Author Archives: Net economy

How The OECD Wants To Make Globalization Work For All

By Ronald Janssen – In its key issues paper for the Ministerial Council, the OECD recognizes that the frictional costs of opening to world trade have been much higher than so far assumed.

Workers losing their job because of competition with low wage economies were supposed to find new jobs elsewhere and do so quickly because the same process of globalization would be pushing up overall national income.

The OECD now openly admits that this assumption was wrong.

A second critical stance is taken on what the OECD calls a ‘plausible’ link between globalization and rising inequalities. Here, it explicitly admits that globalization has weakened the bargaining power of labor in advanced economies, invoking the threat of cheap import competition from low wage countries as well as that of moving investment and production there.

Trade and investment deals are often rushed through parliaments when all details have been negotiated, thus providing big business the opportunity to weigh on decision-making by massive lobbying of governments in the preceding trade negotiations themselves. The OECD specifically adds that ‘the cost-benefit balance of provisions such as ISDS look increasingly questionable, especially when both sides are advanced economies with low risk of discriminatory treatment of foreign investors and reliable judicial systems.” more> https://goo.gl/TM76h7

Our illusory sense of agency has a deeply important social purpose

BOOK REVIEW

The Cognitive Neuropsychology of Schizophrenia, Author: Chris Frith.

By Chris Frith – We humans like to think of ourselves as mindful creatures. We have a vivid awareness of our subjective experience and a sense that we can choose how to act – in other words, that our conscious states are what cause our behavior. Afterwards, if we want to, we might explain what we’ve done and why. But the way we justify our actions is fundamentally different from deciding what to do in the first place.

Or is it? Most of the time our perception of conscious control is an illusion. Many neuroscientific and psychological studies confirm that the brain’s ‘automatic pilot’ is usually in the driving seat, with little or no need for ‘us’ to be aware of what’s going on. Strangely, though, in these situations we retain an intense feeling that we’re in control of what we’re doing, what can be called a sense of agency. So where does this feeling come from?

Humans are social animals, but we’d be unable to cooperate or get along in communities if we couldn’t agree on the kinds of creatures we are and the sort of world we inhabit. … more> https://goo.gl/yohWCj

Updates from Aalto University

Collaboration and partners
By Pia Kåll – When I was still in high school and even during my matriculation exam, I was convinced that University of the Arts was the place to be for me. However, at the time of applying I changed my mind and applied to Aalto University to study applied physics because it sounded challenging. It also felt like the right thing to do – to let art be a hobby and get a job from another field.

After I graduated, I started my dissertation. However, I didn’t finish it because I visited a McKinsey recruitment event and decided to grab the opportunity to influence the development and strategy of large, global companies as a consultant.

When I was offered a seat on the Executive Board of Outotec, I just couldn’t decline the challenge. At first, I led Strategy and M&A and later on broader responsibilities including product development and development of business processes and operational models.

In that position I realized that I enjoy working in different situations and with different people in as many different fields, and among as various questions as possible. In private equity , these sides are combined. When I transferred to CapMan, I first worked as a Partner in Buyout, and starting from June 2017 I have worked as a Managing Partner. more> https://goo.gl/DzM5Na

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Who Needs Washington?

On healthcare and climate change, governors step in where Congress can’t – or won’t.
By Susan Milligan – Congress may be unable or unwilling to pass major legislation.

Governors and states, lauded as laboratories of democracy at best and recalcitrant junior players at worst, are stepping up to fill the power void.

And while governors are more empowered to stop federal policies or legislation than to force their enactment, the state players can have a great deal of influence over how the whole nation – and not just their constituencies – live, experts say.

On climate change, too, governors in both parties are implementing environmental policies Trump has rejected as too onerous on business.

The sheer size and economic influence of states can push national policy and trends as well. Texas, with its big buying power in school textbooks, has an outsized influence on details such as questioning evolution in science textbooks.

And while California’s greenhouse emissions standard might not be much liked by industry, which one would refuse to do business with the Golden State, which has the sixth-biggest economy in the world? And when states can’t stop Washington from passing policies, they can slow-walk their implementation or scream so loudly Washington is forced to regroup. more> https://goo.gl/zU7ruc

The Next Crisis Will Start in Silicon Valley

By William Magnuson – It has been 10 years since the last financial crisis, and some have already started to predict that the next one is near. But when it comes, it will likely have its roots in Silicon Valley, not Wall Street.

Our banks are better capitalized than ever. Our regulators conduct regular stress tests of large institutions. And the Dodd-Frank Act imposes strict requirements on systemically important financial institutions.

But while these reforms have managed to reduce the risks that caused the last crisis, they have ignored, and in some cases exacerbated, the emerging risks that may cause the next one.

These financial technology (or “fintech”) markets are populated by small startup companies, the exact opposite of the large, concentrated Wall Street banks that have for so long dominated finance. And they have brought great benefits for investors and consumers. By automating decision-making and reducing the costs of transactions, fintech has greased the wheels of finance, making it faster and more efficient.

But revolutions often end in destruction. And the fintech revolution has created an environment ripe for instability and disruption. It does so in three ways. …

Wall Street is no longer the future of finance. Silicon Valley is. more> https://goo.gl/LK6CsY

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Why religion is not going away and science will not destroy it

BOOK REVIEW

The Territories of Science and Religion, Author: Peter Harrison.
Narratives of Secularization, Editor: Peter Harrison.
The Future of Christianity, Author: David Martin.

