Fuzzy little things that I find interesting.

Political musings from someone who thinks the S-D curve is more important to politics than politicians.

Month: May, 2018

I am a sucker for good visualization. And this is a fantastic one.

How 2 M.T.A. Decisions Pushed the Subway Into Crisis

This article is full of visualizations showing how the subway works, how cars move, and how two specific decisions (to increase spacing and slow down trains in work zones) have contributed to slower service despite a flat ridership.

The article is worth reading just for the visualizations alone. This is how an article should be written, and this is how articles on the Internet can be written.


Dematerialization and an introduction to the economics Paul Ehrlich doesn’t understand.

Dematerialization: Humanity’s Biggest Surprise

Andrew McAfee argues that the Earth Day environmentalists correctly diagnosed the problem, a worsening environment, but were wrong about the solution, degrowth. In fact, the drive to reduce costs by making better use of resources has led to a dramatic decrease in resource use even as production has increased, a dematerialization. Poverty not prosperity is the enemy of the environment.

Watch the associated video at the above linked article. And note why we are seeing dematerialization: the creation of greater wealth using fewer molecules out of the planet. It’s not because we’re noble or thoughtful. We’re cheap. And it’s cheaper to own a single phone than all the devices it replaces: a computer, cam-corder, camera, audio recorder, and a dozen other devices.

Sometimes people don’t think before they speak.

Jacinda Ardern says US embassy in Jerusalem hurts peace process, as dozens of Palestinians are killed

Let’s set aside, for a minute, that on the day the U.S. officially moved its embassy to Jerusalem, the Palestinian “protesters” showed up with bombs. And let’s parse what the New Zealand prime minister said:

Jacinda Ardern has condemned the “devastating, one-sided loss of life” in Gaza, as the United States opens its embassy to Israel in Jerusalem.

Protesting the devastating loss of life in Gaza, sure. Every life is sacred, and every life lost is a sorrow–even if, in many ways, a lot of those lives lost were effectively “suicide by cop.”

But “one-sided loss?”

What, is she upset that the protesting Palestinians were unable to kill more Israeli Jews?

And why can’t they both be right?

A 40-Year Debate Over Corporate Strategy Gets Revived by Elon Musk and Warren Buffett

Basically the debate is between “moats” and “innovation”:

When Tesla CEO Elon Musk said that “moats are lame” during the company’s earnings call last week, he was calling out Warren Buffett, the chair of Berkshire Hathaway, who uses “moat” to describe barriers to imitation that stave off competition. “If your only defense against invading armies is a moat, you will not last long,” Musk continued. “What matters is the pace of innovation — that is the fundamental determinant of competitiveness.”

But what if they’re both right?

Take the notion of a “moat”:

Buffett’s notion of moats that prevent competition is nearly as old as the field of strategy itself.

There are three fundamental ways you can build a “moat” in business:

First, you can have a competitive advantage codified in law. Meaning you can create regulatory barriers to entry which make it impossible for competitors to catch up with you.

This method may help guarantee future results–but it has the problem of companies becoming lazy and sclerotic. Middle managers have no incentive to improve and streamline their departments so long as they don’t exceed their budgets, but they do have the incentive to enlarge their departments with extra bloat as the status of middle management is proportional to salary and the size of their department. Budgets eventually bloat to spend the guaranteed profits–and the company is left incredibly inept and unable to innovate (since innovation is risky to profits) and, the moment a whiff of competition appears on the horizon (as competitors figure out how to get around the regulatory barriers), large sclerotic companies fold like a house of cards. And sometimes so quickly it can leave us in shock.

Second, you can enter a field where there is a natural monopoly. Think about social media companies like Facebook, whose economic strength is proportional (rather than inversely proportional) to audience size. Those monopolies can be fickle, however; just see how quickly Facebook’s competitors unraveled as tastes changed.

Third, you can innovate your “moat.”

Look, for example, at Walmart. There is nothing Walmart is doing that couldn’t have been done by Sears, Target, Costco, Dillards, Dollar General, J.C. Penneys or a half dozen other large competitors. That it was done by Walmart was a result of Walmart innovation in the supply chain: streamlining supply to help lower prices to gain audience share, streamlining all the way down to the manufacturer.

But there is nothing Walmart is doing that other companies could not do. There are no regulatory barriers which prevent (for example) J.C. Penneys from doing what Walmart has done: improve internal distribution using just-in-time logistics in order to minimize warehousing costs, and dynamically updating prices as supply prices change.

