Monthly Archives: July 2016

Against Sentimental Democracy

By Ned Resnikoff – To both the democratic socialist candidate and the Occupy Wall Street anarchist, true democracy is all about expressing the unalloyed will and wisdom of the people. That’s the source of its value.

If democracy is little more than a conduit for the will of the people (which is good), then anything that obstructs the popular will is anti-democratic (and therefore bad).

But a sentimental attachment to the popular will isn’t just primitive; it’s dangerous. Even in a democratic system, the will of the people is not a sound guide for political decision-making. It’s a fantasy, and democracy is better off without it.

A good share of democracy’s value comes from its ability to resolve political disputes non-violently. Democratic institutions also provide a check on the ability of one faction to arbitrarily dominate another.

Of course, it is entirely possible for a majority to dominate a minority through popular vote — which is part of why so many democratic governments have institutions designed to thwart pure majoritarianism.

There is also good reason to believe that democracy is better than other systems of government at ensuring an equitable distribution of public goods. Because leaders in a democracy need to win the support of majorities in order to retain power, they need to act in a way that satisfies large portions of the electorate.

Autocrats, because they rely on much smaller coalitions to maintain and exercise power, need only wield the state’s power on behalf of a small coterie.

Democracy matters, but not because it acts as a medium for the public’s collective consciousness. It matters because it is the best system we’ve invented for distributing wealth, maintaining peace, and preventing one portion of society from falling beneath the yoke of another. more> https://goo.gl/tnb3gK

Related>

Beyond anger

BOOK REVIEW

Anger and Forgiveness: Resentment, Generosity, Justice, Author: Martha C Nussbaum.

By Martha C Nussbaum – Anger is both poisonous and popular.

If we think closely about anger, we can begin to see why it is a stupid way to run one’s life. A good place to begin is Aristotle’s definition: not perfect, but useful, and a starting point for a long Western tradition of reflection. Aristotle says that anger is a response to a significant damage to something or someone one cares about, and a damage that the angry person believes to have been wrongfully inflicted.

He adds that although anger is painful, it also contains within itself a hope for payback. The central puzzle is this: the payback idea does not make sense.

There is one, and I think only one, situation in which the payback idea does make sense. That is when I see the wrong as entirely and only what Aristotle calls a ‘down-ranking’: a personal humiliation, seen as entirely about relative status.

If the problem is not the injustice itself, but the way it has affected my ranking in the social hierarchy, then I really can achieve something by humiliating the wrongdoer: by putting him relatively lower, I put myself relatively higher, and if status is all I care about, I don’t need to worry that the real wellbeing problems created by the wrongful act have not been solved. more> https://goo.gl/yB9h81

Nature’s Way to Relieve Stress Inspires Designs for Nearly Indestructible Bridges

By Elizabeth Montalbano – Emeritus Professor Wanda Lewis in the School of Engineering at the University of Warwick has been studying how nature relieves stress for 25 years, taking an approach called “form-finding,” a process of shaping an object, or a structure, by loads applied to it

This process is different than engineering methods that start from an assumed shape and then check the stresses and displacements in a structure under an applied load, she said.

Form-finding enables the design of rigid structures that follow a strong natural form, structures that are sustained by a force of pure compression or tension without bending stresses, Lewis said. These stresses are the main points of weakness in structures and what causes bridges to fail or buckle under weight or stress and cause damage or even collapse.

“In form-finding, we go in the opposite direction — the shape of the structure is not known initially, it is found by the application of load and involves repetitive calculations to find a shape that is in equilibrium with all forces,” she said. more> http://goo.gl/xHtqjI

Economists Give Up on Milton Friedman’s Biggest Idea

By Noah Smith – One of the core pieces of modern macroeconomic theory, handed down to us by the great Milton Friedman [2, 3, 4, 5] probably missed the mark. And now it might be on the way out. And this shift has big implications for how we think about economic policy and finance.

The idea is called the permanent income hypothesis (PIH).

Friedman first put it on paper in 1957, and it still holds enormous sway in the econ profession. The PIH says that people’s consumption doesn’t depend on how much they earn today, but on how much they expect to earn over their lifetime. If a one-time windfall of money drops into your lap, says Friedman’s theory, you won’t rush out and spend it all — you’ll stick it in the bank, because you know the episode won’t be repeated.

But if you get a raise, you might start spending more every month, because the raise was a signal that your earning power has increased for the long term.

PIH is so dominant that almost all modern macroeconomic theories are based on it.

So it’s not much of an exaggeration to say that Friedman’s PIH is the cornerstone of modern macroeconomic theory. Unfortunately, there’s just one small problem — it’s almost certainly wrong.

Not completely wrong, mind you, just somewhat wrong. more> http://goo.gl/03oQ59

People don’t trust economists anymore

By Allison Schrager – It wasn’t always this way. Plenty of government administrations have made bad economic choices, but on balance, policy makers embraced the advice of economists—to promote trade, to run budget surpluses when the economy is booming, to adopt incentives to promote and subsidize work. But now many of these ideas, considered generally successful up until recently, have fallen out of favor with politicians as well as the public.

The most obvious reason for the recent populist resurgence is that things are terrible.

Economists promised free, unregulated markets would mean more growth—and then the Great Recession happened. Most economists support free trade but minimized the fact that, just like any policy shift, more trade would create winners and losers in the short run. In developed countries like the US, jobs in manufacturing are disappearing and wages are stagnant.

