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December 31, 2013

"Western Union Bullied the Makers of Public Policy into Serving Private Capital"




WesternUnionAndTheCreationOfTheAmericanCorporateOrderBK2013-12-28.jpg












Source of book image: online version of the WSJ review quoted and cited below.







(p. A13) Until now there has been no full-scale, modern company history. Joshua D. Wolff's "Western Union and the Creation of the American Corporate Order, 1845-1893" ably fills the bill, offering an exhaustive and yet fascinating account.


. . .


If people today remember anything about Western Union, it is that its coast-to-coast line put the Pony Express out of business and that its leaders didn't see the telephone coming. Mr. Wolff tells us that neither claim is exactly true. It was Hiram Sibley, Western Union's first president, who went out on his own, when his board balked, to form a separate company and build the transcontinental telegraph in 1861; he made his fortune by eventually selling it to Western Union. And the company was very aware of Alexander Graham Bell's invention, patented in 1876, but history had supposedly shown that it wasn't necessary to control a patent to win the technology war. The company's third president, William Orton, was sure that Bell and his "toy" would not get the better of Western Union: "We would come along and take it away from him." They didn't.


. . .


Mr. Wolff contends that the company's practices set the template for today's "corporate triumphalism," not least in the way Western Union bullied the makers of public policy into serving private capital. Perhaps, but telecom competition today is so ferocious and differently arranged from that of the late 19th century that a "triumphant" company today may be toast tomorrow--think of BlackBerry--and can't purchase help with anything like Western's Union's brazenness and scope. Western Union had friends in Congress, the regulatory bureaucracy and the press. Members of the company's board of directors chaired both the 1872 Republican and Democratic national conventions. It seemed that, whatever the battles in business, politics, technology or the courts, the company's shareholders won.



For the full review, see:

STUART FERGUSON. "Bookshelf; The Octopus of the Wires." The Wall Street Journal (Mon., Dec. 23, 2013): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date Dec. 22, 2013, and has the title "BOOKSHELF; Book Review: 'Western Union and the Creation of the American Corporate Order, 1845-1893,' by Joshua D. Wolff.")


Book under review:

Wolff, Joshua D. Western Union and the Creation of the American Corporate Order, 1845-1893. New York: Cambridge University Press, 2013.






December 30, 2013

Wind Power Fined $1 Million for Killing Birds




GoldenEagleOverWindTurbine2013-12-29.jpg "A golden eagle flies over a wind turbine on Duke Energy's wind farm in Converse County, Wyo." Source of caption and photo: online version of the WSJ article quoted and cited below.


(p. A17) The Justice Department announced late . . . [in the week of Nov. 17-23] that a subsidiary of Duke Energy has agreed to pay $1 million for killing golden eagles and other federally protected birds at two of the company's wind projects in Wyoming. The guilty plea was a long-overdue victory for the rule of law and a sign that green energy might be going out of vogue.

As Justice noted in its news release, this is the first time a case has been brought against a wind company for violating the Migratory Bird Treaty Act. The 1918 law makes it a federal crime to kill any bird of more than 1,000 different species. Over the past few decades, federal authorities have brought hundreds of cases against oil and gas companies for killing birds, while the wind industry has enjoyed a de facto exemption. By bringing criminal charges against Duke for killing 14 golden eagles and 149 other protected birds, Justice has ended the legal double standard on enforcement.



For the full commentary, see:

ROBERT BRYCE. "Wind Power Is Brought to Justice; Duke Energy's guilty plea for killing protected birds is an ominous sign for renewable energy." The Wall Street Journal (Fri., Nov. 29, 2013): A17.

(Note: ellipsis, and bracketed words, added.)

(Note: the online version of the commentary has the date Nov. 28, 2013.)






December 29, 2013

Concentrating on One Task Results in Better Thinking




NassCliffordObit2013-11-10.jpg "Clifford Nass studied how new technology affected people." Source of caption and photo: online version of the NYT obituary quoted and cited below.



Nass focused on how interruptions from technology would reduce a person's ability to think well. But doesn't his research also imply that interruptions from other causes, including those from co-workers in open "collaborative" office designs, would likewise reduce a person's ability to think well?


(p. 27) Clifford Nass, a Stanford professor whose pioneering research into how humans interact with technology found that the increasingly screen-saturated, multitasking modern world was not nurturing the ability to concentrate, analyze or feel empathy, died on Nov. 2 near Lake Tahoe. He was 55.


. . .


One of his most publicized research projects was a 2009 study on multitasking.


. . .


"We all bet high multitaskers were going to be stars at something," he said in an interview with the PBS program "Frontline." "We were absolutely shocked. We all lost our bets. It turns out multitaskers are terrible at every aspect of multitasking. They're terrible at ignoring irrelevant information; they're terrible at keeping information in their head nicely and neatly organized; and they're terrible at switching from one task to another."

He added, "One would think that if people were bad at multitasking, they would stop. However, when we talk with the multitaskers, they seem to think they're great at it and seem totally unfazed and totally able to do more and more and more."

With children doing more multitasking and people asked to do more of it at work, he said, "We worry that it may be creating people who are unable to think well and clearly."


. . .


Dr. Nass found that people who multitasked less frequently were actually better at it than those who did it frequently. He argued that heavy multitasking shortened attention spans and the ability to concentrate.



For the full obituary, see:

WILLIAM YARDLEY. "Clifford Nass, Who Warned of a Data Deluge, Dies at 55." The New York Times, First Section (Sun., November 11, 2013): 27.

(Note: ellipses added.)

(Note: the online version of the obituary has the date November 6, 2013.)


The famous study on multitasking that Nass authored is:

Ophir, Eyal, Clifford Nass, and Anthony D. Wagner. "Cognitive Control in Media Multitaskers." Proceedings of the National Academy of Sciences (PNAS) 106, no. 37 (September 15, 2009): 15583-87.






