Tuesday, July 30, 2013

The secret to productivity? Focus

Something that's drilled into you if you're follower of GTD, but something apparently one Harvard Economist has discovered (GTDTimes):

But time isn’t the problem, says Harvard economist Sendhil Mullainathan. The ultimate barrier to success is a shortage of mental “bandwidth,” or the ability to focus on a task in the moment. A lack of time isn’t the issue; a lack of focus is.

Hacks to Happiness

Based on studies - Buy experiences, not possessions; Focus; and Give (Lifehacker).

More in China's debt

A big part of the problem is the lack of transparency - but that's hardly an issue that's isolated to China's debt (WSJ) - and by way of reference, Canada's net Debt to GDP ratio hovers somewhere around 35% while the US hovers around 107% and climbing:

Monday, July 29, 2013

The sustainable way to deliver economic growth

Freedom, not regulation. Read the whole thing (Reason):

President Obama is again turning his attention to the elusive economic recovery. His “pivot” will be for naught, however, as long as he continues to ignore two important points: first, government is a major squanderer of scarce resources, and second, its regulations are impediments to saving and investment.[...]

The market test assures that bad trade-offs are avoided, or at least quickly corrected if they are made. If steel is being used to make one product when consumers are demanding something else, the competitive entrepreneurial process sees to it that steel will be redirected.

No corresponding process exists in the political realm. It contains no incentives to look out for the consumers’ welfare. Instead, we have political theater and value destruction.

UBS: How much money makes you wealthy?

Not surprisingly, "wealth" is relative to the economic freedom it buys (Bizjournal):

How much money makes you wealthy? In a recent survey, investors told UBS $5 million.

Most of them said, however, that the amount isn’t as important as the freedom of no financial constraints on what they do. A large cash reserve helps.

Thirty-one percent of millionaires surveyed said they don’t consider themselves wealthy.

Early birds happier but less productive, intelligent and wealthy than night owls?

That's what some research suggests (Independent, HuffingtonPost). I tend to be a night owl but I fight those impulses somewhat successfully since starting CrossFit at 515am.

Labor unions, technology and Silicon Valley

TechCrunch makes the argument that what makes unions and Silicon Valley incompatible to dislike technology is not only the fear that technology will replace them but it will affect their jobs. Of course, I'd observe that job "protection" only makes them less sustainable and those being "protected" subject to greater loss when that protection finally goes away.

These attitudes help to explain why unions have lost so much ground over the past several decades.

Profits and healthcare: Heart Surgery in India for $1,583 Costs $106,385 in U.S.

This is pretty exciting. The money quote (Bloomberg via HN):

Shetty is not a public health official motivated by charity. He’s a heart surgeon turned businessman who has started a chain of 21 medical centers around India. By trimming costs with such measures as buying cheaper scrubs and spurning air-conditioning, he has cut the price of artery-clearing coronary bypass surgery to 95,000 rupees ($1,583), half of what it was 20 years ago, and wants to get the price down to $800 within a decade. The same procedure costs $106,385 at Ohio’s Cleveland Clinic, according to data from the U.S. Centers for Medicare & Medicaid Services.

“It shows that costs can be substantially contained,” said Srinath Reddy, president of the Geneva-based World Heart Federation, of Shetty’s approach. “It’s possible to deliver very high quality cardiac care at a relatively low cost.”

Medical experts like Reddy are watching closely, eager to see if Shetty’s driven cost-cutting can point the way for hospitals to boost revenue on a wider scale by making life-saving heart operations more accessible to potentially millions of people in India and other developing countries.

“The current price of everything that you see in health care is predominantly opportunistic pricing and the outcome of inefficiency,” Shetty, 60, said in an interview in his office in Bangalore, where he started his chain of hospitals, with the opening of his flagship center, Narayana Hrudayalaya Health City, in 2001.

Bankrupt Detroit moves ahead with stadium

Highlighting and proving yet more useful future examples of how not to do economic development (WalterRussellMead). The evidence that publicly funded stadiums are a bad idea (Reason), is pretty universal (theAtlantic). And yet, they do so anyway. That they are moving ahead in already bankrupt Detroit on a half a billion dollar stadium, makes me think that Reason is right - Detroit won't get a chance at a second act.

