Roll-ups in Agriculture

Once you have the semblance of land rights, these things are possible (NYT). There is a certain delicious irony in the idea that collective farms are being made corporate in Russia. The potential for combining small plots of land in many countries in Africa and turning them into commercial/corporate farms would not only unleash the wealth of many of the poor, but alleviate rising food prices.

Unfortunately as things stand today, while some countries are moving towards the formalization of land rights, they're in the minority.

Wealth as Cure for Caste Bias

As an aside, it's remarkable that these articles are appearing in the NYT - and kudos to them for doing so. I just hope they bother circulating them around the editorial board. Markets are currently our most efficient way to recognize merit - so it should follow that markets reduce prejudice with time (NYT). What India's poor needs are more markets, not less of them:

“Economic expansion is going to neutralize caste in 50 years,” he predicted. “It will not end caste.”

I'm reminded by a quote by a noted Canadian asset manager when asked about the limitations to women and minorities in finance. To paraphrase: 'it doesn't matter if they're a purple martian midget so long as they bring in the numbers.'

"To Make a Stock Pop: Innovate"

Well, duh (NYT). Profits are the result of innovation. It therefore follows and is confirmed that those who spend more money on research and development tend to outperform those who spend less and cut back during hard times.

While it would have been useful if the NYT had bothered with giving us the performance differential between those who spent more on R&D and the control group, the research also undercuts the argument that those who profit have some sort of obligation to give back given the benefits of their research and investments made before the fact and further undercuts the cynical idea that profit is largely achieved through cronyism and what amounts to fraud.

Quote of the Day

From Arnold Kling:

To me, political campaigns are not sacred events, to be eagerly anticipated and avidly followed. They are brutal assaults on reason.

Mostly BizLinks

As it so happens, with the exception of one, there aren't really any residual political/economic tabs that I want to rant about at the moment but there are a few posts/articles that I found to be interesting:

• [Economics] How one Danish professor proposes we rid ourselves of massive cost overruns on infrastructure projects that politicians say "have to" be built (Miller-McCune): benchmarking to other similar projects and adding financial incentives. Seems pretty shocking that this hasn't been done before.
  
  
• [Human Resources, Entrepreneurship] How startups can compete effectively for the best candidates against big, better funded firms (HRWorld). More here from Funnelholic: 3 Keys to Hiring Success.
  
  
• [Manufacturing] Cool new resource on designing and specifying die castings (NADCA via Core77)
  
  
• [Trends, Entrepreneurship] Figuring out what the trends are before they affect you (Inside Retailing via Core77). While it's a bit fuzzy, the way I look at it is understanding what the need you/your business serve / major business costs and understand how that need / costs can change based on both traditional competitors and marginally related/emerging industries.
  
  
• [Manufacturing] They call it mistake-proofing, I call it idiot-proofing (Reliable Plant via Core77). Excellent advice and a source of competitive advantage especially as customers are more apt to consider the broader cost/value of a product/service. The idea is simple, design your products for the lowest common denominator of who you see to be your customers.
  
  
• [Turnarounds, Finance] A profile of Lone Star: a vulture capital firm that specializes in recapturing value in assets other Wall Street firms no longer want (Portfolio). If I had to do things differently, vulture capital is definitely where I would want to be. While I suspect there's a lot of minutiae, the problem solving aspect under tight timelines definitely appeals to me.
  
  
• [Finance, Entrepreneurship] Lessons from a startup buyout (Gigaom). If you're a startup, how to position and prepare yourself (and your firm) for being bought out.
  
  
• [Marketing] Advice I should probably be following: Six Rules for Rewriting (Michael Nielsen). Advice I actually found to be quite useful when you have to proof/rewrite your own work.
  
  
• [Entrepreneurship] 7 startup mistakes (Lending Club)
  

Where US Consumers Plan to Cutback

From Paul Kedrosky, a study by Unilever:

Guy Kawasaki's 5 Lessons Learned as Entrepreneur

Worth the read:

Focus on cash flow.
Make a little progress every day.
Try stuff.
Ignore schmexperts.
Never ask anyone to do something that you wouldn't do.

Global Happiness is on the Rise

At least according to one survey (Businessweek). Their byline reads: "The 2008 World Values Survey found that freedom of choice and tolerance—and not simply wealth—have lots to do with a rise in happiness". I would make the argument that it's wealth that allows us more freedom of choice and incentivizes us to be tolerant but either way, it's good news (though I suppose it depends on how happiness gets defined - see earlier link on Martin Seligman at TED). What the researcher said when asked what the path to happiness was:

While Inglehart does not profess to know the true secrets of happiness, he says that this most recent study has made the picture a bit clearer. In his opinion, benevolence and expressions of gratitude appear to be subtle but powerful ways to bring happiness into one's life and to extend it. Religion and solidarity in the community play a big role in this, he says, but any positive belief system can help. "Latin America seems to understand this," he says.

"In the old days I would have told you to work hard and save your money," says Inglehart. "It's different today. I just haven't nailed it down yet."

"Financial Incentives Trump Social Networks"

A bit of a retort to an earlier post that money undermines community. It apparently makes the community more productive as well (Slate). Economics researchers work with a farmer to improve strawberry picking productivity at a farm with a series of interesting experiments like the following (read the whole thing):

• The researchers found that managers tended to do their friends favors by assigning them the easiest rows. This made life comfortable for insiders but was unproductive since the most efficient assignment for fruit picking is for the best workers to get the best rows. The researchers responded by linking managers' pay to the daily harvest. The result was that managers started favoring the best workers rather than their own friends, and productivity rose by another 20 percent.
  
  
• "They proposed a "tournament" scheme in which workers were allowed to sort themselves into teams. Initially, friends tended to group themselves together, but as the economists began to publish league tables and then hand out prizes to the most productive teams, that changed. Again, workers prioritized money over social ties, abandoning groups of friends to ally themselves with the most productive co-workers who would accept them. In practice, that meant that the fastest workers clustered together, and again, productivity soared—by yet another 20 percent."

I suspect a number of these experiments would have direct applicability to just about any low skilled labour job.

Dyson & Red

There's something about the energy of entrepreneurs that fascinates me. Here are two good profiles of entrepreneurs who have made a mark in their respective industries making cool products:

• James Dyson: vacuum cleaners (FT via Paul Kedrosky)
• Jim Jannard: founder of Oakley & now developing Red - the high end digital line of cameras (Wired)
  

Game Theory & The Joker

If you haven't seen Dark Knight yet, I'd highly recommend it (I'm actually hoping I can catch it again on an IMAX somewhere sometime soon). For anyone who's remotely interested in economics/psychology, Presh Talwalkar via Club for Growth does a breakdown of the opening scene which happens to be an excellent example of Game Theory.

Dark Days Ahead?

A pretty bleak global economic forecast courtesy of Nouriel Roubini (Bloomberg via Paul Kedrosky). Of course economists wouldn't be economists if there weren't at least one predicting a global meltdown - the problem is that these days, depending on where you are in the economic food chain, things seem pretty uncertain if not bleak.

Whither China? Part II

Not that they weren't already, but I suspect articles like this will be even more common following the completion of the Olympics: "China's Bright Past Belies a Hazy Future" (WSJ). Another article in the same paper ends on this note:

"These have been a good Games, very good for China," said Pei Yuekai, the owner of a corner grocer in downtown Beijing. Mr. Pei had been watching the Games throughout the day on a small television in his store and had thrilled at the Games -- not just the Chinese victories but the sheer excitement of hosting people from so many countries. His son has kept a diary and has plastered his rooms with flags from around the world. "He now realizes how big the world is."