December 28, 2013

Carnegie Objected to $2 a Year Fee to Use Private Library




(p. 44) The story of Andy Carnegie defeating the villainous adults played well in his Autobiography and the biographies that drew from it, but there is another side to the tale which we should not neglect. The Anderson Library was not a free public library, funded by the city, but a subscription library, which relied in great part on the support of its patrons.* Although "working boys" should, as he had argued, have been allowed to borrow books without paying the two-dollar subscription fee, Andy Carnegie, six months from his eighteenth birthday, was hardly a "working boy." He held a man's job and received a man's pay of twenty-five dollars a month. Was it unreasonable for the librarians to ask him to contribute a two-dollar annual subscription fee to keep the library from having to close its doors for the third time in its young history?

Andy thought so. With a talent for cloaking self-interest in larger humanitarian concerns, he made a premature case for free public libraries.



Source:

Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.

(Note: italics in original.)

(Note: the pagination of the hardback and paperback editions of Nasaw's book are the same.)






December 27, 2013

"Myth that Most C.E.O.'s Are Extroverts"




MerrimanDwightMongoDBcoFounder2013-12-07.jpg








""It's a myth that most C.E.O.'s are extroverts," says Dwight Merriman, chairman and co-founder of MongoDB, an open-source document database. He has overcome his own earlier shyness, he says, and relies on enthusiasm for his work." Source of caption and photo: online version of the NYT interview quoted and cited below.



(p. B2) Q. I take it you're an introvert.

A. I am.

Q. You were C.E.O. of MongoDB for five years before becoming chairman, and a big part of that job no doubt required you to spend a lot of time with people and give a lot of talks. How did you handle that?

A. I think 95 percent of the time you can get past that with just sheer brute force. I remember public-speaking class in college. I really didn't want to do it. But today, when I give talks to 1,000 people, I'm not nervous at all. I think you get used to it. You just have to force yourself out of your comfort zone.

And it's a myth that most C.E.O.'s are extroverts. Many are, but probably no more than the general population. I do what works for me, which is being enthusiastic and passionate about what we're doing. You've just got to find what works for you.


For the full interview, see:

ADAM BRYANT. "CORNER OFFICE: Dwight Merriman; Being an Effective Leader Without Being an Extrovert." The New York Times (Fri., November 1, 2013): B2.

(Note: bold and italics in original.)

(Note: the online version of the interview has the date October 31, 2013, and has the title "CORNER OFFICE; Dwight Merriman of MongoDB on Leading by Enthusiasm.")






December 26, 2013

Innovators Agree: Whiteboard Is Fast, Easy to Use and Big




(p. B1) . . . Evernote, like pretty much every tech company I've ever visited, is in thrall to the whiteboard. Indeed, as technologically backward as they may seem, whiteboards are to Silicon Valley what legal pads are to lawyers, what Excel is to accountants, or what long sleeves are to magicians.

They're an all-purpose tool of innovation, often the first place a product or company's vision is dreamed up and designed, and a constant huddling point for future refinement. And though many digital technologies have attempted to unseat the whiteboard, the humble pre-electronic surface can't be beat.

The whiteboard has three chief virtues: It's fast. It's easy to use. And it's big. "We're often doing something I call 'designing in the hallway,' " said Jamie Hull, the product manager for Evernote's iOS apps. "When a new problem or request comes up, the fastest thing you can do is pull two or three people aside, go to the nearest wall, and figure it out."

Unlike a computer or phone, the whiteboard is always on, always fully charged, and it doesn't require that people download, install, and launch software to begin using it.



For the full commentary, see:

FARHAD MANJOO. "HIGH DEFINITION; High Tech's Secret Weapon: The Whiteboard." The Wall Street Journal (Thurs., Oct. 31, 2013): B1-B2.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Oct. 30, 2013. The online version combined paragraphs 1 and 2 above and 3 and 4 above. I have returned them to the form they had in the print version.)






December 25, 2013

Politically Correct Artisanal Locally Sourced Combat Video Game




CallOfDutyGhostsFemaleAvatar2013-11-06.jpg "Call of Duty: Ghosts Female avatars have been added, and so has an "extinction" mode involving fighting aliens, in this game for the PlayStation 3, Xbox 360, Wii U and PC." Source of caption and image: online version of the NYT review quoted and cited below.


From a review of the video game "Call of Duty: Ghosts":


(p. C5) ". . . the South Americans torture a character using artisanal, locally sourced interrogation techniques supposedly (and naturally) used by Amazonian tribes."


For the full review, see:

CHRIS SUELLENTROP. "VIDEO GAME REVIEW; A Fantastical Shootout, Moving Across Space and Time." The New York Times (Weds., November 6, 2013): C5.

(Note: ellipsis added; bold in caption in original of both print and online versions.)

(Note: the online version of the review has the date November 5, 2013.)






December 24, 2013

Carnegie's Uncle Aitkin Expected to Make a Good Profit Starting a Private Lending Library





Shortly after arriving in Allegheny City (near Pittsburgh) Andrew Carnegie's Uncle Aitkin had complained in a letter:


(p. 42) "There is no possibility of getting papers or periodicals to read here for a small sum--most of the people being in the habit of purchasing them for their own use. This has been to me a great deprivation. I really find that books here are as dear as in the old country everything considered."

Uncle Aitkin hoped to remedy this flaw in American cultural life--and make a profit at it--by starting up his own lending library. "I am now convinced that for any one to keep a library and to give works out at a cheaper rate would pay very well & I think I will be engaged in this business in a short time,--after I make a little money by lecturing etc." Regrettably--for Uncle Aitkin and for Allegheny City's starved readers--he never got around to setting up his business.



