of the early Renaissance—the Fuggers of Augsburg, Medicis of Florence and, in Venice, one Antonio de Rompiasi, who in 1464 hired a tutor in mathematics for his three sons. Like any sensible teacher, young Luca Pacioli aimed to make his lessons memorable and clear. Good humanist that he was, 30 years later he gathered all the world’s knowledge of the subject into a single massive volume.

His “Summa de Arithmetica, Geometria, Proportioni et Proportionalita” was the 615-page work of a mature professor who had spent decades working across northern Italy. The book was revolutionary on more than one count. It integrated computation using Hindu-Arabic numerals with the logic of classic Greek geometry; it was written in the Italian of the marketplace rather than Latin; and it was circulated in large numbers thanks to the new technology of printing. Yet its greatest significance lay in a slim ‘how to’ chapter that described the double-entry accounting system used by Venetian merchants.

With examples from dealers in butter to lemons to silk, Pacioli set out the method for tracking income and expenditure and the calculation of net profit or loss, which for the first time allowed an immediate snapshot of a firm’s financial position. This slim section would facilitate the birth of the modern corporation.

“Without order there is chaos,” Pacioli observed in a breezy style that is still in vogue in business books today. His manual is stuffed with quotes from scripture and Dante and pithy advice such as “Don’t learn from ignoramuses who have more leaves than grapes.” He wrote the accounting chapter to help would-be traders in Venice, then the capital of the financial world, “sleep easily at night”. Without double-entry book-keeping, “their minds would keep them awake with worry”. He could not suspect that what might be called “Book-keeping for Dummies” would become the backbone of business for centuries.

Like many monumental works of 15th-century printing, Pacioli’s treatise has survived in its original form. Some 120 copies still exist, from an initial run of about 1,000. Now today’s moguls have a chance to own this first folio of finance. Christie’s, the auction house, is offering a first edition in its original vellum binding for sale in New York on June 12th. The starting price is $1m for what it unabashedly calls “the most influential work in the history of capitalism.”

Pacioli’s later life augments the glamour of the first printed use of ‘plus’ and ‘minus’ signs. Impressed by the book, Leonardo da Vinci convinced his patron Lodovico Sforza to hire Pacioli to teach at the court of Milan. Pacioli and Leonardo collaborated on the treatise “Divina Proportione,” which married maths with art through the study of perspective. Not one, but two Renaissance masters were thus responsible for the exquisite harmony of “The Last Supper”…

The 15th-century guide to book-keeping enabled the rise of modern corporations: “A revolutionary treatise goes on the block.”

* Craig Shaw Gardner

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As we count carefully, we might recall that it was on this date in 1902 that a US patent (#701,839) was issued to Americus F. Callahan of Chicago, Ill., which he called the outlook envelope– what we call the window envelope.

300px-USPatent701839-CallahanAmericus-WindowedEnvelope source

 

“I always pass on good advice. It is the only thing to do with it. It is never of any use to oneself.”*…

 

Defoe

During his long life, Daniel Defoe was confidant to a king and victim of the pillory.

 

A writer of astonishing productivity, Defoe is mainly known to modern audiences for such novels as Robinson Crusoe and Moll Flanders. But he was also arguably history’s greatest business writer, and his output includes probably the first English business manual, The Complete English Tradesman, from which, even today, you can learn a great deal about commerce, credit, and capitalism. It first appeared in 1726 — when Adam Smith was roughly 3 years old — and was reprinted in the colonies by no less a figure than Benjamin Franklin, himself a comparably entrepreneurial polymath and man of many faces. For a while it was a popular handbook for merchants on both sides of the Atlantic…

The author of Robinson Crusoe, who dealt with ups and downs as an entrepreneur, also penned one of history’s most useful business manuals: “Daniel Defoe’s hard-earned lessons on business and life.”

* Oscar Wilde, An Ideal Husband

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As we consider the source, we might spare a thought for LeRoy Robert Ripley; he died on this date in 1949.  A cartoonist, entrepreneur, and publisher, he created and parlayed Ripley’s Believe It or Not!, a successful panel series in daily newspapers into a radio series then a TV series, and into a string of museums, or Odditoriums as he billed them.