Sunday, July 28, 2013

What Capitalism Isn't: Imperialism

Contrary to the views of some, the basic underlying principles of imperialism and capitalism are contradictory and unable to co-exist:

Cause for techno-optimism?

Are we in an "innovation drought"? No, argues economic historian Joel Mokyr of Northwestern University:

Part of the answer is that new types of work will emerge that we cannot foresee. A hundred years ago, people were wondering what would happen to the workers who would no longer be able to find work farming. Nobody at the time would have been able to imagine the jobs of today, such as video game programmer or transportation security employee.

But if the bulk of unpleasant, boring, unhealthy and dangerous work can be done by machines, most people will only work if they want to. In the past, that kind of leisurely life was confined largely to those born into wealth, such as aristocrats. Not all of them lived boring and vapid lives. Some of them wrote novels and music; many others read the novels and listened to the music. Some even were engaged in scientific research, such as the great Robert Boyle (one of the richest men in 17th century England), and a century later, Henry Cavendish, the English chemist and physicist who identified hydrogen gas.

Aristocratic life in the past depended on servants, and the servants of the future may be robots -- but so what? More worrisome, the aristocratic life depended on a flow of income from usually hard-working and impoverished farmers paying rich landowners. The economic organization and distribution in a future leisure society may need a radical re-thinking. As John Maynard Keynes wrote in 1931 in his "Economic Possibilities for our Grandchildren," "With a little more experience we shall use the new-found bounty of nature quite differently from the way in which the rich use it today, and will map out for ourselves a plan of life quite otherwise than theirs."

Saturday, July 27, 2013

PSA: Coffee dramatically reduces suicide risk?

Not that I plan on starting to drink coffee anytime soon... but does Tiramisu count? (Harvard Gazette via Instapundit)

Drinking several cups of coffee daily appears to reduce the risk of suicide in men and women by about 50 percent, according to a new study by researchers at the Harvard School of Public Health (HSPH). The study was published online July 2 in The World Journal of Biological Psychiatry.

Wherein Warren Buffett's Son Misunderstands the Difference Between Inequality and Poverty

Not sure where to begin in dissecting this opinion piece in the NYT. First, it confuses poverty and inequality:

Because of who my father is, I’ve been able to occupy some seats I never expected to sit in. Inside any important philanthropy meeting, you witness heads of state meeting with investment managers and corporate leaders. All are searching for answers with their right hand to problems that others in the room have created with their left. [...] But this just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over.
Second, he creates a straw man rejecting ideas of accountability and financial sustainability:
And with more business-minded folks getting into the act, business principles are trumpeted as an important element to add to the philanthropic sector. I now hear people ask, “what’s the R.O.I.?” when it comes to alleviating human suffering, as if return on investment were the only measure of success. Microlending and financial literacy (now I’m going to upset people who are wonderful folks and a few dear friends) — what is this really about? People will certainly learn how to integrate into our system of debt and repayment with interest. People will rise above making $2 a day to enter our world of goods and services so they can buy more. But doesn’t all this just feed the beast?
And finally, I'll highlight is his fuzzy approach to "poverty" and his lack of context:
Nearly every time someone feels better by doing good, on the other side of the world (or street), someone else is further locked into a system that will not allow the true flourishing of his or her nature or the opportunity to live a joyful and fulfilled life. [...] I’m really not calling for an end to capitalism; I’m calling for humanism.
Are the poor on the other side of the world really the same is those across the street? Compare the "poor" in the west who are far more likely to suffer from morbid obesity to those who suffer under oppressive regimes who face starvation - how similar are they? Compare the poor in the west today - often with cellphones, microwaves, access to much greater varieties of food and products from around the world and other conveniences of modernity, to those decades earlier against the metric of "true flourishing of his or her nature or the opportunity to live a joyful and fulfilled life." Have things really gotten worse? Are the problems facing the poor really the same? Heck, even compare the opportunities to entrepreneurs today over decades earlier - has it really gotten worse?

But he does make one useful observation: charities are growing rapidly. While they are growing faster than government and business, they lack accountability and transparency:
According to the Urban Institute, the nonprofit sector has been steadily growing. Between 2001 and 2011, the number of nonprofits increased 25 percent. Their growth rate now exceeds that of both the business and government sectors. It’s a massive business, with approximately $316 billion given away in 2012 in the United States alone and more than 9.4 million employed.

China's Detroit?