Source:

Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.

(Note: the pagination of the hardback and paperback editions of Nasaw's book are the same.)






December 23, 2013

Over-Regulated Tech Entrepreneurs Seek Their Own Country




The embed above is provided by YouTube where the video clip is posted under the title "Balaji Srinivasan at Startup School 2013."




(p. B4) At a startup conference in the San Francisco Bay area last month, a brash and brilliant young entrepreneur named Balaji Srinivasan took the stage to lay out a case for Silicon Valley's independence.

According to Mr. Srinivasan, who co-founded a successful genetics startup and is now a popular lecturer at Stanford University, the tech industry is under siege from Wall Street, Washington and Hollywood, which he says he believes are harboring resentment toward Silicon Valley's efforts to usurp their cultural and economic power.

On its surface, Mr. Srinivasan's talk,—called "Silicon Valley's Ultimate Exit,"—sounded like a battle cry of the libertarian, anti-regulatory sensibility long espoused by some of the tech industry's leading thinkers. After arguing that the rest of the country wants to put a stop to the Valley's rise, Mr. Srinivasan floated a plan for techies to build an "opt-in society, outside the U.S., run by technology."

His idea seemed a more expansive version of Google Chief Executive Larry Page's call for setting aside "a piece of the world" to try out controversial new technologies, and investor Peter Thiel's "Seastead" movement, which aims to launch tech-utopian island nations.



For the full commentary, see:

FARHAD MANJOO. "HIGH DEFINITION; The Valley's Ugly Complex." The Wall Street Journal (Mon., Nov. 4, 2013): B4.

(Note: the online version of the commentary has the date Nov. 3, 2013, and has the title "HIGH DEFINITION; Silicon Valley Has an Arrogance Problem.")






December 22, 2013

Spain's $11 Billion Per Year Slows Global Warming by 61 Hours




(p. A17) Today Spain spends about 1% of GDP throwing money at green energy such as solar and wind power. The $11 billion a year is more than Spain spends on higher education.

At the end of the century, with current commitments, these Spanish efforts will have delayed the impact of global warming by roughly 61 hours, according to the estimates of Yale University's well-regarded Dynamic Integrated Climate-Economy model. Hundreds of billions of dollars for 61 additional hours? That's a bad deal.



For the full commentary, see:

BJORN LOMBORG. "Green Energy Is the Real Subsidy Hog; Renewables receive three times as much money per energy unit as fossil fuels." The Wall Street Journal (Tues., Nov. 12, 2013): A17.

(Note: the online version of the commentary has the date Nov. 11, 2013.)






December 21, 2013

Farm Land Reverts to Forest as Farmers Move to Cities




OrtegaDeWingLandRevertsToForest2013-10-27.jpg "NEW GROWTH; Marta Ortega de Wing once raised pigs in Chilibre, Panama, on land now reverting to nature, a trend dimming the view of primeval forests as sacred." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. A1) CHILIBRE, Panama -- The land where Marta Ortega de Wing raised hundreds of pigs until 10 years ago is being overtaken by galloping jungle -- palms, lizards and ants.

Instead of farming, she now shops at the supermarket and her grown children and grandchildren live in places like Panama City and New York.

Here, and in other tropical countries around the world, small holdings like Ms. Ortega de Wing's -- and much larger swaths of farmland -- are reverting to nature, as people abandon their land and move to the cities in search of better livings.

These new "secondary" forests are emerging in Latin America, Asia and other tropical regions at such a fast pace that the trend has set off a serious debate about whether saving primeval rain forest -- an iconic environmental cause -- may be less urgent than once thought. By one estimate, for every acre of rain forest cut down each year, more than 50 acres of new forest are growing in the tropics on land that was once farmed, logged or ravaged by natural disaster.

"There is far more forest here than there was 30 years ago," said Ms. Ortega de Wing, 64, who remembers fields of mango trees and banana plants.

The new forests, the scientists argue, could blunt the effects of rain forest destruction by absorbing carbon dioxide, the leading heat-trapping gas linked to global warming, one crucial role that rain forests play. They could also, to a lesser extent, provide habitat for endangered species.



For the full story, see:

ELISABETH ROSENTHAL. "New Jungles Prompt a Debate on Saving Primeval Rain Forests." The New York Times (Fri., January 30, 2009): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the article has the date January 29, 2009 and has the title "New Jungles Prompt a Debate on Rain Forests.")






December 20, 2013

After First "Debilitating" Federal Funding, Morse Funded Telegraph Privately




(p. 37) The first telegraph line had been completed . . . , in 1844, when Samuel F. B. Morse, with $30,000 in federal funding, connected Washington to Baltimore. Morse and his partners had expected to get funding to build additional lines from the federal government, but their experience securing their first $30,000 had been so debilitating that they gave up entirely on the public sector and turned to private capital to fund their new telegraph lines. Henry O'Rielly secured the franchise and agreed to raise the capital to string telegraph poles from east to west. His plan was to extend one line from Buffalo to Chicago, the other across the Alleghenies from Philadelphia through Pittsburgh, to St. Louis, and then north to Chicago, and south to New Orleans.

Although customers were scarce and the first telegraph lines were continually breaking (or being broken by bands of boys who took great joy in throwing stones at the glass insulators that glistened in the sunlight), O'Rielly and the handful of entrepreneurs who believed in the future of telegraphy raised sufficient capital to extend their lines mile by mile. By late 1846, they had also connected Boston to Washington, via New York City and Philadelphia; New York City to Buffalo, through Albany; and in late December, Philadelphia to Pittsburgh, via Lancaster and Harrisburg.



Source:

Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.

(Note: ellipsis added.)

(Note: the pagination of the hardback and paperback editions of Nasaw's book are the same.)






