Did technology kill the truth?

By Tom Wheeler – We carry in our pockets and purses the greatest democratizing tool ever developed. Never before has civilization possessed such an instrument of free expression.

Yet, that unparalleled technology has also become a tool to undermine truth and trust.

The glue that holds institutions and governments together has been thinned and weakened by the unrestrained capabilities of technology exploited for commercial gain. The result has been to de-democratize the internet.

We exist in a time when technological capabilities and economic incentives have combined to attack truth and weaken trust. It is not an act of pre-planned perdition. Unchecked, however, it will have the same effect.

For a century-and-a-half, the economic model for media companies was to assemble information in order to attract eyeballs for advertising. To maximize that reach, traditional outlets curated that information for veracity and balance.

In stark contrast, the curation of social media platforms is not for veracity, but for advertising velocity. more>

Moral Life in the Global City

By Ian Klaus – Commerce depends on trust, civility, people doing favors. The bodega on the corner is not just a retail outlet. It’s a place where people in the neighborhood slowly get to know each other.

The ordinary virtues are things like trust, forgiveness, resilience, the basic honesty of ordinary life, a certain basic decency and civility that you see in ordinary life. These are the not-heroic virtues. Courage would be a heroic virtue. Self-sacrifice would be a heroic virtue. In a decent society we shouldn’t ask people to be heroes.

Globalization impacts every second of our daily lives. But the people we justify ourselves to, the people we care about when we exercise these virtues, are very local: Mom, Dad, family, kin, our neighbors, our workmates. When you display the virtues of decency, you’re not displaying an abstract commitment to treat all human beings decently. All you’re doing is treating the human beings you interact with every day decently. The ordinary virtues don’t generalize, they particularize. They don’t universalize. They are all very local. more>

Updates from Ciena

By John Hawkins – 100G. One hundred billion bits per second. Let that sink in for a minute.

You may have seen broadband offers from your local phone, cable, or wireless operator for 1 Gb/s services. But 100 Gb/s? Nice as it sounds, who needs it? Well, you’d be surprised.

As it turns out, 100GbE service is in demand for several reasons. Not in your residential context, mind you, but in a growing number of enterprise and operator scenarios – and it’s starting to get noticed. Current industry projections estimate that almost $7B (US) worth of 100G Ethernet services will sell this year, and will approach $20B by 2020.

We have been experiencing continued growth in bandwidth consumption for years. No surprise there. Shipments for 1GbE ports are still the sweet spot and the volume leader, while 10GbE ports are gaining ground according to Ovum. The trend is driven primarily by the growth in enterprise/residential service aggregation, mobile network buildouts, and data center interconnect. more>

Required reading to understand the tax policy fight

By Vanessa Williamson – First lesson: the top-heavy tax cuts on the policy agenda today are not the natural outcome of a widely held antipathy to taxation, or an admiration for wealthy people that is sometimes ascribed to the American public. Americans are more willing to pay taxes and are more concerned about economic inequality, than you might think.

Martin’s key insight is explaining how wealthy people managed to build broader constituencies for their tax cuts: by channeling frustration about other aspects of the tax code into support for policies that mostly cut rates at the very top.

So, what’s the takeaway? We can’t explain the tax reform on the table in Washington by looking at the preferences of most Americans. Instead, the impetus for top-heavy tax cuts comes from organized interests working strategically to disguise the regressive effects of the policies they have proposed, or by connecting their big-business-friendly policies with cultural and ethnic resentments that continue to motivate large swathes of the voting public. more>

Rescuing Economics From Neoliberalism

By Dani Rodrik – As even its harshest critics concede, neoliberalism is hard to pin down. In broad terms, it denotes a preference for markets over government, economic incentives over social or cultural norms, and private entrepreneurship over collective or community action.

The term is used as a catchall for anything that smacks of deregulation, liberalization, privatization, or fiscal austerity. Today it is reviled routinely as a short-hand for the ideas and the practices that have produced growing economic insecurity and inequality, led to the loss of our political values and ideals, and even precipitated our current populist backlash.

The use of the term “neoliberal” exploded in the 1990s, when it became closely associated with two developments, neither of which Peters mentions. One was financial deregulation, which would culminate in the 2008 financial crash—the first that the United States had experienced since the interwar period—and in the still-lingering euro debacle. The second was economic globalization, which accelerated thanks to free flows of finance and to a new, more ambitious type of trade agreement. Financialization and globalization have become the most overt manifestations of neoliberalism in today’s world. more>

Free Money: The Surprising Effects of a Basic Income Supplied by Government

By Issie Lapowsky – A legislated basic income is in the realm of fantasy at the moment. Even among its proponents there is almost no agreement about the fundamentals, starting with how much money would be an optimal basic income.

Ioana Marinescu, a professor at the University of Pennsylvania’s School of Social Policy and Practice, who researches basic income, says that research on the Alaska fund is enlightening, but not dispositive. “We know $2,000 a year makes a real difference to many people,” Marinescu says. “But would something lower still make a difference? We don’t know.”