220px-Robert_Ripley source

 

 

“The great packing machine ground on remorselessly, without thinking of green fields; and the men and women and children who were part of it never saw any green thing, not even a flower”*…

 

beef

 

Cheap beef and a thriving centralised meatpacking industry were the consequence of emerging technologies such as the railroad and refrigeration coupled with the business acumen of a set of honest and hard-working men like… Philip Danforth Armour. According to critics, however, a capitalist cabal was exploiting technological change and government corruption to bankrupt traditional butchers, sell diseased meat and impoverish the worker.

Ultimately, both views were correct. The national market for fresh beef was the culmination of a technological revolution, but it was also the result of collusion and predatory pricing. The industrial slaughterhouse was a triumph of human ingenuity as well as a site of brutal labour exploitation. Industrial beef production, with all its troubling costs and undeniable benefits, reflected seemingly contradictory realities.

Beef production would also help drive far-reaching changes in US agriculture. Fresh-fruit distribution began with the rise of the meatpackers’ refrigerator cars, which they rented to fruit and vegetable growers. Production of wheat, perhaps the US’s greatest food crop, bore the meatpackers’ mark. In order to manage animal feed costs, Armour & Co and Swift & Co invested heavily in wheat futures and controlled some of the country’s largest grain elevators. In the early 20th century, an Armour & Co promotional map announced that “the greatness of the United States is founded on agriculture”, and depicted the agricultural products of each US state, many of which moved through Armour facilities.

Beef was a paradigmatic industry for the rise of modern industrial agriculture, or agribusiness. As much as a story of science or technology, modern agriculture is a compromise between the unpredictability of nature and the rationality of capital. This was a lurching, violent process that saw meatpackers displace the risks of blizzards, drought, disease and overproduction on to cattle ranchers. Today’s agricultural system works similarly. In poultry, processors like Perdue and Tyson use an elaborate system of contracts and required equipment and feed purchases to maximise their own profits while displacing risk on to contract farmers. This is true with crop production as well. As with 19th-century meatpacking, relatively small actors conduct the actual growing and production, while companies like Monsanto and Cargill control agricultural inputs and market access.

The transformations that remade beef production between the end of the American civil war in 1865 and the passage of the Federal Meat Inspection Act in 1906 stretched from the Great Plains to the kitchen table. Before the civil war, cattle raising was largely regional, and in most cases, the people who managed cattle out west were the same people who owned them. Then, in the 1870s and 80s, improved transport, bloody victories over the Plains Indians, and the American west’s integration into global capital markets sparked a ranching boom. Meanwhile, Chicago meatpackers pioneered centralised food processing. Using an innovative system of refrigerator cars and distribution centres, they began to distribute fresh beef nationwide. Millions of cattle were soon passing through Chicago’s slaughterhouses each year. By 1890, the Big Four meatpacking companies – Armour & Co, Swift & Co, Morris & Co and the GH Hammond Co – directly or indirectly controlled the majority of the nation’s beef and pork…

Exploitation and predatory pricing drove the transformation of the US meat industry – and created the model for modern agribusiness: “The price of plenty: how beef changed America.”

* Upton Sinclair, The Jungle

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As we muse on meat, we might recall that it was on this date in 1637 (or nearabouts, as closely as scholars can say) that Cardinal Richelieu introduced the first table knives (knives with rounded edges)–reputedly to cure dinner guests of the unsavory habit of picking their teeth with the knife-points of the daggers that were, until then, used to cut meat at the table (though some suspect that Richelieu was acting in self-preservation).  Indeed, years later, in 1669, King Louis XIV followed suit, forbidding pointed knives at his table; indeed, he extended the prohibition, banning pointed knives in the street in an attempt to reduce violence.

 source

 

 

Written by LW

May 14, 2019 at 1:01 am

“The vitality of the ordinary members of society is dependent on its Outsiders. Many Outsiders unify themselves, realize themselves as poets or saints.”*…

 

 

Gertrude Morgan

Sister Gertrude Morgan in her Everlasting Gospel Revelation Mission; some of her work, hanging behind her.  New Orleans, Louisiana, 1974

 

In a new book, Walks to the Paradise Garden, author Jonathan Williams, editor Phillip March Jones, and photographer Roger Manley gather interviews and encounters with artists they met along their road trips through the American South in the 1970s. Some of the artists they spoke with, like Sister Gertrude Morgan, would eventually be discovered by the art-world establishment, while others they met—like former mechanic Vernon Lee Burwell—continued to labor in obscurity.