December 19, 2013

Regulators Harass Saucy and Irreverent Buckyball Entrepreneur




ZuckerCraigBuckyballs2013-12-07.jpg










"Craig Zucker, former head of Maxfield & Oberton, which made Buckyballs, sells Liberty Balls to raise a legal-defense fund against an unusual action by federal regulators." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. B1) Over the last three weeks, more than 2,200 people have placed orders for $10-to-$40 sets of magnetic stacking balls, rising to the call of a saucy and irreverent social media campaign against a government regulatory agency.


. . .


It involves an effort by the federal Consumer Product Safety Commission to recall Buckyballs, sets of tiny, powerfully magnetic stacking balls that the magazines Rolling Stone and People once ranked on their hot products lists.

Last year, the commission declared the balls a swallowing hazard to young children and filed an administrative action against the company that made the product, demanding it recall all Buckyballs, and a related product called Buckycubes, and refund consumers their money. The company, Maxfield & Oberton Holdings, challenged the action, saying labels on the packaging clearly warned that the product was unsafe for children.

But the fuss now has less to do with safety. After Maxfield & Oberton went out of business last December, citing the financial toll of the recall battle, lawyers for the product safety agency took the highly unusual step of adding the chief executive of the dissolved firm, Craig Zucker, as a respondent in the recall action, arguing that he con-
(p. B6)trolled the company's activities. Mr. Zucker and his lawyers say the move could ultimately make him personally responsible for the estimated recall costs of $57 million.

While the "responsible corporate officer" doctrine (also known as the Park doctrine) has been used frequently in criminal cases, allowing for prosecutions of individual company officers in cases asserting corporate wrongdoing, experts say its use is virtually unheard-of in an administrative action where no violations of law or regulations are claimed.


. . .


Three well-known business organizations -- the National Association of Manufacturers, the National Retail Federation and the Retail Industry Leaders Association -- banded together this summer to file a brief urging the administrative law judge reviewing the recall case to drop Mr. Zucker as a respondent.

The groups argue that holding an individual responsible for a widespread, expensive recall sets a disturbing example and runs counter to the business desire for limited liability. They contend that such risk would have a detrimental effect on entrepreneurism and openness in dealing with regulatory bodies.


. . .


Conservative legal groups like Cause of Action, a nonprofit that targets what it considers governmental overreach, have been watching the proceedings with interest and weighing taking some action.

"This really punishes entrepreneurship and establishes a bad precedent for businesses working to create products for consumers," said Daniel Z. Epstein, the group's executive director. "It undermines the business community's ability to rely upon the corporate form."


For the full story, see:

HILARY STOUT. "In Regulators' Sights; Magnetic-Toy Recall Gives Rise to Wider Legal Campaign." The New York Times (Fri., November 1, 2013): B1 & B6.

(Note: ellipses added.)

(Note: the online version of the article has the date October 31, 2013, and has the title "Buckyball Recall Stirs a Wider Legal Campaign.")






December 18, 2013

Buffett's Berkshire Buys More of Dubious DaVita




A case has been made on CNN that DaVita has committed Medicare fraud costing taxpayers many millions of dollars. DaVita has been discussed in previous blog entries on November 30, 2012, May 18, 2013, and June 11, 2013.



(p. 3D) Omaha investor Warren Buffett's company bought nearly 3.7 million more shares of DaVita Inc. after the dialysis provider reported its earnings . . . [in the first week of November 2013].

Berkshire Hathaway Inc. said in documents filed with the Securities and Exchange Commission on Friday that it owns 35.1 million shares of DaVita.



For the full story, see:

THE ASSOCIATED PRESS. "Berkshire buys 3.7 million more shares of DaVita after report." Omaha World-Herald (Mon., November 11, 2013): 3D.

(Note: ellipsis and bracketed words added.)






December 17, 2013

Stem Cells Used to Create Tiny, Simple Human Livers




LiverBudsMadeFromStemCells2013-10-27.jpg "Researchers from Japan used human stem cells to create "liver buds," rudimentary livers that, when transplanted into mice, grew and functioned." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. A3) Researchers in Japan have used human stem cells to create tiny human livers like those that arise early in fetal life. When the scientists transplanted the rudimentary livers into mice, the little organs grew, made human liver proteins, and metabolized drugs as human livers do.

They and others caution that these are early days and this is still very much basic research. The liver buds, as they are called, did not turn into complete livers, and the method would have to be scaled up enormously to make enough replacement liver buds to treat a patient. Even then, the investigators say, they expect to replace only 30 percent of a patient's liver. What they are making is more like a patch than a full liver.

But the promise, in a field that has seen a great deal of dashed hopes, is immense, medical experts said.

"This is a major breakthrough of monumental significance," said Dr. Hillel Tobias, director of transplantation at the New York University School of Medicine. Dr. Tobias is chairman of the American Liver Foundation's national medical advisory committee.



For the full story, see:

GINA KOLATA. "Scientists Fabricate Rudimentary Human Livers." The New York Times (Thurs., July 4, 2013): A3.

(Note: the online version of the story has the date July 3, 2013.)


The research article is:

Takebe, Takanori, Keisuke Sekine, Masahiro Enomura, Hiroyuki Koike, Masaki Kimura, Takunori Ogaeri, Ran-Ran Zhang, Yasuharu Ueno, Yun-Wen Zheng, Naoto Koike, Shinsuke Aoyama, Yasuhisa Adachi, and Hideki Taniguchi. "Vascularized and Functional Human Liver from an iPSC-Derived Organ Bud Transplant." Nature (July 3, 2013) DOI: 10.1038/nature12271.