A reminder that the sometimes hysterical fears (or even perverse admiration for their central planning) some people have of China's rapid ascent are not based on reality. China has many massive hurdles to overcome on its way to becoming a superpower (ABS-CBN):

Many of the province's mainstay industries, including shipbuilding and the manufacturer of solar panels, are drowning in overcapacity. Profits are dwindling, and the government's tax growth is braking hard.

That leaves Jiangsu vulnerable as President Xi Jinping and Premier Li Keqiang slow the country's giant economy to push through reforms aimed at reducing its reliance on the massive investment that made the country the factory to the world in favour of more services- and consumption-led growth.

As part of that, Beijing has ordered a clamp down on provincial government borrowing and land sales, the mainstay income for many local administrations. But equally, Beijing expects local governments to absorb much of the cost of downsizing many industries, leaving provinces like Jiangsu caught between a rock and a hard place.

Standard Chartered, Fitch and Credit Suisse have estimated local government debt in China at the equivalent of anywhere between 15 percent and 36 percent of the country's output, or as much as $3 trillion based on World Bank GDP figures for 2012.

Friday, July 26, 2013

A bit of a caveat on the pursuit of growth...

While the upside is that markets have become increasingly larger, Fred Wilson (AVC) notes the downside to rubbing up against the limits of growth:

Of course, you can come up with new lines of business, new hit products, or make acquisitions to keep on the growth treadmill. But recognize that is what you are on. You can and will become a slave to it.

Startups and their rich uncle pennybags (VCs) are particular slaves to this drug. We build and finance companies that are designed to grow and grow and grow. That's how we create wealth, jobs, and impact. It's a fantastic ride that I cannot get off. But these rides do slow down and even end sometimes. And that's a bitch.

TerraPower's search for better nuclear power

Fracking, I think, is only the bridge technology to something cheaper and even cleaner... Updates on TerraPower (Weinberg Foundation via HN)

TerraPower’s interest in alternatives such as molten salt reactors (MSRs) came to light last month when the company’s director of innovation, Jeff Latkowski, surfaced in the audience at the Thorium Energy Alliance Conference in Chicago. The two-day gathering included presentations on thorium fuel and on reactors including molten salt reactors, high temperature solid fuel reactors, accelerator driven reactors, and others.

Latkowski quietly joined the five-year-old Bellevue, Wash., company a year ago to look after alternative approaches to nuclear. “My job at TerraPower is everything outside the Traveling Wave Reactor,” Latkowski told me in an email exchange after the Chicago event.

Thursday, July 25, 2013

Travel Tip: 3 Images to Save to the Cloud Before You Start Travelling

Good tip: Save the first few pages of your passport, credit card, and prescription information to the cloud before you start travelling (ApartmentTherapy). Caveat: do what you can to make sure the information is secure.

Develop crowd competitions that work

I love the idea of crowd competitions probably because in many ways they're democratizing and often enabled by the massive advances in communication technology we've had. Ahmad Ashkar, the CEO of the Hult Prize, provides a framework for how to develop competitions that succeed (HBR) - read the whole thing:

But to effectively harness the power of the crowd, you have to engage it carefully. Over the past four years, we've developed a well-defined set of principles that guide our annual "challenge," (lauded by Bill Clinton in TIME magazine as one of the top five initiatives changing the world for the better) that produces original and actionable ideas to solve social issues.

Companies like Netflix, General Electric, and Proctor & Gamble have also started "challenging the crowd" and employing many of these principles to tackle their own business roadblocks. If you're looking to spark disruptive and powerful ideas that benefit your company, follow these guidelines to launch an engaging competition

The problem with economic development in Africa isn't with its entrepreneurs

In fact, as Ann Harrison, the author of a new study from Wharton notes: "If … you were to give African entrepreneurs the same kind of environment as an American or European entrepreneur, they would outperform their counterparts." I'd go further that most if not all of the issues that the authors identify really come back to poor governance and bad policy (Forbes):

According to the researchers, insufficient infrastructure, scarce access to credit and political monopolies cripple these economies. Inefficient telecommunications, a proxy for infrastructure, consistently retains top ranking among the reasons for their perennial disadvantage. The difficulty to gain financing — due to a lack of formal lending sources — garners second place. Single-party rule also inhibits progress to a lesser degree. “If one could adjust the daunting list of geographic, infrastructure, political, economic and institutional factors to the levels [that exist] elsewhere,” the authors write, “Africa possesses an inherent advantage.” Harrison adds that this could be because African firms have had to become stronger and work smarter in order to survive such a challenging environment.

