August 4, 2015

A Critical Mass Need to Be Motivated by the Telos of a Practice



(p. 227) The fact that some people are led into a practice in pursuit of goals that are external to the practice-- money, fame, or what have you-- need pose no threat to the integrity of the practice itself. So long as those goals do not penetrate the practice at all levels, those in pursuit of external goals will eventually drop out or be left behind or change their goals or be discredited by those in pursuit of a practice's proper goals. However, if external goals do penetrate the practice at all levels, it becomes vulnerable to corruption. Practices are always developing and changing, and the direction that development takes will be determined by participants in the practice. Good practices encourage wise practitioners who in turn will care for the future of the practice.


Source:

Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.


A somewhat similar point is made in:

Diamond, Arthur M., Jr. "How Institutional Incentives and Constraints Affect the Progress of Science." Prometheus 26, no. 3 (Sept. 2008): 231-239.






August 3, 2015

Tesla Cars Are Built on Government Subsidies



(p. A13) Nowhere in Mr. Vance's book, . . . , does the figure $7,500 appear--the direct taxpayer rebate to each U.S. buyer of Mr. Musk's car. You wouldn't know that 10% of all Model S cars have been sold in Norway--though Tesla's own 10-K lists the possible loss of generous Norwegian tax benefits as a substantial risk to the company.

Barely developed in passing is that Tesla likely might not exist without a former State Department official whom Mr. Musk hired to explore "what types of tax credits and rebates Tesla might be able to drum up around its electric vehicles," which eventually would include a $465 million government-backed loan.

And how Tesla came by its ex-Toyota factory in California "for free," via a "string of fortunate turns" that allowed Tesla to float its IPO a few weeks later, is just a thing that happens in Mr. Vance's book, not the full-bore political intrigue it actually was.

The fact is, Mr. Musk has yet to show that Tesla's stock market value (currently $32 billion) is anything but a modest fraction of the discounted value of its expected future subsidies. In 2017, he plans to introduce his Model 3, a $35,000 car for the middle class. He expects to sell hundreds of thousands a year. Somehow we doubt he intends to make it easy for politicians to whip away the $7,500 tax credit just when somebody besides the rich can benefit from it--in which case the annual gift from taxpayers will quickly mount to several billion dollars each year.

Mother Jones, in a long piece about what Mr. Musk owes the taxpayer, suggested the wunderkind could be a "bit more grateful, a bit more humble." Unmentioned was the shaky underpinning of this largess. Even today's politicized climate modeling allows the possibility that climate sensitivity to carbon dioxide is far less than would justify incurring major expense to change the energy infrastructure of the world (and you certainly wouldn't begin with luxury cars). Were this understanding to become widespread, the subliminal hum of government favoritism could overnight become Tesla's biggest liability.



For the full commentary, see:

HOLMAN W. JENKINS, JR. "BUSINESS WORLD; The Savior Elon Musk; Tesla's impresario is right about one thing: Humanity's preservation is a legitimate government interest." The Wall Street Journal (Sat., May 30, 2015): A13.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date May 29, 2015.)


The book discussed in the commentary is:

Vance, Ashlee. Elon Musk: Tesla, SpaceX, and the Quest for a Fantastic Future. New York: Ecco, 2015.


The Mother Jones article discussing government subsidies for Musk's Tesla, is:

Harkinson, Josh. "Free Ride." Mother Jones 38, no. 5 (Sept./Oct. 2013): 20-25.






August 2, 2015

A Swift Defense of Property Rights



(p. B1) When Taylor Swift speaks, even the most powerful company in the world listens.

Less than 24 hours after Ms. Swift complained publicly that Apple was not planning to pay royalties during a three-month trial period of its new streaming music service, the company changed course, and confirmed that it will pay its full royalty rates for music during the free trial.

"When I woke up this morning and read Taylor's note, it really solidified that we need to make a change," Eddy Cue, Apple's senior vice president of Internet software and services, said in an interview late Sunday.


. . .


