Monthly Archives: June 2016

We’re Not as Selfish as Economists Think We Are

BOOK REVIEW

The Age of Consent: A Manifesto for a New World Order, Author: George Monbiot.
Captive State: The Corporate Takeover of Britain, Author: George Monbiot.
Poisoned Arrows, Author: George Monbiot.
Amazon Watershed, Author: George Monbiot.
No Man’s Land, Author: George Monbiot.
Feral: Searching for Enchantment on the ­Frontiers of Rewilding, Author: George Monbiot.

By George Monbiot – The revelation that humanity’s dominant characteristic is, er, humanity will come as no surprise to those who have followed recent developments in behavioral and social sciences. People, these findings suggest, are basically and inherently nice.

Chimpanzees, the authors note, behave more like the homo economicus of neoliberal mythology than people do.

Humans, by contrast, are ultra-social: possessed of an enhanced capacity for empathy, an unparalleled sensitivity to the needs of others, a unique level of concern about their welfare, and an ability to create moral norms that generalize and enforce these tendencies.

So why do we retain such a dim view of human nature?

Partly, perhaps, for historical reasons. Philosophers from Hobbes to Rousseau, Malthus to Schopenhauer, whose understanding of human evolution was limited to the Book of Genesis, produced persuasive, influential and catastrophically mistaken accounts of “the state of nature” (our innate, ancestral characteristics).

Their speculations on this subject should long ago have been parked on a high shelf marked “historical curiosities.” But somehow they still seem to exert a grip on our minds. more> http://goo.gl/uBI2iW

Innovation Is Not Enough

By Dani Rodrik – We seem to be living in an accelerated age of revolutionary technological breakthroughs. Barely a day passes without the announcement of some major new development in artificial intelligence, biotechnology, digitization, or automation.

The debate is about whether these innovations will remain bottled up in a few tech-intensive sectors that employ the highest-skilled professionals and account for a relatively small share of GDP, or spread to the bulk of the economy.

The consequences of any innovation for productivity, employment, and equity ultimately depend on how quickly it diffuses through labor and product markets.

The economic historian Robert Gordon argues that today’s innovations pale in contrast to past technological revolutions in terms of their likely economy-wide impact.

Electricity, the automobile, airplane, air conditioning, and household appliances altered the way that ordinary people live in fundamental ways. They made inroads in every sector of the economy.

Perhaps the digital revolution, impressive as it has been, will not reach as far.

On the supply side, the key question is whether the innovating sector has access to the capital and skills it needs to expand rapidly and continuously.

In a world of premature deindustrialization, achieving economy-wide productivity growth becomes that much harder for low-income countries. It is not clear whether there are effective substitutes for industrialization. more> https://goo.gl/XAB6Ti

Updates from Georgia Tech

Roadmap for Advanced Cell Manufacturing Shows Path to Cell-Based Therapeutics
By John Toon – An industry-driven consortium has developed a national roadmap designed to chart the path to large-scale manufacturing of cell-based therapeutics for use in a broad range of illnesses including cancer, neuro-degenerative diseases, blood and vision disorders and organ regeneration and repair.

Over the past decade, new and emerging cell-based medical technologies have been developed to manage and possibly cure many conditions and diseases. In 2012 alone, these technologies treated more than 160,000 patients. Before these treatments can be more widely available, however, the cell therapeutics community will have to develop the capability for advanced, large-scale manufacturing of high-quality and consistent living cells.

To advance that goal, the Georgia Research Alliance (GRA) and the Georgia Institute of Technology (Georgia Tech) have launched the National Cell Manufacturing Consortium (NCMC), an industry-academic-government partnership that recently released the National Roadmap for Advanced Cell Manufacturing. Establishment of the consortium and development of this 10-year national roadmap was sponsored by the National Institute of Standards and Technology (NIST).

The roadmap was announced June 13 at the White House Organ Summit. more> http://goo.gl/bjvzQr

Related>

The Risk of a Constitutional Crisis in Britain

By Noah Feldman – What, exactly, is a constitutional crisis?

And equally fascinating, what would a constitutional crisis look like in the country that initiated the modern idea of the national constitution and yet still lacks a written one?

There is no official definition of a constitutional crisis — that in itself is a telling fact. In order to trigger one, a country usually has to be facing a situation in which its constitutional principles offer no clear, definitive answer to a pressing problem of governance.

Although constitutional uncertainty is a necessary condition for a crisis, it isn’t sufficient. For a situation to count as a crisis, powerful political actors, which can include large swaths of the population, have to signal that they are ready to press one course of action to its limits. Meanwhile, other comparably powerful actors have to be prepared to push the other way.

It’s worth remembering that Britain has the longest tradition in the world of resolving its potential constitutional confrontations relatively smoothly, without a written document. more> http://goo.gl/04w5mS

Related>

Here’s How to Rethink the Corporation

BOOK REVIEW

The Shareholder Value Myth, Author: Lynn Stout.
Pay Without Performance, Authors: Lucian Bebchuk and Jesse Fried.
In Search of Excess: The Overcompensation of American Executives, Author: Graef Crystal.
The Price of Inequality, Author: Joseph Stiglitz.
Strategic Management, Author: R. Edward Freeman.

By Susan Holmberg and Mark Schmitt – The story of skyrocketing executive pay is a story about our conception of the corporation and its responsibilities.

And until we rethink our deepest assumptions about the corporation, we won’t be able to master the challenge of excessive CEO pay, or the inequality it generates. Is the CEO simply the agent of the company’s shareholders?

Is the corporation’s only obligation to return short-term gains to shareholders?

Or can we begin to think of the corporation in terms of the interests of all those who have a stake in its success—its customers, its community, and all of its employees?