As with any program, there are infinite opportunities for abuse and bad decisionmaking.

One illuminating New York Times article illustrated how the men and women who scrub toilets and do other low-skilled work for companies like Apple are hired from contracting companies which set the terms of their employment. Those workers are cut off from the benefits and upward mobility that the company’s engineers and marketers enjoy. Because the workers are contractors, the big tech companies feel no pressure to raise their wages, and aren’t responsible for offering health-care coverage.

Looked at in this light, the tech-led efforts to push a basic income can appear hypocritical. more>

Updates from GE

By Yari M. Bovalino – A few years ago, scientists working in GE labs in upstate New York came up with a cool idea for fixing broken parts. Literally. Calling the approach “cold spray,” they shot tiny metal grains from a supersonic nozzle at aircraft engine blades to add new material to them without changing their properties.

Anteneh Kebbede, manager of the Coatings and Surface Lab at the GE Global Research Center, who helped developed cold spray, said the technology can build whole new parts with walls as thick as 1 inch or more. “For manufacturers, the potential benefits are enormous,” Kebbede says. “Imagine being able to restore an aging part to its original condition with a tool that looks like a spray gun.” It is “like a fountain of youth for machine parts.”

GE engineers have already taken a dip. Earlier this year, engineers at the GE Aviation subsidiary Avio Aero started testing the technology in Bari, Italy. Last month they used it to repair the first part: a gearbox from the world’s most powerful jet engine, the GE90. more>

Do civilizations collapse?

BOOK REVIEW

Understanding Collapse: Ancient History and Modern Myths, Author: Guy D Middleton.

By Guy D Middleton – In After Collapse (2006), Glenn Schwartz compiled a useful list of circumstances in which archaeologists might identify collapse: ‘the fragmentation of states into smaller political entities; the partial abandonment or complete desertion of urban centers, along with the loss or depletion of their centralizing functions; the breakdown of regional economic systems; and the failure of civilizational ideologies’.

We also need to think about what we apply the term ‘collapse’ to – what exactly was it that collapsed? Very often, it’s suggested that civilizations collapse, but this isn’t quite right. It is more accurate to say that states collapse. States are tangible, identifiable ‘units’ whereas civilization is a more slippery term referring broadly to sets of traditions.

Looking around us, we can see the trouble we are in, we can see the threats to our overpopulated world, to our overly complex and thus increasingly vulnerable society and way of life.

We do not need to make other peoples’ histories into lessons for ourselves. When the evidence for environmentally driven collapses in the past is so weak, and the evidence for contact-era atrocities so strong, it is a wonder that the former is the focus and the lesson, rather than the latter. Perhaps we should be asking ourselves what exactly we should be learning from history. more>

Do Corporations Make Any Sense?

BOOK REVIEW

The Vanishing American Corporation: Navigating the Hazards of a New Economy, Author: Gerald F. Davis.

By Rick Paulas – On the last day of the year of 1600, the East India Company was created. It was the precursor to the modern corporation, an organizational idea that’s lasted more than 400 years. But will the corporation continue to be dominant forever?

To Gerald F. Davis, signs of the corporation’s futility began in the 1980s and ’90s, as the rise of financialization—in which financial services account for a higher share of national income than other sectors—transformed the American economy.

The transformation came through a dismantling of New Deal-era protections, including decades of court decisions that chipped away at the Glass-Steagall Act, the 1933 legislation separating investment and commercial banking. As Suzanne Burger, a political science professor at the Massachusetts Institute of Technology, put it in a 2014 piece: “[S]ince the 1980s, financial market pressures have transformed U.S. corporate structure itself.” Instead of manufacturing or services, Wall Street became the economy’s driving force.

Davis says the future of the economy can go in two directions, depending on how quickly and powerfully masses organize. The first is the nightmare scenario: A few chief executive officers from a handful of companies (Davis suggests technology giants Google, Facebook, and Amazon as the likely trio) wielding unchecked power.

“If Mark Zuckerberg wanted to sell Facebook to Vladimir Putin for one trillion dollars, he has the power to do so,” Davis says. “It’s a concentration of control we haven’t seen in American history before.” more>

Updates from Chicago Booth

How pricing strategy can affect a company’s indebtedness
By Alex Verkhivker – Highly indebted companies became a talking point in the 2007–10 financial crisis. How did so many companies—including corporate giants such as General Motors, which had an accounting leverage of more than 34 times and debt of more than $172 billion before its December 2008 bailout—take on so much risk?

One explanation could have to do with pricing. Companies that rarely change the price of their products or services are more likely to find themselves short of cash than those that are more flexible on pricing.

Consequently, when credit is flowing freely, the former are more likely to borrow, according to research by University of Maryland’s Francesco D’Acunto, University of California at Berkeley’s Ryan Liu, University of British Columbia’s Carolin Pflueger, and Chicago Booth’s Michael Weber.

When credit is tight, companies with flexible prices have higher debt levels—but when more credit is available, companies with inflexible prices lever up. That’s because companies with the stickiest prices are the most financially constrained. So when offered credit, they take on more debt. more>

Related>