Ms. Swift, who last year pulled her music from Spotify in another dispute over royalties, called Apple's policy "shocking, disappointing and completely unlike this historically progressive company."

"We don't ask you for free iPhones," she added. "Please don't ask us to provide you with our music for no compensation."


. . .


(p. B5) Ms. Swift has long been outspoken on economic issues for musicians. In a piece in The Wall Street Journal last year, she wrote: "Valuable things should be paid for. It's my opinion that music should not be free."



For the full story, see:

BEN SISARIO. "Taylor Swift Criticism Spurs Apple to Change Royalties Policy." The New York Times (Sat., JUNE 22, 2015): B1 & B5.

(Note: ellipses added.)

(Note: the date of the online version of the story is JUNE 21, 2015, and has the title "Taylor Swift Criticism Spurs Apple to Change Royalties Policy.")






August 1, 2015

Little Progress Toward Complex Autonomous Robots



(p. A8) [In June 2015] . . . , the Defense Advanced Research Projects Agency, a Pentagon research arm, . . . [held] the final competition in its Robotics Challenge in Pomona, Calif. With $2 million in prize money for the robot that performs best in a series of rescue-oriented tasks in under an hour, the event . . . offer[ed] what engineers refer to as the "ground truth" -- a reality check on the state of the art in the field of mobile robotics.

A preview of their work suggests that nobody needs to worry about a Terminator creating havoc anytime soon. Given a year and a half to improve their machines, the roboticists, who shared details about their work in interviews before the contest in June, appear to have made limited progress.


. . .


"The extraordinary thing that has happened in the last five years is that we have seemed to make extraordininary progress in machine perception," said Gill Pratt, the Darpa program manager in charge of the Robotics Challenge.

Pattern recognition hardware and software has made it possible for computers to make dramatic progress in computer vision and speech understanding. In contrast, Dr. Pratt said, little headway has been made in "cognition," the higher-level humanlike processes required for robot planning and true autonomy. As a result, both in the Darpa contest and in the field of robotics more broadly, there has been a re-emphasis on the idea of human-machine partnerships.

"It is extremely important to remember that the Darpa Robotics Challenge is about a team of humans and machines working together," he said. "Without the person, these machines could hardly do anything at all."

In fact, the steep challenge in making progress toward mobile robots that can mimic human capabilities is causing robotics researchers worldwide to rethink their goals. Now, instead of trying to build completely autonomous robots, many researchers have begun to think instead of creating ensembles of humans and robots, an approach they describe as co-robots or "cloud robotics."

Ken Goldberg, a University of California, Berkeley, roboticist, has called on the computing world to drop its obsession with singularity, the much-ballyhooed time when computers are predicted to surpass their human designers. Rather, he has proposed a concept he calls "multiplicity," with diverse groups of humans and machines solving problems through collaboration.

For decades, artificial-intelligence researchers have noted that the simplest tasks for humans, such as reaching into a pocket to retrieve a quarter, are the most challenging for machines.

"The intuitive idea is that the more money you spend on a robot, the more autonomy you will be able to design into it," said Rodney Brooks, an M.I.T. roboticist and co-founder two early companies, iRobot and Rethink Robotics. "The fact is actually the opposite is true: The cheaper the robot, the more autonomy it has."

For example, iRobot's Roomba robot is autonomous, but the vacuuming task it performs by wandering around rooms is extremely simple. By contrast, the company's Packbot is more expensive, designed for defusing bombs, and must be teleoperated or controlled wirelessly by people.



For the full story, see:

JOHN MARKOFF. "A Reality Check for A.I." The New York Times (Tues., MAY 26, 2015): D2.

(Note: ellipses, and bracketed expressions, added. I corrected a misspelling of "extraordinary.")

(Note: the date of the online version of the story is MAY 25, 2015, and has the title "Relax, the Terminator Is Far Away.")






