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Posts Tagged ‘business

“Regulation isn’t an obstacle to thriving free markets; it’s a vital part of them”*…

 

 

30 years or so ago, your correspondent’s father-in-law dragged him along to a cocktail party in D.C. at which we encountered Bill McGowan, the then-Chairman of MCI, the alternative long-distance company that prospered as ATT’s monopoly hold on the market eroded, then evaporated.  As another gentleman joined our little group, McGowan smiled archly and said, “ah, here’s my head of R&D”… then introduced us to his General Counsel.

Of course, business strategies that turn on challenging regulatory regimes, or practicing regulatory arbitrage, date back much further than MCI.  Indeed, Theodore’s Vail Bargain (creating the Bell System monopoly) in the early 20th century created the status quo that McGowan (and others) later attacked.

More often than not, emerging technology has enabled (if not, indeed, driven) these regulation-challenging new entrants.  So it’s no surprise that we find the marketplace today positively rife with them.

Elizabeth Pollman, of Loyola (Los Angeles) Law School, and Jordan M. Barry, of UC San Diego Law School, have studied the phenomenon…

This Article examines what we term “regulatory entrepreneurship” — pursuing a line of business in which changing the law is a significant part of the business plan. Regulatory entrepreneurship is not new, but it has become increasingly salient in recent years as companies from Airbnb to Tesla, and from DraftKings to Uber, have become agents of legal change. We document the tactics that companies have employed, including operating in legal gray areas, growing “too big to ban,” and mobilizing users for political support. Further, we theorize the business and law-related factors that foster regulatory entrepreneurship. Well-funded, scalable, and highly connected startup businesses with mass appeal have advantages, especially when they target state and local laws and litigate them in the political sphere instead of in court.

Finally, we predict that regulatory entrepreneurship will increase, driven by significant state and local policy issues, strong institutional support for startup companies, and continued technological progress that facilitates political mobilization. We explore how this could catalyze new coalitions, lower the cost of political participation, and improve policymaking. However, it could also lead to negative consequences when companies’ interests diverge from the public interest…

Further to the notion that “the Internet might provide profitable opportunities at the edges of the legal system.” see also Strategic Law Avoidance Using the Internet: A Short History” (pdf) by Tim Wu of Columbia Law School.

[TotH to Matt Levine, whose column/newsletter “Money Stuff” is quite wonderful.]

* James Surowiecki

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As we’re careful for what we ask, we might send mannerly birthday greetings to Baldassare Castiglione; he was born on this date in 1478.  A Renaissance soldier, diplomat, and author, he is most famous for The Book of the Courtier.– a prime example of the courtesy book, offering advice on and dealing with questions of the etiquette and morality of the courtier– which was enormously influential in 16th century European court circles.

Raphael’s portrait of Baldassare Castiglione

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Written by LW

December 6, 2017 at 1:01 am

“The gods keep livelihood hidden from men. Otherwise a day’s labor could bring man enough to last a whole year with no more work.”*…

 

Ind Rev

Upheaval more than a century into the Industrial Revolution, and more than 100 years ago:
An International Workers of the World union demonstration
in New York City in 1914. Credit: Library of Congress

 

As automation and artificial intelligence technologies improve, many people worry about the future of work. If millions of human workers no longer have jobs, the worriers ask, what will people do, how will they provide for themselves and their families, and what changes might occur (or be needed) in order for society to adjust?

Many economists say there is no need to worry. They point to how past major transformations in work tasks and labor markets – specifically the Industrial Revolution during the 18th and 19th centuries – did not lead to major social upheaval or widespread suffering. These economists say that when technology destroys jobs, people find other jobs…

They are definitely right about the long period of painful adjustment! The aftermath of the Industrial Revolution involved two major Communist revolutions, whose death toll approaches 100 million. The stabilizing influence of the modern social welfare state emerged only after World War II, nearly 200 years on from the 18th-century beginnings of the Industrial Revolution.

