Daily Archives: February 2, 2021

Monopoly Was Invented to Reveal the Toxic Greed of Capitalism

It was a rags-to-riches fabrication that ironically exemplified Monopoly’s implicit values.
By Kate Raworth – ‘Buy land – they aren’t making it any more,’ quipped Mark Twain. It’s a maxim that would certainly serve you well in a game of Monopoly, the bestselling board game that has taught generations of children to buy up property, stack it with hotels, and charge fellow players sky-high rents for the privilege of accidentally landing there.

The game’s little-known inventor, Elizabeth Magie, would no doubt have made herself go directly to jail if she’d lived to know just how influential today’s twisted version of her game has turned out to be. Why? Because it encourages its players to celebrate exactly the opposite values to those she intended to champion.

Born in 1866, Magie was an outspoken rebel against the norms and politics of her times. She was unmarried into her 40s, independent and proud of it, and made her point with a publicity stunt. Taking out a newspaper advertisement, she offered herself as a ‘young woman American slave’ for sale to the highest bidder. Her aim, she told shocked readers, was to highlight the subordinate position of women in society. ‘We are not machines,’ she said. ‘Girls have minds, desires, hopes and ambition.’

In addition to confronting gender politics, Magie decided to take on the capitalist system of property ownership – this time not through a publicity stunt but in the form of a board game. The inspiration began with a book that her father, the anti-monopolist politician James Magie, had handed to her. In the pages of Henry George’s classic, Progress and Poverty (1879), she encountered his conviction that ‘the equal right of all men to use the land is as clear as their equal right to breathe the air – it is a right proclaimed by the fact of their existence’.

Traveling around America in the 1870s, George had witnessed persistent destitution amid growing wealth, and he believed it was largely the inequity of land ownership that bound these two forces – poverty and progress – together. So instead of following Twain by encouraging his fellow citizens to buy land, he called on the state to tax it. On what grounds? Because much of land’s value comes not from what is built on the plot but from nature’s gift of water or minerals that might lie beneath its surface, or from the communally created value of its surroundings: nearby roads and railways; a thriving economy, a safe neighborhood; good local schools and hospitals. And he argued that the tax receipts should be invested on behalf of all.

Determined to prove the merit of George’s proposal, Magie invented and in 1904 patented what she called the Landlord’s Game. more>

Updates from McKinsey

Breaking through data-architecture gridlock to scale AI
Large-scale data modernization and rapidly evolving data technologies can tie up AI transformations. Five steps give organizations a way to break through the gridlock.
By Sven Blumberg, Jorge Machado, Henning Soller, and Asin Tavakoli – For today’s data and technology leaders, the pressure is mounting to create a modern data architecture that fully fuels their company’s digital and artificial intelligence (AI) transformations. In just two months, digital adoption vaulted five years forward amid the COVID-19 crisis. Leading AI adopters (those that attribute 20 percent or more of their organizations’ earnings before interest and taxes to AI) are investing even more in AI in response to the pandemic and the ensuing acceleration of digital.

Despite the urgent call for modernization, we have seen few companies successfully making the foundational shifts necessary to drive innovation. For example, in banking, while 70 percent of financial institutions we surveyed have had a modern data-architecture road map for 18 to 24 months, almost half still have disparate data models. The majority have integrated less than 25 percent of their critical data in the target architecture. All of this can create data-quality issues, which add complexity and cost to AI development processes, and suppress the delivery of new capabilities.

Certainly, technology changes are not easy. But often, we find the culprit is not technical complexity; it’s process complexity. Traditional architecture design and evaluation approaches may paralyze progress as organizations overplan and overinvest in developing road-map designs and spend months on technology assessments and vendor comparisons that often go off the rails as stakeholders debate the right path in this rapidly evolving landscape. Once organizations have a plan and are ready to implement, their efforts are often stymied as teams struggle to bring these behemoth blueprints to life and put changes into production. Amid it all, business leaders wonder what value they’re getting from these efforts.