July 31, 2015

George Bailey Wanted to Make Money, But He Wanted to Do More than Just Make Money



(p. 219) Actually, it's not so strange. The norm for bankers was never just moneymaking, any more than it was for doctors or lawyers. Bankers made a livelihood, often quite a good one, by serving their clients-- the depositors and borrowers-- and the communities in which they worked. But traditionally, the aim of banking-- even if sometimes honored only in the breach-- was service, not just moneymaking.

In the movie It's a Wonderful Life, James Stewart plays George Bailey, a small-town banker faced with a run on the bank-- a liquidity crisis. When the townspeople rush into the bank to withdraw their money, Bailey tells them, "You're thinking of this place all wrong. As if I had the money back in a safe. The money's not here." He goes on. "Your money's in Joe's house. Right next to yours. And in the Kennedy house, and Mrs. Backlin's house, and a hundred others. Why, you're lending them the money to build, and they're going to pay you back, as best they can.... What are you going to do, foreclose on them?"

No, says George Bailey, "we've got to stick together. We've got to have faith in one another." Fail to stick together, and the community will be ruined. Bailey took all the money he could get his hands on and gave it to his depositors to help see them through the crisis. Of course, George Bailey was interested in making money, but money was not the only point of what Bailey did.

Relying on a Hollywood script to provide evidence of good bankers is at some level absurd, but it does indicate something valuable about society's expectations regarding the role of bankers. The norm for a "good banker" throughout most of the twentieth century was in fact someone who was trustworthy and who served the community, who was responsible to clients, and who took an interest in them.



Source:

Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.

(Note: italics in original.)






July 30, 2015

Institutional Improvements Can Sometimes Be Designed, Rather than Only Spontaneous



A distinguished school of libertarian and neo-Austrian economic thought argues, following F.A. Hayek, that institutional improvements only arise from spontaneous order, and never from conscious design. There is something to their argument, but the designs of Alvin Roth provide counter-examples.


(p. A13) Mr. Roth's work has been to discover the most efficient and equitable methods of matching and implement them in the world. He writes with verve and style, describing many market malfunctions--from aboriginal tribes in Australia arranging marriages for children not yet born to judges bending every rule in the book to hire law clerks years before they have graduated from law school--and how we ought to think about them.

Mr. Roth's approach contrasts with standard debates over free markets versus government regulation. We want markets to be thick, quick, timely and trustworthy, but without careful design markets can become thin, slow, ill-timed and dangerous for the honest. The solution to these problems is unlikely to be regulation legislated from on high. Instead what Mr. Roth practices is nuanced market design created mostly by market participants. Mr. Roth found, for example, that even though the problems in the market for gastroenterologists and law clerks looked the same (hiring started years before schooling ended), the solutions had to be subtly different because of differences in culture, history and norms.



For the full review, see:

ALEX TABARROK. "BOOKSHELF; The Designer of Markets; In some markets, price isn't the determining factor. You can choose to go to Harvard, but Harvard has to choose to accept you first." The Wall Street Journal (Tues., JUNE 16, 2015): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date JUNE 15, 2015, and has the title "BOOKSHELF; Matchmaker, Make Me a Market; In some markets, price isn't the determining factor. You can choose to go to Harvard, but Harvard has to choose to accept you first.")


The book under review is:

Roth, Alvin E. Who Gets What -- and Why: The New Economics of Matchmaking and Market Design. New York: Houghton Mifflin Harcourt Publishing Co., 2015.






July 29, 2015

How Home Solar Panel Subsidies Increase Inequality



(p. A13) Well-meaning--but ill-conceived--federal, state and local tax incentives for rooftop solar give back between 30% and 40% of the installation costs to the owner as a tax credit. But more problematic are hidden rate subsidies, the most significant of which is called net metering, which is available in 44 states. Net metering allows solar-system owners to offset on a one-for-one basis the energy they receive from the electric grid with the solar power they generate on their roof.