Focusing on Quality over Quantity? Maybe you shouldn't

This post popped up on HackerNews which is pretty inspirational: "I'm learning to code by building 180 websites in 180 days. Today is day 115" (JenniferDewalt). But it was the first comment by Derek Sivers that is really resonating with me:

There’s this great story from the book “Art and Fear”, that's very appropriate here:

The ceramics teacher announced on opening day that he was dividing the class into two groups.

All those on the left side of the studio, he said, would be graded solely on the quantity of work they produced, all those on the right solely on its quality.

His procedure was simple: on the final day of class he would bring in his bathroom scales and weigh the work of the “quantity” group: 50 pounds of pots rated an “A”, 40 pounds a “B”, and so on.

Those being graded on “quality”, however, needed to produce only one pot — albeit a perfect one — to get an “A”. Well, came grading time and a curious fact emerged: the works of highest quality were all produced by the group being graded for quantity.

It seems that while the “quantity” group was busily churning out piles of work-and learning from their mistakes — the “quality” group had sat theorizing about perfection, and in the end had little more to show for their efforts than grandiose theories and a pile of dead clay.
I'm in the middle of trying to pivot, exploring a lot of ideas I've had on the backburner for a while. This is just a good reminder not to get bogged down in trying to make things perfect but to focus more on creating and executing.

How adding iodine to salt resulted in a decade's worth of IQ gains for the US

Hmmm... Given that we're consuming less iodized salt (ScientificAmerican), I wonder if it's going to have a reverse impact (BusinessInsider via Instapundit):

A new NBER working paper from James Feyrer, Dimitra Politi, and David N. Weil finds that the population in iodine-deficient areas saw IQs rise by a full standard deviation, which is 15 points, after iodized salt was introduced. Since one quarter of the population lived in those areas, that corresponds to a 3.5 point increase nationwide. We’ve seen IQs go up by about 3 points every decade, something called the Flynn effect, so iodization of salt may be responsible for a full decade’s worth of increasing IQ in the U.S.

Why Tax Code Simplification Matters

USA Today via Instapundit:

As anyone who dreads April 15 knows, the code is a farce that wastes taxpayers’ time and money, caters to the influential lobbies and corrupts Congress. In the quarter-century since the last reform, it has grown so complicated that it costs individuals and companies $160 billion each year to comply. That’s nearly double what the federal government spends annually on highways, bridges, airports and other transportation projects.

Tuesday, July 23, 2013

Ryan Carson, Founder of TeamTreehouse: Tips for Founders

Including productivity tips for everyone. Much recommended.(RyanCarson)

Study: Extroverts are happier, Introverts should act like Extroverts to feel happier?

That's the study (WSJ). I get the idea that moving outside your comfort zone has its rewards (there are studies for that too! NYT) - but that Extroverts are more motivated because of their sensitivity to dopamine? On the other hand, motivation and productivity (actually getting things done) I suppose aren't the same thing.

37Signals: Bootstrapped, Profitable and Proud

An awesome series from 37Signals (via HN).

CrossFit Founder Greg Glasman: "I'm a rabid libertarian"

So I've been doing CrossFit at CrossFit Toronto for just over a year now starting with a bunch of bootcamps. It's been phenomenal. I've never been in better shape, it's given me a bit more discipline (waking up to go to 515am classes requires discipline) and it's nice having visible abs. And, the founder, Greg Glasman is a "rabid libertarian" to boot:

Sunday, July 21, 2013

How to Raise an Entrepreneur

Parenting tips for those who want to encourage entrepreneurship traits (WSJ):

How do you get kids ready to become entrepreneurs?

The classic answer, of course, is the lemonade stand: Encourage your kids to start a homespun business instead of just bugging you for money. But entrepreneurs and educators say the real solution goes much deeper than that. There are crucial psychological traits an entrepreneur needs to succeed, they say, and parents should help kids develop them at every opportunity.