And in fact, many companies are making serious inroads into Walmart’s market. Further, Walmart’s biggest competitor is Amazon–which is attempting to make the overall process of buying goods as painless as possible. Walmart has found itself in the interesting position of having to sink a small fortune into online e-commerce–and those spending pressures are putting significant pressure on Walmart’s bottom line as they have to catch up with Amazon, a company that has had over 20 years to innovate.

But then, Amazon is in the interesting position of trying to compete with physical brick-and-mortar retail–and Amazon has found itself in the position of having to innovate in an area where Walmart has nearly 50 years of experience.

Perhaps the strategist Musk most sounds like is Columbia’s Rita Gunther McGrath, who in 2013 wrote a book titled The End of Competitive Advantage. McGrath put forward two main ideas: First, companies should give up on the idea of sustainable competitive advantage and admit that any advantage is transient. Second, strategy and innovation are best thought of in conjunction. “The assumption of sustainable advantage creates a bias toward stability that can be deadly,” she writes. Musk couldn’t have tweeted it better.

One of the advantages of innovation is that even when the answers seem apparent to your competitors, a lot of “innovation” really involves “learning from your mistakes”–and that process (ironing out the glitches) can take years.

Elon Musk is learning this lesson the hard way at Tesla, a brand new car company attempting to out-car-comapny the likes of General Motors or Ford, each who have nearly 100 years of experience building cars. And a lot of the things Tesla is ironing out revolve around manufacturing: around figuring out how to mass produce cars, then to improve the production of those cars. (Tesla has confessed to problems in this area, for example, by overly relying on automation without understanding internal manufacturing processes.)

This “learning from your mistakes” happen even with the smallest companies–and is one reason why common wisdom is that you won’t reach profitability until after running your business for three years. Even with something as simple as a flower shop, it takes three years to learn the best places to buy flowers, to store them, what flowers will sell at what time of the year, how to hire the right people and retain the right talent, how to integrate with on-line retailers, how to advertise and the right times to run sales and the right times to raise your prices. And that doesn’t even cover the dozens or hundreds of little issues that come up–ranging from where to buy sales slips and how to accept credit cards to dealing with the thermostat in your refrigerators.

Now if a company has a culture of innovation, even as other companies catch up, you can continue to outpace those other companies. Apple’s new iPhone X form factor, for example, works better than other Android devices made by third party companies which use a similar notch because they have had more time to consider the unusual screen shape. And it has taken at least a year for Android device makers to figure out how to handle the notch; early phones simply displayed a rectangular display with missing pixels.

Meanwhile Apple is spending a lot of time where Tim Cook is most comfortable: streamlining the entire supply chain.

The most interesting part about innovation is that a country’s wealth is proportional to its knowledge.

In a country with no knowledge, the most you can do with a pile of pure sand is to perhaps build a cat litter box. A little knowledge and you may learn adding sand to an adhesive (such as powdered calcium oxide mixed with water) makes a good concrete.

But in a country with a lot of knowledge, instead of using it to make sand boxes or cement, you can make microprocessors which drive an iPad.

Innovation allows us to know how to add value and grow wealth by turning wheat, apples and sugar into an apple pie. Innovation allows us to know how to extract granulated sugar from beats. Innovation allows us to know how to weave cloth–and to build machines which can weave cloth, so we can have cheap clothing. And innovation allows us to know how to make the jigs and machines which cut and shape the components we take for granted–to build houses and cars and pour asphalt and make pencils and build a modern society.

Innovation, in other words, makes wealth. Not money, not property, not material possessions–but innovation.

And a culture of innovation allows companies to both understand their customers and sell them a better product (such as the iPhone; the original version was a sad little toy compared to today’s models), as well as building a world with more wealth than before.

Innovation is why the United States is the wealthiest nation per capita on Earth. And innovation will make us even wealthier.

The problem with Warren Buffet’s “moats” is that, if done wrong, they can lead to stagnation, bloat and eventual economic failure. It’s why its important to allow innovation–and to allow innovation to engage in “creative destruction.” Marx’s observation that capitalists will eat their own is a feature, not a bug.

And the biggest problems we create for our future selves is when we try to save large corporations that should be allowed to go bankrupt and have their assets stripped and sold off to the highest bidder.

Can you imagine where we would be if General Motors was allowed to go into bankruptcy, and had sold off parts of its manufacturing capabilities to Tesla?