December 16, 2013

Carnegies Liked Pittsburgh Area's Growing Economy and Flexible Labor Market




(p. 32) For all its Old World charms, Dunfermline too had had its epidemics, its scavenging rodents, muddy streets, and clean water shortages. The reason why the Hogans and the Aitkins and the Carnegies and thousands like them had come to the United States in general, and the Pittsburgh area in particular, had less to do with health, hygiene, or the physical environment than with an abundance of well-paid jobs. In this respect, Pittsburgh and Allegheny City were everything that Dunfermline was not: their markets for manufactured goods were expanding rapidly, their economies were diversified, and there were no craft restrictions on the employment of skilled artisans.


Source:

Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.

(Note: the pagination of the hardback and paperback editions of Nasaw's book are the same.)






December 15, 2013

Amazon's User Reviews Increase Rationality of Consumer Choices




AbsoluteValueBK2013-12-08.png
















Source of book image: http://2.bp.blogspot.com/-dNUZ_u-GWSk/UpqE0zmFQQI/AAAAAAAAAko/Z8uisfEjgRc/s1600/Absolute+Value+cover.png



(p. 3) You are no longer the sucker you used to be.

So suggests continuing research from the Stanford Graduate School of Business into the challenges marketers face in reaching consumers in the digital age. As you might suspect, the research shows that a wealth of online product information and user reviews is causing a fundamental shift in how consumers make decisions.

As consumers rely more on one another, the power of marketers is being undermined, said Itamar Simonson, a Stanford marketing professor and the lead researcher.


. . .


To get the full impact of the findings, you first have to know the conclusions of a similar experiment decades ago by Dr. Simonson, . . . .  . . .

The researchers found that when study subjects had only two choices, most chose the less expensive camera with fewer features. But when given three choices, most chose the middle one. Dr. Simonson called it "the compromise effect" -- the idea that consumers will gravitate to the middle of the options presented to them.


. . .


Flash forward to the new experiment. It was similar to the first, except that consumers could have a glimpse at Amazon. That made a huge difference. When given three camera options, consumers didn't gravitate en masse to the midprice version. Rather, the least expensive one kept its share and the middle one lost more to the most expensive one.

"The compromise effect was gone," said Dr. Simonson, or, rather, he nearly exclaimed the absence of the effect, underscoring his surprise at the findings. They are to be published next month in "Absolute Value," a book by Dr. Simonson and Emanuel Rosen.

Today, products are being evaluated more on their "absolute value, their quality," Dr. Simonson said. Brand names mean less.


For the full story, see:

MATT RICHTEL. "APPLIED SCIENCE; There's Power in All Those User Reviews." The New York Times, SundayBusiness Section (Sun., December 8, 2013): 3.

(Note: ellipses added.)

(Note: the online version of the article has the date December 7, 2013.)


The new research is reported in:

Simonson, Itamar, and Emanuel Rosen. Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information. New York: HarperBusiness, 2014.






December 14, 2013

In Britain Right and Left Support "Libertarian Paternalism"




(p. 4) In 2010, Mr. Cameron set up the Behavioral Insights Team -- or nudge unit, as it's often called. Three years later, the team has doubled in size and is about to announce a joint venture with an external partner to expand the program.

The unit has been nudging people to pay taxes on time, insulate their attics, sign up for organ donation, stop smoking during pregnancy and give to charity -- and has saved taxpayers tens of millions of pounds in the process, said David Halpern, its director.


. . .


Creating Commitment

One morning in late May 2008, 10 copies of a little red book arrived for Rohan Silva in Norman Shaw South, the Westminster wing where the leader of the political opposition -- at the time, the Conservatives -- is traditionally housed.

The book was "Nudge," and Mr. Silva, then 27 and David Cameron's youngest adviser, piled them up on his desk. He had read the book as soon as it came out, a few weeks before. In fact, he had read deeply on behavioral economics and social psychology and met many of the American academics who specialized in the field. He was eager to spread the message in his country. "We used to joke about Ro being on commission for Thaler and Sunstein," said Steve Hilton, Mr. Cameron's former director of strategy and now a visiting scholar at Stanford.


. . .


Libertarian Paternalism


. . .


. . . , the question in Britain no longer seems to be whether, but how, to nudge. In their book, Professor Thaler and Mr. Sunstein defined their approach as steering people toward decisions deemed superior by the government but leaving them free to choose. "Libertarian paternalism," they called it, and while that term is not used much in Britain, there is broad agreement on the subject among the left and the right.

Mr. Halpern used to be policy chief for Tony Blair, the former Labour prime minister, and later wrote a report on behavioral policy-making commissioned by Mr. Blair's Labour Party successor, Gordon Brown. In one small way, the 2010 election campaign was also a race to decide which party would carry out an idea that had been percolating in the intellectual ranks of both for some years.

Wider Horizons

One of Mr. Thaler's favorite nudges is something that Schiphol Airport near Amsterdam adopted in public bathrooms: a small sticker of a fly in the center of a urinal has been shown to improve aim. It saves the airport cleaning costs.

During a recent visit to Downing Street, Mr. Thaler ran into Mr. Cameron in the men's room. There were no fly stickers.

"What's the deal?" he joked.


For the full story, see:

KATRIN BENNHOLD. "The Ministry of Nudges." The New York Times, SundayBusiness Section (Sun., December 8, 2013): 1 & 4.

(Note: ellipses added; bold in original.)

(Note: the online version of the article has the date December 7, 2013, and has the title "Britain's Ministry of Nudges.")


The Nudge book is:

Thaler, Richard H., and Cass R. Sunstein. Nudge: Improving Decisions About Health, Wealth, and Happiness. Revised & Expanded (pb) ed: Penguin Books, 2009.






December 13, 2013

"Government Takes What It Wants"




FreethAndCampbellZimbabweFarmers2013-10-27.jpg "Mike Campbell, 76, challenged Zimbabwe's land redistribution law. He and his son-in-law, Ben Freeth, 38, were beaten by a gang." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. 1) CHEGUTU, Zimbabwe -- Edna Madzongwe, president of the Senate and a powerful member of Zimbabwe's ruling party, began showing up uninvited at the Etheredges' farm here last year, at times still dressed up after a day in Parliament.