While this might sound logical, it isn't. An average California resident with solar, for example, generally pays about 17 cents per kilowatt-hour for electric service when the home's solar panels aren't operating. When they are operating, however, net metering requires the utility to pay that solar customer the same 17 cents per kilowatt-hour. But the solar customer still needs the grid to back up his intermittent solar panels, and the utility could have purchased that same solar power from a utility-scale solar power plant for about five cents per kilowatt-hour.

This 12-cents-per-kwh cost difference amounts to a wealth transfer from average electric customers to customers with rooftop solar systems (who also often have higher incomes). This is because utilities collect much of their fixed costs--the unavoidable costs of power plants, transmission lines, etc.--from residential customers through variable-use charges, in other words, charges based on how much energy they use. When a customer with rooftop solar purchases less electricity from the utility, he pays fewer variable-use charges and avoids contributing revenue to cover the utility's fixed costs. The result is that all of the other customers have to pick up the difference.



For the full commentary, see:

BRIAN H. POTTS . "The Hole in the Rooftop Solar-Panel Craze; Large-scale plants make sense, but panels for houses simply transfer wealth from average electric customers." The Wall Street Journal (Mon., May 18, 2015): A13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date May 17, 2015.)






July 28, 2015

Mobile Tech Drives Social Revolution in Saudi Arabia



(p. 6) RIYADH, Saudi Arabia -- Life for many young Saudis is an ecosystem of apps.

Lacking free speech, they debate on Twitter. Since they cannot flirt at the mall, they do it on WhatsApp and Snapchat.

Young women who cannot find jobs sell food or jewelry through Instagram. Since they are banned from driving, they get rides from car services like Uber and Careem. And in a country where shops close for five daily Muslim prayers, there are apps that issue a call to prayer from your pocket and calculate whether you can reach, say, the nearest Dunkin' Donuts before it shuts.

Confronted with an austere version of Islam and strict social codes that place sharp restrictions on public life, young Saudis are increasingly relying on social media to express and entertain themselves, earn money and meet friends and potential mates.

That reliance on technology -- to circumvent the religious police, and the prying eyes of relatives and neighbors -- has accelerated since it first began with the spread of satellite television in the 1990s. Saudis in their 30s (and older) recall the days of unsanctioned courtship via BlackBerry Messenger.

But the scale of today's social media boom is staggering, with many of the country's 18 million citizens wielding multiple smartphones and spending hours online each day. Digital has not replaced face-to-face interaction, but it has opened the door to much more direct and robust communication, especially in a society that sharply segregates men and women who are not related.

The spread of mobile technology is driving nothing short of a social revolution in the lives of young people. In this rich but conservative kingdom that bans movie theaters, YouTube and Internet streaming have provided an escape from the censors and a window to the outside world. A young Shariah judge, for example, confided that he had watched all five seasons of "Breaking Bad."



For the full story, see:

BEN HUBBARD. "Young Saudis Find Freedom on Smartphones." The New York Times, First Section (Sun., MAY 24, 2015): 6 & 11.

(Note: the date of the online version of the story is MAY 22, 2015, and has the title "Young Saudis, Bound by Conservative Strictures, Find Freedom on Their Phones." )






July 27, 2015

To Maintain Enrollments Professors Are Often Pressured to Inflate Grades



(p. 198) Dedicated college professors demand that students do the difficult reading and writing necessary to become skillful in understanding the complexities of the world. But the university distributes resources like research funds and new faculty positions based in part on how many students populate classes and how positively students evaluate courses. How much do you simplify to keep up enrollment and keep resources flowing into your department?


Source:

Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.






July 26, 2015

"Nimble" Account of the Creative Destruction of the Music Industry



(p. C1) Stephen Witt's nimble new book, "How Music Got Free," is the richest explanation to date about how the arrival of the MP3 upended almost everything about how music is distributed, consumed and stored. It's a story you may think you know, but Mr. Witt brings fresh reporting to bear, and complicates things in terrific ways.

He pushes past Napster (Sean Fanning, dorm room, lawsuits) and goes deep on the German audio engineers who, drawing on decades of research into how the ear works, spent years developing the MP3 only to almost see it nearly become the Betamax to another group's VHS.