Data and technology leaders no longer need to start from scratch when designing a data architecture. The past few years have seen the emergence of a reference data architecture that provides the agility to meet today’s need for speed, flexibility, and innovation (Exhibit 1). It has been road-tested in hundreds of IT and data transformations across industries, and we have observed its ability to reduce costs for traditional AI use cases and enable faster time to market and better reusability of new AI initiatives. more>

Updates from Ciena

Why you need the highest level of trust in your encryption solution
In Europe, full certification from BSI is one of the top security accreditations you can get, and Ciena’s optical encryption solutions have achieved it; just one more reason why Ciena is the ideal partner to help you protect your in-flight data and streamline your compliance strategy, be it to the European General Data Protection Regulation (GDPR), or any other data regulation. Jürgen Hatheier, CTO EMEA at Ciena, explains why.
By Jürgen Hatheier – Several recent headlines about large GDPR-related financial penalties for data breach violations, continue to spark massive investments in security compliance initiatives across all industries. However, these programs are sometimes limited to protecting data held within the organization – with little or no consideration for ‘in-flight’ data traveling between locations across the Wide Area Network (WAN).

This is no longer adequate, as large amounts of data are transported over high-capacity wavelengths across fiber optic networks and cybercriminals are exploiting any potential gaps within an organization’s security strategy. It’s not uncommon, for example, for hackers to use ‘wiretap’ devices to steal data as it travels over optical fiber connections.

The frequent lack of physical security makes this kind of attack relatively easy, allowing hackers to access fiber and install wiretaps in cabinets in the street, under man-hole covers, and in other easy-to-breach locations. These wiretaps can also be left in place for long periods of time without being detected, leading to large quantities of data being stolen, with no indication when breaches even started.

The only way to prevent the theft of data using wiretaps is to encrypt ‘in-flight’ data as it travels over WAN connections. The ability to do this effectively has now become a key requirement in tender processes for network rollouts, and is critical for protecting customers and their data in the GDPR era. more>

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Updates from Chicago Booth

Who is driving stock prices?
Some investors influence valuations more than others do, research suggests
By Emily Lambert – When stock prices fluctuate, commentators often attribute the moves to demand from certain groups of investors. A radio report might attribute a daily rise in the S&P 500 to sentiment-driven retail investors—or maybe hedge funds, pension funds, or sovereign-wealth funds.

But some investors drive valuations more than others do, suggests research by Chicago Booth’s Ralph S. J. Koijen, NYU’s Robert J. Richmond, and Princeton’s Motohiro Yogo. In traditional stock-valuation methods, it doesn’t matter who owns a stock. Indeed, someone valuing a company’s stock typically estimates the company’s expected profits, and then discounts these profits using an appropriate discount rate as implied by, for instance, the capital asset pricing model (CAPM). The demand of a particular group of investors matters only to the extent that it affects the market risk premium and therefore the discount rate, producing a typically small effect. But some research is starting to chip away at the gap between narratives about investor-driven market swings and traditional finance models.

The latter assume that markets are highly elastic, Koijen explains—if prices deviate slightly from their fair values, investors rush in to arbitrage such small mispricings away. But the market is far less elastic than thought, a growing literature demonstrates. In this case, differences in investor demand have a meaningful impact on prices.

If asset prices reflect differences in demand for the shares, who is driving that? Koijen, Richmond, and Yogo developed a framework to trace back differences in valuation ratios and expected returns to various investors. They assembled investors into eight groups, from passively managed behemoths such as the Vanguard Group, to smaller, actively managed investment advisers and hedge funds. They then modeled how valuations would shift if all the assets of one group were to be redistributed to other institutional investors in proportion to their assets—if all hedge fund assets, for example, were held instead by other institutions in the market. The effect of that would depend on an investor’s size and strategy compared with others in the market, the researchers show.

Overall, small, active investment advisers have the largest influence on valuations, according to the researchers. Controlling for size, they find that hedge funds tend to be the most influential. “Per dollar of capital, they are much more influential than pension funds and insurance companies,” says Koijen. more>

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