Of course, to China's leaders, that can be both a good and bad thing.

Does Thinking of Money Undermine Community?

Apparently yes according to Princeton's Peter Singer - via Greg Mankiw. But why?

Vohs and her colleagues suggest that as societies began to use money, the necessity of relying on family and friends diminished, and people were able to become more self-sufficient. “In this way,” they conclude, “money enhanced individualism but diminished communal motivations, an effect that is still apparent in people’s responses today.”

Good thing? While I'm not entirely convinced that this is a persistent state I can definitely buy the idea that money and wealth has allowed us to rely less on family and friends. But does it mean that having more money makes us less caring? If it did, wealthier societies wouldn't also be more generous than others. Of course being wealthier, by definition, allows us to be more charitable - but does charity = community? The pursuit of money can also result in less racism and prejudice if the priority becomes profit and, arguably as a corollary, merit. Lots of unanswered questions but definitely an interesting study.

More Reasons to Kill Corporate Taxes

Twenty more from US News via Club for Growth. While I think the ideas may win a few converts, the likelihood that any of the mainstream parties - particularly in the US. I mean it's not that those 'evil faceless multinational corporations beholden to heartless shareholders' do anything except create jobs that pay for government, and generate ideas that make living healthier, happier and better.

Silly Ideas: Economic Ignorance

Austrian Economist Steve Horwitz asks "What is the fallacy of fact and fallacy of theory that the reasonably well-informed layperson believes about economics that are most in need of correction? That is, which ones do the most damage?"

Some Highlights:

• Fallacy of Fact: that the economic well-being of the average American is on the decline.
• Fallacy of Theory: that consumption (rather than savings/investment) is the source of economic growth.
• Fallacy of Fact: All human action is zero-sum.
• Fallacy of Theory: greed causes prices.
• Fallacy of Fact: Moderation, not theory, is most important in policy.
• Fallacy of Theory: Trade deficits are bad.

Of course, it's the politicians and journalists who play to these fears that surprise, surprise lead to rent-seeking solutions of regulation and government. The sad irony is that they end up most hurting those on whose behalf they claim they seek to help.

Why Privacy Matters

I'm afraid I've sort of fallen in this trap. I figure the only thing anyone in the government would get by reading my emails and seeing where I go on the internet or say on the phone would be a bad case of boredom. That said, a column by Bruce Schneier at Wired makes sense:

Too many wrongly characterize the debate as "security versus privacy." The real choice is liberty versus control. Tyranny, whether it arises under threat of foreign physical attack or under constant domestic authoritative scrutiny, is still tyranny. Liberty requires security without intrusion, security plus privacy [...] And that's why we should champion privacy even when we have nothing to hide.

Defining "Fair"

(via ASI):

But while the prime minister appears to believe that expanding the state is the key to creating a fairer society, Osborne had a very different take on the subject. He said there were three elements to 'fairness':

• First of all, people should be properly rewarded for their efforts. That means free markets with lower and fairer taxes.
• Secondly, fairness requires equality of opportunity. That means extending choice in education and healthcare to everyone – not just the wealthy – and reforming welfare so that it empowers people to get back to work, rather trapping them in poverty.
• Thirdly, the current generation should not make future generations pay for their mistakes. And that means establishing a long-term price for carbon emissions, and coming up with a new fiscal framework to scale-back government borrowing.

Makes sense. By invoking the idea of "class warfare" some politicians want us to believe that equality of outcomes is "fair" by playing to greed and envy of the electorate. For some it's become more about robbing the rich to pay for the excesses of politicians and less about the poor. In the US, the rich already pay a disproportionate amount in taxes: "The richest 1% of Americans now pays 35% of all income taxes. The top 10% pay more taxes than the bottom 60%."

In market-based economies, wealth is almost always a direct result of innovation. The idea that the rich owe society ignores the reality that they have already given far more than they've received. It seems somewhat idiotic as a matter of policy that you would penalize the people who most benefit society. It's the equality of opportunity and ensuring that incentives to innovate continue to exist that matters.

Brave Soul Indeed...

For some reason I find it perversely amusing when some left wing nutter spouts some ridiculous comment about being "brave" while spouting off about Bush or some odd little conspiracy theory on prime time to some sympathizing interviewer. Now here's someone who's truly brave: Martyn Perks, is a design consultant who calls green design "anti-design" (via core77) in quite the smack-down:

What underpins the general shift towards green design is a widespread sense of guilt and self-doubt felt by many designers about blighting the world with too much stuff. The paradox is that the big idea they turn to for salvation - environmentalism - means that rather than endeavouring to produce something new to solve the problem, one that makes use of the best possible processes, ideas and resources, designers will attempt to regain a sense of purpose and credibility by preaching to the rest of us to lower our horizons. [...]

Every so often, moments do arise which push the boundaries a bit further, or if you are lucky, by a long way. That's called innovation. And when it occurs, it must be seized upon. However, the greening of design 'thinking' only seeks the opposite effect: the deliberate curtailment of that freedom to think. The designer makes a virtue out of doing less and thinking small. This is 'anti-design'. Holding back ideas inevitably means crap solutions. And that affects us all.

I can't say I disagree - I just hope he's prepared for all those villagers with their pitch forks who ironically are often the first to call for censorship of ideas they don't agree with.

On American "Selfishness" & Global "Generosity"

From Instapundit: "that's how it is with nanny-state approaches: They dampen private impulses toward unselfishness, even as officials line their pockets." Americans give some of the most in the world to charity on a per capita basis except they don't do it through government. This is what offends rent seeking bureaucrats and proponents of big government the most. Engaging in ludicrous revisionism, these people would have us forget continued UN ineptitude and the fact that their dithering following the Tsunami resulted in as much as 30% being spent in overhead (Instapundit) - and that's not counting how much was spent in graft.

More from the DC Examiner: "Whatever the case is with his own selfishness, the evidence of an internationally superior American generosity is impressive, beginning with the numbers on our charitable giving. We give twice as much as the British per capita, and according to The American magazine, seven times as much as the Germans and 14 times as much as the Italians. Even in inflation-adjusted dollars, the amount given each year just keeps getting larger, and meanwhile, we do far more volunteer work than in other industrialized countries."

Further, this idea that we can spend our way out of global poverty is truly offensive as it not only takes away from the blame local governments deserve for perpetuating and creating poverty but implies that the world's poorest are somehow naturally less capable than the rest of us.

PSA: Check out Xobni

If you use Outlook, check out Xobni - a plug-in that can reshape the way you manage email. I first heard about Xobni in TechCrunch earlier this year but was a bit too afraid to try it. I can't stress enough how important email is to me, so whatever its supposed benefits it's gotta be stable first and foremost. So recently when a friend pointed me to Walt Mossberg's review, I thought I'd give it a try. Definitely worth it (Xobni). There's another recent profile of one of the founders here (MIT TechnologyReview).

I've started to think about email more around people and conversations - which is exactly how it should work. I keep a number of different (and generally large) .PST files open at any given time with a huge number of emails, and I really haven't seen much performance degredation. Finding information in email is now faster and more accurate than Google Desktop (whose index files also get absolutely massive). That said, I'm thinking of reinstalling Google Desktop though to search my other files though most of my files these days reside in Groove.