Tuesday, July 16, 2013

What they didn't tell us about the Bhopal/Union Carbide disaster

The standard account of the Bhopal/Union Carbide disaster goes something like this: "In the name of profit, a large American multinational corporation neglected safety; as a result, many people, especially poor people, were killed and maimed, and the corporate executives involved have never been criminally prosecuted." What they disturbingly omit (StephenHicks via Smalldeadanimals):

the standard accounts also omit to mention that the decision to use the hazardous chemical MIC was the Indian government’s, not Union Carbide’s; that government directives also required the building of larger rather smaller facilities; that the Indian government was also pursuing an affirmative action programme, replacing Union Carbide’s foreign experts in engineering and agricultural chemistry with locals; and, finally, that the decision to situate the chemical plant in the middle of a residential community was the Indian government’s, not Union Carbide’s, exacerbated by a re-zoning policy that included giving thousands of construction loans to encourage Indians to build their homes near the chemical plant…

Sunday, July 14, 2013

For Better Decisions...

Ensure accountability for decision processes in addition to outcomes (PsychologyToday via Lifehacker):

Research demonstrates that long before outcomes are known, asking employees to explain their decision processes can encourage them to conduct a thorough, evenhanded analysis of the options.

Process accountability can be applied to our own choices, too. It just means setting some criteria for the decision process in advance. Before arriving at the restaurant, you might agree that you’ll only wait for 30 minutes. Prior to choosing an employee to hire, you could decide how much training this position should receive.

Saturday, July 13, 2013

Friday, July 12, 2013

Thai Politicians Learn Markets Anticipate

It'd be a man bite story if it weren't for how insane the idea was to begin with (Time):

The plan was simple: Thailand’s government would buy rice from local farmers at a generous price, some 50 percent above the market rates. It would hold the rice in warehouses, cutting off exports to the rest of the world. The sudden shortage from the world’s heavyweight champion of rice exports would cause a spike in global prices. Then, payday for the government as it swung open the warehouse doors and sold its stockpile to the world at a premium. Farmers win, the government wins, foreign consumers lose, but then they don’t vote in Thai elections, so what do they matter? The plan was a political no-brainer, except for one problem: Thailand’s government underestimated how quickly the market can kick back at any would-be puppeteers.

[...] And it was Thailand’s great misfortune that exactly one week after it slashed exports, India lifted its export ban, flooding the market with 10 millions tons of rice. Rather than orchestrate a price hike, Thailand helplessly stood by as global prices sank.

David Dawe, a senior economist with the U.N.’s Food and Agriculture Organization, can look at a spreadsheet of historic rice prices and see a roller coaster of emotions. He points to June 2011, when the current Thai administration was campaigning on its rice plan. Even before the election, rice traders had anticipated the coming shortage and bid up the price. “You’ve got this big bump of $100 a ton,” says Dawe. “Thais were probably pretty happy at that point, thinking, ‘Okay not too bad, we can probably drive them even higher.’” Then, in September of 2011, shortly after Prime Minister Yingluck Shinawatra’s administration was swept into office on a wave of votes from the farming sector, India opened the floodgates. Dawe points to this moment and says, “Reality sets in. The Vietnamese started lowering their prices and the Thais just got left behind.” Over the next year, Thailand was knocked from its perch as the world’s top exporter of rice, tumbling behind India and landing just short of Vietnam.

Thursday, July 11, 2013

Milton Friedman Makes the Case for the "Negative Income Tax"

via HN:

"How Do Real Prisoners Play Prisoner’s Dilemma?"

Maybe it's because there's more of an expectation that the "game" will need to be played again in the future? From Freakonomics:

We report insights into the behavior of prisoners in dilemma situations that so famously carry their name. We compare female inmates and students in a simultaneous and a sequential Prisoner’s Dilemma. In the simultaneous Prisoner’s Dilemma, the cooperation rate among inmates exceeds the rate of cooperating students. Relative to the simultaneous dilemma, cooperation among first-movers in the sequential Prisoner’s Dilemma increases for students, but not for inmates. Students and inmates behave identically as second movers. Hence, we find a similar and significant fraction of inmates and students to hold social preferences.

Cheaper, lower energy way to desalinate water one nanoliter at a time

Cool - and exciting (UniversityofTexas via HN):

By creating a small electrical field that removes salts from seawater, chemists at The University of Texas at Austin and the University of Marburg in Germany have introduced a new method for the desalination of seawater that consumes less energy and is dramatically simpler than conventional techniques. The new method requires so little energy that it can run on a store-bought battery.

