Bookish Posts

Largest Embassy May Be White Elephant

2012-02-10T18:47:00.001+03:00

Reading this article reminded me of an old blog post here on the US Embassy building in Baghdad. At the time, the tenor of the post was that this was the most expensive and expansive embassy building in the world at the time. At the time, the overall costs could have been attributed to the need to fortify the grounds that hold the building together with the residences of the embassy stuff. To my mind then, it was also a testament to the fact that the US foresaw a continuing role for it in that country for the foreseeable future.

Five years hence, it is clear that the combat mission is being drawn down with the result that the compound now looks unwieldy. It illustrates that telling the course of war and US engagement in the future was not accurate at that time. At the same time, the concerns for safety of workers means that the embassy compound is a fort that does not predispose embassy staff to meeting with Iraqi's. So without looking at the vast expense, this embassy building risks becoming a white elephant. As one official asks, "what prompted the designers to build it in such scale?"

General Uhm's Five Start Lecture on Development

2012-02-05T01:38:00.000+03:00

The one area in which I concede to state involvement is the provision of security within institution run by constitution. I have noted with amazement the fact that in the US in particular, military leaders often find lucrative positions in directorships in corporations ostensibly to provide strategic views and insights. Today, I have just watched the clip by Peter Von Uhm, the Chief of Defense of The Netherlands and confirmed my view that some military leaders are indeed deep thinkers with an understanding of what their contribution to stability and peace is.

In the very incisive presentation, he alludes to his family's history as the motivation for his choice for military life and how the gun, while seen as a simple instrument of violence and conflict, qualifies as a peace builder when used in a controlled and legally regulated manner. He walks his listeners through historical data on conflicts and human suffering and how the world has become increasingly safe over the last few centuries and attributes this to democratic control of military and violence through states. As if that were not enough, he ties the story together with growth and development by stating the empirical fact that stability and trade beget further peace because trade and exchange make conflict unduly expensive. In this way, trade and peace are self-reinforcing. This would be fantastic teaching aid for a class on economics and development.

Five star presentation from a five star general.

Stopping The Gold Thieves

2012-02-01T18:08:00.000+03:00

Reading through this article on the rise of burglaries and robberies that affects South Asians resident in the United Kingdom just got me thinking about the burdens of wealth and the advantages of fiat money. That story highlights the rise of thefts among families from south asia who are known to keep substantial amounts of gold as savings. This form of saving is attributed to the preference by these families to save through precious metals with a known record for keeping its value over generations.

It is unsurprising that when the owners of commodities in great demand may face the risk of theft especially when the price of gold has appreciated remarkably in recent times. To a thinking robber, it is probably less risky to steak jewelry from a family house than attempt a bank robbery or other goods. In addition, the package would be valuable and yet manageable both in terms of ease of hiding and the ability to convert the items into cash with minimum risk of detection. However, I am unsurprised that the owners of the property are unable to find either safe boxes in banks or to insure their property. This does not make sense to me especially since the vulnerability to theft and conversion of gold would lead to equally ingenious ways for ensuring its safety. Thinking about the fact that a family that claims to live modestly owned that much gold suggests that a bank would offer to keep the property for a fee. In my sympathy for the loss of property keenly acquired over generations, I think a fee-based repository for the jewelry is missing from the market. In my estimation, it will not be long before it is available. This would be a good problem for a crowd sourcing solution.

Business Leaders Dont Need Medals From State

2012-02-01T12:55:00.000+03:00

I have never quite understood why people who work in difficult situations in commercial enterprises think so highly of gifts of recognition awarded by states and their agencies. This idea came back forcefully to me when I read that a former CEO of the Royal bank of Scotland has had a Knighthood recalled because of ostensible mismanagement of the firm in which he was head. Patrick Wintour of the Guardian writes that Fred Goodwin had the Knighthood recalled and the decision as communicated to him by by a committee of five officers of the State in the U.K.

To my mind, I think that irrespective of the demonstrated incompetence that Goodwin had exhibited, it surprises me that everyone seems to think that this affects his reputation adversely. My contention is that the state should not be giving the marks of ostentation to business people and imagine that they are very highly valued unless they were sold. I would like to find out how much Fred Goodwin would pay for the Knighthood if it were sold to him because then it would reflect objective value. Since the state used tax payers money to call Fred to a meeting and awarded a medal made out of the funds of other tax payers, I do not think that Fred should really mind giving it back.

Now, I hope that medal could be auctioned to the highest bidder and the money dedicated to better public purposes. the state has no reason to appease entrepreneurs who go into a business and excel because their reward should come from their enterprises. As it stands, I am unsure whether the recall means that the decision to award the medal was wrong in the first place and who is to take responsibility for that.

Africa's Tweet Data Means Nothing

2012-01-26T19:02:00.000+03:00

It is a well-known that due to the availability of digital technology, there is a surfeit of data that represent human behaviour than ever. And yet the availability of vast amounts of data does not mean that it is necessarily more accessible or comprehensible. For instance, Portland, a firm that tracks technology uses has presented the results of its research in a chart appearing in image on this post and appearing on this datablog by Simon Rogers of the Guardian. The chart presents data on the the volume of Twitter messages sent within African countries. As is possible the image looks neat but I am certain that the chart tells the casual observer virtually nothing except that it was prepared by a person who does not understand the data that was collected.

To start with, there is a diversity of countries in Africa and so presentation of the absolute numbers is useful. However, there are number of school boy errors that emerge from that presentation. First, the placement of the data side by side invites comparisons among countries and creates the ranking system that the developers of the charts displays. This ranking is not possible because of the differences in population among these countries. Second, given the failure to account for the populations differences that are truly vast, the data cannot provide information that the heading of the chart purports. This second error may not be the fault of the data collectors but I suspect that the Guardian's data editors would spot this. The volume of messages are definitely provided by a different number of people in each country.

Professors Experiment With College Education

2012-01-26T16:00:00.000+03:00

I keep wondering how different education will be supplied and consumed in a couple of decades when digitization will be more mature. My wondering was in part reflected in this blog post in which I linked to an article about the MIT having introduced an e-learning course for which certification would be provided to participants. To my mind, the MIT may have been experimenting with a system which would then be varied and then used to inform the methods for delivering university-level education in the future. And the provision of certificates was the institution's way of ensuring that it has sufficient takers to allow for the experiment to yield meaningful results while assessing demand.

Sebastian Thrun, a professor from MIT learned from the huge demand for the free course on artificial intelligence and opted to convert that into a business opportunity. As MSNBC reports, the business will provide online education through video instruction with the teacher's time used in helping students to solve problems. This model is not a radical invention as the Khan Academy has a comparable model except that the latter is provided for open participation and with points accumulation as the evidence of accomplishment.

I am quite surprised that Sebastian Thrun resigned from MIT and is becoming a competitor in the provision of education services. It is difficult to assess the prospects of the new business but my view is that the demand that was expressed could follow the new business and this experiment means that soon, the top schools may have to consider taking the competition to their former employees. The MIT should consider taking over Udacity. One cannot say anymore that technology is not changing education.

Blackberry's Wrong Call

2012-01-24T13:08:00.001+03:00

Soon after the election of president Obama in November 2008, the press made reports about the fact that he would have to let go of his Blackberry device because it was not approved communication device for the US president. At the time, I stated on this ~~posted a~~ blog post ~~stating~~ that Research In Motion, the makers of the Blackberry set of devices, ought to have taken the opportunity to assert that its systems were quite robust and that the security features could be comparable to considered alternatives. In my view then, their failure to pitch in here may have been a chance lost for high-powered marketing irrespective of whether the challenge was taken up or not.

Three years later, it is clear that Blackberry has had a difficult time and has lost a lot of ground to its competitors in that smart phone market. Its struggle in that market has culminated in the the resignation of its leadership team and replacement of the Chief eExecutive Officer. Juliette Garside of the Guardian reports that the slide in market share and the share price prompted the changes in management as the firm struggled to provide new gadgets.

While I still think that the firm will continue to provide its gadgets in spite of the lower market share, its new management will be required to make tough choices with no guarantee of success. To my mind, this episode illustrates the fact that the technology industry is not only dynamic but that it is difficult to tell what clients will buy in the future in addition to executing business plans perfectly.

The iPad as a Textbook

2012-01-19T17:51:00.000+03:00

A couple of months ago, I stated in this post that Steve Jobs of Apple had stated to his biographer that information technology had not demonstrated revolutionary value for education. My interpretation is that he foresaw that the one area where this could happen would be to digitize textbooks and thereby undercut the huge rents that go to publishers every year. It appears that the corporation has taken this further by attempting to build on the success of the iPad to deliver textbooks and other applications for young learners. Cecilia Kang of the Washington Post reports on the business approach taken by Apple in introducing a number of new approaches to delivering an interesting learning experience for learners.

There is a definite concern about the possible lock-in effect that would result from widespread adoption of the iPad and related software from Apple. Even assuming that this will be successful, one has to consider whether the quest to break the hold that textbook publishers have on education is worth breaking in exchange for the possibility of better education outcomes. I am inclined to believe that the delivery of education would be improved substantially and it is less likely that Apple would dominate for long since other manufacturers of tablet computers would be able to provide the same textbooks on their platforms. An additional advantage is that the use of iPads and other tablets will call for innovative ways of delivering lessons.

Politicians Take on Banning Pyjamas In Public

2012-01-18T19:07:00.003+03:00

One of the paradoxes about the United States is that it is a nation that is truly given to respecting individual freedom and yet one also finds petty bureaucrats who try to limit choices in ridiculous ways. An MSNBC story covers the story in Louisiana where a state official is making proposals to stop people from wearing pajama pants in public. Now, one just wonders why such a ridiculous idea should be given any consideration. Wearing pyjamas in public is unsightly but I think that it is silly to put forth legislation to ban this and then have to fund the enforcement of that law.

To my mind, several cities have attempted to ban the appearance of individuals in public but I am unsure that the numbers of people engaged in this and the cost of enforcement make it even worthy of considering. My advise is for this guy to find soem other more important issues to dedicate his regulatory creativity on. Just look the other way when one person walks past you in the street. they are suppossed to live in a free country!

Diet Industry Under Pressure

2012-01-17T19:08:00.001+03:00

If there is a trend in the globe today, it is that people question legitimately whether all financial institutions and instruments have any social value besides ensuring commissions and revenue for those who generate them. And while I understand that there are firms and individuals who are culpable for destroying value and harming clients, I am still clear that there are equally lucrative industries that are based on unverifiable myths. Reading this article a couple of days ago, it occurred to me that the slimming and dieting industry is one that sells products, books and services that do not only have dubious value but occasionally built on unsubstantiated scientific claims.

Speaking of the weight loss "industry", I think that the use of celebrities to endorse products is not in itself objectionable. What I find ridiculous is that people are made to believe that a thirty day special programme would in itself lead to permanent shedding of unwanted weight. It is no surprise that a good proportion of those who successfully shed weight while on the plans do end up accumulating it all over again. In many instances, people take on diets based entirely on perceptions on what ideal weight should be and the preponderance of weight loss regimes suggests that this in itself is an industry that feeds its anxious clients incomplete information. Perhaps all firms in the industry should take pay based on their success rates.

The reasonable response should be public education to ensure that individuals are able to make decisions based on evidence. That aside, there is need to deemphasize the idea that there is an epidemic obesity as I think that intervention by government will affect individual freedoms.

Economics of Income for Clergy

2012-01-15T01:43:00.000+03:00

Some of the literature available suggests that the major determinants of a person's income would be a combination of skills level, scarcity of the skills and therefore the amount of competition available and perhaps the degree of specialization. Brian Palmer's article in Slate Magazine compares the nominal incomes of individuals who provide religious services in the United States. I am surprised by the revelation not only because I have never considered this issue but also because the piece reveals interesting differences in the institutional organization of the various faiths.

Clearly, judging from the income reported, it appears that it is more financially rewarding to be a Rabbi. In trying to explain the reason for this, it is notable that Rabbi's tend to have more training and are comparatively likely to have made higher investment in their professional life on account of the longer training duration. On the other hand it is also clear that due to their numbers, Christian churches are in competition with one another and this inevitably drives compensation for pastors towards the marginal wage. It would be useful to determine the standard deviation across wages for all professionals providing religious services in addition to finding out which specific faith has the highest inequality within its professional cadre. My guess would be that the protestant Christian churches would have the highest inequality because the pastors of the mega-churches are in a different league and are a minority.

To my mind, it can be stated respectfully that the provision of religious services across monotheistic religions is amenable to analysis through basic tools of price theory. This labour market shows sensitivity to the amount of skill and the professionals therein are also able to supplement income by taking up other employment. Finally, it is clear that competition with the distinct faiths affects the income for individual pastors.

Are Nigerian Protests Justifiable?

2012-01-11T22:28:00.000+03:00

This year started on a very difficult note for the government of Nigeria generally and for the president in particular. Not only is the country faced with a problem of armed groups attacking civilians ostensibly to enforce religious homogeneity, the government made a critical but unpopular decision in economic policy. The latter decision involved the suspension of subsidies on petroleum with the immediate result that prices went up substantially. To my mind though, it is most surprising that the public demonstrations throughout the major cities have been organized to try and force the government to reverse the economic policy while the press that I refer to has not reported equally public campaigns for government action to respond to the loss of lives from cowardly armed groups.