Pricing Just Under Whole Numbers

Apparently French researchers say it works. From the Economist Blog:

[A]ccording to a French study the phenomenon still swings a considerable number of shoppers. Researchers found that lowering the price of a pizza from 8.00 euros to 7.99 euros boosted sales by 15%.

Maybe it's just the French? Alternative explanations here (Tim Hartford @FT) and here.

Achieving Self-Sufficiency in Energy or Food

Both bad ideas (Worthwhile Canadian Initiative and Townhall via Instapundit). These two quotes apply to both:

• "It's amazing how ideas with no merit become popular merely because they sound good." (John Stossel)
• "Specialisation and trade reduces exposure to catastrophic risk. In countries that insist on self-sufficiency, a [shortage] means [devastation]. In countries that participate in world markets, [underproduction] means a trade deficit in [any commodity here]."

Why Corporate Taxes are the Worst Tax

Well argued by the Washington Times (though obviously I'm a sympathetic audience):

The vast majority of economists would rank the corporate income tax as being worst and the sales tax and residential property tax as the best.

Politicians love to score points by excoriating faceless corporations for "not paying their fair share" but the reality is that corporations, even more than rich people, are mobile. More here:

The corporate tax should be abolished because it is the most destructive tax. In a typical year, it only produces about 10 percent of federal revenue. This static revenue loss would be quickly made up by the increase in shareholder dividends that should no longer have a tax preference (in the way that sole proprietorships, partnerships, and limited liability companies are now taxed), and through the additional productivity, international competitiveness and job growth that would result from abolition of the corporate income tax.

What does it say about those U.S. politicians who rant about U.S. companies moving their businesses to other countries and U.S. citizens moving their capital elsewhere, when many of those same politicians oppose tax rate reductions and even advocate tax rate increases? [...]

The corporate tax should be abolished because it is the most destructive tax. In a typical year, it only produces about 10 percent of federal revenue. This static revenue loss would be quickly made up by the increase in shareholder dividends that should no longer have a tax preference (in the way that sole proprietorships, partnerships, and limited liability companies are now taxed), and through the additional productivity, international competitiveness and job growth that would result from abolition of the corporate income tax.

Not a glitch, a feature

Pretty funny albeit delayed response from EA (Entertainment Arts). Whoever came up with the idea deserves a raise. A year ago, a Youtuber uploaded a video that showed a "glitch" that allowed Tiger Woods to walk on water. Here's EA's response (via kotaku):

"Think Different"

An inspired Apple ad from way back:

Cool Tech News

Hmmm I've just passed 501 posts of what barely passes for verbal diarrhea. Anyway, I found these tech tidbits interesting:

• A "technical advance" to "growing blood" (LAT). Cool but kind of freaky and makes me think of that scene of Carrie at the prom for some reason. For some reason I've had an odd fascination with synthetic blood... probably because I used to follow a synthetic blood company way back when. update: a lot more information here (New Scientist)
  
  
• Nanobatteries made using viruses (Crunchgear). "I don’t know what’s cooler, that I could coat everything I have in micron-thin battery film, or the fact that these guys are using viruses to do the dirty work." Yeah, what he said.
  
  
• Brewing cellulostic ethanol with the same enzyme used to make sake (Autobloggreen). Just a reminder that the days of high energy prices are numbered and it would truly be idiotic for governments to try to decide what the "winning" technology will be.
  

Saving on Shipping by Using Predictive Modelling

OK so maybe it's a bit geeky of me to find this terribly interesting but it's about saving money (which I'm definitely into) and logistics (a sometimes tangential interest). Apparently Dell saves 60% on their shipping costs (which I imagine must be gargantuan) by using predictive modeling. Per Crunchgear:

If ever anyone tells you that math is all theory and no application, slap them in the face.

Link Roundup

It has been nutty busy lately. You know you're in trouble when you feel tired after updating the "to do"'s for the week. I've also really caught on to the fact that I've been allowing certain projects to slip after delegating tasks. Tasks of course that seemingly drift into the abyss and are ignored until they are harassed over them makes the list and the things I have to track significantly longer.

Anyway, I need to close my browser and reboot so here they are:

• [Economics/Politics] Arguing that the firm should not be beholden to the profit motive/shareholders (Creative Capitalism via the Economist blog). Frankly it's just plain silly. This idea that corporations are beholden to society in some way over and above the impact they have in creating jobs, technology and driving real progress strikes me as ungrateful. Further, the firms who take a "stakeholder" approach to doing business are generally less creative and more susceptible to market forces. Nevertheless, these are ideas that are useful to consider from time to time if only to dismiss out of hand particularly since those who generally make this argument don't generally differentiate between short term and sustained profitability.
  
  
• [Economics/Politics] Does Obama treat success as a form of failure? (Roger Kimball via Instapundit). It goes back to this idea that those who make more money and are more successful in society "owe" more to society despite the immense contributions they make. It bears reminding that wealth is created and is generally destroyed with government does the distributing.
  
  
• [Managing/Marketing] "8 Pricing Strategies you can implement now" (Small Biz Trends). Practical advice.
  
  
• [Technology] Science you can use: apparently "warp drive a possibility, scientists say" (Telegraph).
  
  
• [Marketing] Something you should know already - using monetary incentives / slashing your price to promote your product, devalues your product (Incentive Intelligence).
  
  
• [Politics/Economics] Highlighting the fact these folks "went to J-School, not B-School" (Just One Minute). Of course the gaffes this past week were even more extensive, if not hilarious prompting this comment from Scrivener: "Maybe they should teach a few business courses in journalism school? At least for students who plan to write in the business section of the paper?" Remedial math might also be a useful skill for some of these people.
  
  
• [Economics/Politics] Repeating the mistakes that made the Depression Great (Washington Post).
  
  
• [Managing/Startup] "Trust Customers over VCs" (37Signals). A bit of an extreme position since I figure that it all depends on what you need/want to do. There are quite a number of people who build businesses to sell out or to hit some ridiculous valuation, but I would tend to agree with David Heinemeier Hansson on this one in that it's probably far easier to build a business focusing on serving a solid market/need over chasing some ethereal/elusive valuation.
  
  
• [Managing/HR] "8 Essential (Life) Skills they didn't teach you in School" (Life Hacker). Quite useful and some good references with the 'networking' and 'time management' bits that I need to work on.
  
  
• [Managing/Startup] "9 Deadly Startup Diseases" (Sitepoint). Quite useful and I can a bit frighteningly relate to a few of these.
  
  
• [Managing/Startup] Winners know when to quit (NYT). I find the publishing source of this somewhat ironic but nevertheless, it's a useful article to consider. I think it may make it far too easy for some people to decide to quite early but just as importantly maybe it will convince some people who persist in quixotic goals to save time and money putting their efforts elsewhere.
  
  
• [Africa/Development/Economics] Failing Zimbabwe (Vanity Fair). An intense, personal look at what has happened in Zimbabwe. As the joke goes, "what if your purpose in life is to serve as an example to others of what not to do". Except in this case, it's not so funny. I think the West, as a result of liberal guilt truly failed Zimbabwe and could have made significantly more of a difference saving at least hundreds of thousands of lives and reducing human misery.
  