Tuesday, July 09, 2013

Avoiding the Romanticizing Traditional Medicine

This idea applies across cultures - particularly given the seemingly unconventional ideas many have (AaonMagazine via Instapundit):

Embracing African medicine means not romanticising it. Science should be the great leveller: it doesn’t matter where brilliant ideas come from, so long as they work. Both Western doctors and African healers will always be tempted to be a little too optimistic about their own healing abilities, which is why it is so important that we use all of our best empirical tools to keep their delusions in check.

Germany's Solar Industry is Imploding

Dog bites man: Massive subsidies to industry prove unsustainable. (Forbes via HN)

Sunday, July 07, 2013

Shale Gas is even Green!

Not that one ever really knows what qualifies as "green" these days, but from Walter Russell Mead (via Instapundit):

Ask a green what he or she thinks about fracking, and you’re likely to get an earful of criticism about methane leaks, poisoned groundwater, and climate change disaster. But a new report from the ecologically minded Breakthrough Institute (BI) makes the case that shale gas actually has a net environmental benefit. Nevermind the boosts to our energy security, and economy that fracking provides; the controversial drilling process is worth embracing on green merits alone.

Natural gas’s biggest green qualification is the extent to which it displaces coal as an energy source. Burning coal emits roughly twice as much greenhouse gas into the air as natural gas. Thanks to the shale boom, we’re getting less of our electricity from coal-fired power plants and more from natural gas. The BI notes, “From 2008 to 2012, annual coal consumption for US electric power declined, on average, by 50 million tons.” That’s something greens should be cheering, and it’s mostly thanks to fracking.

But natural gas doesn’t just beat coal on carbon emissions. The BI explains why, at the local level, shale gas does less harm than coal.

It seems pretty straightforward at this point: the more natural gas we burn, the less coal we burn. That leads to lower carbon emissions and less harm to the environment and local communities.

Many greens have one final quibble: that the increased share of shale gas in our energy mix will come at the expense of the fledgling solar and wind industries.

Breakthrough has an answer for that as well. Gas plants are a lot cheaper to build than coal plants, and cheaper to scale up if needed. Surprisingly, this is actually good news for solar and wind energy. When the wind isn’t blowing and the sun isn’t shining, we need other sources of energy. Coal plants have high capital costs: they’re generally much more expensive than natural gas plants, which means, once built, they’re going to stay online as long as possible to recoup that initial investment. Natural gas plants are cheaper to build, so there’s less of a need to keep them on when the sun is shining and the wind is blowing. In that sense, natural gas makes our power supply more flexible and boosts the viability of renewable energy sources.

Is financial over-regulation increasing rents in the Bay area?

There's a large body of research that suggests high rents are often the result of restrictive zoning and even rent control - but one TechCrunch author argues that it's financial over-regulation that's caused rising rents:

When wealth is created but concentrated in certain ZIP codes, both local areas and the nation’s economy is affected. It all has a cascading effect. With more wealth locked into San Mateo and surrounding counties, the demand for assets rises quickly. House prices skyrocket. Individuals who don’t have enough cash reserved for a down-payment are forced to rent, where competition for rental property creates its own endless race. Contractors rush to meet housing demand, springing up buildings in a boom-time that create noise pollution and closed streets and blocked highway on-ramps, which combines with more and more warm bodies flocking to the Bay Area for the shot to work in the one sector that provides any hope for real, sustainable economic growth. This is why — in large part because of SOX — that your rent is high, why there’s so much traffic and construction, and why it won’t change anytime soon.

There are many, many reasons a great number of people would benefit if private companies operated in an environment where restrictions wouldn’t dissuade shareholders and investors from accessing public markets earlier. Entrepreneurs and investors would have an attractive exit option earlier in their life cycle; entrepreneurs wouldn’t have to rely on “build and shut down” acquisitions to get an exit; employees and insiders wouldn’t feel as much pressure to access liquidity through secondary offerings; wealth-creation would be more spread out and could generate even more jobs; and retail investors would have an equal chance to invest into the next Facebook when its valuation is, say, around a billion dollars versus when its $100B. For a bit of perspective, Google IPO’d after raising a relatively modest amount of venture capital, and Microsoft IPO’d at a $500M valuation — in these cases, the wealth created post-IPO was spread out and technically available to all who could invest in public markets.