And she made her intentions clear, the Etheredges say: she wanted their farm and intended to get it through the government's land redistribution program.

The farm is a beautiful spread, with three roomy farm houses and a lush, 55,000-tree orange orchard that generates $4 million a year in exports. The Etheredges, outraged by what they saw as her attempt to steal the farm, secretly taped their exchanges with her.

"Are you really serious to tell me that I cannot take up residence because of what it does to you?" she asked Richard Etheredge, 72, whose father bought the farm in 1947. "Government takes what it wants."

He dryly replied, "That we don't deny," according to a transcript of the tapes.



For the full story, see:

CELIA W. DUGGER. "White Farmers Confront Mugabe in a Legal Battle." The New York Times, First Section (Sun., December 28, 2008): 1 & 10.

(Note: the online version of the article has the date December 27, 2008 and has the title "White Farmers Confront Mugabe in a Legal Battle.")


FreethInjuriesAfterBeating2013-10-27.jpg











"Mr. Freeth circulated photographs of his injuries online after the invasion of his farm." Source of caption and photo: online version of the NYT article quoted and cited above.







December 12, 2013

Carnegie Attended a Private School Where Teacher Was an Entrepreneur




(p. 15) At the age of eight, Andra had begun attending school. Although he implies in his Autobiography that it had been his decision to put off school until then, eight, in fact, was the age at which most Scottish boys entered the classroom. There were numerous schools in Dunfermline in the early 1840s, thirty-three of them to be exact, almost half endowed or supported by the kirk (church) or the municipality. Andra was sent to one of the "adventure" schools, so called because they were started up and supported "entirely on the teachers' own adventure."


Source:

Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.

(Note: italics in original.)

(Note: the pagination of the hardback and paperback editions of Nasaw's book are the same.)






December 11, 2013

Portland Government Stops Girl from Selling Mistletoe to Pay for Braces







In Portland, the government is stopping an 11 year old girl from selling mistletoe to raise money for her braces. Here is a link to the KATU local Portland ABC news station video report: http://www.katu.com/news/local/11-year-old-told-not-to-sell-mistletoe-but-begging-is-fine-234014261.html?tab=video&c=y It also has been posted to YouTube at: http://www.youtube.com/watch?v=Vj4caXi0wdw






December 10, 2013

Use of Floppy Disks Shows Slowness of Government




(p. A14) WASHINGTON -- The technology troubles that plagued the HealthCare.gov website rollout may not have come as a shock to people who work for certain agencies of the government -- especially those who still use floppy disks, the cutting-edge technology of the 1980s.

Every day, The Federal Register, the daily journal of the United States government, publishes on its website and in a thick booklet around 100 executive orders, proclamations, proposed rule changes and other government notices that federal agencies are mandated to submit for public inspection.

So far, so good.

It turns out, however, that the Federal Register employees who take in the information for publication from across the government still receive some of it on the 3.5-inch plastic storage squares that have become all but obsolete in the United States.


. . .


"You've got this antiquated system that still works but is not nearly as efficient as it could be," said Stan Soloway, chief executive of the Professional Services Council, which represents more than 370 government contractors. "Companies that work with the government, whether longstanding or newcomers, are all hamstrung by the same limitations."

The use of floppy disks peaked in American homes and offices in the mid-1990s, and modern computers do not even accommodate them anymore. But The Federal Register continues to accept them, in part because legal and security requirements have yet to be updated, but mostly because the wheels of government grind ever slowly.


. . .


. . . , experts say that an administration that prided itself on its technological savvy has a long way to go in updating the computer technology of the federal government. HealthCare.gov and the floppy disks of The Federal Register, they say, are but two recent examples of a government years behind the private sector in digital innovation.



For the full story, see:

JADA F. SMITH. "Slowly They Modernize: A Federal Agency That Still Uses Floppy Disks." The New York Times (Sat., December 7, 2013): A14.

(Note: ellipses added.)

(Note: the online version of the article has the date December 6, 2013.)






December 9, 2013

Carnegie Was Important Innovative Entrepreneur




AndrewCarnegieBK2013-12-07.JPG
















Source of book cover image: http://img1.imagesbn.com/p/9781594201042_p0_v2_s260x420.JPG



Andrew Carnegie was a famous, much reviled, and much praised innovative entrepreneur. He is not my favorite innovative entrepreneur. He was happy to have the government protect the steel industry, and he tried to have his sidekick take all the blame for a violent episode at his steel works. But he worked hard (at least in his early decades), was often generous, fought against Teddy Roosevelt's imperialism, and most importantly, he greatly improved the process for making steel, thereby increasing its quality and decreasing its price.

Nasaw's serious and substantial biography is useful at untangling and documenting the good and the bad. In the next several weeks, I will be quoting some of the more important or thought-provoking passages in the book.



Nasaw's biography of Carnegie is:

Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.

(Note: the pagination of the hardback and paperback editions of Nasaw's book are the same.)






December 8, 2013

Functional Stupidity Management




(p. 1194) In this paper we question the one-sided thesis that contemporary organizations rely on the mobilization of cognitive capacities. We suggest that severe restrictions on these capacities in the form of what we call functional stupidity are an equally important if under-recognized part of organizational life. Functional stupidity refers to an absence of reflexivity, a refusal to use intellectual capacities in other than myopic ways, and avoidance of justifications. We argue that functional stupidity is prevalent in contexts dominated by economy in persuasion which emphasizes image and symbolic manipulation. This gives rise to forms of stupidity management that repress or marginalize doubt and block communicative action. In turn, this structures individuals' internal conversations in ways that emphasize positive and coherent narratives and marginalize more negative or ambiguous ones. This can have productive outcomes such as providing a degree of certainty for individuals and organizations. But it can have corrosive consequences such as creating a sense of dissonance among individuals and the organization as a whole. The positive consequences can give rise to self-reinforcing stupidity. The negative consequences can spark dialogue, which may undermine functional stupidity.