This blogger will say no more than that no government that is legitimately elected should succumb to political pressure emanating from groups driven by an ideology that holds no respect for life. Indeed, the government's feeble response to the bombings and murders is the main point of weakness that I see. Regarding the suspension of subsidies, it may well be that the timing is unfortunate but it is clearly sensible economic policy. Reading this story, it is evident that the protests that issued on account of rising fuel prices causes difficulty to some citizens but I am certain that the incidence of the benefits of a subsidy on petroleum fuel is taken by the car owners and middle class people. The claim that this resultant price hike harms the poorest is demonstrably untrue because the owners of vehicles in this country are unlikely to be the indigent. Besides my regret in the damage to property and the risks faced by law enforcement officers, I think that this is an urban middle class bawling for subsidies at the expense of poorer Nigerians.

The moral of the story: there is never a right time to pull back subsidies even if in most cases, abolishing subsidies is the right economic policy.

Truth About Japanese Economy

2012-01-10T23:49:00.001+03:00

Judging from the surfeit of press and other commentary on Japan, one would get the erroneous impression that following the joint collapse of Japanese financial institutions and property markets in the late 1990's, that economy has remained perpetually in limbo. In this article, Eamon Fingleton provides proper perspective to the issue through reminders that perception is starkly different from reality. While I have never visited Japan, most of what I watch shows that the citizens of that country enjoy a very high standard of living.

While it is true that Japanese corporations that dominated financial and technology markets ceded their position to other corporations, the economic adjustment within Japan did not cause a collapse. True, the rate of growth has not been high, but Japanese incomes have kept an upward creep and in some areas, the quality of technology and other services available within Japan are the enviable standards. While being cautious about Eamon's claims, it is still relevant to mention that Japan's early growth was sufficiently sound to ensure that the painful adjustments due to the property and bank crashes did not devastate its citizens. in short, Japan may not have caught up with the United States but its standards of living are still high and other fast growing countries would accomplish a lot by just getting to where Japan is.

I am less sanguine about the argument that the citizens took a conscious decision to keep very low population growth. It is clear that the demographic position as it exists would soon have adverse effects on the growth of that country. It may well be that its economic policies were mostly sound but the desire to maintain strict racial homogeneity may be attractive social and cultural policy but is surely disastrous economic policy. Its time for Japan to review that because this is perhaps its most pressing policy failure today.

Sports Organizations and Corruption

2012-01-07T19:27:00.000+03:00

The title of this blog post came to me as I read this article and tried to relate it to other instances where strong evidence of corruption in international sport has been revealed. It addresses the disclosure that an official of a boxing institution was curiously present in the front during the contest between Amir Khan and Lamont Peterson some weeks ago. Khan's team alleges that this official may have adversely influenced the judges.

To be honest, notwithstanding my reference to to FIFA in this post, I am generally suspicious of conspiracy theories. However, it is clear that the incentives for improper behavior are clearly available in lucrative sports disciplines. It seems that officials at the boxing match under reference acted in a less than transparent manner and this has called to question the decision of the fight.

I agree now that incentives for corruption in private bodies is high and that the international sports organizations should be a lot more transparent in their financial and contractual affairs. Granted that a majority of them are private organizations and therefore subject to scrutiny by their membership alone, I am inclined to the belief that their monopoly status adds to the opacity.

Why Expensive Musical Instruments Do Not Sound Better

2012-01-04T16:08:00.000+03:00

There are several ways in which conventional wisdom and expert opinion is very sensible advice but my reading of Freakonomics has led me to agree that what is the consensus and unquestioned wisdom is frequently plainly wrong and based on no evidence. Ian Sample of the Guardian writes about the results of a modest experiment with persuasive results that tested the claim that antique musical instruments (specifically violins) have a superior sound to more modern versions. Granted that there are limitations to the experiment principally related to the blindfolding of the players together with the small sample of the instruments, I am persuaded that its results are valid.

What the results show is that the instruments that are highly valued as having been created by a master such as Antonio Stradivari do not produce superior sound that it detectable to expert players. As the story states, these unique instruments are very highly valued by collectors and performers and are the prices are often justified on account of their superior quality of sound. What the results imply is that the less valuable instruments are probably not inferior in this respect. To my mind, the value of the Stradivarius instrument is most probably based on their rarity and scarcity. In addition, most of the owners of these antique instruments are very capable musicians whose skill may give the impression that that quality of performance is produced by the rare instrument. Instead, its just that the skill is the real magic.

These findings trace the continuing realization that most claims such as the superior taste of expensive wines, performance of maestros and now the sound quality of antique musical instruments, sometimes fails when subjected to randomized testing.

Technology and Education: MIT Takes A Dip

2011-12-22T18:21:00.001+03:00

It is possible that I have not searched diligently enough but I have not seen any publication with a coherent view for how education in general and learning will be affected by the rise of the new tools and ideas from the digital field. The closest I came to how much the Internet and related tools will affect education was in the Biography of Steve Jobs in addition to the report by MacArthur Foundation on The Future of Learning Institutions in a Digital Age. The former states that Steve Jobs thinks that the major effect of technology would be in digitization of text books and learning materials. The advantage here would be that updates would be regular, less costly and that the parents and the public sector would take the initiative away from publishers. I thought then that that was not really profound but that Jobs was being uncharacteristically real in the possible effects on education from technology. The latter publication was more sanguine but also profound in stating that most learning will involve de-centered teaching and with young learners getting skills from diverse places and methods.

I accidentally encountered this piece by Tamar Lewin of the NYT in which it is reported that the MIT has introduced an e-learning course for which it will be possible to gain certification and credentials. This new development is a step forward because open courses have been offered by leading universities in the world but many have not had certificates and my interpretation was that this would eventually lead to the death of certificates and "credentialism". My reading of this is that universities may be responding still to the heavy demand for certificates as evidence of proficiency. What is profound is that the costs of acquiring good quality education are tending towards zero. This is worthy of keeping a keen eye upon.

Contrasting Income Growth for Africa and Asia

2011-12-21T17:19:00.000+03:00

Keen observers of the growth trajectories of countries cannot help noticing that apart from the larger economies in Asia, sub-saharan africa has registered unprecedented growth levels in the last decade. The argument is relevant because one of the major problems that the latter region has had is the inability to hold on to an upward growth momentum for meaningful periods of time. Instead, Africa's example has been fluctuations of growth rates that coincide with commodity price changes. The summary of this experience from the mid-1970s is that dependence of petroleum and agriculture-based commodities is not a reliable path to growth and improvement of welfare.

And that's why the contention is that it is yet not possible to state with confidence that sub-saharan Africa has overcome the mix of economic and political problems that it faces. That brings me to this fascinating article in the East African which makes the credible and well-based claim that the countries in the eastern region of africa will be leaders in overall growth in the coming two decades. It is an article worthy of reading because it is based on a complicated but sensible method for assessment of the complexity of an economy and concludes that the countries of the region under reference have economies that are more complex and diverse in production than is warranted by the incomes today.

The author of the article concentrates on a list of manufacturing firms to illustrate the claim derived from the index of complexity. it is less clear to me that all these firms confer a comparative advantage to the region because it is unlikely that all are able to compete internationally. My view is that given the fact that manufacturing industry is a smaller proportion of the overall GDP of these countries, there is scope for growth but not necessarily for all existing firms. A final point that is worthy of note is that in spite of the prediction that the region will lead in GDP growth, it will still fall behind India and China in respect of per capita income growth. I think the reason is that this region has a large and youthful population and is expected to maintain strong moderately population growth for a few more decades.

Apple's Effect on Competition in E-Book Market

2011-12-20T18:28:00.001+03:00

This blogger has maintained in posts including this that the book publishing industry has chosen to go the way of music producers by burying their heads in the sand. iIn particular, I am of the view that it is preposterous to sell digital copies of books at the same cost as the paper version. For a while Amazon seemed to be acting in the interest of the reading public by ensuring that new publications were available at lower cost in digital format and thereby ensuring that the gains from digitization broke the existing model of book publication and pricing.

Indeed, there was a danger that Amazon could have used its market power to depress the margins for publishers. And then came Apple with a deal for the publishers for an agency model for digital books on the iPad. This gave greater power to the publishers as they were able to apply new clout to ensure that books were sold through an agency model with retailers keeping 30% of the sale price. The effect of this is that prices of books not only went up but that the odd fact of digital books going at higher costs became real again.

Juliette Garside reports on the effort by antitrust officials in Europe who are questioning the new arrangement. Their main claim, with which I am in agreement, is that the agency model has placed consumers at a disadvantage in the sense that books have gone up by a margin of up to 50%. To my mind, there is no price war anymore as the publishers are back in the driving seat, with Apple's help, and are dictating costs and seeking uniform prices again. Like most windy antitrust cases, this will probably go on for long but on this score, i am confident that the bureaucrats are on the side of the consumers.

Ode to Christopher Hitchens

2011-12-19T19:17:00.002+03:00

While 2011 may have been a year of confusion and economic difficulty in Europe, nothing beats the very interesting outcomes for a number of despots. I am certain that nobody would have guessed that Muammar Gaddafi, Zine Abidine Ben Ali and Hosni Mubarak are no longer leaders and some barely alive. And one would think that the troubles facing Syria's Bashar Assad and Khalifa's of Bahrain would be enough for the year and yet another strong arm leader, Kim Jong Il, with no respect for life and political opinions has passed on in North Korea.

And yet to be philosophical about it, the latter passed on on the same date as Christopher Hitchens, an unapologetic advocate for reason and vociferous defender of the right to free expression. There is no better way to tie all this together than to refer to this fantastic piece by Hitchens on life in North Korea. In there, he talks about his visit to North Korea and the experience with the effects of aggressive ideology and the use of conflict to organize all society. Most interesting is the fact that the separation of the Koreas and the racist nationalism of the North exists side by side with the fact that the average citizen of this totalitarian regime is six inches shorter than those of south Korea. I agree as well with the statement that nothing is more totalitarian that "racist nationalism".

Champagne or Wine for Consumption Growth

2011-12-18T22:53:00.000+03:00

Many times, economists and business people use the movement of inventory and other consumption indicators as proxies for the state of the economy. Consumer sentiment is a reliable one but it is often not possible to conveniently aggregate all consumption in even the smaller economies, leave alone one as large and complicated as the US. Writing in the NYT here, Adam Davidson explores the simple ways in which consumption of certain items reflect the recovery of sustained lack of confidence in the United States today.

As the article states, the trend in consumption of some items are far better indicators of the improved economic conditions than others. To my mind, it is sensible that the rising purchase of high cost wines may not be a representative of the whole economy because this good is primarily consumed by high income individuals whose consumption is not affected much because they have not had a squeeze on incomes. This merely shows that tracking the sales volumes of high cost wines is not the most useful way to assess the state of national consumption. It turns out that lipstick and nail polish sales go in different directions and that the latter has lost the predictive ability perhaps because of a structural change in the industry and consumption. It turns out that while sales volumes of high cost wines is not useful, the most consistent predictor is the consumption of champagne. And with the figures suggesting that consumption champagne going up, US citizens are popping corks for the right reasons. The world needs the US citizens to pop the champagne corks.

Intelligence and Creativity

2011-12-13T23:57:00.001+03:00

"Intelligence is not enough for creativity. So intelligent people defend the position given them by their intelligence by claiming that creativity is not a learnable skill but an inborn talent-which they cannot be expected to acquire". Edward De Bono in, Think! Before Its Too Late. p. 25

Tiger Wins Again

2011-12-05T18:08:00.001+03:00

I have stated here and here before that the general view among sports commentators that Tiger Woods is unlikely to regain imperious form and win golf tournaments had to be wrong. As the Guardian reports, Tiger's performance at the Chevron World Challenge tournament shows that this player still maintains the skill set that has enabled him to retain the admiration of dispassionate sports fans. In my view, while one win does not mean that the player will continue to do so, it merely states that the bets against Tiger winning a major again must shift decisively because this player has time, history and skill on his side.

It is understandable that there are the questions about what the strength of the field was, but a number of those on the list were far ahead of him and yet he won. Skeptics must be allowed their say but many professional golfers would like to take away the Chevron Challenge prize while only a select few do.

Watch the guy.

Is Facebook Like a City?

2011-11-29T18:43:00.001+03:00

To be honest, I have not figured out exactly how the leading enterprises in the social media industry will be able to convert the large user-base into a revenue model. I am certain that the answer is out there but unlike a majority of people who are enthusiastic about the rise of these new industries, I do not mind being educated on how that will happen. I would be ready to bet that it will be very hard and that at best, only a handful will succeed in finding and executing that revenue plan.

To me, the most obvious value in social media today is that they represent a platform for rich and real time data that is subject to interesting analysis. That idea resurfaced as I was going through this original take on Facebook by Wabi-Sabi and Ikeda at the Foundation for Economic Education (FEE). I am sure that these two are not the first to compare that formidable network to a real-life phenomena but I find their comparison to the growth of cities really interesting. Going on a limb, one could say that the linkages between people on Facebook would be parallel to how cities grew and that those links are in turn measures of prosperity in the way that cities represent dense networks for economic activity.