Scott Kupor, a Managing Partner at Andreessen Horowitz, wrote a strong piece artfully detailing this view, suggesting over-regulation effectively blocks the entire middle class from participating in the massive wealth creation driven by technological advancement. Over the years, USV’s Fred Wilson has written many great posts on this topic, discussing the nuances of going public early, how public markets can have a harmful effect on company culture, and how potentially distortive the IPO process can be relative to true company value.

Elections are not democracy

Lessons from Egypt (NationalReview via Instapundit). As Reynolds, points out:

Elections are necessary but not sufficient for a democratic republic. You also need limits on state power, and civil society. Frankly, what’s most impressive to me is how resilient and robust Egyptian civil society has been in the face of the Muslim Brotherhood’s clear effort to establish an Iran-style theocracy.

Designing markets that work

Reason discusses how differences in regulation have allowed the broadband access available to consumers in the US to now supercede those of Europe - particularly interesting given how it wasn't so long ago pundits were bemoaning the US's 'moribund' level of competition versus that of Europe:

Meanwhile, Europe’s broadband speeds have remained stagnant. Broadband companies in the U.S. are installing advanced fiber-optic technology faster than Europe, according to a recent study by the Information Technology and Innovation Foundation. That likely ensures that the gap will continue to widen.

Indeed, it’s the willingness of telecom companies to invest in new infrastructure that ensures broadband growth. In the U.S. we enjoy what’s known as “facilities-based competition,” which means that broadband providers own their network and compete with each other based on improvements to their facilities. In most of Europe, by contrast, broadband providers lease access to the network from the local phone company at fixed rates. That may mean a greater number of competitors, but also little incentive to improve the network facility.

As the White House report noted, just two U.S. telecommunications companies—AT&T and Verizon—“account for greater combined stateside investment than the top five oil/gas companies, and nearly four times more than the big three auto companies combined.” If companies thought they would be forced to lease their networks to rivals at regulated rates, it’s doubtful they’d make such investments.
Developing markets has been somewhat top of mind at the moment as I've recently summarized a book (Scribd) Making Markets (Amazon). I'd highly recommend the book to anyone who is interested in how to build, analyze and design markets.

Making it easier to fire people means more people get hired

Kind of counter intuitive in a way, but also not really - after all, employers put off hiring because they worry about having to fire them if they don't work out for cultural reasons let alone regulatory ones (DivisionofLabour via AdamSmith):

Using 1981–2009 data for the 50 states, this article examines the relationship between economic freedom and the unemployment rate, the labor force participation rate, and the employment-population ratio. After controlling for a variety of state-level characteristics, the results from most specifications indicate that economic freedom is associated with lower unemployment and with higher labor force participation and employment-population ratios.

Wednesday, July 03, 2013

Research: People with a lot of Self-Control are Happier

As Glenn Reynolds notes: "Funny, because for the past 50 years or so we’ve been casting self-control as the enemy of happiness" - at theAtlantic:

Results: The more self-control people reported having, the more satisfied they reported being with their lives. And contrary to what the researchers were expecting, people with more self-control were also more likely to be happy in the short-term. In fact, when they further analyzed the data, they found that such people's increased happiness to a large extent accounted for the increased life satisfaction.

Finding your Passion

Passion is probably one of the best and most sustainable motivators (and it's one of the things that get you through the ups and downs of entrepreneurship), so this is a pretty good primer (Bakadesuyo):

Researchers found there are two types of passion: harmonious and obsessive. The latter is a bad thing, more like an addiction or being a stalker. We’ll focus on the former, thanks. So what defines harmonious passion?

Robert Vallerand and colleagues came up with a “Passion Scale.” How many of these are true of an activity you engage in?

Via Ungifted: Intelligence Redefined:
1. This activity allows me to live a variety of experiences.
2. The new things that I discover with this activity allow me to appreciate it even more.
3. This activity allows me to live memorable experiences.
4. This activity reflects the qualities I like about myself.
5. This activity is in harmony with the other activities in my life.
6. For me it is a passion, which I still manage to control.
7. I am completely taken with this activity.

Tuesday, July 02, 2013

The Club of Rome is still wrong

Bjorn Lomborg in the Slate:

That message still resonates today, though it was spectacularly wrong. For example, the authors of The Limits to Growth predicted that before 2013, the world would have run out of aluminum, copper, gold, lead, mercury, molybdenum, natural gas, oil, silver, tin, tungsten, and zinc.