. . .


(p. C6) Even better, he has found the man -- a manager at a CD factory in small-town North Carolina -- who over eight years leaked nearly 2,000 albums before their release, including some of the best-known rap albums of all time. He smuggled most of them out behind an oversized belt buckle before ripping them and putting them online.

Mr. Witt refers to this winsome if somewhat hapless manager, Dell Glover, as "the most fearsome digital pirate of them all."


. . .


Into these two narratives Mr. Witt inserts a third, the story of Doug Morris, who ran the Universal Music Group from 1995 to 2011. At some points you wonder if Mr. Morris has been introduced just so the author can have sick fun with him.

The German inventors and Mr. Glover operate as if they unwittingly have voodoo dolls of this man. Every time they make an advance, and prick the music industry, there's a jump to Mr. Morris for a reaction shot, screaming in his corner office.


. . .


Mr. Witt covers a lot of terrain in "How Music Got Free" without ever becoming bogged down in one place for long. He is knowledgeable about intellectual property issues. In finding his reporting threads, he doesn't miss the big picture: He gives us a loge seat to the entire digital music revolution.

He is especially good on the arrival of iTunes and the iPod.



For the full review, see:

DWIGHT GARNER. "Books of The Times; That Download Has a Back Story." The New York Times (Tues., JUNE 16, 2015): C1 & C6.

(Note: ellipses added.)

(Note: the online version of the review has the date JUNE 15, 2015, and has the title "Books of The Times; Review: In 'How Music Got Free,' Stephen Witt Details an Industry Sea Change.")


The book under review is:

Witt, Stephen. How Music Got Free: The End of an Industry, the Turn of the Century, and the Patient Zero of Piracy. New York: Viking, 2015.









Eight Most Recent Comments:



Jim Rose said:

It is often forgotten that the Minister for International trade and industry in the late 1960s up until 1971 was Tanaka – the most corrupt man in postwar Japanese politics. He had previously been Minister for Public Works, but to generate the necessary bribe income to pay an entire generation of Japanese politicians to step aside to allow him to become Prime Minister in the early 1970s at a young age, he thought the Ministry of International trade and industry was a better position to garner influence and donations. My professors in Japan worked in the Ministry of International trade and industry and the Ministry of Finance in the 1970s and 1960s. None of them seemed to carry over their picking winners skills into their private portfolios when they retired. see http://utopiayouarestandinginit.com/2014/03/14/if-you-are-so-smart-why-arent-you-rich/



Aaron said:

Interested to see how not only did Hamilton gain a vote, but also how Jefferson lost one.



Dave Megan said:

Merging of companies is always better when they have a better goal. It will give better service for the public.



Ed Rector said:

The 'quickened pace of production' of the early Reagan years was directly attributable to RR's massive deficit spending. The national debt almost tripled under the watch of St. Ronnie. BO will have to work overtime to even approach this record of accomplishment.



Aaron said:

The last two paragraphs comport perfectly with what Paul Tough describes in a book you posted on a few months ago, "How Children Succeed." Tough advocates that a stable, loving relationship between kids and their parents, especially in the first few years of life, produces self-assured and less anxious adults due to brain formation or chemical reactions that take place in a baby's brain (simplified summary). As always, appreciate the posts, especially the Paul Tough book.



Rev. Pfloyd said:

Hans' "The Best Stats You've Ever Seen" Ted Talk is my favorite Ted Talk ever, which is a pretty big statement when you share company with talks like Sir Ken Robinson's education talk and Steven Pinker's Human Nature and the Blank Slate" talk.



Rev. Pfloyd said:

Voting with your feet. And of course now people are fleeing France to move across the water to England for the same reason. It's truly a global world; soaking the rich really isn't an option anymore.



otacon said:

The media tends to be a willing participant in fanning the flames of racism. Check CNN or the Drudge Report. Every day there is at least one racially charged story. Every day. It has become a tool for news outlets to get clicks but ultimately is a disservice to pretty much everyone.





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