Along with a deep sense of religious wonder, there is a sense of urgency to the work featured in Walks to the Paradise Garden, a compulsion to make more and more of it until it covered the walls of their homes, crowded the hallways, and spilled onto the front lawn. As Williams writes in the introduction to the book, “We’re talking about a South that is both celestial and chthonian,” pertaining to both heaven and hell. “They are often one and the same.”…

Outsider artists and their work: “Finding Jesus on the Front Yard.”

* Colin Wilson, The Outsider

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As we see through different eyes, we might recall that it was on this date in 1886 that a different kind of “outsider” made its first appearance: Coca-Cola was first sold to the public at the soda fountain in Jacob’s Pharmacy in Atlanta, Georgia.  It was formulated by pharmacist John Stith Pemberton, who mixed it in a 30-gallon brass kettle hung over a backyard fire.  Pemberton’s recipe, which survived in use until 1905, was marketed as a “brain and nerve tonic,” and contained extracts of cocaine and (caffeine-rich) kola nut. The name, using two C’s from its ingredients, was suggested by his bookkeeper Frank Robinson, whose excellent penmanship provided the famous scripted  “Coca-Cola” logo.

Pemberton’s Palace

 

Written by LW

May 8, 2019 at 1:01 am

“Cleanliness is next to godliness”*…

 

Hand dryer

 

Public bathrooms offer three primary options to dry a pair of wet hands. First, there is the venerable crisp-pleated paper towel. Second, the old-style warm-air dryer: those indestructible metal carapaces that, through their snouts, breathe down upon our hands. And finally, the jet dryer sub-species of the sort Dyson makes, whose gale-force winds promise to shear away every drop of moisture rather than slowly evaporating it. In the quest to dominate the world’s restrooms, Campbell discovered, Dryer v Towel is a pitched contest of business strategy and public relations. “Expect to be lied to a lot,” Campbell told me. “It’s almost like the cola wars. You have Pepsi v Coke, and you have hand dryers v paper towels.”

The chief battleground for this duel is public hygiene. Science has tried and failed to come to a consensus about the hygienic superiority of one product over the other. Even so, the paper towel industry has funded or promoted a rash of studies claiming that hand dryers turn bathrooms into mosh pits of pathogens. These results almost always make news. Any sort of health scare is a gift to a journalist – an opportunity to write viral headlines such as “Hand dryers are blowing bacteria all over your hands” or “Hand dryers are germ-flinging bullshit”…

As an invention, the paper towel isn’t much older than the hand dryer; the Scott Paper Company, based in Philadelphia and now owned by the tissue giant Kimberly-Clark, developed the first restroom towel in 1907, while the Airdry Corporation, in New York, patented the earliest “drying apparatus” in 1922. For most of the 20th century, the towel was the more dominant product. Dryer companies, by and large, just made dryers; their budgets were small and their influence limited. The biggest manufacturers of paper towels were behemoths such as Kimberly-Clark or Georgia-Pacific, which also produced a vast range of other items. Their pockets were deeper, their leverage over customers greater.

Only after Dyson arrived and other dryer firms shook themselves awake did the contest acquire any edge at all. The numbers still weigh heavily in favour of Big Towel. In 2020, according to the market research firm Technavio, the world will buy roughly $4bn (£3bn) worth of multi-fold paper towels, of the kind most commonly seen in public bathrooms; the same year, hand dryer sales will jump to $856m, having grown 12% every year since 2014. Between 2012 and 2020, a Dyson spokesperson reckoned, hand dryers will have sucked $873m out of paper towel revenues. This is why, he argued, Big Towel launches such regular broadsides at hand dryers…

For a century, the humble paper towel has dominated public toilets. But a new generation of hand dryers has sparked a war: “Hand dryers v paper towels: the surprisingly dirty fight for the right to dry your hands.”

*  John Wesley

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As we pray for peace, we might recall that it was on this date in 1953 that the U. S Patent and Trademark Office issued patent number 2,636,176 to Howard C. Rossin for an overcoat for two people (or Siamese Twins).

 source

 

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