  
• [China/Economics] What went up, in hindsight far too quickly, is now coming down. Documenting the fall in the Chinese stock markets (20 month low) and real estate prices. With the US slow down and the draconian policies in preparation for the Olympics, the question that more people are starting to ask is 'whither the Chinese economy?'
  

Figuring out the Difference between Correlation, Causation & External Factors

This was instructive (Economist Blog). So it turns out that there is a negative relationship between beer drinking and scientists having their papers published/cited. So what does this mean?

• According to the original authors, 'correlation': The more beer scientists drink, the less likely they are to have a paper published or cited.
  
  
• Interpretation of the people at the Freakonomics blog, 'causation': "professors with poor publishing records subsequently drink more."
  
  
• And from the Economist Blog, 'other': "snooty journal editors are biased against beer drinkers."

Of course what gets back to the general public these days as a result of media's interpretation is probably different altogether with the standard drivel probably something along the lines of "blame Bush / that's why we need Obama".

Bad China Laws

Seriously bad laws in China - courtesy of FP unsurprisingly via China Law Blog. While these laws generally have bad intended and unintended consequences, they're considerably more serious than say the silly, generally old laws (Dumb Laws) that we have in the West that we just haven't gotten around to getting rid of. But it's a good reminder that "regulations are often a form of rent seeking." (ASI)

Outside Looking In...

A few interesting articles on China:

• How US manufacturing can compete against China (FT). Despite the hype, US manufacturing isn't going away. Recently the environment has been better for domestic manufacturers given the increased costs of shipping/energy and changing Chinese policies regarding the VAT. Further, where speed is of importance or innovation/development is critical, China continues to lag significantly.
  
  
• On the strength of the China's Manufacturing Sector (Cato). "Until the 19th century, China had been the world leader in manufacturing for over a millennium. It lost that position during the so-called 150 years of shame and humiliation at the hands of inept leaders and foreign powers. The reclaiming of the title could be taken as the formal introduction of a new era."
  
  
• The "Little Emperors" (Psychology Today via Instapundit): "Coddled from infancy and raised to be academic machines, China's only children expect the world. Now they're buckling under the pressure of their parents' deferred dreams."

Overthrowing (Bad) Governments One Cell Phone at a Time...

More evidence... it's a bit old (presentation from TED in 2005) but it's heartening to know that it's an idea that's actually working and to boot, someone's getting ridiculously rich in the process:

Just Because They Call it "Capitalism"...

...does not make it so (WSJ). I confess I find it a bit irritating when people point to places like Indonesia or Russia calling it "capitalism" where markets are driven by corrupt insiders who also control government. It's sort of like calling a dictatorship a "democracy" (of One).

Increasing Vid Resolution 4x using Still Photos

Pretty impressive (via CrunchGear):
Using Photographs to Enhance Videos of a Static Scene from pro on Vimeo.

"For Most People College is a Waste of Time"

From the WSJ - a different perspective on college (or uni for those north of the 49th parallel):

First, we will set up a single goal to represent educational success, which will take four years to achieve no matter what is being taught. We will attach an economic reward to it that seldom has anything to do with what has been learned. We will urge large numbers of people who do not possess adequate ability to try to achieve the goal, wait until they have spent a lot of time and money, and then deny it to them. We will stigmatize everyone who doesn't meet the goal. We will call the goal a "BA."

[...]

The solution is not better degrees, but no degrees. Young people entering the job market should have a known, trusted measure of their qualifications they can carry into job interviews. That measure should express what they know, not where they learned it or how long it took them. They need a certification, not a degree.

Sounds about right... though in my somewhat limited experience, there's a definite difference between the approaches taken in problem solving between those with undergrad degrees and those without - but that doesn't mean that there aren't exceptions and why shouldn't people have an alternative to proving themselves outside of paying 10-50K / year for 4 years?

China's Draconian Pollution Control Efforts Pay Off?

From Time's China Blog - The day the Opening Day Ceremonies in Beijing:


Today/last night... the difference a few days make:

Link Roundup

Firefox is once again bogged down by too many tabs that I think you might find useful or in the very least I'll probably find useful at some point in the future, so it's time for a dump:

• [Africa/Development] Good news in Africa - free trade agreement struck amongst 14 countries in southern Africa. (Club for Growth)
  
  
• [Africa/Development] One small positive outcome of Zimbabwe's incompetent / racist and despotic government: technology leaks. "The Nigerian states of Nassarawa and Kwara have persuaded white farmers from Zim to farm in their states. Loans and about 45,000 acres have been allocated to each farmer persuaded to head north." (The Croydonian)
  
  
• [Economics/Politics] The problem with green/blue bins: "Sorting of rubbish can be done very well by large machines at centralised factories (or even outsourced to foreign lands). But the green movement insist we do it at home as a penance for our consumerism, almost as if when we needed pins we were forced to make them at home. It is this forbidding of the division of labour that makes us poorer and is symptomatic of the green movement." (An Englishman's Castle via ASI)
  
  
• [China] Apparently some people who watched the Olympic opening ceremonies thought it was a metaphor for the rise of collectivism (Economist Blog, as first published, not surprisingly in a column from the NYT). If that's the case it's definitely not the China I know. More fisking on this idiocy from Imagethief quoting James Fallow.
  
  
• [Economics] Tragedy of the commons/bunnies (an illustrative flash game)
  
  
• [Development/Economics] Not surprisingly, the best form of wide scale disaster preparation is to encourage economic development. (Instapundit)
  
  
• [Development/Research & Development] Making design work for the developing world. (NHPR)
  
  
• [Commodities] Debunking 3 myths being pushed by environmentalists over offshore drilling. (Washington Post)
  
  
• [Finance] Confessions of a Risk Manager - the economic tension / culture at banks that led up to the subprime crisis. (Economist)
  
  
• [Politics] An unfortunate event in Waterloo, my home town: "I now realize that I was in Canada, where only politically correct speech is protected."(SDA)
  
  
• [Research & Development/Managing] "Design is the engine that can transform a company into a powerhouse of nonstop innovation." (Businessweek via Core77)
  
  
• [Regulatory] Safe Kids = Fat Kids. Unintended consequences. (WSJ)
  
  
• [Marketing/Managing/HR] Everyday psychology: "how to detect lies, make your smile more attractive, persuade people, avoid getting scammed, and reduce your cholesterol level. One example: one person expressing an opinion three times has 90% of the effectiveness as three people expressing it once." (Guy Kawasaki)
  
  
• [Marketing] Differentiating yourself from "commodity oriented competition" by beefing up your "intangibles". (Seth Godin)
  

Buckling Down for a Recession

Good advice for any smaller business - and while it's written for the ad agency world, the advice makes sense (Ad Age):

• Keep what you have while getting someone else's.
• Great agencies shine brightest during dark times.
• Work hard even when there isn't a lot of work going on.

Concluding: "It is easy to become discouraged, and even a little frightened, by a bad economy. Small agencies are especially vulnerable. But much of the failure is caused not by a bad economy but by the fear of one. Those agencies that pursue their goals regardless of the economic situation will have much more success than those who allow it to dictate business decisions." Of course as I've noted before, having your own business requires the emotional (and financial) fortitude to ride out the storms but clearly when the economy falters this effect can be amplified.

"Demographic Inversion"

An interesting trend to watch (The New Republic):

For one thing, the deindustrialization of the central city, for all the tragic human dislocations it caused, has eliminated many of the things that made affluent people want to move away from it.