Walmart Cashing Checks Now

2011-11-28T18:17:00.001+03:00

Because of my enduring fascination with how retail markets generate value within economies, I am an unqualified admirer of businesses such as Amazon and Walmart. Indeed, my admiration of these two is most evident in the fact that they remain the most cited business institutions on this blog. Of the two, I am especially enamored with the creativity of the Walmart as mentioned here, among other spots on this blog. It has gone beyond its classical business model of low cost retail products and logistics to ensuring that it plays a role in competing against banks in reducing the banking charges that greatly irk many low-income earners.

Andrew Martin and Stephanie Clifford file a piece in the NYT detailing how Walmart utilized customer feedback on their real costs of banking charges. this information was directed towards ensuring that the check cashing costs offered by Walmart are sufficiently competitive to ensure that its share is growing in that area. In my view, the retailer has responded well in not only demonstrating that the fees are not close to the marginal costs as they should be, but also that the competition is adding value by saving money for clients who may save it or use it to acquire more groceries.

To my mind, the move by Walmart in providing an alternative avenue for check cashing is demonstrably useful but also highlights the inefficiencies in the banking charges. The high degree of automation in the financial services industry makes me to think that Walmart may still have a margin even after lowering the costs. Predictably, the banking institutions against whom this new move presents a rising threat respond in a manner that betrays their callousness by asking for Walmart to be regulated too. This posture is baffling to me because one would expect that they would instead ask to be released from regulations in order to be able to compete even further. instead, the argument for regulation in the piece is one that would raise Walmart's costs as opposed to a response that would reduce the banking institution's costs and ensure that costs would stay low. Walmart is beating these banks at their game.

Umberto Eco on Simple Things

2011-11-28T16:39:00.001+03:00

"Its only publishers and some journalists who believe that people want simple things. People are tired of simple things. They want to be challenged. " Umberto Eco

NBA and Players Reach Tentative Agreement

2011-11-27T01:17:00.001+03:00

This has been a turbulent year for the sports franchises based in the United states because of negotiations regarding the sharing of revenue between players and the team owners. The NFL reached an agreement in which players ceded a portion of future revenues in order to end the lock-out. On the other hand the NBA season has been delayed by months and there was the remote possibility that the season would be cancelled altogether due to the great chasm that could not be bridged.

It seems now that the team owners and the players union have reached an agreement and the season is due to start with the first matches scheduled on Christmas day. As this article in the Guardian states, the full details of the settlement are not out yet but the detectable anxiety to get an agreement going in order to redeem the the season in shortened form is a major factor. To my mind, it is clear again that the brinkmanship on the part of the owners seems to have led to capitulation by the players. When the full details of the agreement are released, it is almost certain that it is the players who will have yielded more ground.

Reviewing Rugby World Cup 2011

2011-11-19T00:52:00.001+03:00

Many sports fans are today aware of the fact that statistical analysis of sports events has become common. This often manifests itself in the application of statistical techniques to purchase players and even in choice of play during set pieces during play. the one place in which the reasoning with data is more overt and subject to clear assessments is in the development of predictive models for ranking teams in a tournament.

A couple of articles written by Eoin O'Connell here and here in Significance Magazine presents a clear narrative on the author's reasoning about the pools, the form teams, and determinants of qualification towards the finals. This model is fascinating because his predictions correctly names seven of eight teams that qualify from the pool stages. While the predictor model is narrated, it is easy to see how the logic of the model worked and how it turned out where results did not go as predicted. Going towards the semi-finals and finals, the second piece states clearly that New Zealand team has the advantage of form and superior performance during the pool that makes the team less likely to lose. the model proves correct though the Wales replaced Ireland as the other finalist. The narrative is impressive as it highlights a systematic and approach to analysis of the games with data used to strengthen the stories. What one concludes is that home advantage and team form is a hugely powerful predictor of the outcome.

NBA Players Union in Good Hands

2011-11-10T23:36:00.001+03:00

This year has seen some titanic battles and negotiations pitting players unions against team owners in the major sports franchises in the United States. It started with the NFL Players union against the owners which I blogged about here and here. I maintain my conclusion in this post that the players seem to have conceded far too much.

Since then, the comparable parties in the National Basketball Association have also been in discussions that have led to the cancellation of the first twenty games of the season. I was pleasantly surprised to find that the NBA Players Union have added Kevin Murphy of University of Chicago to their team as an advisor. Reading this perceptive interview on the issue shows that the players are really in good hands. To start with, the guy understands the economics of the teams and understands that his duty is not to push for any result but rather to help the negotiating teams to understand the implications of any position that they take. Whatever the outcomes, I am certain that the players will receive exceptional advice.

What Do Governments Need Most?

2011-11-09T00:36:00.000+03:00

I have often engaged in intense discussions about the value of entrepreneurship skills and whether these can apply in diverse industries and sectors. To my mind, a very capable entrepreneur could run other institutions in either the public or third sector. In spite of that, it is clear that people with such diverse skills are few and far between.

Looking at the story about Andrew Flanagan who runs a children's charity in the UK leads me to the view that it is indeed possible to find people who can cross from private sector firms and into social and policy entrepreneurship. As Randeep Ramesh of the Guardian states, there are universal principles and good sense that allow for managerial efficiency to lead to improvements. These changes may include staffing, operational issues and financial management. The most profound one though is the very perceptive reasoning that charities should not seek to supplant or supplement government in provision of public services. Flanagan argues correctly that instead, these charities should see themselves as think tanks that generate and test new ideas that may be recommended for wider implementation.

Implicit in that profound and correct finding is the fact that citizens should require that failure in the provision of public services is sometimes as much a failure of good ideas than the absence of material resources.

How Real Capitalists See the World

2011-11-07T18:59:00.000+03:00

While a disproportionate number of people are occupied with the Occupy Wall Street protests, it is amazing that the numerous good things that come from principled capitalism are altogether ignored. Leaving aside the predictable views of some of those supporting and opposed to the Occupy Wall Street protests in New York and the rest of the world, I came across this short but really good NYT story about what real capitalists can and often do to benefit society.

Worthy of reading for oneself, I find it profound for the reason that it highlights the exceptional degree of generosity from Robert and Dorothy King. Having built their own enterprise and made substantial sums, they have opted to make a donation of US$ 150 million to Stanford University to establish the Stanford Institute for Innovation in Developing Economies. Its purpose is to study the creation of programmes and businesses through which a large difference could be made.

To my mind, this gift is profound for a couple of reasons, including the fact that it is an expression of generosity at a particularly difficult moment when many people may be anxious about the possibility of a second recession and its possible effects on further erosion of their wealth. Equally important is the fact that as the political hacks are looking for people to blame and make some political mileage from the ongoing controversy, this family has demonstrated that real capitalists go ahead with their work, support what hey can and leave everyone to judge the result. there's no better way to defend capitalism. As I said in an earlier post, this couple makes me shout, "Capitalism Rocks".

Rolex Dials Tiger's Number

2011-11-05T01:51:00.001+03:00

Tiger Woods has been a subject in this blog post in two related ways. The first is when I questioned whether endorsements by celebrities really do improve sales while the second was the belief expressed here and here that Tiger Woods would regain his high ranking and be a dominant player again. At the time when the conventional wisdom holds that Tiger's days are all gone, a sponsor no less prestigious than Rolex has appointed Tiger Woods as a spokesman.

In addition to relating the story behind the creation of the unique brand, Slate magazine's Seth Davidson interrogates this decision and concludes that this firm is sure that Tiger is momentarily at a disadvantage but will regain his form in the future. Trust a corporation that is organized in a different way to understand that Tiger is still a class act in his game. A good bet that will pay off.

Polemics of Demography and Fear

2011-11-01T17:06:00.002+03:00

I stated in this last blog post that I would not put up a link to all those lamentations that the world is overcrowded o account of unverified claim that the there are now 7 billion living souls. One must accept that in the same world where the costs of circulating ideas has fallen much more than the population has risen, people are bound to find all sorts of preposterous connections and cause alarm. Reading this piece in the NYT, I had to renege on my light promise not to link to these pieces.

Taking without question that the human population has reached a new record, a number of institutions are trying to tie their neo-Malthusian argument to environmental conservation. Among the arguments is that the levels of greenhouse gases being produced on a per person are so high that every new birth adds to the warming of the planet and therefore to almost certain environmental catastrophe.

Such campaigns may be well-timed but that does not imply that the claims are sensible. As contrarian voices quoted in the piece mention, family size reduction cannot be the solution to global warming and environmental conservation.fertility rates are higher among poorer populations in South Asia and sub-Saharan Africa but it is these populations that also generate the lowest levels of carbon pollution per person.So yes, I want spotted owls and polar bears to survive but it makes no sense to me to claim that birthing families are responsible for my never seeing a live one. That is not the real trade-off.

7 billion Time Bomb That Will Not Explode

2011-10-31T19:11:00.000+03:00

7I decided to write the blog post today without any reference to articles primarily because most of what is being expressed about the world's population today is plainly overstated. For some reason based on forecasts and population models, it was decided that October 31, 2011 is declared as the day when the World's population reaches the 7 billion people mark. As usual, the neo-malthusians see this as another opportunity to scare people with the old and tired ideas about mass starvation and humanity running out of resources because over-population. Needless to say, this is all nonsense to me.

I agree that a large part of the world's population today still live in materially deprived and sorry situations. I dispute the claim that these people living in sections of Africa, south Asia and Latin America are surplus and that the rest would of necessity be better off if they has just not been born. As if requires restatement, I concede that poverty is real and with employment, the primary issues that should concern people. At the same time, I am an unequivocal supporter of both the provision of contraceptives and maternal healthcare. What I find completely preposterous is that most articles in the major news outlets, including some that I have linked to before are using this opportunity to ring alarm bells about a crowded and heating planet.

So let me end with this: please stop patronizing poor people throughout the world and instead save our minds to think about providing females with more than basic education and opportunities for their advancement. Thereafter, get out of the way and let the population care for itself. 7 billion is not a problem, poverty and inflexible thinking are!

Tax Code Madness

2011-10-27T18:40:00.002+03:00

Despite my admission to libertarian attitude, I find it difficult o maintain that all problems are created by government. the one area where I think politicians give government a bad name is in trying to argue for why tax rates should be at one level or the other. That aside, I am keen to ensure that a limited government as measured by the proportion of wealth that it extracts from working people is kept to a bare minimum and the regulations for compliance as simple as possible.

With that in mind, I see that nothing demonstrates the fact that when it comes to taxes, most politicians are all thumbs by the fact that the tax code of the US government runs into millions of words. granted that some politicians with an ideological persuasion may want to exaggerate its length, a tax code that is several times larger than the constitution of the US demonstrates that it was designed to fail. writing in Slate, Brian Palmer tries to make sense of the estimates given by some politicians in the republican party and says that all considered, the tax code could be in the 3-10 million range depending on whether supplementary notes and consonants are included or not. however one measures it, the tax code that long is not useful. No wonder one sees politicians coming up with beautiful-sounding but arbitrarily determined measures as 9-9-9.

Random Error By Random House

2011-10-26T17:47:00.000+03:00

The Internet makes publication of information easier but also exposes authors and corporations to full public glare for small but potentially embarrassing errors. I received a link to read an excerpt of John Grisham's latest book, the Litigators and noticed a very odd thing. Looking at the price stated for the Hard Cover version of the book on the website by Random House here today led me to wonder whether a novel would really be on sale for US 250 per copy, when the paper back is less than US$ 10 and the large print at US$ 29. I had to compare prices and looked up the cost on the Amazon website and confirmed my bet that there is an error on the Random House site. Now, if the webmaster for Random House would just make the correction. This is creating the impression that the the publisher's pricing mechanism is poorly informed as Amazon's price at US$ 15.22 is several times cheaper.

Sad End for a Despot

2011-10-21T12:08:00.001+03:00

"For the region, today’s events prove once more that the rule of an iron fist inevitably comes to an end. Across the Arab world, citizens have stood up to claim their rights. Youth are delivering a powerful rebuke to dictatorship. And those leaders who try to deny their human dignity will not succeed". Barack Obama

Light Still Travels Fastest

2011-10-20T00:34:00.000+03:00

A couple of weeks ago, I posted this piece and made reference to a scientific experiment whose results suggested that some particles could possibly move faster than light. A careful review of the conditions of the experiment has been conducted with the result that the time differential occurred in the conditions that were set to measure the speed. This means that as I suspected, there was a measurement error in the set up and this created the distortion. While the explanation here requires better than average knowledge of physics, I think that it is still intelligible. As it explains, the measurement error did occur due to the experimental conditions.

I am unsure whether to be glad that my hunch was confirmed but I am still amazed that the error arose from the careful arrangement which was intended to provide accuracy. May I go on a limb now and state that time travel may never be possible. And that is not to state any new thing.

Creative Destruction in Publishing Industry

2011-10-17T18:33:00.000+03:00

In my view, it is in the decade after the Internet bubble ended that it is becoming clear that there are solid businesses ideas that can be based on the Internet and digital capabilities today. Amazon is one of the few corporations that seems to be particularly savvy at taking on old businesses using the Internet as a plank of the strategy. David Streitfeld writes that publishing firms are watching in disbelief as Amazon is cutting down the number of people in the transactions chain and contracting authors directly before publishing their work.

This bears a number of advantages for the author in terms of time saved and a chance to publish book. On the other hand, authors are sure that there income will be entirely dependent on the recorded sales as there is no upfront bonus payment. because a number of authors are taking up this offer with alacrity, I am certain that in spite of the complaints, it seems that this approach is a useful alternative to the vertically integrated structure that traditional book publishers prefer.