The foundation of “pay for performance” is “agency theory” or “shareholder primacy.” The intellectual godfather of shareholder primacy is Milton Friedman, who wrote in 1970 that “a corporate executive is an employee of the owners of the business [i.e., the shareholders]. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible,”

The stakeholder corporation is not a new idea. The term stakeholder has been in circulation since the 1960s to characterize the key groups of people that support an organization. R. Edward Freeman brought it into the management world in 1984, when he published Strategic Management. The book proposed that effective management consists of balancing the interests of all the corporation’s stakeholders, including employees, customers, and communities.

The stakeholder corporation is not only a brilliant model, as the German economic success, especially in manufacturing, shows—it is also the key to the unresolved problem of CEO pay.

Shareholder primacy is now so self-evidently flawed that we should be emboldened to think of a range of options—through policy, corporate norms, and culture—for changing CEO pay practices. more> http://goo.gl/yzhzPP

What Leaders Do to Inspire Engagement

BOOK REVIEW

1001 Ways to Energize Employees, Author: Bob Nelson.

By Howard Risher – This is not an issue that can be delegated to the human resources office or to consultants. Neither has much influence on how managers at any level do their jobs. They can write the script but the message has to come from an organization’s leaders.

With the caveat that every organization is different, students of leadership have highlighted several things that leaders emphasize in organizations with high levels of engagement.

One that should be automatic in government is making certain employees understand and agree with the purpose of the organization.

People want to work for successful organizations. Agencies could do a far better job of keeping employees aware of progress. The corollary is that leaders articulate and frequently repeat goals and expectations. From advertising we know people need to hear things a number of times before they “buy” it. more> http://goo.gl/Rd1pei

Updates from GE

The Lazarus Project: How Software Brought To Life A Decommissioned Power Plant In Italy’s Industrial Heart
By Tomas Kellner – Outside the industrial city of Turin, the combination of renewable energy, traditional generation and a high-voltage cable from France has created more power supply than the region can absorb.

So much so, in fact, the glut took at least one decades-old power plant out of commission in 2013.

“If you are losing money, you don’t want to invest more if you have no clue whether you are ever going to get it back,” says Mario Cincotta, general manager of multi-year agreements for GE’s Power Services business in Europe.

But Cincotta’s business came back with a solution. He and his team analyzed the local energy segment, upgraded the plant’s natural gas turbine with new technology and software and figured out how to start and stop it 2.5 times faster. The speed is critical to helping the plant ramp up when the wind stops blowing and the grid needs power.

Cincotta says the project started as a data mining exercise.

They first installed a new type of combustor on GE’s 9FA gas turbines powering the plant that improved the turbine’s response times and also allowed it to operate within the emissions envelope set by Italian regulators.

“The technology turned an airplane into a space shuttle, but now we needed the data and software to drive it,” Cincotta says. “Without them, the power plant would be just a fancy toy.” more> http://goo.gl/lV3OXX

Brexit will hurt the UK. But it could save the European Union.

By Timothy B. Lee – Unsurprisingly, the Brits have looked at the shambles the euro had made of the rest of Europe and vowed never to adopt the common currency.

But the rest of the EU is in a pickle, because it’s extremely difficult to leave the currency once you’ve joined it. Greece discovered this the hard way during last year’s financial crisis.

What the eurozone needs, then, is to develop the economic institutions that can make the euro work well as a shared currency.

In other words, the EU needs to transform itself from a loose confederation of governments — akin to America’s Articles of Confederation — into a proper government with the full powers of a sovereign state.

One of the biggest problems with this plan was that the British had no interest in participating. And because they had refused to join the eurozone, they had little skin in the game and felt no particular urgency about it.

At the same time, it would have been extremely awkward for the eurozone to try to integrate without Britain. more> http://goo.gl/UaT5bZ

Related>

Revenge Would Be the Wrong EU Response to U.K. Exit

By Mark Gilbert – The EU should regard the referendum result as a wake-up call. Discontent with how the bloc operates isn’t restricted to Britain.

A survey of more than 10,000 voters across Europe published by the Pew Research Center earlier this month showed rising dissatisfaction. The proportion of French respondents with a favorable view of the EU, for example, slumped to 38 percent from 69 percent in 2004; in Spain the deterioration was to 47 percent from 80 percent.

The most sensible EU response would be a retreat on at least some of the issues that were at the forefront of the U.K. referendum but are also pressure points across the bloc — immigration, the centralization of decision making and the broader agenda of trying to impose “ever closer union” on a reluctant populace.

An alternative solution, however, might see the EU accept the reality of a two-speed Europe. more> http://goo.gl/1N4uNB

Related>

The right to obscurity on the Internet

By Paula Bruening – Do individuals have a right to be hidden, or obscured, on the internet?

The Court of Justice of the European Union (CJEU) ruled that search engine operators in the EU consider the merits of individuals’ requests to have data about them delisted, and when appropriate, remove links to that data.

Currently, the responsibility for complying with the court’s decision falls to search engine companies. Companies bear the burden of reviewing the facts of the request the responsibility for determining whether they meet the admittedly minimal guidance established by the court and for delisting items if they do. As a result, an individual who wants certain links delisted not only from Google but also from Yahoo, Bing and Facebook would need to petition each company separately.

Creating a global Internet Obscurity Center would shift the responsibility and decision-making authority away from private companies. It would provide individual petitioners with greater convenience and certainty, relieving them of the burden of petitioning multiple companies. Individuals would submit one petition to the Center, which would make one determination.

The Center could be funded by search engine companies and data brokers – any company that could possibly be petitioned to take down links – but would maintain independence by employing its own leadership and staff trained in EU privacy law, who would make the decisions. more> https://goo.gl/nxqMLq