Source of paper abstract:

Alvesson, Mats, and André Spicer. "A Stupidity-Based Theory of Organizations." Journal of Management Studies 49, no. 7 (Nov. 2012): 1194-220.







December 7, 2013

Innovative Fracking Entrepreneurs Again Show that Energy Is Only Limited by Ingenuity




TheFrackersBK2013-11-03.jpg












Source of book image: online version of the NYT review quoted and cited below.





(p. 7) In "The Frackers," Gregory Zuckerman sets out a 25-year narrative that focuses on the half-dozen or so Texas and Oklahoma energy companies behind the fracking boom, especially Chesapeake Energy, the Oklahoma City giant that is the Exxon Mobil of fracking. Technologies are born. Gushers gush. And fortunes are made and lost.

In the process, Mr. Zuckerman assembles a chorus of little-heard American voices, from George Mitchell, the Greek goatherd's son whose company first perfected fracking, to Chesapeake's two founders, Aubrey K. McClendon and Tom L. Ward.


. . .


Geologists knew that layers of shale spread across North America contained commercial amounts of oil and gas, but not until a young geologist at Mr. Mitchell's company, Mitchell Energy, perfected a new "secret sauce" of water-based fracturing liquids in the early 1990s did layers of shale -- in Mitchell's case, the Barnett Shale of North Texas -- melt away and begin to yield jaw-dropping gushers.

Oryx Energy, a company that was based in Dallas, was among the first to pair fracking with horizontal drilling, producing even more startling results. Still, it took years, Mr. Zuckerman writes, before larger businesses, especially the skeptical major oil companies, fathomed what their smaller rivals had achieved. This allowed what were flyspeck outfits like Chesapeake to lease vast acreage in shale-rich areas, from Montana to eastern Pennsylvania.



For the full review, see:

BRYAN BURROUGH. "OFF THE SHELF; The Birth of an Energy Boom." The New York Times, SundayBusiness Section (Sun., November 2, 2013): 7.

(Note: ellipses added.)

(Note: the online version of the review has the date November 2, 2013, and has the title "OFF THE SHELF; 'The Frackers' and the Birth of an Energy Boom.")


Book being reviewed:

Zuckerman, Gregory. The Frackers: The Outrageous inside Story of the New Billionaire Wildcatters. New York: Portfolio/Penguin, 2013.






December 6, 2013

Interruptions and Distractions Disrupt Worker Productivity





Someday we will look back at open office plans as another way-overdone management fad. See also my earlier entry on the effects of workers switching tasks and my earlier entry on open offices.


(p. D2) Research led by Bing C. Lin, a doctoral candidate in industrial and organizational psychology at Portland State University in Oregon, found intrusions, or unexpected interruptions, increased exhaustion, physical strain and anxiety by one-third to three-fourths as much as the size of employees' actual workloads. Bottling up frustration when someone barges into your cubicle worsens the strain, according to the study of 252 employees, published earlier this year in the International Journal of Stress Management.


For the full story, see:

SUE SHELLENBARGER. "WORK & FAMILY MAILBOX; Sue Shellenbarger Answers Readers' Questions." The Wall Street Journal (Weds., Nov. 13, 2013): D2.

(Note: the online version of the review has the date Nov. 12, 2013, and has the title "WORK & FAMILY; The Toll of Office Disruptions; Latest Research on Distractions and Worker Efficiency.")


The Lin study summarized above is:

Lin, Bing C., Jason M. Kain, and Charlotte Fritz. "Don't Interrupt Me! An Examination of the Relationship between Intrusions at Work and Employee Strain." International Journal of Stress Management 20, no. 2 (2013): 77-94.






December 5, 2013

Wind Power Increases Government Corruption




LaclairKathyDislikesWindTurbines2013-10-27.jpg "Kathy Laclair of Churubusco, N.Y., dislikes the noise from the wind turbine blades and says their shadows give her vertigo." Source of caption and photo: online version of the NYT article quoted and cited below.



(p. A1) Lured by state subsidies and buoyed by high oil prices, the wind industry has arrived in force in upstate New York, promising to bring jobs, tax revenue and cutting-edge energy to the long-struggling region. But in town after town, some residents say, the companies have delivered something else: an epidemic of corruption and intimidation, as they rush to acquire enough land to make the wind farms a reality.

"It really is renewable energy gone wrong," said the Franklin County district attorney, Derek P. Champagne, who began a criminal inquiry into the Burke Town Board last spring and was quickly inundated with complaints from all over the state about the (p. A16) wind companies.


. . .


. . . corruption is a major concern. In at least 12 counties, Mr. Champagne said, evidence has surfaced about possible conflicts of interest or improper influence.

In Prattsburgh, N.Y., a Finger Lakes community, the town supervisor cast the deciding vote allowing private land to be condemned to make way for a wind farm there, even after acknowledging that he had accepted real estate commissions on at least one land deal involving the farm's developer.

A town official in Bellmont, near Burke, took a job with a wind company after helping shepherd through a zoning law to permit and regulate the towers, according to local residents. And in Brandon, N.Y., nearby, the town supervisor told Mr. Champagne that after a meeting during which he proposed a moratorium on wind towers, he had been invited to pick up a gift from the back seat of a wind company representative's car.

When the supervisor, Michael R. Lawrence, looked inside, according to his complaint to Mr. Champagne, he saw two company polo shirts and a leather pouch that he suspected contained cash.