Today, as globalization and automation dramatically boost corporate productivity, many workers have seen their wages stagnate. The increasing power of automation and artificial intelligence technology means more pain may follow. Are these economists minimizing the historical record when projecting the future, essentially telling us not to worry because in a century or two things will get better?…

We should listen not only to economists when it comes to predicting the future of work; we should listen also to historians, who often bring a deeper historical perspective to their predictions. Automation will significantly change many people’s lives in ways that may be painful and enduring.

Get a start on understanding that history at “What the Industrial Revolution Really Tells Us About the Future of Automation and Work.”

* Hesiod, Work and Days

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As we hum “Hi Ho, Hi Ho,” we might send ink-stained birthday greetings to Richard March Hoe; he was born on this date in 1812.  In 1847, he patented the rotary printing press.  Hoe had invented the press a couple of years earlier and improved it before submission. His creation greatly increased the speed of printing, as it involved rolling a cylinder over stationary plates of inked type, using the cylinder to make an impression on paper– thus eliminating the need to make impressions from pressing type plates, which were heavy and difficult to maneuver.  In 1871, Hoe added the ability to print to continuous rolls of paper, creating the “web press” that revolutionized newspaper and magazine printing.  His first customer was Horace Greeley’s New York Tribune.

Hoe’s “web perfecting press,” with continuous feed

source

 

Written by LW

September 12, 2017 at 1:01 am

“You can’t trust water: Even a straight stick turns crooked in it”*…

 

New Yorkers like to say their tap water is the best in the world. Surely, then, it’s worth a $1.99-a-month subscription to drink it when you’re away from your sink—right?

That is the concept behind Reefill, a startup that aims to bring the subscription model to the simple, free act of filling up a water bottle at a café. The company wants to build 200 smartphone-activated water fountains inside Manhattan businesses, less to make money off the Nalgene crowd than to hit Dasani, Aquafina, and the wasteful consumption habits of bottled water–guzzling Gothamites…

Just as one field of startups is dedicated to doing what Mom won’t do for you anymore, another is reviving the infrastructure of the 19th century. Uber eventually found its way to the bus; Reefill, to the public drinking fountain…

Top up at “The Startup That Wants to Sell You a Subscription to New York City Tap Water Explains Itself.”

* W.C. Fields

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As we pine for the days of bigger visions, we might recall that it was on this date in 1961 that President John F. Kennedy gave the historic speech before a joint session of Congress that set the United States on a course to the moon.

In his speech, Kennedy called for an ambitious space exploration program that included not just missions to put astronauts on the moon, but also a Rover nuclear rocket, weather satellites, and other space projects.

Read the transcript here.

 source

 

Written by LW

May 25, 2017 at 1:01 am

“The only function of economic forecasting is to make astrology look respectable”*…

 

We should remember that we will pass down a whole society to our kids—including the natural environment that underwrites the quality of life of future generations. If the cost of ensuring that large numbers of children do not grow up in poverty and that the planet is not destroyed by global warming is a somewhat higher current or future tax burden, that hardly seems like a bad deal—especially if the burden is apportioned fairly. Now suppose, by contrast, that we hand our kids a country in which large segments of the population are unhealthy and uneducated and the environment has been devastated by global warming, but we have managed to pay off the national debt. That is, after all, the future that many in the mainstream of the economics profession are prescribing for the country. Somehow, I don’t see future generations thanking us…

Economists have botched the promise of widely distributed prosperity: why they have no intention of stopping now– and why that matters so much: “The Wrongest Profession.”

* John Kenneth Galbraith

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As we recalculate, we might recall that it was on this date in 1602 that Vereenigde Oost-Indische Compagnie (VOC, or The Dutch East India Company, as it’s known in the Anglophone world) was born.  Generally considered the world’s first trans-national corporation and the first publicly to issue stocks and bonds (and the first company to be ever actually listed on an official stock exchange), it began with a 21-year monopoly on the Dutch spice trade.  The VOC also prefigured the mega-corporation of today in that it had quasi-governmental powers, including the ability to wage war, imprison and execute convicts, negotiate treaties, strike its own coins, and establish colonies.  Considered by many to be the greatest corporation in history, the VOC eclipsed all of its rivals in international trade for almost 200 years.

 source

 