By Peter Harrison – Scientists, intellectuals and social scientists expected that the spread of modern science would drive secularization – that science would be a secularizing force. But that simply hasn’t been the case. If we look at those societies where religion remains vibrant, their key common features are less to do with science, and more to do with feelings of existential security and protection from some of the basic uncertainties of life in the form of public goods.

The US is arguably the most scientifically and technologically advanced society in the world, and yet at the same time the most religious of Western societies.

As in India and Turkey, secularism is actually hurting science.

In brief, global secularization is not inevitable and, when it does happen, it is not caused by science. Further, when the attempt is made to use science to advance secularism, the results can damage science.

The conflict model of science and religion offered a mistaken view of the past and, when combined with expectations of secularization, led to a flawed vision of the future. Secularization theory failed at both description and prediction.

The real question is why we continue to encounter proponents of science-religion conflict.

Religion is not going away any time soon, and science will not destroy it. more> https://goo.gl/ZjLZJx

Updates from GE

Strange Cargo: How Do You Move An 8 Million-Pound Heat-Recovery Steam Generator Down The Hudson? Swimmingly.
By Amy Kover – The journey — the first of its kind for such a machine — began in 2015, when the New Jersey-based power company PSEG ordered GE’s latest HA-class gas turbine and other equipment for a new combined-cycle power plant in Sewaren, an industrial town tucked away behind New York City’s Staten Island.

The machines included a heat-recovery steam generator, or HRSG in power-industry parlance. It recovers waste heat from the gas turbine and turns it into steam that powers a steam turbine to generate more electricity, making the power station more efficient.

GE typically arranges to have all the parts delivered to the power plant for on-site construction. However, as the project began to unfold, it became clear that building the steam generator, which is much larger than the turbines, in New Jersey was going to be a challenge. The site happens to be located in one of the country’s most densely developed areas.

To overcome this challenge, PSEG decided to build the 4,000-ton HRSG in upstate New York and ship it to New Jersey in one piece. GE worked closely with PSEG and construction firm Megrant to crack this logistical riddle. more> https://goo.gl/u8Y2mi

David Brooks Is Mistaken: The Economy Is Broken

By Steve Denning – Brooks concludes blithely that “the market is working more or less as it’s supposed to.” It is therefore wrong to conclude that the U.S. economy has “structural flaws.” That is “a story that is fundamentally untrue.”

The difficulty with the argument, as Brooks well knows, is that one or two good years don’t make an era. Two years of income growth don’t undo the trauma flowing from 50 years of wage stagnation, much less lead to the conclusion that there are “no structural flaws” in the economy.

The brute fact remains that median salaries have stagnated for some 50 years. That’s the real problem of the U.S. economy that economists ought to be talking about.

When moderates deny the obvious, the disaffected inevitably turn elsewhere.

If moderates want to be listened to, they will need to take a harder look at what is going on, come up with coherent explanations for what has gone wrong, and offer plausible remedial action. more> https://goo.gl/zuoJbQ

Return of the city-state

BOOK REVIEW

Radicals Chasing Utopia, Author: Jamie Bartlett.
The End of the Nation State, Author: Jean-Marie Guéhenno.
The End of the Nation State, Author: Kenichi Ohmae.
The New Localism: How Cities Can Thrive in the Age of Populism, Author: Bruce Katz.

Nation-states came late to history, and there’s plenty of evidence to suggest they won’t make it to the end of the century
By Jamie Bartlett – To the people living under the mighty empire, these events must have been unthinkable. Just as they must have been for those living through the collapse of the Pharaoh’s rule or Christendom or the Ancien Régime.

We are just as deluded that our model of living in ‘countries’ is inevitable and eternal.

Which is all rather odd, since they’re not really that old. Until the mid-19th century, most of the world was a sprawl of empires, unclaimed land, city-states and principalities, which travelers crossed without checks or passports. As industrialization made societies more complex, large centralized bureaucracies grew up to manage them.

Those governments best able to unify their regions, store records, and coordinate action (especially war) grew more powerful vis-à-vis their neighbors. Revolutions – especially in the United States (1776) and France (1789) – helped to create the idea of a commonly defined ‘national interest’, while improved communications unified language, culture and identity. Imperialistic expansion spread the nation-state model worldwide, and by the middle of the 20th century it was the only game in town.

There are now 193 nation-states ruling the world. more> https://goo.gl/2N1bGb

Updates from Ciena

#Ciena25: The Story Behind the Founding of Ciena
By Bruce Watson – The company that would eventually become Ciena began its life as an inspiration inside the head of David Huber.  The former General Instruments engineer had an idea for how to help cable companies squeeze more television channels through their lines to end consumers.  In 1992, he set out to turn those ideas into a reality, and on November 8, 1992, the paperwork was officially filed in Delaware for the new company.

Huber immediately began searching for venture capital funding.  In late 1993, Huber was introduced to Pat Nettles, a veteran leader of several telecom companies.  By early 1994, Nettles was brought on-board to run the business side of things and was soon the company’s first CEO (though owning a doctorate in particle physics, Nettles was no stranger to the technology side of things himself).

Nettles quickly convinced Huber that it was the long-distance phone companies, not the cable TV industry, that would be the best target for Huber’s invention.

The introduction between the two was orchestrated by Jon Bayless, a venture capitalist who’s firm Sevin Rosen Funds provided $3 million in start-up funding for the business in February 1994. more> https://goo.gl/ZdVzLE