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Posts Tagged ‘competition

“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

“But if you’re gonna dine with them cannibals / Sooner or later, darling, you’re gonna get eaten”*…

 

hot dog

 

A select few athletes are so iconic, they’re known by a single name. Jordan. The Babe. Serena. Pelé. Tiger. Shaq.

And, of course, Kobayashi.

The godfather of competitive eating, Takeru Kobayashi burst onto the American scene at the 2001 Nathan’s Hot Dog Eating Contest, where the lithe 5-foot-8 Japanese 23-year-old, using a revolutionary water-dipping technique and a body-wiggling maneuver known as the “Kobayashi Shake,” ate an astounding 50 hot dogs—double the prior record. That feat thrust Kobayashi to instant superstardom, and his subsequent five wins at the famed July 4th competition only solidified his standing as the king of the eating world—a title he’d only officially relinquish in 2007, when American Joey Chestnut dethroned him at the Nathan’s extravaganza.

The tumultuous saga of Kobayashi and Chestnut is the subject of ESPN’s latest “30 for 30” documentary, The Good, The Bad, The Hungry, which details the stratospheric rise and controversial fall of Kobayashi, whose reign was cut short by losses to Chestnut (winner of 11 Nathan’s contests, and a multi-world record holder), a falling-out with Major League Eating (MLE) and its co-founder George Shea, and an eye-opening arrest at the 2010 Nathan’s event…

More on this epic rivaltry at “The Rise and Fall of Kobayashi, Godfather of Competitive Eating: ‘They Were Making a Joke of Me’.”  Find The Good, The Bad, The Hungry here.

* Nick Cave

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As we go for the gold, we might recall that it was on this date in 1928 that sliced bread was sold for the first time, by the Chillicothe Baking Company of Chillicothe, Missouri.

For more on this seminal development, see “What was the best thing before sliced bread?

source

 

 

Written by LW

July 7, 2019 at 1:01 am

“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

source

 

Written by LW

December 6, 2017 at 1:01 am

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