When Mr. Lawrence asked whether the pouch was part of the gift, the representative replied, "That's up to you," according to the complaint.



For the full story, see:

NICHOLAS CONFESSORE. "In Rural New York, Windmills Can Bring Whiff of Corruption." The New York Times (Mon., August 18, 2008): A1 & A16.

(Note: ellipses added.)

(Note: the online version of the article has the date August 17, 2008.)



NoWindTurbinesSign2013-10-27.jpg









"To some upstate towns, wind power promises prosperity. Others fear noise, spoiled views and the corrupting of local officials." Source of caption and photo: online version of the NYT article quoted and cited above.






December 4, 2013

"Israel's Entrepreneurial Character"




(p. 272) Israel's entrepreneurial character led Google to establish a center in Haifa as well as the more expected Tel Aviv. The Haifa office was a move to accommodate Yoelle Maarek, a celebrated computer scientist who had headed IBM's labs in Israel. Google hired another world-class computer scientist, Yossi Matias, to head the Tel Aviv office. (In 2009, during Google's austerity push, the company would merge the engineering centers and Maarek would depart.)


Source:

Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.






December 3, 2013

Amazon's Story of the Evolution and Revolution of Disruptive Innovation




EverythingStoreBK2013-10-29.jpg

















Source of book image:
http://i1.wp.com/allthingsd.com/files/2013/10/Stone_EverythingStore1.jpg



(p. C5) Mr. Stone, a senior writer for Bloomberg Businessweek and a former reporter for The New York Times, tells this story of disruptive innovation with authority and verve, and lots of well-informed reporting. Although "The Everything Store" retraces early ground covered by Robert Spector's 2000 book, "Amazon.com: Get Big Fast," Mr. Stone has conducted more than 300 interviews with current and former Amazon executives and employees, including conversations, over the years, with Mr. Bezos, who "in the end was supportive of this project even though he judged that it was 'too early' for a reflective look" at the company.

"The Everything Store" does not examine in detail the fallout that Amazon's rise has had on book publishing and on independent bookstores, but Mr. Stone does a nimble job of situating the company's evolution within the wider retail landscape and within the technological revolution that was remaking the world at the turn of the millennium.



For the full review, see:

MICHIKO KAKUTANI. "BOOKS OF THE TIMES; Selling as Hard as He Can." The New York Times (Tues., October 29, 2013.): C1 & C5.

(Note: the online version of the review has the date October 28, 2013.)


The book under review is:

Stone, Brad. The Everything Store: Jeff Bezos and the Age of Amazon. New York: Little, Brown and Company, 2013.


StoneBrad2013-10-29.jpg










"Brad Stone" Source of caption and photo: online version of the NYT review quoted and cited above.







December 2, 2013

Paper Towels Are Better than Air Dryers at Removing Bacteria





Green environmentalists have forced hot air hand dryers on us in many public restrooms. They are slow and noisy and frustrating, and many of us leave the restroom with still-wet hands. But did you also know that by taking away our paper towels, the environmentalists are helping to spread disease? Read the article abstract below:


(p. 791) The transmission of bacteria is more likely to occur from wet skin than from dry skin; therefore, the proper drying of hands after washing should be an integral part of the hand hygiene process in health care. This article systematically reviews the research on the hygienic efficacy of different hand-drying methods. A literature search was conducted in April 2011 using the electronic databases PubMed, Scopus, and Web of Science. Search terms used were hand dryer and hand drying. The search was limited to articles published in English from January 1970 through March 2011. Twelve studies were included in the review. Hand-drying effectiveness includes the speed of drying, degree of dryness, effective removal of bacteria, and prevention of cross-contamination. This review found little agreement regarding the relative effectiveness of electric air dryers. However, most studies suggest that paper towels can dry hands efficiently, remove bacteria effectively, and cause less contamination of the washroom environment. From a hygiene viewpoint, paper towels are superior to electric air dryers. Paper towels should be recommended in locations where hygiene is paramount, such as hospitals and clinics.


Source:

Cunrui, Huang, Ma Wenjun, and Susan Stack. "The Hygienic Efficacy of Different Hand-Drying Methods: A Review of the Evidence." Mayo Clinic Proceedings 87, no. 8 (Aug. 2012): 791-98.






December 1, 2013

Kits Let Model T Owners Transform Them into Tractors, Snowmobiles, Roadsters and Trucks




ModelTtractorConversion2013-10-25.jpg "OFF ROAD; Kits to take the Model T places Henry Ford never intended included tractor conversions, . . . " Source of caption and photo: online version of the NYT article quoted and cited below.



(p. 1) WHEN Henry Ford started to manufacture his groundbreaking Model T on Sept. 27, 1908, he probably never imagined that the spindly little car would remain in production for 19 years. Nor could Ford have foreseen that his company would eventually build more than 15 million Tin Lizzies, making him a billionaire while putting the world on wheels.

But nearly as significant as the Model T's ubiquity was its knack for performing tasks far beyond basic transportation. As quickly as customers left the dealers' lot, they began transforming their Ts to suit their specialized needs, assisted by scores of new companies that sprang up to cater exclusively to the world's most popular car.

Following the Model T's skyrocketing success came mail-order catalogs and magazine advertisements filled with parts and kits to turn the humble Fords into farm tractors, mobile sawmills, snowmobiles, racy roadsters and even semi-trucks. Indeed, historians credit the Model T -- which Ford first advertised as The Universal Car -- with launching today's multibillion-dollar automotive aftermarket industry.



For the full story, see:

LINDSAY BROOKE. "Mr. Ford's T: Mobility With Versatility." The New York Times, Automobiles Section (Sun., July 20, 2008): 1 & 14.

(Note: the online version of the story has the title "Mr. Ford's T: Versatile Mobility.")






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