The economics profession may deserve to lose some trust. Net-net, there may be more winners than losers from trade, but that doesn’t lessen the burden economic that households on the losing side have had to carry; we indeed may have minimized those costs. Economic theory predicts technology will bring more productivity and prosperity, but instead of making vague promises about the future, economists could be doing more to figure out how to make the transition less painful for people in jobs threatened by technology.

Meanwhile, the public keeps losing confidence. more> http://goo.gl/oB0xRW

How to Hire for Team Skills

BOOK REVIEW

The End of Average: How We Succeed in a World That Values Sameness, Author: Todd Rose.
The Essential Guide for Hiring and Getting Hired, Author: Lou Adler.

By Lou Adler – The big, seemingly obvious finding was that job descriptions listing skills, experience, competencies and behavioral traits were not great predictors of future success. While measuring these things could reduce interviewing errors due to bias, there were too many other factors that could cause a person to underperform.

The Most Important Interview Question: Can you please describe your most significant team accomplishment of your entire career?

Imagine I’m interviewing you and I ask you to describe the most significant team accomplishment of your entire career. This could be managing a team or a project or being on an important team. What team accomplishment would you pick and how would you describe it?

After providing a quick overview how would you answer the following clarifying questions?

  • Who was on the team and what roles did they play?
  • When did it occur and what was your assigned role? Did this change at all during the project?
  • How did you get on the team?
  • What were the objectives of the team and were they met?
  • Describe the plan or project and how the team was managed. Were you part of this?
  • What was your biggest contribution to the team? How were you recognized formally for this?
  • Who did you influence the most? Did you coach anyone? Did anyone coach you?
  • What did you like most about the team? Least?
  • What would you change if you could about the team makeup?
  • Who were the executives on the team and did you influence them in any way?
  • What was the biggest team problem or conflict you faced and how did you handle it?

By itself, this type of question and fact-finding would reveal a lot about the team skills of the person being interviewed. more> http://goo.gl/gHZxV2

Farewell To VCRs

By Yuri Kageyama – Japanese electronics maker Funai Electric Co. says it’s yanking the plug on the world’s last video cassette recorder.

A company spokesman said the company wanted to continue production to meet customer requests, but can’t because key component makers are pulling out due to shrinking demand for VCRs.

Funai’s VCR factory, which is in China, is off-limits to media coverage for security reasons because other products are made at the same plant, he said.

Funai began making videotape players in 1983, and videotape recorders in 1985. The company says they were among its all-time hit products.

Panasonic Corp. withdrew from making VCRs several years ago, making Funai the only manufacturer. more> http://goo.gl/qtl1el

A Wealth Tax Looks Like It Can Make a Country Richer

By Noah Smith – Standard economic theory says that taxation reduces productivity.

But what if it were possible to impose taxes in a way that also increased productivity?

The basic idea is startlingly simple.

Lots of people have wealth but aren’t able to use it effectively — they pick bad investments, or use it to start failing businesses. The U.S. tax system accommodates these people with a variety of breaks; if they lose on their investments, they get capital gains tax write-offs, while if their businesses are unprofitable those companies pay no tax.

Meanwhile, the people who put wealth to good use — the savvy entrepreneurs and wise investors of the world — get taxed on their profits and capital gains.

The net effect of this system is to allocate more of society’s capital to the people who are least able to put it to good use. more> http://goo.gl/SLWtwh

How Perfect Markets Concentrate Wealth and Strangle Growth and Prosperity

By Steve Roth – Perfect markets concentrate wealth. It’s their nature. But at some point, market-generated wealth concentration strangles those very markets (compared to markets with broader distributions of wealth).

But wealth concentration doesn’t just strangle the flows of spending, production, and income. It throttles the accumulation of wealth itself.

The dynamics are straightforward here: poorer people spend a larger percentage of their income than richer people. So if less money is transferred to richer people (or more to poorer people), there’s more spending — so producers produce more (incentives matter), there’s more surplus from production, more income, more wealth … rinse and repeat.

If a few richer people (who dominate our government, financial system, and economy) have the choice between making our collective pie bigger or just grabbing a bigger slice, grabbing the bigger slice is the hands-down winner.

That’s why decades of Innovative Financial Engineering has served, mostly, not to efficiently allocate resources to efficient producers, improve productivity, or increase production. Rather, these fiendishly clever entrepreneurial inventions control who gets the income from production. You can guess who wins that game. Top wealth-holders would be nuts to play it any other way (if you go with economists’ definition of rationality …).

But for the rest of us, it’s a loser’s game — at least compared to the world we could be living in. more> http://goo.gl/84WTBg

Endless fun

BOOK REVIEW

Consciousness and the Social Brain, Author: Michael Graziano.

By Michael Graziano – Imagine a future in which your mind never dies. When your body begins to fail, a machine scans your brain in enough detail to capture its unique wiring. A computer system uses that data to simulate your brain.

It won’t need to replicate every last detail. Like the phonograph, it will strip away the irrelevant physical structures, leaving only the essence of the patterns. And then there is a second you, with your memories, your emotions, your way of thinking and making decisions, translated onto computer hardware as easily as we copy a text file these days.

That second version of you could live in a simulated world and hardly know the difference. You could walk around a simulated city street, feel a cool breeze, eat at a café, talk to other simulated people, play games, watch movies, enjoy yourself. Pain and disease would be programmed out of existence.

Your connectome, simulated in a computer, would recreate your conscious mind. Of course, nobody knows if the connectome really does contain all the essential information about the mind. Some of it might be encoded in other ways. Hormones can diffuse through the brain. Signals can combine and interact through other means besides synaptic connections. more> https://goo.gl/7xUMFf