I'm pretty sure I don't agree with the author's take on the implications of what's happening - nor the idea that America's cities are turning more European and all (the largely negative things) that entails. And while I'm not sure that a world of concrete is the best place to build a family, the one thing I do miss about NYC is the conveniences of the city. While not nearly as 24/7 as I would have liked, given my generally odd hours it is considerably better than the other places where I've lived. With broadband anywhere, anytime and on demand, it's obviously going to matter less where you (and/or your business) are which I think will also lead to a revival of rural communities.

"Don't Underestimate [China's] Capacity for Positive Change"

Not sure why all these libertarian institutions are leaping to the defense of China lately - of course this may not bode well as it could be a reflection of their concern that the US is about to raise trade barriers to China. From Reason Online:

Robert Ross, a China scholar at Harvard and Boston College, says, "I would put China in the top 10 percent of all the authoritarian states in the world"—comparing it favorably with many East Asian countries (notably North Korea and Burma), most Middle Eastern countries, including Saudi Arabia, and most African nations.

While I don't disagree, being lumped in a comparative group with North Korea and Burma isn't exactly what I'd call complimentary - even if you're considered better than the rest. Sucks be to the ones still targeted by the state and all the corruption it entails but credit should be given where credit is due.

Update: From Fistful of Talent on the Olympics lipsyncing scandal:

Sigh... First up, it's sad, but it seems like this kind of stuff hits every culture. Part of me is actually encouraged that China (still a communist state, people) has opened up enough where this thing would surface, be reported on, then have some communist official go on TV and try and defend it. In a sick kind of "entertainment tonight" way, that's progress.

Yes, let's take progress where we can get it. The bizarre thing is that the Chinese government didn't bother to think that maybe after something like this got out it would be worse for their image than if they let a little girl with a great voice sing a song, albeit with crooked teeth.

Replicator Technology Being Funded?

While I can't say that it's so good for my line of work, it's still pretty cool: "Finally experiments have been funded to test the viability of diamond mechanosynthesis... MNT-built diamond products can be at least ten times stronger than steel, 100 times stronger than aluminum or plastic... The experimental proof of the nine molecular tools are the first funded steps on a journey of 27 years. " It's a bit far off. (Next Big Future)

The Rise of the Biofuels?

From Popular Mechanics: 7 next-generation biofuels (via Instapundit). My guess is that it's going to be a combination of a number of technologies that pushes us over the tipping point on the reliance of oil.

It Pays to be Conservative.

Literally (Paul Kedrosky). Apparently Conservative mutual and hedgefund managers do marginally better than Liberal ones:

The authors discover that the coefficient for Democratic fund managers is 0.061% compared to the 0.092% for Republicans, which amounts to a 36 basis points a year difference.

(Yes, it's tiny but it's still statistically relevant). Plus it means you're happier too!

Liberals, claim New York University psychologists Jaime Napier and John Tost, have a tougher time rationalising social and economic inequality than conservatives...conservatives mix a martini and hit the country club, while liberals write angry letters and stage protests.

Trade First. Political Freedoms to Come?

It's an admittedly self-serving policy that I endorse (Cato in Far Eastern Economic Review). It does make sense though: trade spreads ideas and create wealth, which in turn breeds a yearning for freedom. On the other hand, it does sometimes mean sacrificing a minority under generally oppressive governments though clearly it's not a policy that can always works.

Man Lands Plane Using Text Messaging

Funny, scary and amazing. While the guy wasn't using a Blackberry, it reminded me of September 11th when the only way to communicate with the outside world from ironically probably the most wired place in the world was using the Blackberry on the old MobiText system.

The Rise of Solar?

Not sure if it's vaporware or real but in the very least, this is promising (via Instapundit):

But if you want the off-peak market, you’ll have to price your cells at about US $1 per watt. That price is called grid parity, and it’s the holy grail of the photovoltaic industry. At least 80 firms around the world, from Austin to Osaka, are in the chase.

Surprisingly, at the moment no company is ­closer to that grail than a little start-up called First Solar, which until very ­recently had been known only to specialists. It’s located in Tempe, Ariz., and analysts agree that it will very likely meet typical grid-parity prices in ­developed countries in just two to four years. It’s got a multibillion-dollar order book, it’s selling all the cells it can make, it’s adding production capacity as fast as it can, and its stock price has rocketed from $25 to more than $250 in just 18 months.

I'm not sure about that statement about "no company is closer to that grail"... since at least Nanosolar is saying that they've made it but I suppose their efficiency in the field remains to be proven.

Utility of Non-Compete Agreements?

A good friend once pointed out to me that "you can't steal clients." Clients have the free will to go where they want to go - and it's in the interest of society that they do have the mobility to do so. The remedy is simple: better service, better products and better pricing. You don't look very hard to find the lamentations over the instability of markets but without them, we'd never have the wealth and opportunities that we have today.

As for why this post (SF Chronicle):

In a unanimous decision, the justices [for California State's Supreme Court] said state law since 1872 has forbidden what are called noncompete clauses that restrict management employees' options after they leave a company.

It will be interesting to see if there will be other states who follow suit.

Update: TechCrunch believes The Noncompete Ruling won't change Anything, Anywhere:

Daniel McCoy, an attorney at Fenwick and West who specializes in employment litigation, says that the ruling is too subtle to have any impact on the law’s standing in other states. Because there has been no real change, no precedent has been set that didn’t already exist, and there’s little for activists to rally around.

Silicon Valley is the world’s technology hotbed, bringing both talent and revenues to California. If the potential economic gains to be seen in states like Massachusetts and Washington aren’t enough of an incentive to drive them to change their policy, we can’t expect this ruling to change anything.

"May the Fleas of a Thousand Camels Invade your Armpits"

That's a good curse. It's from the latest angst ridden note from PassiveAggressiveNotes.com:


On a somewhat related note, I'll confess - I'm one of those people who have these bouts of road rage (that have moderated somewhat with time/age) - and I can't say I sometimes don't mind the speed. I just can't understand why it's so difficult for some people to understand that the left lane is for passing. Another big pet peeve is rubber necking. Apparently someone has recently written a book though about the "idiots" who populate the road (NYT):

Traffic jams are not, by and large, caused by flaws in road design but by flaws in human nature.

Update: More in an interview @ Amazon (via Paul Kedrosky).

Quote of the Day

Ayn Rand (via ASI):

Wealth is the product of man's capacity to think.

Best Experience for Aspiring Entrepreneurs?

Sales (WSJ). There's a bit of a sleazy used car sales approach / 'selling freezers to eskimos' stigma with sales. The irony is it's probably the least effective form of sales. Not many of my classmates from university started out in sales (and substantially fewer started or ultimately chose the entrepreneurial route - in fact I can probably count the number on 2-3 fingers) and that's unfortunate.

Sales at its core is the end mile of solving someone else's problems. The rejection/instability is also useful for figuring out if you have (or building) the EQ to deal with being an entrepreneur.

"Reining In" the Interest Rates of Payday Lenders

In the aftermath of the problems related to subprime lending, some states are moving in to limit what companies can charge for making loans (WSJ). Ironically some civil rights groups are coming to the defense of "predatory lenders" (as described by left-wing rag Mother Jones).