A footnote to an excellent article.

Fine Tuna Markets

Here’s a further point. Take as an example any of the many modern market ‘mundane marvels’ that you wish – for example, Jeff’s can of tuna salad; the availability in Boston of inexpensive fresh flowers in January; the many gasoline stations appropriately spaced out along the hundreds of thousands of miles of highways and roads in the United States, and always filled with gasoline for sale (and, increasingly, also with coffee, snacks, and other grocery items); fresh bagels in the morning; supermarkets packed with tens of thousands of different, affordable goods; pencils; whatever. Now cast your mind back to a time – not long ago in the great expanse of human history – when the mundane marvel that you have in mind did not exist. Imagine someone thinking of such a marvel (“Hey, wouldn’t it be great if residents of Boston could be regularly and inexpensively supplied with fresh flowers throughout the year, even in the dead of New England’s winters?!”) Imagine further that nearly everyone agrees that humanity would indeed be well-served were this imagined marvel to become a reality.

The saddest part to me–the one that fills me with the greatest frustration and makes me think the person who offers the idea is someone who really needs to be caged and studied like a freak of nature–are those who argue the availability of all these marvels: of canned tuna from a vending machine, of fresh flowers in January, of affordable travel, of all of the material things we take for granted–is somehow a problem.

That there are those who argue this wealth is a problem, as if only the truly lucky should have access to tuna or the truly worthy should even see fresh flowers in January, strike me as monsters who should be shot in the head rather than permitted to attain real and tangible political power.

Fortunately monsters are often too stupid to rise in the ranks of power.

Unfortunately a few monsters have–and have caused unimaginable death and suffering as a result.

Mumble, mumble, hot standby, mumble, mumble.

I made the observation, oh, perhaps a thousand times, about how one of the problems with solar and wind power is that they are often backed by “hot standby” power plants: plants which are burning coal (so they keep their boilers hot), so that they can quickly spin up a turbine if a cloud drifts by or the wind ebbs. And of course while they’re burning fuel but not spinning a turbine, the fuel is simply being wasted–in the off chance the turbine needs to be engaged to make up for ebbs in the renewable power sources.

And every time I make the observation I get a lot of “yeah, bullshit. Renewable energy rocks, and you just hate green power.”

Well, no. I love green power. It’s just solar and wind is not as green as everyone says it is.

Well, I guess all that “green” (*cough*) power is catching up to Europe:

An Omnibus Climate and Energy Roundup

The coup de grace for this story is a recent study in Energy Policywhich concludes that the rush to force renewable energy into the electricity grid has actually increased the use of fossil fuels to maintain overall power output and grid stability.

Which means, ironically, all those countries who stayed part of the Paris Accord that the US pulled out of have fallen behind. Meanwhile the US has significantly reduced our carbon footprint, primarily by using natural gas, which emits less carbon dioxide per kilowatt generated.

And it happened thanks to market forces.

Now if green types thought with their heads rather than their hearts, they’d embrace nuclear rather than scrap it. And it was scrapping nuclear which caused “green” Germany to pollute like a chimny.

“Do No Evil.” Yeah, now about that…

Google Bans Bail Bond Ads, Invites Regulation

Google’s decision to ban ads from bail bond providers is deeply disturbing and wrong-headed. Bail bonds are a legal service. Indeed, they are a necessary service for the legal system to function. It’s not surprising that bail bonds are used in communities of color and low income neighborhoods because it is in those neighborhoods that people most need to raise bail.

Thank God Google is coming down on anyone who profits from the minority community, such as bail bonds which help get blacks accused of crime from those minority communities out of jail.

Next, I’m sure Google will prohibit defense lawyer ads from running for anyone Google detects is black–you know, because helping blacks defend themselves in court is a money-making racket. And of course it is better to let those blacks rot in jail, because liberal reasons. </sarcasm>

There is irony here, but most of my friends on the left would miss it. Something something rolling the clock back to 1950’s Democrats something something–but it would be hateful for me to point out the glaringly obvious…

Remember: when you ask for more government intervention, this is what it looks like.

Off-duty officer holds man at gunpoint over $1 package of mints

An off-duty Buena Park, California Police officer decided that a $1 pack of candy was worth risking human life. Mistakenly believing Jose Arreola was shoplifting a package of Mentos he had just purchased, the cop went into thug mode.