There's no guarantee that the publishers will be wiped out but I think that as I have stated here and here before, publishers should not defend a flooded shore. They must move to higher ground and ensure that Amazon does not wipe them out. A book publishing and author payment model based on sending papers to physical book stores will not suffice. This is an industry that i would watch and while I do not advise on stocks, I would downgrade and keep downgraded the stocks for most publishers until it is clear that they have real understanding why they are losing readers first and now authors. Is this creative destruction at work?

Demand for Counterfeit College Diplomas

2011-10-11T17:53:00.000+03:00

A couple of weeks ago, I suffered the considerably minor inconvenience of missing the deadline for registration for a course due the fact that I misplaced the original copy of my college diploma. I was led to note that there is such a disproportionate great reliance on proof of college attendance through the presentation of paper credentials. And this requirement of proof of graduation is itself creating unintended effects by providing incentives for counterfeit papers presented to some employers who are none the wiser.

Reading this article by Schmidt and Al-Jawoshy of the NYT, I was reminded that the demand to produce certificates and diplomas as proof of educational attainment and therefore professional suitability for jobs is indeed serious. As the story states, a professor in one of the largest universities in Iraq has paid a dear price and is possibly in danger of further harm for his principled effort to stop the issue of diplomas to unqualified people. It should not be a life and death matter to defend the credibility of a university's certification system but perhaps a private sector business may develop from this.

Similar to Shaffi Mather's business that I blogged about here, I see an entrepreneurial opportunity for a firm to charge a fee to certify qualifications at college level in a place such as Iraq and possibly universally.

How Cafes Allocate Seats

2011-10-11T00:15:00.001+03:00

A small cafe that i visit from time to time has a growing clientele of two types. One category are those who come in for a quick bite over lunch and intend to get a quick meal and depart soon after without spending much time. A different category includes a number who are often alone or in pairs and sit in the cafe occupying the most comfortable seats while working on their laptops or tablets for extended periods of time. A couple of days back, I was there and noted that the lunch hour was very busy but a number of seats were occupied by single patrons whose were occupying spaces for up to four people because of the arrangement of seats.

To my mind, given the fact that the second category of patrons were bound to stay for long on account of the complimentary wireless service, they were displacing the first category of patrons who were often in multiples but who could not together fit into the space that was occupied by the loungers. This presents a problem because it is obvious that the revenue from the first category of guests would be more than the rest and their displacement may lead to loss of revenue. My solution is that the cafe should consider auctioning the best seats in the cubicles or require that a minimum expenditure be required during the busy hours in order to maximize revenue. This may appear unfair but it is clear that the patrons who come for a quick lunch are the more profitable and therefore pay for both the space and the complimentary wireless service.

iSalute Steve Jobs

2011-10-06T17:59:00.001+03:00

Its a pity that my first two blog posts for the month have been about truly remarkable men who are no longer in this life. I intend not to compete with the brilliant pieces telling the story of Steve Jobs and highlighting the strength of his character and toughness of the man. Sometimes, it is sufficient to merely state that this was a remarkable man who death reminds me of a deep mystery of life itself and the limits of human understanding of our world. Fare thee well, Mr. Jobs. iSalute the life and your singular achievements.

Steinman's Nobel Comes Three Days Late

2011-10-04T00:39:00.001+03:00

There are all kinds of sensible reasons one can consider for why the Nobel Prizes are not awarded posthumously. Among them is to ensure that the prestige of the award is provided to the individual who carried out often important and difficult work. It is therefore a sad coincidence that the committee for the Nobel Prize on Physiological Sciences sent the happy message of the award to Ralph Steinman and learned that he passed on a few days prior to the announcement.

Certainly a well-deserved prize and his name goes to the record of winners except that the repository of the award will not have his lecture for the prize. Congratulations are due to Ralph Steinman as this statement confirms that in spite of his demise, he reamins a winner.

Atul Gawande on Finding and Executing Ideas

2011-09-30T18:32:00.002+03:00

"But finding a good idea is apparently not all that hard. Finding an entrepreneur who can execute a good idea is a different matter entirely. " Atul Gawande in The Checklist Manifesto p.171.

Pankaj Ghemawat's World is Not Flat

2011-09-29T07:40:00.001+03:00

The orthodoxy today has it that the world is integrating at a furious pace on account of growing market influences and technology is making borders completely irrelevant. I have been surprised with the fact that this is taken as a given by businesses and even some politicians. That was until I read this book by Pankaj Ghemawat and to my consternation realized that the flat world ideas that circulate are grossly overstated and misleading.

And it is relevant that this academic is not only highly regarded and qualified to address that subject but is keenly aware of the benefits that would issue from increased globalization. It is just that he is alert to the fact that having plucked the lowest hanging fruits, everyone seems to be taking the superficial level of integration as real. As the indicators that he adopts show, the world is far less globalized than even leaders of firms that operate on a global scale are aware of. In this interview with Leslie D'Monte, he observes that "there is social pressure to believe that the world is flat", and that has prevented dispassionate examination of the subject.

Bucksbaum Bequest Credits Couple and Capitalism

2011-09-27T18:09:00.001+03:00

I am an unqualified admirer of capitalism and freedom not only because there is no better alternative but mostly because such an alternative would hardly emerge. A very substantial and well-considered bequest by Carolyn and Mathew Bucksbaum to the University of Chicago's medical school well demonstrates the immense social and moral value of capitalism. As stated by Dirk Johnson in this NYT story, the bequest of US$ 42 million of money earned is to be dedicated to research and teaching medical practitioners to treat patients with empathy. This idea behind the bequest Bucksbaum Institute for Clinical Excellence is informed by the experience of Mrs. Bucksbaum at the hands of a less-empathetic doctor.

No doubt the couple are worthy of a national award from the President but the main lesson for me is how effective real capitalism is in channeling funds towards causes that nobody pays for. And it is quite laudable that the couple did not throw a small portion of that money into a lobby group to ensure that government pays for that need. A story like this becomes useful for demonstrating the fact that while markets may be amoral, high-minded philanthropy such as this is only possible with capitalism. Capitalism rocks!

Moving Faster Than Light?

2011-09-25T00:09:00.001+03:00

One of the things about science is that it is based on a set of very well-understood and predictable laws. Discoveries about the laws of physics do not come too often anymore because most of the fundamental principles are well understood and applied. Of those laws, the constant on the maximum speed of light in a vacuum is taught without question at high school level. A couple of days ago however, the Opera laboratory publicized results suggesting that they had conducted experiments that suggest that it is possible for some particles to surpass this constant.

This is still being tested but its implications, as stated in the article in the Guardian here, are undoubtedly profound. To start with, if the results are verified, then it would require a review of the known laws of physics. New hypotheses would emerge and this result would even create the possibility that time machines and short cut dimensions in space do exist. My strong hunch is that an error may have occurred but its worth waiting for verification. On the other hand, the professors at the Opera lab may have earned a future Nobel prize in physics.

Turkish Club Opens Up to Better Fans

2011-09-21T23:32:00.001+03:00

Depending on what one reads, the conventional wisdom driven by sports journalists is that the typical sportsman earns too much money and does not behave well-enough to be an examples to the younger people. Predictably, this view goes unquestioned and is trumpeted again and again whenever a player is found to have committed indiscretions whether in public or on the pitch. My view though is that more often, the sports fan and especially the soccer fun in the leagues of Europe exhibit far worse behaviour. They are not called out for that behaviour because the sports associations and the teams often rely on their continuing to buy expensive tickets for matches and supporting clubs through the purchase of merchandise.

Fenerbahce, a Turkish soccer club was condemned to play a match in an empty stadium following crowd trouble. That club instead turned this situation around by distributing free tickets to women and children by banning all males aged 12 years and above. As reported on Louise Taylor's blog here, the match went ahead and the crowd turned up in full support of the teams with no crowd trouble. I see this as an extremely intelligent way for the club to try and build a fan base among women and children while denying trouble making men an opportunity to watch the matches live.

Clearly, this cannot work throughout a season of more than 25 games but it is an important symbolic gesture to a new audience. That the racist chanters and violent mobs were kept from the stadium was victory in itself.

Roland Fryer Jr. Becomes a MacArthur Genius

2011-09-21T01:01:00.001+03:00

The MacArthur Foundation presents very generous awards to professionals in diverse fields to enable them to extend their work. This involves an annual payment of US$ 100,000 per year for five consecutive years. I am glad to note that Roland Fryer Jr. is one of the recipients this year especially because he does wonderfully insightful work by use of the powerful tools of economics to investigate issues of race in the United States. Prof. Fryer's work stands in a good place for his professional interest tend to cover important areas in which the findings could inform direct policy in areas such as education and use of experiments. Congratulations to the 22 professionals. More brain power to all of them.

Is China Really As Powerful as the US?

2011-09-21T00:25:00.001+03:00

Judging from the immense trouble that president Obama of the United States is having in getting politicians to work behind a coherent and mutually agreeable plan, one can safely assume that the country is bound to delay recovery and have its preeminence in the world eroded. This state of political discord has not only led to concern about the functional health of that political system but that this undermines the nation's ability to deal with big problems related to large deficits and long-term problems in financial undertakings.

In spite of the undoubted disfunction in the political process and its effects on the economy, I maintain that the US still has some time before any economy, china included, can get to surpass it in factors of material economic and military dominance. Simon Johnson, writes in this article that a book that is due for publication later in the fall suggests that China may have already surpassed the United States in world dominance. To be clear, the author of that book, Arvind Subramaniam, is a vey competent academic and his views ought to be given serious reflections before reply. That notwithstanding, I still applaud China's very successful development experiment over three decades but it is unlikely that it has surpassed the United States yet.

Looking at the World Bank's latest data on Gross National Income (GNI) on a per capita basis still leaves China at one tenth of US equivalents in nominal terms. to my mind, given the extreme importance of total income in determining dominance in scientific, commercial and cultural affairs, I think that China's dominance may be real but it is not yet close to the United States today. I will read the book after its publication and comment on the claims and data deployed to support the claim.

Yasheng Huang Tells The India Vs China Story

2011-09-19T01:12:00.002+03:00

Many comparisons of the development experiment between China and India and pitch conveniently on the side that commentators favour. As a result, there is very little clarity of thought about why China has indubitably raced ahead of India in economic growth, notwithstanding the absence of liberalization on the political affairs in China. Many people therefore readily assume that India's main problem seems to be its extremely open political system which makes it a disadvantage in terms of quick execution of development plans. Yasheng Huang's presentation to explain the differences is a tour de force in the TED talk below on that subject in which confusion and cliche's have endured.

As Huang maintains, it is a fact that India has not done so poorly but has been compared with a ver successful China. It is equally instructive that the slow reform in social policy that would register achievements for India's women is a critical barrier to its ability to compete.

Planning Fallacy

2011-09-17T11:04:00.002+03:00

David Brooks of the NYT bases his last article on a book to be published soon that is written by by Daniel Kahnemann. As David sees it, the book is an injunction against the very solid belief in planning and the general tendency to assume that what is planned is carried out and that the results of a planned process are superior. He uses the lessons from the book to analyse the goings-on in the US today and concludes that the nature of political leadership means that problems must be tackled even when solutions are not at hand and where government intervention is not likely to yield a quick or sure solution. A good piece from a journalist whose articles often predictably start from objective observations and then end up with a conservative pill as the solution.

Why Terror is a Poor Political Tactic

2011-09-15T22:28:00.001+03:00

This is a significant week for all people concerned with public affairs for it sent minds back to the dreadful event in New York a decade ago. For all the evil, that event necessarily changed many people whether believers in freedom or not because it suddenly put those who favour wide freedoms on the defensive. Ten years later, the guy who took responsibility for the attack on the US has been taken out and everyone reflections on the extent to which all the predictions about impending woe have come to fruition or not.

To my mind, it is very clear that notwithstanding the ability of terror groups to harm people here and there, the whole world accepts that perhaps we either are all stronger than we imagined or the terror groups not as formidable as was imagined. Placing facts as they are, most people ceded freedoms at airports and accepted statist interpretations of the events with minimum fuss.In spite of the initial success in scaring people to surrender freedom, few people would say that mass murderers intent on causing terror have won. And yet the missing piece is why it has all come to nothing and the terror groups are nowhere near achievement of whatever amorphous goals that they claim to advance.

Steven Pinker in this well-composed article provides an incisive view for why groups that deploy terror and fear as a political tactic almost always fail. His conclusion is that these groups gain recognition but that terror tends to feed on itself with groups collapsing through overreach and senseless violence.

Levitt on Adoption

2011-09-14T00:04:00.000+03:00

When I started writing this blog, I promised myself to try and make comments as opposed to merely linking to other blogs or articles. Below is a speech by Steven Levitt about his family's experience with adoption and its outcomes. This truly speaks for itself.

HT: Freakonomics Blog

Quoting Kenneth Elzinga

2011-09-08T18:54:00.000+03:00

"The truly influential economist is one who affects how economists view fundamental problems in their own discipline and affects how non-specialists come to view the world of economic reality." Kenneth Elzinga.

Widening The Pool of Donors

2011-09-06T18:00:00.000+03:00

Because I think that many market arrangements are amoral, it is understandable that market transactions sometimes yield results that many consider absurd or even undesirable. Again, as a libertarian, my instrument of analysis is the degree to which those transactions were predicated on individual freedom for the parties. the area of bio-ethics is loaded with emotion and delicate sensibilities regarding how human beings may sell body parts or even price and transact on products that allow for conception of children.