Of course the results will be predictable. According to the WSJ: "Indeed, payday lenders have withered away in several states that have passed rate caps. Since the Oregon legislature passed a 36% payday loan cap last year, about three-quarters of the state's 330 or so payday lenders have closed." In the rush to protect people from themselves, Reason Online points out the flaw: markets are more rational than politicans think: America's check cashers don't exploit the poor; they serve them (via Instapundit). To beat this point home even further, this applies as much to the real poor in places like Africa as it does to the relative poor as pointed out earlier. From the WSJ on a credit experiment in South Africa:

The lender charged its normal rate: 200% APR. The remaining, just-below-the-normal-approval-bar applicants (the "control group") were rejected in line with the lender's normal credit policy.

We then tracked both groups over the next six to 27 months, measuring their well-being based on a range of economic, social, health and mental health measures. Applicants who were randomly approved for a loan had higher incomes, less hunger, better credit scores and more positive outlooks than their control group counterparts -- even after paying the high interest rate. Though they had higher than normal default rates, the borderline loans were also profitable for the lender.

This should serve as a reminder that, as the US drags others into an economic slowdown, political responses often have the perverse effect of prolonging hardship rather than alleviating it. Of course politicians and policy makers tend to forget that it was their interference in markets (add to the CRA, the role of the Federal Reserve with cheap credit not to mention Fannie and Freddie) that got us into this mess to begin with.

Either CNN's standards were absurdly low to begin with....

...or they've dropped considerably, earning their moniker of Chicken Noodle News. I was doing a bit of running at the gym scanning the TV banks for something interesting to watch. There's something very wrong when the best footage CNN could come up with for their leading story (Rielle Hunter & John Edwards) was courtesy of Extra! TV. Just remember these are the same people who complain that bloggers don't have 'integrity'.

Legacy media indeed (Instapundit). It's remarkable to watch how how this story has morphed from one about a repugnant politician to how the media can't be trusted to give us the news and how reporters are now bumbling around pretending as if they still matter.

Opening Ceremonies: "Liveblogging ACTIVATE. Set phasers to MAXIMUM SNARK!"

Ha (Brendan O'Kane via China Law Blog). One choice quote: "if there’s anything with international appeal, it’s drums, gongs, and caterwauling transvestites".

Nostalgia for Times that Never Were

Recently, I've been hearing comments from a few people who are seemingly repulsed by "what they've done to the environment over there" in China. Lost in the concern over air quality during the Olympics, is a remarkable economic revolution. One wonders if these "concerned" people would be happier if China were still a lush largely industrial-less and state run economy as people starved to death as they do now in places like Zimbabwe? The reality is that there is little nostalgic about the abject level of poverty my progenitors and other relatives experienced.

From The Club for Growth on what people will learn from watching the Olympics in China:

People will learn about China's amazing capitalist revolution and the huge impact it's having on the country and the world. Once they learn the facts, I think it will take their breath away. As Boaz writes, "The changes in China over the past generation are the greatest story in the world–more than a billion people brought from totalitarianism to a largely capitalist economic system that is eroding the continuing authoritarianism of the political system."

Couldn't agree more. People need to know this.

Indeed. More from Cato's David Boaz.

Update: Silk Road's David Dayton also makes the case that this is why the government is tolerated - even appreciated. From what I've seen, people have longer memories than this. Things are better, but guess who made circumstances that bad to begin with? That said, I think the government has done a good job at deflecting the blame, but with the wealth of a larger middle class comes an inevitable threat that could be impossible to manage. It's also useful to note that while things may be better than they ever were, the Chinese government did not change because it wanted to, but because if they didn't, their survival would have been at risk with their economy stagnating and people starving while the rest of the world - particularly the decadent and greedy Americans, would have continued to leave them behind.

Google's Knol vs Wikipedia

While I have little more than mild disgust of former US Presidential candidate John Edwards' indiscretions while his wife was battling cancer, I find the fact that Wikipedia and nearly all of the mainstream press deliberately suppressed the story since last week absolutely stunning. It would appear that they decided to allow their reputations die with Edwards' political hopes. It's a dangerous precedent for Wikipedia that has already shown it actively censors debate on global warming (Forbes). It makes you wonder what else they're either lying about or not telling you. Thankfully, despite some of Google's sometimes questionable tactics, they launched Knol, July 23, 2008.

What makes this competition fascinating is that both take fundamentally different philosophies to developing their content. TechCrunch describes Knol as monetizable wikipedia. Google rewards writers with adwords but requires authorship and therefore accountability. Wikipedia editors hide behind pseudonyms. Already there are those who claim that Google, is playing favorites (Seldo.com). TechCrunch also opines:

Wikipedia works well because it’s almost like a charitable organization. Everyone contributes what they can in the hopes of furthering the world’s knowledge. Knol’s community will likely be far more concerned with earning money than the general welfare, which may hurt both its credibility and the amount of participation it sees from the community.

If anything, the heavy handed one-sided tactics on politically sensitive issues show that Wikipedia can be very selective about what it wants the world to know. This anti-commercial bias from TechCrunch is also remarkable. Given that names and authorship are required I think TechCrunch misses another incentive - reputation. This is why some people will write about obscure topics. The idea that being commercial and doing good for the community are antithetical like the idea that not for profit motivations always result in positive benefits for society are ones that should have died a long time ago. The organization that wins will be the one that offers the most accurate resource of information - but what I don't understand is why most bloggers who have opined on the subject think that this is currently Wikipedia.

Cortera's blog makes the point that "trust is hard to gain, but easily lost" assuming that it's only Google's reputation at risk. Recent events suggest that this isn't the case.

Update: Have English content producers lost their "sense of community"? They've stopped making "revisions."

Link Roundup

Posting has been a bit slower due to an onslaught of work and the development of a new area of growth for us. In any event, I badly need to clear some of my tabs so here goes:

• [Funny/Marketing] Embarrassing Urls (TrendHunter). While it certainly makes their websites/email addresses more memorable, I suspect the inflow of um, er, other traffic sort of negates this. Some of them are old but if you haven't seen this before this one is particularly good: Looking for a Therapist finder = www.therapistfinder.com
  
  
• [Economics] As the US Dollar rises again - or in Paul Kedrosky's words, as other currencies collapse against the US Dollar, the opposite seems to be happening in some emerging markets.
  
  
• [Economics/Entrepreneurship] The irony that sometimes the best thing that you can do to build value and wealth is by claiming you're not in it for the money. Here (Division of Labour) and here (core77). While Jim Buckmaster, Craiglist said "the key to their success is an anti-commercial value system based on three 'ironies': 'the ironies of unbranding, demonetizing, and noncompeting.'" (Fortune Magazine)
  
  
• [Funny] Use your browser history to estimate your gender. Instapundit is androgenous. Sucks to be him. In case anyone is wondering, I'm 100% male. And yes, it really does put me at ease.
  
  
• [Managing/HR/Marketing] Guy Kawasaki suggests that you read Influence: The Psychology of Persuasion by Robert Cialdini to learn how to be persuasive with an interesting sales story (PILOTed) to go with it (sure it's a bit long and yes, the word "interesting" to me may be indeed be synonymous with boring for you).
  
  
• [Managing/Psychology] Apparently scientists now know what it is in certain faces that make them "trustworthy or fearsome" (Princeton via Instapundit). My question is as follows: since when are trust and fear binary choices?
  