Written by LW

March 20, 2017 at 1:01 am

“Sameness is the mother of disgust”*…

 

Let’s imagine we’re on a beach that’s a mile long, and on that beach there are a couple of ice cream carts…

cart1

Let’s also imagine that the ice cream sold at each cart is identical in quality and cost, so the only reason customers choose one cart over the other is when one cart is closer. Given all of that, the best location of the carts is with each cart halfway between the middle of the beach and one of the ends. In this arrangement each cart gets 50% of the customers, and no one has to walk more than 1/4 mile to get some ice cream.

cart2

But what if one of the ice cream vendors decides to move their cart a bit closer to the middle of the beach…

cart3

They are now the ice cream cart of choice for a bigger segment of the beach, and will get more business. The other ice cream cart has no choice but to retaliate…

cart4

Now once again they each serve the same percentage of the beach-going public. Since any further movement by either cart would mean a loss of business for that cart, they end up permanently side by side, in the middle of the beach, even though this is a less optimal location for their customers.

That is a simple example of something called Hotelling’s law; the tendency of competing products to end up as similar as possible…

“Producers of products and services tend to make their products and services as similar as possible to those of their competitors.”  From The Laws of the Universe, the story of Hotelling’s Law.

* Petrarch

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As we nose around for niches, we might send ambitious birthday greetings to Count Giovanni Pico della Mirandola; he was born on this date in 1463.  An Italian philosopher, he undertook, in 1486, at the age of 23, to defend 900 theses on religion, philosophy, natural philosophy and magic against all comers, in the process of which he wrote his famous Oration on the Dignity of Man, which has been called the “Manifesto of the Renaissance”; a revitalization of Neo-Platonism, it was a seminal text of Renaissance humanism and of what has been called the “Hermetic Reformation.”

Pico’s portrait, from the Uffizi Gallery in Florence

 source

Written by LW

February 24, 2017 at 1:01 am

“I never worry about diets. The only carrots that interest me are the number you get in a diamond.”*…

 

From James Vaughan, via From Deco to Atom

* Mae West

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As we peel ’em, we might spare a thought for Josiah Wedgwood; he died on this date in 1795.  An English potter and businessman (he founded the Wedgwood company), he is credited, via his technique of “division of labor,” with the industrialization of the manufacture of pottery– and by his example, much of British manufacturing.

Wedgwood was a member of the Lunar Society, the Royal Society, and was an ardent abolitionist.  His daughter, Susannah, was the mother of Charles Darwin.

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Written by LW

January 3, 2017 at 1:01 am

“Consider the furniture!”*…

 

Ikea is a behemoth. The home furnishing company uses 1 percent of the planet’s lumber, it says, and the 530 million cubic feet of wood used to make Ikea furniture each year pulls with its own kind of twisted gravity. For many, a sojourn to the enormous blue-and-yellow store winds up defining the space in which they sit, cook, eat and sleep.

All that wood is turned into furniture that tries to bring a spare, modern aesthetic to the masses. “We’re talking about democratizing design,” Marty Marston, a product public relations manager at Ikea, told me.

The furniture is also sold according to some unique economics. In many cases, Ikea’s famously affordable pieces get dramatically cheaper year after year. In others, prices creep up. In some cases, products disappear entirely. The result is an ever-evolving, survival-of-the-fittest catalog that wields an enormous amount of influence over residential interiors…

Pull up a chair at “The Weird Economics Of Ikea.”

* Arthur Conan Doyle, The Adventure of the Mazarin Stone

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As we avoid the meatballs, we might spare a thought for Sir Thomas Bouch; he died on this date in 1880.  A railway engineer and executive whose career began at age 17, Bouch was knighted for designing the two-mile-long Tay River Bridge— on which an estimated 75 people died when the bridge collapsed.  An enquiry found Bouch to be liable, by virtue of bad design and construction; he died four months after the verdict.

Bouch is thus also indirectly responsible for the best-known poem, “The Tay Bridge Disaster,” by the gentleman widely-regarded to have been the the worst published poet in British history, William Topaz McGonagall.

Sir Thomas Bouch

 source

Written by LW

October 30, 2016 at 1:01 am

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