Reading an article in NYT today, i was struck by how people assume that such transactions are free of trade-offs. Jacqueline Mroz writes about the call to regulate through limitation, the number of times that a single donor of sperm may b allowed to conceive babies. Starting with the fact that some concerned parents realized that the a number of donors have fathered a large number of children, they state that limits are demonstrably necessary in order to prevent the possibility of incest.

While I fully understand the concern that may emerge from in-breeding, I am not sure that this endeavor to limit donations is useful or intelligent. To start with, the real possibility of mutations arising from such relationships is undeclared and that is perhaps it is inestimably low. In addition, I am not sure that the reason that a small number of donors have such a high rate is possibly explained by the demand for specific characteristics that these individuals bear. Finally, there is always the possibility that the donated items may be exported across countries to ensure that the likelihood of mutations is reduced and diversity of genetic resources expanded. The approach being led by sledgehammer regulation is not as smart as imagined.

Coase Theorem for Wealthy Londoners

2011-09-01T18:49:00.001+03:00

My view about the limits to property rights is that all individuals with legitimate rights should explore all means for use of their property with no hindrance. As I read this article by Sarah Lyall, it came to me that a number of property owners in London are choosing to construct pools, theaters and other amenities underground. At first glance, it looks as if this is inordinately expensive but it is just possible because property costs are high and it would not be possible to make acquisitions to allow for the lavish extensions that these owners desire. Because of the limits to extension of property into the sky, these fairly affluent people are choosing to dig underground in order to add to the facilities available to them.

Apart from the illustration of the fact that planning and zoning rules could lead to absurd consequences, I think that this situation reveals that these neighbours should be schooled in the Coase Theorem. Indeed, the excavation and construction creates inconveniences and burden to people in those neighborhoods. And yet, the rise of suits merely suggests that appropriate rules for governing downward expansion are not properly developed. I have not property considered the means for reaching a workable formula but the suits will merely lead to bureaucratic and stiff regulations to the chagrin of all.

Vettel is Not All Time Best in Formula 1

2011-08-30T19:13:00.001+03:00

Journalism is a profession that has immense value for bloggers and it has been the basis upon which a large proportion of this blog has based analysis or commentary. Many people seem to think that it is only in the area of political coverage does partisanship overtake objectivity but I consider that sports journalism too is especially prone to commentary that includes exaggeration or even outright misstatements.

Take as an ~~the~~ example of this piece by David Coulthard, a retired driver on the Formula 1 circuit, writing in the Daily Telegraph. It is true that during the last race, the Red Bull team for which Sebastian Vettel is a driver took the top two positions on the podium as they have dominated racing this season ~~year~~ and the last. The performance of that team has been very good and it has been the most consistent over the last couple of years. That notwithstanding, the article gives the impression that Sebastian Vettel's dominance is so pronounced that he is altogether worthy of the consideration of the crown of the best driver ever.

I disagree with this for the reason that comparisons across time as David Coulthard makes should of necessity come with a caveat that time references are tricky because of change of rules and circumstances. Secondly, it strikes me as odd that he chooses to concentrate criticism of Michael Schumacher and Lewis Hamilton as drivers who supposedly rely on the ability to steer very firast and therefore inferior to the more rounded Vettel. That criticism is allowed but is too limited to the supposed faults of two drivers alone that it makes it unworthy of much consideration. Knowing as swell that the writer raced against Michael and obviously came out second best means that he is unlikely to be as fully objective.

To my mind, he should be aware or honest to state that the consistent change in regulations makes the sports particularly prone to shifts in dominance that may have nothing to do with the capability of individual drivers. Formula 1 is also peculiar in the sense that drivers are hostage to the reliability and consistency of their teams. As it is today, the Red Bull team has a superior car in stability and fitness for the rules and the rest are catching up. To conclude, while I defer to his opinions ~~ideas~~ because I have been close to but never driven a Formula 1 machine, I am also reasonably certain that the differences in capability between the drivers is much smaller than that between the cars. Formula 1 is at least as much about engineering as much as it is about the ~~and~~ capability of individual drivers. That explains why drivers in the same team tend to finish in roughly same positions. One would expect David Coulthard to know that or ask for data to prove that.

Burying Doha Development Agenda

2011-08-29T18:38:00.001+03:00

I must admit that for a long time, I have wondered whether the World Trade Organization's Doha Development Agenda wold yield its expected fruit. Reading a number of articles by those in the know, it appears that the Doha Round was all along set for massive disappointment and failure. Jean-Pierre Lehmann writes in the FT (gated) and openly calls for an end to the pretense ~~to end~~ and for Doha to be buried because its long been dead.

I have closely examined and participated in a couple of mMinisterial conferences but I was not always sure that the outcome would be such a mess. With the benefit of hindsight, it is clear that this Trade rRound was bound to be long and difficult on account of the different expectations between member states. I am sometimes left aghast when I hear that there is a developing country and developed country divide with China, iIndia and Brazil being the torch bearers for the developing nations. The poor definition of sides is part of the problem because it encourages the argument of victimhood into debates with expectations of market opening by the "northern" countries.

Jean-Pierre Lehmann's assessment is plausible but I disagree with the claim that ~~fact that~~ Pascal Lamy's exit would in itself render the WTO's future as safe. As a custodian of the affairs of the WTO ~~round~~ on behalf of the member states, Lamy's demeanour has been exemplary and the problem here is with the intransigence of the members as opposed to the secretariat of the WTO. I am not sure that the WTO can be saved if the Doha Round fails completely especially since the piecemeal approach to trade reforms is the "modus operandi" for many of its members. As a system of exchanging concessions, the WTO seems to be reaching its limits and there's nobody to blame but is members.

Why Blame Powerpoint?

2011-08-29T10:42:00.001+03:00

I learnt from watching this Ted Talk by Julian Treasure that silence and listening is an invaluable, if increasingly rare, skill. As a result, I try to keep at least three minutes of absolute silence every day and dedicate that time to letting my mind go through small thoughts. A few days ago, in my musing, I wondered why one I always hear more calls for banning things than for letting people decide for themselves.

~~Looking at an article in the Guardian,~~ I received an email link to this piece by Julie Bindel covering the quest by a determined political group that wants to ban the use of Powerpoint in Switzerland. I agree too that some of the worst presentations that I have sat through were by people who misuse of Powerpoint while thinking that flashing pictures and flying bullets on the screen is replacement for intelligible presentation. It may well be that the existence of Powerpoint reduces the cost of producing full colour gibberish. Despite that fact, it seems that this political party is mistaken in thinking that use of flip charts is a solution. tTo start with, it is obviously paternalistic for anyone to insist on another's use of flip charts in addition to the fact that this solution fails to reckon with the fact that poor presentation is often a sign of poor public speaking skills and cluttered thinking. In my view, one cannot resolve that merely by changing presentation tools.

This reminded me that it is often much easier to build a political case around what should be banished from society than what decisions should be reversed. To my mind, it would be helpful for people who sit through pPowerpoint presentations to remind presenters that colour and theatrics do not a good presentation make. pPerhaps it would help for someone to just stop a presenter and ask, "Assume that you did not have the graphics, what would you want me to know?"

No More World Records for Women

2011-08-26T18:12:00.001+03:00

The World Athletics Championships, which I call the truncated Olympics will begin in the South Korean city of Daegu in less than 24 hours. This competition is held every second year and in my view, represents the a more accurate view of capability in sporting events than the popular and congested spectacle called the Olympic Games. I was musing about what the probability of world records being broken until I encountered a fantastic piece of sports and science journalism by Edward McClelland in the Slate Magazine.

It tackles the issue of doping in sports today and traces the story of the effect of steroids and related substances on the performance of individual athletes. An interesting point that emerges is that while both male and female athletes have a history of doping in athletics, the effects of doping onf female athletes seems to have endured. It is a curious fact that the average record in athletics events for women is 21 years old while comparable figures for men is one third of that. It raises the interesting finding that in the days before detection could occur, female athletes gained a disproportionately large "premium" from doping than male athletes did. The explanation is plausible because most of the hormones used are male hormones that appear to give a larger boost to women before the reacheds a point of diminished returns.

The argument is very sensibly laid and the fact that male records in similar events have fallen many times more than the equivalent for females lends this theory a lot of explanatory power. However, I am sure that the abolition of the existing records to ensure that they are broken again is an inferior choice. pPerhaps the IAAF should design an award system based on how close any athlete gets to the record that has stood for longer. Besides, while it is justifiable to view suspiciously some records that have endured ~~for long~~, it would be naive to assume that today's male athletes are not cheating in a way that is not possible for female athletes to do.

Why Fifa is Corrupt

2011-08-25T19:20:00.000+03:00

The title to this blog post would not surprise anyone who knows a little about the politics of international soccer. many English newspapers have written extensively about the lack of transparency in the game especially after the curious award of the next two tournaments to Russia and Qatar. It is not as if the world federation of national soccer administration just became corrupt when it's Executive Committee overlooked a very strong bid and denied England the opportunity to host the tournament. To my mind, the fact that FIFA is a strict monopoly is also part of the reason why it is corrupt.

As Brian Phillips traces the corruption through a historical view, I consider that FIFA's monopoly status does make it particularly attracted to exclusive dealing as a standard business approach. The organization earns a up to 87% of its finances from the Wold Cup tournaments held every four years and which involves political bidding by countries trying to get into a beauty contest and related underhand dealings in order to be host. this structure is typical of monopolies which first asserts itself by choosing safe avenues for revenue and does not offer the biggest asset to bidding through auctions. It would make perfect sense for the organization to auction the right to hosting tournaments to countries and have the prize go to the highest bidder. That it will not subject to a market test its best assets is evidence of the contentment of monopolies.

It is also worthy of notice that while the corruption in the assignment of hosting and marketing rights has a vicarious effect on fans and the the global audience, it is worrisome that the trend shows a steady decline in the democratic credentials of hosts. And yes, while even the citizens of non-democratic countries are soccer fans, their governments are more likely to have wasted public money in hosting the tournaments and paying bribes to secure those rights. It is clear that FIFA has great potential to grow both revenues and raise public welfare but that is not the least concern when governments can underwrite the costs of tournaments while FiIFA's bosses keep the big money and the glory.

Padraig Backs Tiger's Return

2011-08-25T10:36:00.000+03:00

http://www.free-extras.com/images/golf_ball-2698.htm

I had initially thought that Tiger Woods would resume his dominant position very quickly after resolving his personal problems. Its clear now that I was wrong about the timing but I still maintain that superlative performance for which Tiger was known would not disappear in a flash. Obviously that view is not considered sensible in light of the player's performance over the last couple of tournaments. I am glad to see that Padraig Harrington, acknowledges here that Tiger's performance is far better than what the rankings show and is cautiously optimistic that Tiger is still capable of breaking the record of 18 Golf Major wins.

That claim does not sound unreasonable to me despite the caution behind the voice. For the same reasons that I mentioned here, I am sure that Tiger Woods is not to be considered a marginal player. He will win more majors and I would place a wager on his breaking jack Nicklaus' record.

Looking at Boeing 787

2011-08-22T18:46:00.002+03:00

Image Credit: Boeing Image Neg. #K63968
http://www.boeing.com/companyoffices/gallery/images/commercial/787/k63370.html

I recently acquired interest in and posted here on the economics of commercial passenger airlines. I was rather surprised that commercial airlines have been unable to raise the travel speed across destinations for more than three decades. And this is especially interesting because in that time, there have been substantial technology improvements that would make improvements in speed easily possible. To test this hypothesis, I have been looking out for specifications on the Boeing 787 Dreamliner.

Brett Snyder, writing at the CNN page takes readers through the new features that would improve passenger comfort. I noted that the article completely makes no reference to gains in speed across destinations. As the blog post argued, the barrier is not necessarily technology but the costs that would go with increased consumption of fuel at higher speeds. Commercial flight is an industry which faces hard constraints set by fuel costs.

Are All Postal Services Slowly Dying?

2011-08-19T19:01:00.000+03:00

Annie Lowrey writes a piece in Slate showing why the restrictions on its operations have left the US Postal Services with a revenue model that is causing increasing revenue losses and shrinking earnings at the same time. the article reminds me that one of the industries that was conventionally considered almost obsolete on account of the rise of email was the postal services. And it is indeed true email communication has dented revenues for post offices that rely on delivery of letters.

Reading the reference piece, it reminds me about how difficult it often is to completely retire an organization that is established in the public sector. I think that the rise of the internet and web-based email was a significant blow to the business model of most postal services but that need not condemn them to guaranteed death. In the case of US Postal Service, one sees that politicians and unions state the intent of ensuring that the organization survives but act in ways that undermine that survival. In the end, it is the public that must continue to provide subvention or pay for the massive debt that the service runs. Among the ideas that constrain the US postal Service is the insistence in maintaining numerous offices while also controlling the price of basic mail delivery. It is as if some people in authority do not understand that the price ceiling limits revenues due while the reluctance to close offices raises costs. From the description, the US postal Service does a good job but is hamstrung by bad economics.

I would like to examine a postal service in a nation with a substantial land mass and population that runs on a profit or is able to meet its costs. I will post a blog here as soon as I find one example.