Remember, “Government is simply the name we give to the things we choose to do together.”

And also remember, police officers are the people we hire in order to enforce those things we choose to do together.

And the more government you want, the more cops and investigators and people armed with guns who can turn your entire life upside down we need to enforce those things we’ve chosen to do together.

And the more cops you hire, the more thugs you will inevitably get–if only because, despite doing our best, a few bad apples inevitably fall through.


Moral Licensing In Action

Study: Greens Believe they have a “Moral License” to Pollute

From the abstract:

We conducted a one-year longitudinal study in which 600 American adults regularly reported their climate change beliefs, pro-environmental behavior, and other climate-change related measures. Using latent class analyses, we uncovered three clusters of Americans with distinct climate belief trajectories: (1) the “Skeptical,” who believed least in climate change; (2) the “Cautiously Worried,” who had moderate beliefs in climate change; and (3) the “Highly Concerned,” who had the strongest beliefs and concern about climate change. Cluster membership predicted different outcomes: the “Highly Concerned” were most supportive of government climate policies, but least likely to report individual-level actions, whereas the “Skeptical” opposed policy solutions but were most likely to report engaging in individual-level pro-environmental behaviors. Implications for theory and practice are discussed.

I’ve seen “moral licensing” in action: people who engage in public displays which suggest they are altruistic–such as buying organic foods or putting a “Greenpeace” bumper sticker on their car, feel they have a license to be selfish assholes. It’s why parking at Whole Foods is such an adventure. It’s as if we only have a limited amount of “goodness” in each of us, and belief and faith spends some of that “goodness.” So if you believe in global warming–you’re the least likely to engage in individual behaviors (such as switching to LED light bulbs) that help fight global warming.

Now there are some potential confounding effects in play. For example, the younger you are, the more likely you are to believe strongly in liberal causes and believe in government action. But on the other hand, the less money you have–so the less likely you are to be able to afford to take environmentally friendly measures.

But today, with LED light bulbs costing virtually nothing (once you consider the lifespan of the bulb), and with some measures–like bumping your thermostat down in the winter and up in the summer actually *saving* money–I’m not entirely sure if the “those who feel most strongly can do the least” theory holds.

Instead, I believe a lot of what is going on is moral posturing: wearing a little ribbon on your shirt to show people you’re a good person, so you can have license to be a selfish prick.

An aside about the root of natural and legal rights, about positive and negative rights.

From another Reddit comment:

As an aside, let me note what the folks like Locke and other 17th and 18th century Scottish and English philosophers like Hume were trying to do is formulate a philosophical basis for morality and ethics, and the derived rights that come from this framework, absent a God who simply creates these things by fiat.

Thus, you have David Hume talking about morality and ethics coming from our own sentimental attachments to others (which caused Adam Smith to eventually write Wealth of Nations, one of the most frequently misquoted and misunderstood works of philosophy, and the sequel to his more important Theory of Moral Sentiments). You have Thomas Hobbes talking about voluntary social compacts derived from human judgement absent an omniscient God to help guide us (other than through understanding of His works). You have our founding fathers, many of whom were Deists, trying to create a country absent an interfering God and the attendant notions that came with it, such as the divine right of Kings.

While God may have set the whole universe into motion, God does not intervene, and it is man who defines ourselves, our morality, our ethics, our notion of rights and governments and the relationship between man and country. We may use our God-given (natural) talents to divine what is proper–but God does not then come down with fiery tablets (or inspired Kings or Popes) to tell us we’re wrong.

Compare and contrast to the European experiment, starting with the French Revolution, which simply replaced “God” with an abstract notion of “The People”, and which replaced aristocratic rule and the divine right of Kings with “citizens committees.”

There was really no attempt at reordering society in Europe from its feudal roots; instead, they simply offered an alternate justification for pre-existing (culturally entrenched) notions. Thus, the various “positive rights” Europe thinks is owed to the population, such as the right to work or the right to health care, is simply noblesse oblige repackaged for the modern era. People are still surfs, though they have greater rights than the surfs of old; people are still subservient to culture and states; a Frenchman is French because he was born French, not simply because he lives in France.

While both the US and the nations of Europe functionally look very similar: both collect taxes, have government administrations, provide welfare to the poor, *the philosophical bases for each nation are radically different.*

And without understanding the underlying philosophical bases and how different they are, Europeans and Americans trying to discuss political philosophy may as well be speaking different–and mutually incomprehensible–languages.