  
• [Managing/HR] We ooze non-verbal cues according to psychologist Carol Kinsey Goman, also author of The Non-Verbal Advantage. For the information you can use, in an interview with Connie Loizos @ PE Hub who asked "Aside from the face, what body part best gives away what emotions someone is experiencing? Feet! Feet are the least rehearsed part of the body, so even if you have your game face on and have adjusted your body posture to convey confidence, your feet will give you away. They’ll point in direction where you want to head — often at the door — or toward the person in the meeting who you prefer. When someone crosses his legs, his top leg and foot will point at a person with whom he agrees. Feet also bounce if you’re nervous, ankles cross and pull back when you feel like they aren’t part of the group, and toes point up when you’re feeling happy and confident. Really, if you want to know what’s going on in a meeting, just drop your pen and look under the table." Pervert.
  
  
• [Funny/Scary] Freakonomics asks the question "why don't business leaders assassinate competitors?" and leaves it open ended.
  
  
• [Other] The NYT rationalizes your coffee fix claiming that it's mostly good for you under certain circumstances. I don't like coffee myself. When I was young and naive, I deluded myself into believing I wanted to become a lawyer so I figured I wanted to save the effectiveness of coffee for law school and then when I never went, I just never took up the habit.
  
  
• [Politics] A reminder that no matter what the CBC and other undoubtedly well meaning news organizations tell you, healthcare in the US is n0t a free market capitalist system. Indeed, pretty far from it. Reason online tells us both why and how it happened.
  
  
• [Psychology/HR] Happiness inequality has fallen in the US despite the fact that income inequality has risen. It may be time to revisit the assumption that the two are related. From Justin Wolfers on the Freakonomics Blog.
  
  
• [Politics/Development/Economics] On the brilliant minds at the World Bank: "The bank thought it financed an electric power station, but in fact financed a brothel" - quoted from Paul Rosenstein-Rodan at the Bayesian Heresy who also asks "What's the value added of the World Bank. Albeit with limited direct experience I suspect that on balance the answer is either "not much" or "negative".
  
  
• [Finance/Managing] Find venture capitalists in your area. Introduction to the web utility from the company's blog via Guy Kawasaki
  
  
• [R&D] While Gy Kawasaki talks about patents and how not to protect your intellectual property, Michael Heller in Forbes (via Instapundit) tells us why we need to change the patent system and why patent reform could save us.
  
  
• [Politics/Regulation] Finally (last one for tonight), a reminder that deficits are the result of spending and regulatory problems not because the rich don't pay their "fair share" or some other trope. Steve Malanga from Real Clear Markets notes that state governments that have been favorable to business with low taxes and fewer regulatory burdens are getting through recent economic hard times considerably better than those who weren't:
  

  The DCI study, coming as it did amidst growing talk of state fiscal crises around the country, is particularly revealing. Of the approximately $48 billion in accumulated budget shortfalls that the 29 states with projected deficits are facing, $33 billion, or two-thirds of the gap, is concentrated in those five states considered by corporate executives to be the least friendly to business. Meanwhile, among the five states ranked as having the best business environment, Texas and North Carolina have no projected budget gaps, and Georgia, Tennessee and Florida are facing shortfalls amounting to about $4.1 billion, or less than one-tenth of the states’ total.

  Well let's hope that people start recognizing the relationship calling it justice rather than an excuse to bail poor fiscal management and governance out. Of course this effect bears some striking similarities to the economic state of other countries around the world.
  

"They Like Me, They Like Me, They Really Do!"

Or maybe not so much (Washington Post):

Essentially, the people of China think twice as many people in the world like their country as actually do. This isn't a gap; it's a chasm. And the information bubble around the Chinese people explains a lot.

via China Law Blog. Longer term, I don't think this bodes well for a society that can quickly turn defensive and nationalistic. Presumably despite the disconnect, it's better than it was before just given that the average Chinese citizen isn't nearly as isolated as they were before. It would be interesting to see the polling after the effects of the much hyped Olympics wears off.

Quote of the Day

Jonah Goldberg (via Instapundit):

Capitalism is the greatest system ever created for alleviating general human misery, and yet it breeds ingratitude

Move Faster

A structured approach on to how to create a sense of urgency in your organization is explored by Michael Hyatt (CEO of textbook publisher Thomas Nelson). One of his observations that resonated with me:

Unfortunately, in the 20-plus years since we began that venture, I have learned that there seems to be an inverse relationship between a company’s size and the sense of urgency embedded in the culture.

More often than not, small companies have a sense of urgency. Why? Because their very survival is at stake. If they don’t move quickly, they get squashed by larger, more established competitors.

The practical tips he suggests, some obvious others less so, as follows:

• Walk faster—show some hustle.
• Respond faster to emails and voice mails. Don’t allow yourself to become someone else’s excuse for not getting their work done.
• Get to the point quickly and insist that others do the same.
• Keep meetings short and on-point. Always insist on an agenda.
• Eliminate every piece of paperwork that doesn’t facilitate a specific outcome. My motto: “When in doubt, throw it out.”
• Be quick to change tactics. If something is not moving you toward your desired outcome, do something else.
• Do it now!

Changing the World, One Cell Phone at a Time

An interesting story that plays into how telecommunications are changing the world making it more difficult for governments to stifle liberties starting with the freedom to buy cheap cell phones (Club for Growth):

Denis O'Brien, a self-made billionaire who owns Digicel Group, is arming the masses in dangerous countries like Haiti, Fiji, and Papua New Guinea. But he's not giving them guns and artillery. Instead, he's selling them cell phones.

Read the whole thing.

Google Interview Questions

These questions are sort of fun (Smooth Noodle Maps). While useful in testing a candidate's critical thinking skills, I would imagine that they're not as helpful in determining if someone will be a strong performer. I've come to believe that given the choice of a candidate with superlative attributes of collaborating/leadership, persistence or intelligence (versus just average in the others), my top choice would not be intelligence.

Why (Corporate) Culture Matters, #XXIV

I've been thinking more or more that my blog is becoming a hodge podge of what are really two interests but I'm a bit too lazy to actually have two blogs so this will have to do for now. Anyway, Incentive Intelligence by Paul Hebert makes a few interesting points. First, by quoting from Jim Champy's Outsmart - How to do what your Competition Can't: "Companies that outsmart their competitors depend on culture to manage behavior. Incumbents use rules and controls." (Reading this was one of those aha! moments for me)

That said, Hebert disagrees with Champy's comment that "bedrock values...simply appear in time of need." I can see what Champy's saying. I think most of us have some idea of Southwest Airline's culture as being born out of threats of failure as much as anything else - and it is during these rough times that a management team's values really show (probably especially true for small companies who are perpetually struggling to survive making the opportunities for delivering these symbolic messages ever present), I also agree with Hebert. Notes Hebert:

Nothing is "undeclared" and "appears" within a company. If a company has a value or shared belief there is someone or something reinforcing it. Whether it's the comments in the hallway, at meetings or to the press. Somehow the culture is being reinforced.

What ever you want your culture to be at your company - don't wait for it to appear. Make the effort and reward and recognize the behaviors that represent those values/beliefs.

A Strengthening Yuan?

With Chinese factories seeing their share of economic problems (AllRoads), the Chinese government seems to be slowing the appreciation of the RMB relative to the USD. In fact in the past week, the value of the RMB has fallen relative to the USD (ChinaStakes): "The rate of RMB against the USD opened at 6.8163 last week, and closed at 6.8420, slumping by 257 basis points."