Amazon Takes on Publishers

2011-08-18T18:40:00.000+03:00

This blog has covered posts such as this one on Amazon Kindle and its rising effect towards digitization of books and a reduction in the role of publishers. To my mind, it is clear that book publishers are burying their heads in the sand in the same manner that music production corporations did in the early part of the last decade and lost. Among the many things that publishers fail to understand is that the availability of digital books is placing them in a situation where they must justify their value in the book publishing value chain.

I am therefore elated after reading here that Amazon has created a crack on the door by directly publishing a book by Timothy Ferriss. This is clearly not the first book that has been converted directly into a digital book but it shows that Amazon is now considering direct competition with publishers.As the story confirms, the foray into direct publishing is a well-considered one as the corporation has created a strong complement of professionals with editorial and publishing capability. This mans that more authors will be given the option of considering direct publication through the channels provided by Amazon. And I can bet that an increasing number will take that option.

Ford Ka Not The Car To Steal

2011-08-16T16:57:00.001+03:00

Reading this story in the Guardian has led me to the realization that the Ford Ka is subject to far less auto theft in comparison to other models. Despite the fact that that story has not stated the proportion of automobiles that were used to reach that conclusion, it is still worth examining the reason that this car is less prone to attracting thieves. To start with, a former car thief suggests that it is because the Ford Ka has less attraction for vehicle thieves. One might see that as an explanation but it is insufficient in my view. This is because there are several smaller cars of that nature in the streets of European cities and yet this car appears to be less attractive to a thief. It cannot be just that car thieves are repulsed by the size because the leader in stolen cars is the Toyota Yaris.

As reported, the Volkswagen Touareg is second most vulnerable to theft, followed by the Volvo XC90 and the Porsche 911. To my mind, these next three are easily attractive because they are high value vehicles with respectable resale values. The quoted ex-burglar seems to understand this and states clearly that this category of cars are well built and have power. And these vehicles are often lost through the momentary carelessness of owners which makes the thief have access to the keys. It is less likely that they do not have safety features thus ~~that~~ would be more difficult to disarm. I find this counter intuitive because I guessed that the high value vehicles would be conspicuous and better protected.

Warren Buffet on Shared Tax Sacrifice

2011-08-15T18:33:00.001+03:00

Despite my being a libertarian, I find it completely annoying that people ascribe their reluctance to pay taxes on non-existent reasons. Writing in the NYT, Warren Buffet bells the cat by stating and refuting the unreasonable stances maintained by politicians who are opposed to taxation by using wealthy investors as cover. Many people assume that the claim that taxation of incomes reduces incentives for investments is established in theory and empirically without question.warren Buffet states that the idea that all taxation is harmful to investment is ideologically driven but is not supported by his own experience or knowledge. hHe makes a valid case that is hard to refute but will not necessarily shut up the ideologues of zero taxation.

Because the article speaks for itself, I see no need to paraphrase it as I am not close to paying US$ 6 million in annual income taxes and neither do I pay income taxes to the US government. However, I will state that it is understandable for any person to desire to keep as much of his earned income as is possible but that there is no reason to think that a no tax movement is automatically consistent with being ~~necessarily~~ libertarian. In other words, it is not honest to overstate the need to maintain low tax regime or the value of absolving super-rich from paying taxes.

Rodrik's View on Extrapolation of Growth Data

2011-08-08T18:35:00.000+03:00

To my mind, Dani Rodrik is without doubt one of the foremost Development Economists and one to whom I take time to read even when I do not agree or understand his points about the government's role in development. Among his consistent and lucid ideas is the view that industrial policy does have arole to lay in the growth and ultimate development of a country. Having seen the vast number of failed attempts at driving the economy through government's choice of growth sectors, I find this view to be more nuanced than either his detractors or others who approve government action do admit.

That notwithstanding, I am always in Rodrik's corner with regard to assessments about the longer term prospects of selected economies. His article on Project Syndicate demonstrates that nuance again by carefully asking for a review of the conventional opinion that emerging countries and developing countries generally are bound to contribute in a large way to growth in the world economy in the future. As he argues, the US and European nations are faced with both systemic and structural problems that require deft management while most of the rest of the world has had comparatively impressive growth over the last decade.

Dani Rodrik asks the important question about whether developing countries can drive forward the world economy. Judging from his well-argued piece, it is possible that hope on the part of commentators appears to triumph over reality and the empirics of the historical record. many of the forecasts about the world transformation away from the west is based on extrapolation of impressive growth in leading countries and even smaller economies of Africa. It is rather naive to expect all these countries to maintain these rates of growth indefinitely. It will be a very difficult task that requires structural reconfiguration of these economies in an way that is not only historically unprecedented but lead to uncomfortable political relations. Irrespective of one's views about the conclusions, the argument is that extrapolation of today's growth rates one way or the other as a substitute of broader analysis is unwise.

Kenya Tries to Burn Ivory

2011-08-03T18:09:00.001+03:00

Source: www.weforanimals.com/free-pictures/wild-animals/elephants/1/elephant-3.htm

Asian and African elephants are without doubt threatened by illegal poaching and are faced with extinction of stocks in some parts of the world. The major risk for elephants comes from the strong demand for ivory for ornamental and other personal uses. And yet the approaches that advocates and some governments take are merely symbolic and have no demonstrable effect on conserving the species.

Looking at this piece in the BBC news site and another at the Kenya Wildlife Service site, it occurred to me that the symbolic value of setting alight a bundle of recovered elephant ivory was widely broadcasted internationally. Going by that story, that is the third occasion in which Kenya's president set fire to a pile of ivory in order to send the truly powerful message of the country's commitment to conserve its elephants. It is debatable whether the conservation effort would be better off with the sale of that stock of ivory in order to use the proceeds to finance conservation. What is clear to me is that knowing the chemical composition of ivory, it is unlikely that the product can really be set on fire and ultimately consumed.

And that brings me to my main point about symbolism in conservation. It is undeniably important to send a clear signal that a country or territory intends to conserve its wildlife. What one wonders about is whether it makes sense to put together a spectacular pyrotechnics show and hope that many people are not familiar with simple precepts of chemistry. To my mind, to ban trade in ivory is not the optimal way of achieving conservation objectives but still understandable because a market design solution exists. It is worrying when the symbolism goes from rejecting discussion of market solutions and to ignore the laws of chemistry. Kenya may ban ivory trade but nobody can burn ivory. It pays to recall that like teeth, ivory does not catch fire.

Tim Harford on Originality of Ideas

2011-07-29T18:30:00.000+03:00

"Most original ideas turn out either to be not original after all, or original for the very good reason that they are useless. And when an original idea does work, the returns can be too high to be sensibly measured." Tim Harford in Adapt. p. 83.

How the Middle Class Takes Shocks

2011-07-29T09:36:00.001+03:00

Searching the name Simon Kuper in the Amazon page will show that he writes very insightful books on the use of economics thinking in the analysis of soccer. He is also a contributor to the Financial Times and has a very informative piece here on the vulnerability of middle classes world over. It is pertinent because the whole world is presently riveted to the remote possibility of US debt default and the less remote one of Greek default and the subsequent contagion throughout interconnected financial markets.

The piece is perceptive and insightful in taking the focus to individuals and households and therefore, considering the micro-level effects and how these impose suffering on account of shocks to the income of individuals. Arguing that those who fall through the "trapdoor" tend to lose faith in the values that support capitalism and suddenly become vulnerable to support conspiracy theories and belligerent leadership, he seems to accept that a sudden economic shock has effects that go beyond the economy.

A response to this thesis requires proper consideration but I think that the government of Greece needs to make tough decisions today because the earlier decisions have been poor and have built up into a far larger problem requiring more sober policies. And as that happens, I hope that the narrative that develops is not a distorted one rather than one that faces the tough facts as they are. Some Greek people lived far beyond their means and relied too heavily on public subvention. Still, I am impressed with the thesis about how some people's political opinions evolves with the changes in their economic circumstances.

Is Netflix the Panacea for Piracy?

2011-07-27T18:48:00.002+03:00

This time, the blog takes a break from the concluded deal between the players union on the one side and the team owners on the other. Farhad Manjoo educates me with his articles on technology and business but I think that the latest piece on Slate is just plain wrong. The gist of his argument is that because of the ease of use of the Netflix subscription service, the piracy of digital entertainment in the form of movies may soon die down. he is obviously mistaken for a number of reasons.

I think that Farhad contradicts himself when he mentions early on that Netflix envisages a decline in the growth of subscribers on account of an upwards adjustment of subscription rates. One would think that he would then extend this argument further by stating that why are the subscribers unwilling to take up the service. My incomplete answer is that many of them know that with a certain level of difficulty, they would still be able to get alternatives or even similar movies through various channels including piracy. Secondly, I suspect that a large proportion of the individuals who download unauthorized versions of entertainment are based in countries in which the streaming service is not available and are thereby unaffected by the availability of streaming services in the US. A third reason is that Farhad makes the big assumption that individuals think of unauthorized content and streamed content as alternatives and therefore consume one to the exclusion of the other.

To my mind, there is no reason to think that the pirates will be held back just because there is an expanded list of movies on Netflix. tThe solution instead is for the owners of these works to understand that while the material is rolled out by geography, the pirates think of the entertainment world as very integrated one.

NFL Vs Players Union III

2011-07-26T19:16:00.001+03:00

In this last blog post, I suggested that the owners of teams somehow used strong arm tactics to scrape away two percentage points from the players and that the real cost of this concessions would be borne by future players. In fairness, the owners also conceded to putting aside some money to ensure that retired players will receive some payments. However, I am surprised that the general assessment seems to be that this deal was fair.

Alex Marvez of Fox Sports covers the emotional session during which the agreement was declared to the public and concludes that there appears to be no ill-will between the sides. tThis may well be but as stated, i I think that the NFL is not only a cartel that hinders competition between franchises by sharing revenues and thereby dividing the market but that owners are aware of the very short careers of a majority of players and exploited it to the maximum. Looking at what has been declared of the collective bargaining agreement, i I am not sure that there was a commercially compelling reason for players to agree to the salary cap and cede 2% points in the overall revenue. In light of the brinkmanship and tough negotiation, I see no reason to revise my view that players ceded much more and are the weaker side. I hope that further facts and analysis shows me otherwise for I wish to be better educated on the economics of the NFL teams. My best wishes for the next decade.

NFL vs Players Union II

2011-07-25T13:50:00.000+03:00

I blogged here a while ago about select details about the financial structure of the NFL and the impending dispute with the players union. For some reason, I understood it that there would be brinkmanship on either side before an acceptable settlement comes up before the next season commences. Jeremy Singer-Vine goes through what is the preliminary proposal presented by the owners proposing that players would be entitled to 46-48% share of revenues as opposed to the even split that characterized the last agreement.

To my mind, the players seem to have ceded quite some ground with that 2-4% spread because I see nothing that shows that the economics of the NFL has changed substantially. Indeed, while this proposal is not concluded yet, reflects the vulnerability of players to the factors that the first blog post revealed. That players have a perishable lifespan in the game allows the team owners to wield substantial economic power. In addition, the existing players have merely preserved their pay by pushing the cuts to younger layers who will face the pay ceilings and salary caps.

The lesson: When two unions engage in discussion with each other, it is future workers that pay the cost. This may be worth bearing in mind in the season of sports and impending political lockouts.

Sales Tax: Amazon Has A Point

2011-07-18T18:37:00.000+03:00

Farhad Manjoo often does a fantastic job at the Slate Magazine in explaining the confluence between technology and business, but in seeing technology as business. His latest piece addresses his view on taxation by different US states on the taxation of goods sold by Amazon. As usual, the coverage of the issues is comprehensive.I am less sanguine about the conclusion that Amazon is reluctant to collect taxes on behalf of states because it has no incentive to do so.

It is obviously true that Amazon is aware that a tax levy on goods that it sells would cause a reduction of quantities purchased. However, the view that Amazon is capable of putting up a system that would track and keep data on taxes due to each state enable the is only half true because keeping this clearing house is not without cost. In essence, I am reluctant to blame Amazon for the fact that states impose taxes that not only reduce trade but also impose tracking costs on businesses.With that in mind, it may be that the states that impose taxes externalize the problem of maintaining records while picking their revenue. I think Amazon is right to state its concerns about that.

Rybka Plagiarized Code

2011-07-11T18:28:00.000+03:00

My recent reading of the book from which this profound quote was extracted led me to wonder about the pressure and interesting life of top chess players and how they incorporate machine learning in their games. bearing in mind that Gary Kasparov, the world's highest ranked player lost to a computer a while back, it occurred to me that computer games would be the next platform for learning for elite players.

That's why more i was quite enamored with this occurrence where it was discovered that the Chess champion among computers known as Rybka, was disqualified for unauthorized use of code from other programmers. The hilarious title of the story aside, it is an illustration that the programmer of the four time champion learned from other open source codes and used it to enhance the performance of Rybka. Come to think of it, any champion could borrow Alekhine's defense or Capablanca's openings without being accused of plagiarism but once the play is in machine language, then different rules apply.