Instead, despite recent increases, commodity prices have generally fallen to about a third of their level 150 years ago. Technological innovations have replaced mercury in batteries, dental fillings, and thermometers: Mercury consumption is down 98 percent and, by 2000, the price was down 90 percent. More broadly, since 1946, supplies of copper, aluminum, iron, and zinc have outstripped consumption, owing to the discovery of additional reserves and new technologies to extract them economically.

Similarly, oil and natural gas were to run out in 1990 and 1992, respectively; today, reserves of both are larger than they were in 1970, although we consume dramatically more. Within the past six years, shale gas alone has doubled potential gas resources in the United States and halved the price.

As for economic collapse, the Intergovernmental Panel on Climate Change estimates that global GDP per capita will increase 14-fold over this century and 24-fold in the developing world.

The Limits of Growth got it so wrong because its authors overlooked the greatest resource of all: our own resourcefulness. Population growth has been slowing since the late 1960s. Food supply has not collapsed (1.5 billion hectares of arable land are being used, but another 2.7 billion hectares are in reserve). Malnourishment has dropped by more than half, from 35 percent of the world’s population to under 16 percent.

HBR: Entrepreneurs get better with age

An explanation why? (HBR):

Just as larger businesses provide economic stability to society in the form of higher pay, better medical care, and retirement, experienced workers provide intellectual and emotional ballast in the workplace including innovation expertise. Think about it — disruptive innovation is about playing where no one wants to play (low-end), or has thought of playing (new market). As individuals move into Erikson's seventh developmental stage, creating something new isn't just a "nice thing to do" — it is a psychological imperative. The urge to create, to generate a life that counts impels people to innovate, even when it's lonely and scary. Data notwithstanding, some of the companies among us will continue allow these individuals to fall into the arms of independent work, if we don't give them the boot first. The smart companies — and my money is on you — will harness this hunger of the underserved, ready-to-serve corp of talent, and upend the competition.

The real threat to jobs isn't China

"Job-Stealing Robots Go Global" (WalterRussellMead via Instapundit):

Asian workers have scored some victories in rising wages, but many are learning something the West has known for some time: Employers will seek out the cheapest labor on offer, and machines are even cheaper than an underpaid human. In the late 20th century, manufacturing jobs shifted from America to China, then from China to Southeast Asia, and now even those are being automated.

For America, at least, this trend shouldn’t be so disconcerting. After all, it’s developed economies like ours that are designing the robots Nike is now using. Low-wage manufacturing jobs are drying up, but they’re being replaced by jobs in building, operating, and repairing the tech in question. Increasingly, companies will be likely to “onshore” these jobs to America, when shipping and distribution becomes much easier and cheaper. Manufacturing, it seems, will come full circle.

Monday, July 01, 2013

For those who fear China's ambitions in Africa

Competition is a good thing (ForeignPolicy via ChrisBlattman):

China is a very positive element to this whole picture,and there are two sides to this: There’s the Chinese government and the Chinese entrepreneur. The Chinese government goes in and they say to a country, “Look, we want to be friends.” And then they say, “Look, we know you’ve got this coal, and we need this coal. We can do a deal with you to export the coal into China, but in order to get it out of the country we’ve got to build a railroad. If you’ll do a long-term deal with us, we’ll build the railroad.”

Once that begins, then you have Chinese contractors, Chinese workers coming in and establishing small businesses and trading. And their relatives come in and they see the opportunities. So you begin to get a private market in Chinese products and to expand and attract other people, and you begin to have more of a market economy.

Then you have people like retail outlets in South Africa wake up and say, “Hey, they’re in the market here. The Chinese are selling this and that. Why don’t we go in and set up a business?” So I would say that generally speaking, the influence of the Chinese has been very positive for these countries.

Of course there are some downsides. Some countries say that the Chinese are doing all the work and we don’t have any jobs and so forth and so on, but these are things that can be ironed out.

The State Department is very much aware of what’s going on,but at the policy level they have not committed the kind of resources that the Chinese have committed. And that’s highly unfortunate, but I think going forward there will be more private-sector involvement from the U.S. in particular.

"Which Came First: The University, Or The Economy?"

DDNews via Instapundit:

Affordable higher education follows innovating economies, and doesn’t create them.

Pretty good advice on money

Courtesy of Seth Godin.