That said, it's interesting to note that in the last year, while the USD has depreciated relative to the RMB from 7.57 /USD to today's 6.86 (Oanda), the Euro has actually risen relative to the RMB from 10.33 / EUR to 10.69 which bolsters the argument that it's really not the Chinese who have been manipulating their currency.

"Economic Justice"...

"... simply means punishing the successful and redistributing their wealth by government fiat. It's a euphemism for socialism." (IBD via Donald Luskin). Real economic justice is about equality of opportunity and not outcomes. I would not want to be an American tax payer after November.

Update: What "economic justice" applied may mean to you - "nearly doubling the tax rates on capital gains and dividends to 28% is a terrible idea" (WSJ). Well, yeah.

How to Spend 10 Billion Dollars...

One of the major reasons economics as a study should trump other social sciences when it comes to considering policy alternatives: it acknowledges that resources are limited in the short run. Compare this to blubbering about some pet project in which an infinite amount of resources should be spent on limited if not dubious benefits.

Conclusions from the most recent Copenhagen Consensus as told by the principal organizer Bjorn Lomborg (WSJ). If your goal is to make a difference, may I suggest that it influence how you make your charitable giving?

Advice for Journalists coming to Beijing

Amusing and true (Ogilvy/Kaiser Kuo).

How not to Hire

Horror story of hiring a sales manager here (Building a Software Company Blog). The YCombinator community responds with tips on achieving the opposite.

I'd have to say that I can sympathize - particularly with the initial idealistic goals. While I won't say that I have become hard and wizened, we do work through sales reps and finding the right ones is tough and it can be an extraordinarily expensive learning process. The best I think managers can do is ensure that sales reps have the tools they need and then develop both positive and negative financial and non-financial reinforcements.

Limiting Economics

Those who know least about economics are often the first to attack it - generally to limit the scope and applicability on policy initiatives that they champion. Emotionally blathering on about "feelings" they often go on to propose some immensely impractical idea that generally means everyone would be worse off - often particularly those they propose to help, and by limiting the scope and applicability of economics that will often predict these outcomes (e.g. tax rebate cheques to "stimulate the economy"), they feel they can insulate their silly ideas.

From the blog Economics of Contempt: "The one criticism of economics that annoys me the most is the charge that economics is unrealistic because economists think people are only motivated by money [...] This is stupid. Basic economic theory says that people seek to maximize utility, which is generally defined as a person's level of satisfaction [...] if you think basic economic models assume that people are only motivated by money, then I'm sorry, but you fundamentally don't understand what economics is all about." (Read the whole thing - it's fairly short)

While sometimes the prescriptions are funny on their face, other times they have far more dire consequences. From Adam Smith Institute's Blog:

Taking lessons from Cuban agriculture with the low level malnutrition there doesn't sound all that wise. The compulsion that accompanies the WWII style mobilisation (yes, they do make a direct comparison) they urge is of course anathema to anyone with the least pretence to a concern for liberty or freedom. Their ideas on how to reform the financial system actually brought on a bout of hysteria: they want credit controls, they want to lower the interest rates so that green schemes appear profitable and they want to divert pensions into such green schemes. They then have the audacity that stuffing your money in to low return green schemes will provide you with a decent pension. Eh? The hysteria turned to giggles when they described the capital controls needed to increase the amount of money available for such investments. Leave aside their both socialist and nationalist insistence that your money must be placed at the use of the nation rather than your use and think instead of this.

[...] Hmm, I wonder what the next argument the millenarian socialists will use as a reason we must destroy civilisation will be?

Indeed.

Cultivating Entrepreneurship

I came across two links on initiatives trying to develop and keep entrepreneurs - one abroad and one in the US. It would seem as if they're trying to build incubators for entrepreneurs without the physical structure that generally entails and instead, with the support and management advice - advice that can be highly valuable or worse than worthless.

The Economist highlights an attempt at building an entrepreneurial network assigning successful business mentors with carefully chosen entrepreneurs in developing countries. I take exception to this comment however:

Much of the difference between countries such as America, where entrepreneurship thrives, and those where it does not is cultural rather than regulatory, she believes. In many emerging economies, business tends to be dominated by a closed elite hostile to new entrepreneurs—and failure is stigmatised, rather than being a badge of honour, as it is in Silicon Valley.

It's a tired and frustratingly silly argument that gets made by detractors of free markets that autocracies (governments run by the elite making laws in favor of said elite) are a consistent and natural outcome of capitalism. This is particularly true of countries like Mexico where regulation favors established and larger enterprises - it's not the lack of an entrepreneurial culture. I believe the US succeeds because the financial incentives exceedingly overwhelm the risks of failure and this begins with a receptive government.

Back in the US, Yale, as described in a blog post from the WSJ, pairs student entrepreneurs with local business people in an attempt at discouraging them from quitting and taking both their ideas and ventures out to California.

Rewarding the Right Financial (and Non-Financial) Metrics

If it ain't gonna build tangible value, it ain't worth the time. Paul Hebert has a fantastic primer on what this means at nearly every level of the organization along with a cheat sheet - definitely read the whole thing:
Of course as Hebert has pointed out in the past, financial incentives are only one tool to motivate people and sometimes financial incentives are inappropriate and even counterproductive to target objectives. That said, this chart is a great starting point for employees to consider their role in an organization and the impact they can make. Those who like this chart, may want to explore the balanced scorecard that either helps sort out the often multiple roles employees play or just confuses them to bits when implemented half-heartedly..

Doha's Collapse isn't the End of Trade

Trade above almost all policy measures (including microfinance) after the implementation of property rights, can do more for the eradication of poverty. It's unfortunate but I get the sense that the political tides towards trade liberalization are shifting back towards protectionism (e.g. "fair trade").

Countries who continue to recognize the importance of trade in development however, still have much they can do beyond bilateral agreements (versus the one big massive multilateral one that was Doha) - starting by cutting the red tape with a few promising examples here (WSJ):

In the past three years, according to the World Bank, 55 countries have implemented 68 reforms to help streamline trading procedures. For example, India introduced an online customs declaration system that allows the customs clearance process to begin before the ship docks and has helped reduce delays for exporters and importers by seven days. Rwanda partially privatized its customs bonded warehouse facilities, sparking construction of new warehouses and a 40% reduction in storage fees.

Logistics as Entertainment

Freakonomics author Steven Levitt makes an observation of how the internet is being used to achieve significant competitive advantage extracted from an experience with ordering Domino's pizza online (particularly relevant to those of us in industries that aren't generally early adopters of information technology):

Of all the things the internet rewards and encourages, great logistics must be near the top of the list. Companies like Amazon and Domino’s thrive because they are better at getting their products quickly to customers than their competitors.

Then, of course, there is the punishment that the internet delivers to those who are logistically challenged.

Update: More from the Club for Growth that points to a recent study of the emails of 180 million people concluding that "any two people on average are distanced by just 6.6 degrees of separation". As the Club for Growth notes:

As the Internet grows and social networks thicken as more people get connected, the ability to talk, trade, and associate with people around the world will be enormous. And that interconnectivity will either smash all the existing barriers that separate us or it will put enormous pressure on policy makers [ed. and managers] to tear them down. The Internet is nothing if it isn't freedom.