The Age of Benevolent Dictators

2011-07-08T13:40:00.000+03:00

A few months ago, I found myself in a discussion with an acquaintance who had visited the Libyan city of Tripoli in the last year. It is to be recalled that at the time, Egypt was in political turmoil due to unrelenting pressure by the citizens for resignation by the president and the leadership. As is common, there were various ideas about how far the series of protests would go throughout the nations of the Middle East and the north of Africa. The discussion started with arguments about what the trajectory of protests would take and which country would next be under pressure. My interlocutor stated firmly that Libya's government would have no reason at all for worry because of the better quality of life that it accorded its citizens. In his view, many people would willingly trade off political freedom for economic prosperity and that was it. While I do not recall exactly the words uttered, the libertarian bone in me was disturbed by the assertion that benevolent dictators are going to be more safe and better for development outcomes.

Today, I got a copy of this piece by the Centre for International Private Enterprise (CIPE) that places a dispassionate argument dispelling the myth of the stability and prosperity of states under the rule of "benevolent dictators". Admitting that there are a number of seemingly prosperous states that have had authoritarian governments, the article makes the important point that this is no reason to conclude that democracy should be secondary to strong economies. And yet, the clear evidence that democratic systems have endured into prosperous economies does not seem to correlate with preference for the former. At the same time, it is clear that democratic systems may be difficult to work under but these governments are more likely to be interested in achievements that go beyond keeping the chairman and his comrades in power.

For all its conciseness and clarity, this article is unlikely to convince everyone that democratic freedom is also most stable avenue towards economic prosperity. One need not only look at Intrade's main board on the chances of Gaddafi's survival to understand that this quest for benevolent dictatorships is ill-informed. We now know that among the governments in the neighbourhood of the Middle east, it is the Libyan government that has the toughest choices ahead of it now. It is also less likely that the regime will survive intact as there are some irreversible changes already afoot.

Is Tiger Beyond His Best?

2011-07-01T13:36:00.000+03:00

A couple of weeks ago, Rory McIlroy won the US Open Golf Tournament for 2011 with an impressive and dominant display that started the comparisons to Tiger woods. Clearly, the winner deserved the glory and provides proof he is one of the top players and not just a rising star. And that brings me to the consideration about the prospects of Tiger Woods in the game.

I stated a while back in this post that Tiger Woods will be back after his tribulations and that he will still be among the players to beat. With more than a year gone since that assertion I think that I would still wager a considerable sum on his return. Tiger's injuries notwithstanding, my confidence in his ability comes from the fact that he plays a sport in which the physical diminution of skills does not occur as quickly and the range in ages of the top players is among the widest in professional sports today. Secondly, the skills that are required to perform in golf are built over time and may be improved over a longer stretch and this gives Tiger a significant advantage.

For that reason, articles such as this about Tiger being invincible probably overstate Tiger's supposed decline, if any and fail to mention the fact that PGA Rankings released last month should be read cautiously. For instance, while the ranking system places Tiger as seventeenth, it is clear to me that this is largely explained by the fact that he has played the least among all players ranked above him. Tiger will be back.

Duncan Watts Explains Market Bubbles

2011-06-30T12:50:00.001+03:00

Reading Duncan Watts piece in Slate Magazine a couple of days back, I was reminded about one of the blog posts a while back on social media. To my mind, it is almost certain that the potential of social media as a whole is being overstated but the enthusiasm for investors and users makes this a difficult argument to make. The poignant point in Duncan Watts' argument is that it is not possible to tell what will constitute success for a firm and so the valuations and assessments on profitability are in many instances just guesses cushioned with convenient justification and hope. It is this enthusiasm that in turn leads to market bubbles irrespective of the industry.

Thus the limits of human ability to tell the future is part of the factors that generate bubbles. Hence by the time everyone agrees to the fact that an industry went through a bubble, it is merely because there has been a backward connection of dots to include stories that make the outcomes almost inevitable. As he concludes, the only certainty at the end of the bubble is that many people suffered genuine confusion and it is the subsequent neat story that is less credible and contrived.

And that explains why his book, Everything is Obvious will probably be one of the business books of the year. And that's because we will be referring to its sometime soon after the social media space has gone through the cycle described in the article.

Story From A Lost Picture Now Found

2011-06-29T17:21:00.002+03:00

Six years ago, I visited the city of Bangkok in Thailand for the first time and was fortunate to have a day to spare as a tourist. In my minimum travel, I concentrate on taking pictures of places of worship and was lucky to have camera around to take pictures at the The Grand Palace complex that neighbors the Wat Phra Kaew. The picture accompanying this blog post was taken during that trip and because I do not take notes, I could not recall the real name until I referred to a guide book today. However, I could still remember clearly that it was a set of temples near the palace and that one of the beautifully decorated temples held the most sacred statue in Thailand, the Emerald Buddha.

In a separate place nearby is an abandoned palace for the royal family in Thailand. Both the temple and the palace side of the complex bear perfectly manicured lawns.

As I recall, the place was so full of tourists and guides and there are portions of the temple that require the removal of shoes with warnings that ~~they are not always safe~~ there is no guarantee that one will find a pair left behind. Somewhere within the temple complex is a very well-crafted and accurate model of the Angkor Wat complex in stone. It is only upon my visit to the latter, ~~four~~ five years later did I recall the craftsmanship and its apparent accuracy. The enduring question in my mind then is why palaces and temples are either very close or combined in a single complex as in both Wat Phra Kaew and the Angkor Wat.

Economics: Barrier to Faster Commercial Flight

2011-06-24T19:01:00.001+03:00

Writing in Slate Magazine, Brian Palmer presents an extremely informative and correct argument for the fact that in spite of the development of flying capability, airlines are not getting passengers faster to their destinations. The argument is simply that fuel costs limit the speeds at which these airlines would operate since faster machines that are already available, would run on more fuel.As it is argued, a 10% gain in flight speed results in 21% increment in fuel consumption. What this means is that mass raising the speed of getting airlines to travel between cities is not a matter of technology but economics. In other words, it is possible to substantially shrink the time between cities such as London and New York but the time gained would not be worthy of the additional costs of fuel.

Meaning that planes will not cross continents much faster and will instead get more comfortable. How's that for a lesson on trade offs and opportunity costs?

Is College Education For All?

2011-06-24T10:07:00.001+03:00

In my libertarian stance, one of the few areas in which I concede to the need for government to spend public money is in public education. A republic of educated people is probably going to do better with respecting rights of individuals than any other alternative. And yet I am easily frustrated by the simple arguments about whether everyone should go for a four year college education or not. To my mind, this question is an obvious red herring because clearly, not everyone who is capable of going through the college curriculum thinks it worthy of his time.

My sense of worry that policy debates in education are getting increasingly pedantic was elevated when I read this article under the title, "Should All Kids Go to College?". Granted that questions like these are often posed so that the author could tackle both sides of a difficult and polarized subject, it is clear that it adds to the confusion. It is abundantly evident that not all kids should go to college because not all kids want to and because one does not have to attend college at a pre-set time.

In conclusion, primary and high school education are worthy of worrying about in terms of the numeracy and literacy of minors. I am not sure that it is a policy issue to worry about the specific drop out rates in college since universal completion at college rates should not be expected. At the same time, the crude argument that there is an inherent and real distinction between vocational training and academic training is patronizing to poor kids and outrightly preposterous. Many people who maintain the argument that certain classes or people ought not to be taken through academically rigorous courses assume that competence is one equals inability in the other and cite the greatly admired apprenticeship system in Germany. Well, they are probably wrong because I have met a German professor of political economy who is also an apprentice in carpentry.

Facebook Needs Revenues More Than New Subscriptions

2011-06-16T10:09:00.000+03:00

It is a fair question to ask whether there is a return to a technology bubble as happened in the early part of this century. The only difference this time may be that it is driven entirely by what technology pundits and the press have aptly named as the social media. Clearly, the leader in this is Facebook which has accummulated more than half a billion users. Charles Arthur of the Guardian cites information here suggesting that it is beginning to plateau in the US, Russia and parts of Europe.

While I claim no special knowledge of the economics and drivers of the industry, I think it is unlikely that the reduction in the pace of growth of new users should worry Facebook's management. To my mind, the strong pace of growth over the last few years is itself remarkable and was bound to reach saturation at some time in the future. The critical thing that social media corporations must worry about now is to build on the back of their strong subscriptions, the appropriate revenue models that begin to show profits. Students of business should keep a keen eye on this industry.

The Outlier in The Middle East

2011-06-10T10:33:00.000+03:00

Governments in the Middle East and Northern Africa have approached the clamour for political and social change in very similar ways and with little success and at great cost to lives of innocent people. The exception seems to be the Kingdom of Saudi Arabia where the monarchy has responded by opening the treasury and expanded welfare programmes and redistribution of the rents from petroleum to citizens through a variety of methods. As Neil MacFarquhar of the NYT states, it is clear that the strategy is to disarm the calls for political reforms by redistributing oil money from the state to citizens through increased construction of housing, raises in pay and contributions to clerics who are friendly to the establishment.

This approach is understandable since Saudi Arabia has comparatively large oil reserves and receives substantial rents for that every year. It is therefore capable of maintaining this distribution to placate citizens and momentarily quell any rising discontent. It is less clear that this approach is bound to work for a long time especially as public expenditures must have a limit and affects the development of private sector. That aside, this political trick should worry watchers of the oil markets because if this approach is maintained into the medium term, then it affects the incentives in the country to play Saudi Arabia's conventional role as the moderator of oil prices. I hope that the monarchy sees this as an opportunity to buy some time and start its reforms because it is unlikely that perpetual appeasement is a good trade off for reforms.

Quoting Gary Kasparov

2011-06-08T17:22:00.000+03:00

Reading Garry Kasparov's book, How Life Imitates Chess, I underlined very many passages in the book and now find myself having to choose only one for this post. It is found on page 212 of the paperback version.

"When preference overrides objectivity to too great a degree, our growth is inhibited."

Walmart's Final Frontier

2011-06-07T19:33:00.000+03:00

Many households in sub-Saharan Africa are especially vulnerable to shocks generated by rising costs of food and fuel. the reason for this is that in spite of the recent economic growth registered in many African countries, the majority of people still live on very low incomes. That the south African competition Commission and the Tribunal have allowed the formal entry of Walmart to take over a leading grocery chain in that country is both fascinating and portentous of good things to come. As argued here, South African unions may be concerned about the entry of Walmart into that country but its lower income people would benefit immensely from this.

The entry of Walmart in a continent that requires serious retail market development is understandably causing concern but increased competition in retail markets is a precondition for further growth. let African urban centers be the final frontier for Walmart. I hope to follow its progress in future blog posts.

Boris Johnson Argues That Rugby Causes Less Violent Crime

2011-06-03T16:21:00.002+03:00

Sometime last week, the UEFA Champions League finals took place in Wembley Stadium in London. The general conclusion was that on that day, the better club, FC Barcelona of Spain won the trophy. As is expected, the punditry went out to express opinions and theories on why FC Barcelona completely dominated the match and what that implies about the football tradition of England, where the vanquished team is based. As usual, most of the commentary was not worthy of reading, leave alone taking seriously.

In my view, the standout analysis of the match and its outcomes came from the Mayor of London, Boris Johnson. His article is definitely worthy of reading and reflection upon. And yet, he too missed a delicate point and made a common error. By way of summary, his argument is that the dominance of FC Barcelona suggests that the approaches chosen by English teams is manifestly inferior. Going further, he posits that England may be better suited for rugby, the sport in which it has produced a recent world beating team. No errors so far, except that he alludes to the fact that rugby is a distinct sport in the sense that areas with the highest participation in rugby are also areas with the lowest levels of crime.

Be that as it may, it is still a leap in abstraction unless he can prove that the direction of causality heads from Rugby towards low violence. Is it not just possible that areas that experience low levels of violence in the first instance are attracted to rugby? Mayor Johnson, correlation is not causation.

Facts From Mexico's Census

2011-05-31T19:04:00.001+03:00

I have just encountered this dated article from the Economist website discussing the results of the official census in Mexico. Starting with the obvious, it assessed Mexico's population at 122 million people and reveals not only interesting changes in the demographic profile but also about household property ownership. A curious fact in the author's mind is the revelation that 93% of Mexican households own televisions while 82% own refrigerators. I am unsure what the ideal is but the point being made by the author that television shows in poor quality seems not to find support from households. To my mind, the goods are probably not substitutes and ownership may be related to price or the size of each household.

No census would be complete without a journalist pulling out data to contrast the ownership of mobile versus terrestrial lines. It emerges that in Mexico, the ratio is 66% to 25% in favour of mobile telephones. I find this even more interesting because in many countries, mobile telephones tend to be perfect substitutes for landlines that have historically been unavailable to low income people. Illiteracy among the youth is at less than 2% while it climbs to as much as one third for those above 75 years shows that the country has done well with expanding the reach of social programmes. Kudos too to corporations and governments for the fact that electricity connections are almost at the universal level.

Image from Wikipedia Commons

Fifa at The Crossroads

2011-05-30T19:24:00.000+03:00

In general, I support private institutions that choose to organiza sporting activity based on agreed rules even if they attempt to consolidate across national boundaries. However, I have also come to the view that when a decision that could be reached through a market mechanism is reached by an alternative means, then it is difficult to preclude biases and corruption. Soccer fans have come to the stark realization that FIFA's methods have not only exposed its delegates and officials to possibility of inducement to corruption but that it is almost certain that its leadership at the regional and international level is corrupt.

Revelations here and here put it beyond doubt that the conspiracy has been blown and the evidence that this institution overlooked corruption is undeniable. No doubt FIFA will buy high-powered public relations but that is looking at it the wrong way. This organization should take the simple mechanism of auctioning the rights to hosting events as a cleaner and more transparent method for assigning hosting rights for future World Cup tournaments.

Dilemma of Diversity at Exclusive Colleges

2011-05-27T19:18:00.000+03:00

David Leonhardt discusses the admission in the most exclusive colleges in the U.S. through the career of the outgoing president of Amherst college, Anthony Marx. In it, he makes the observation that capable students who come from lower income households are unable to make it into elite universities in the U.S. despite the claim by some colleges that the admissions processes are blind to financial capability of students.

One cannot disagree with Anthony Marx's approach to try and ensure that the admissions processes at Amherst capture a more diverse set of students based on their family income and circumstances. However, I think that many universities are altogether unable and unwilling to seek a wider body of students from low income families for the reasons that are obvious. For a private institution that thrives on endowments, it is clear that many would choose borderline students, provided their parents are capable of paying or have a legacy of attendance than a student who is probably the first to attend college from the family.

As a libertarian, I understand fully that some universities may trade away the idea of having a student body representative of the U.S. for the prize of a stable student set. It should be perfectly left to colleges to define the exclusive ideas that will drive their admissions. that Amherst has chosen to interpret its quest for diversity in a different way is its "niche". In my view, that colleges are beginning to define themselves in this way is altogether admirable and Amherst is commended for it.

Brazilian Nannies Understand Supply and Demand

2011-05-24T18:46:00.000+03:00

One of the most difficult and least convincing argument to make to laypeople is how markets determine who earns what income. And this is because for all the formal analysis that we can conduct using the tools of piece theory, it is difficult to explain it more clearly than the fact that scarcity is one of the reasons why ill-educated sportsmen earn more than some people with graduate degrees. A common response that one hears is that how come those who perform important tasks such as teachers, farmers in Africa and child carers are often not paid well in comparison to other people who perform "less essential" tasks .

Having read this article in the NYT, it occurred to me that the market is truly an amoral force and one that has little prejudice. My conclusion is that the situation illustrates how some of the nannies in Brazil are beginning to command proper middle-class wages. And this upward creep in the wages of specific nannies is on account of the additional skills that they have built which make them not only a scarce resource, but creates confidence that makes them able to successfully withdraw their labor and thereby determine its price. And in spite of the fear by a few of their clients that the services of nannies are becoming less affordable, I think that the new wage will lead to an influx of individuals seeking that improved wage. The result is that there will be an increase in supply that will moderate that wage. In my view, it is unlikely that the wages for the nannies making increased investment in their skills will rise as much as the market will be segmented with lower wages for those with the more abundant skills. In all, this is a modest illustration of markets at work.

From Casual Muse to Podcast and An Invention

2011-05-23T18:16:00.000+03:00

During my limited travel around a few countries, I have cursorily noted that a comparatively smaller proportion of the population in Africa and south Asia wear reading glasses. In the attempt to understand why, I consciously avoided the ready answer that limited incomes hinders the purchase of these gadgets in societies with a large number of poor people. My view was maintained by the fact that there is no reason to think that the same proportion of the population in every country should have problems with eyesight and thereby create a demand for reading glasses.

A couple of weeks ago, the Freakonomics Radio featured a show in which an argument was made that the scores of school children could be substantially raised by provision of reading glasses to children with poor eyesight. Still, I did not see that connection but I appreciated the fact that school performance could be raised through what is a non conventional approach. I have had to take back my thinking cap upon reading here of the invention by Prof. Josh Silver. As stated in the Guardian here, he has invented a cheaper and self-adjusting set of reading glasses that would be suitable for correcting eyesight in low income countries.

The simplicity of the gadget is clear and proves once again that one could improve the employment prospects and learning outcomes through the non conventional devices. And I find a perfect connection to my musing, a podcast and an invention So its really true that reading glasses make kids smarter.

Amazon's New Milestone

2011-05-20T09:58:00.000+03:00

I have just seen this piece in the Daily Telegraph reporting that Amazon's e-book sales on the Kindle have surpassed printed titles. It is important not to stretch the meaning of this because it has just happened but it surely marks a new milestone. More importantly, publishers must now confront the new economics of digital books and preparation of marketing and pricing models are bound to change.

One also sees that the initiative is passing from the control of the publishers towards the book stores on the one hand and the readers. I am uncertain about what this interesting fact means for distribution but I am still upset that certain book titles are not released worldwide. Often the problem is that publishers have not worked out a way for universal release. It is difficult to imagine that with e-readers gaining widespread use, the printed books will regain dominance but one can still state the cliche that the printed book will still be here.

NYT Tries to Nudge Readers

2011-05-19T18:46:00.000+03:00

I am a member of a book club that reads books from which insights for business may be extracted. having been an active member for a full year now, one of the fascinating ideas is the degree to which the ideas that are used to run businesses are untested and sometimes completely wrong. In my view, many people who run successful businesses are also out of touch with the new ideas that are in the public domain such as Nudges, data-based experimentation and ideas such as predictive algorithms.

That said, I have just encountered an instance in which the NYT has used the idea of a Nudge in its new subscriber model for the paper. For close to two months now, the NYT has allowed readers a maximum of twenty free articles with the option of taking a subscription in order to continue to read. As a former subscriber to the early Time Select service which also tried a subscription model without success, I have been reluctant to sign up.

However, having had my access run out and found a warning, I noted that the notice suggest that I could take up an initial subscription of unlimited access for US$ 0.99, which would be followed by a subscription of US3.99 per week. One sees immediately that initial subscription is incredibly cheap and the price rises fourfold after the first month. Why? Its clear that the designers understand "Choice architecture" and the inertia that makes it unlikely that the subscription would be cancelled after the first four weeks. I would not call that genius but it shows an alertness that I find laudable.

Schools and Education

2011-05-19T17:26:00.000+03:00

I read Greg Mortenson's Stones to Schools less than a year ago and was impressed by the simple idea that building schools in remote parts of the world was a far effective development tool than many acknowledge. On my part, the theory offered by Greg that building schools in Afghanistan was a far more effective weapon for female child emancipation and longer term peace than the full-scale war that was the alternative, seemed plausible. I thought that while one cannot educate everyone to pacifism, this theory had some merit relative to available alternatives.

Annie Lowrie of the Slate Magazine has put forward this very incisive argument against that theory and one that goes beyond attacking the author. the argument goes that physical construction of schools is not the equivalent of providing an education and therefore the obsession with building schools is itself wrong-headed. The essence of this critique is that while donations are easier to marshal in the name of putting up structures, it is often the provision of education that is a far bigger challenge. Informed by randomized evaluations, the alternative seems to urge that construction should be replaced with payment of superior teachers, de-worming of school children and separating learners into classes that take account of ability.

Competing Through Public Relations

2011-05-16T17:41:00.000+03:00

In the quest to understand the nature of competition in technology markets, I have been following keenly a number of corporations including Google, Facebook, Apple, Microsoft and a couple of others. I am not writing any apers on this but trying to see for myself how technology transform markets, which in turn transforms technology. My not very insightful hunch is that the mechanism for that transformation is through the instrument of competition. This is because while Google and Facebook started with a different view to the services they provided, there's been an unintended convergence on audiences and space that they are now rightly seen as one another's competitor.

Coming back to competition, I have to state that I have been completely unimpressed with the approach taken by Facebook as described by Josh Halliday in the Guardian. Its easy to sit back and say that competition does not need to take place in such ways but one cannot help but be concerned that even corporations run by very intelligent people cannot save their time and concentrate on what they do best. And I am thinking that the same PR firm being involved in this game shows something about the firm more than its clients. Unfettered competition is really a public good.

What Do Brand Value Lists Show?

2011-05-09T12:34:00.000+03:00

I have recently developed suspicion about the idea of brand identity and how the marketing professionals claim that even individuals can be branded. Added to that is the tired idea of rendering phenomenon most into lists with the top people, item or ideas. In spite of that, I have just read through this article in the Guardian claiming that Apple has overtaken Google as the most valuable brand. I wonder whether a list such as this is really useful save as a mechanism for the research company producing it to troop its own colours by generating a list that is supposed to look as if it understands well enough what brands are about.

Putting aside both the methodology and value of that list, I am struck by the fact that in the top ten are 9 corporations from the US. The only exception is China Mobile which bears the distinction of the world's largest mobile phone company by subscription numbers. I am unsure that many people outside Asia would be able to recognize the trade marks of China Mobile if they saw it. In addition to that, it strikes me as noteworthy that the leading corporations in that list are corporations in the cutting edge of technology, software, fast food, sugared beverages and tobacco.

Is US$ 25 Million Enough to Catch a Terrorist?

2011-05-03T18:45:00.000+03:00

While it is demonstrably true that the significant prizes money often leads solutions for policy questions, it has never occurred to me to question whether that is also true for law enforcement action. And with my stated bias most recently stated here towards prizes as a form of outsourcing solutions to business and public policy problems, I begun to think about why this confessed terror boss was not apprehended sooner. Is it possible that a US$ 25 million prize was an insufficient incentive for someone to cooperate with the US state Department?

Writing in Slate Magazine here, Annie Lowrie argues with herself on the same issue too by asking whether the US State Department will be giving out that money for any person who may have provided some information that enabled the planning and execution of that daring raid. As she concludes, there is a dearth of data available for independent testing of the hypothesis and yet officials claim that offering a bounty for fugitives works. Absent some public data and analysis, I am unsure that the US$ 25 million was the right amount because perhaps a fraction or a multiple of that amount would have gotten the same effect much sooner. Maybe so, maybe not.

Untouchable: An Indian Classic

2011-04-28T17:48:00.002+03:00

I was in the Indian City of New Delhi sometime last week for a formal meeting and because I arrived before the conference commenced, I made my way round the book stores on Janpath Road. I entered into a very small book store which had what I considered far too many workers for the size. While browsing from one side of the very small store to the other, I asked one of the attendants to point me to books that would teach something about India. With minimum hesitation, he turned around to the opposite side of the store and grabbed the book that forms the title of my review here. He handed to me Untouchable by Mulk Raj Anand and added with confidence, "This is an Indian classic".

To start with, I have known for a while that India has a very highly developed publishing industry and has one of the lowest costs for publications among developing countries. Still, the degree of knowledge about titles that the store assistant showed is rare because I would certainly have left that store none the wiser if my attention had not been directed towards that book.

The book addresses the social and economic construction of stratification in Indian society in pre-independent India. In reading the book, I see the duality in the fight that this society faced in designated classes of people as untouchable and unclean. Contact with the low caste people known as sweepers would make one contaminated and require ritual baths to restore cleanliness. This novel is based on the life of the youthful Bakha whose family have been sweepers for time immemorial and who are condemned to living apart from higher caste Indians. Their isolation is aggravated by the fact that they have an exploitative relationship which requires the sweepers to take care of cleaning up toilets.

One cannot miss the contradiction that comes from the fact that the caste system in India as in other places, created bogus distinctions that endured. At the same time that the priestly and warrior classes enjoyed superior status and avoided the contamination of sweepers, they depended greatly on these oppressed to accept their inferior station and thereby provide cheap labour for performance of the most unpleasant tasks in that society.

Bakha wonders through the day and is human in the fact that he gets hungry and angered, playful and serious and somehow wonders why his family must forever accept their inferior classification. He has three encounters that could provide a solution from three different people and the most convincing one for me is the technology solution. tThe author integrates history in this work of fiction by exploring the role of the Christian church, Gandhian philosophy and suggestions from educated Indians. In an interesting twist, Bakha returns home in the evening convinced that Gandhi's call for Hindu compassion is part of the solution and wondering whether a flush system would complete lower caste emancipation.

For a book written in the 1930s, it describes from the eyes of an Indian, how injustice can endure when it is justified through religion and culture on the one hand together with an unmentioned but real economic basis. It also reveals the quest for status that makes other lower caste groups such as washers and leather workers to act with derision towards the sweepers. I recommend this reading for any person with an interest in the evolution of societies and to Llibertarians with interest in booting cultures that justify subjugation. Putting myself in the shoes (rare among sweepers) of Bakha, it may be debatable which was the more evil system between colonialism or the caste system. Just wondering!

Book cover Image from Amazon.com

Academics and Despots II

2011-04-28T16:22:00.000+03:00

In musing about the significance of the series of political events in the Middle east and North Africa over the last few weeks, I posted a piece on an article by Dani Rodrik. And as the post states, it seemed that Dani Rodrik was the only prominent scholar that I had read who addressed himself to the difficult issue of what posture intellectuals should adopt in interaction with despotic regimes. Dani talks about a follow up interview here.

An intellectual from Egypt has now added a different voice to that debate. Nawaz El Saadawi writes with contemptuous regard for Egypt's elite. In the author's view, the intellectuals among Egypt's elite seem to know on which side their bread is buttered. As a consequence, they deploy their ability to communicate to a wide audience by applauding the young revolutionaries while also tacitly trying to prevent full trial of Mubarak. As the article states, they are not driven by the need to stop vengeance "per se", but are merely defending a regime that they have applauded for decades.

On my part, the advise is the same. Keep away from regimes that have no respect for life or dignity at a minimum. Any association with despots rarely turns out well. And I mention this with full knowledge that despots are often very determined for acclamation and the refusal of one academic merely means that there are twenty more who would gladly take that position.