Category Archives: Leadership

The flaws a Nobel Prize-winning economist wants you to know about yourself

BOOK REVIEW

Nudge: Improving Decisions about Health, Wealth and Happiness, Authors: Richard Thaler and Cass Sunstein.

By Eshe Nelson – Sorry to say it, but you’re not perfect. We like to believe that we are smart, rational creatures, always acting in our best interests. In fact, dominant economic theory these days often makes that assumption.

What was left of this illusion was further dismantled by the The Royal Swedish Academy of Sciences, who awarded the Nobel prize in economics to Richard Thaler, an American economist at the University of Chicago, for his pioneering work in behavioral economics, which examines humanity’s flaws—namely, why we don’t make rational economic decisions.

People can make bad economic choices based on something Thaler dubbed the “endowment effect,” which is the theory that people value things more highly when they own them. In other words, you’d ask for more money for selling something that you own than what you would be willing to pay to buy the same thing.

People experience the negative feeling of loss more strongly than they feel the positive sense of a gain of the same size. This is also impact by anchoring: If you are selling an item, your reference point is most likely to be the price you paid for something. Even if the value of that item is now demonstrably worth less, you are anchored to the purchase price, in part because you want to avoid that sense of loss.

This can lead to pain in financial markets, in particular. more> https://goo.gl/eR1B2B

The Chinese dream, the British dream, and the American dream, compared

By Zheping Huang – The world’s major powers might all have dreams, be they British or Chinese, South African or American. But these national dreams contain very different promises to each country’s citizens.

In her speech, May described the British dream as the vision that “life should be better for the next generation.” She said her grandmother, a former domestic servant who ended up having three professors and a prime minister among her grandchildren, was proof that the dream could be real.

But she admitted the dream was out of reach for many people today and promised to fix that. In this incarnation, the British dream isn’t so different than the American dream. One sign the British dream needs fixing? The large numbers of the ruling elite who come from this university and do this degree.

Every supreme leader of the Chinese Communist Party has his favorite political slogan. And so it is with the Chinese Dream for Xi jinping, who proposed the term shortly after he stepped into power in late 2012. Xi initially described the Chinese Dream as the vision of “the great rejuvenation of the Chinese nation.”

The term “American Dream” was coined by financier-turned-historian James Truslow Adams in his 1931 book The Epic of America. Adams defines it as the vision that everyone in America can climb the ladder if he works hard.

Today, the American dream is somewhat frayed. Only 23% of Americans believe that it is common for someone to start poor, work hard and get rich. more> https://goo.gl/BAooXf

Fanning the Flames of Chaos

President Trump’s cycle is clear: announce a goal, then back off to let others do the work.
By Kenneth T. Walsh – Trump isn’t a detail man. Throughout his careers in business and politics and during his presidency, he has floated above the landscape of specifics and set general directions. He attempts to sell his ideas to the country as a showman with a proclivity for hyperbole that borders on deception and sometimes crosses into falsehood. His goal, above all, is to score a personal victory and crush his opponents.

Now Trump’s it’s-all-about-me approach is being tested as never before as he copes with a new wave of crises, political battles and tragedies.

Trump’s pattern is clear. He dramatically announces a goal, dominating the news and becoming the center of attention, then backs off and leaves working out the details to others. He declares any success as his own achievement and portrays any failure or setback as someone else’s fault. In short, Trump fans the flames and then lets others fight the fire. He may be creating more chaos than he bargained for and fostering an out-of-control atmosphere which makes most Americans very nervous. more> https://goo.gl/y9XmRA

People Don’t Actually Want Equality. They Want Fairness.

BOOK REVIEW

On Inequality, Author: Harry Frankfurt.
Just Babies: The Origins of Good and Evil, Author: Paul Bloom.

By Paul Bloom – Bernie Sanders talks about economic inequality all the time, and it’s a message that resonates. You don’t need to be a socialist to worry about the divide between rich and poor in America.

People might be troubled by what they see as unjust causes of economic inequality, a perfectly reasonable concern given how much your income and wealth are determined by accidents of birth, including how much money your parents had, your sex, and the color of your skin.

We are troubled as well by potential consequences of economic inequality. We may think it corrodes democracy, or increases crime, or diminishes overall happiness.

Most of all, people worry about poverty—not that some have less, but rather “that those with less have too little.” more> https://goo.gl/wvLUdU

Updates from Chicago Booth

Local communities are driving global politics

By Raghuram G. Rajan – We live in a strange time.

Countries are more prosperous than ever before, new technologies that promise to solve our most intractable problems are on the horizon, and yet there is widespread unhappiness in some of the richest countries in the world. White males of working age in the United States are killing themselves through alcohol, drugs, and suicide at a rate that is as if 10 Vietnam Wars were raging simultaneously.

The immediate reason appears to be economic despair, as moderately educated workers lose jobs because of trade and automation. But workers lose (and gain) jobs regularly.

Why are even well-educated workers, holding decent middle-class jobs, so disheartened now? What should we do?

What we are seeing is a consequence of the information-technology revolution that started in the early 1970s, magnified by trade.

Every past technological revolution has been disruptive, prompted a societal reaction, and eventually resulted in societal change that helped us get the best out of the revolution. We have felt the disruption of the IT revolution, which has sometimes been punctuated by dramatic episodes such as the 2007–10 global financial crisis; we are now seeing the reaction in populist movements of the extreme left and right.

What has not happened yet is the necessary societal change, which is why so many despair of the future.

We are at a critical moment in human history, when wrong choices could derail human economic progress. more> https://goo.gl/aLSuFh

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Updates from GE

The Aviator: How A Young Pilot Became A Top-Flight 3D-Printing Engineer

By Maggie Sieger – At 15, Josh Mook got a job refueling planes and handling bags at a small airport near his hometown of Louisville, Kentucky. He’d work eight hours a day after school, then blow his earnings every Saturday taking flying lessons. “I couldn’t even drive myself there,” Mook recalls. “But I was flying solo.”

Mook has been jetting into the unknown ever since. Originally considering a career in industrial design, Mook moved to aerospace engineering because it combined his love of flying with his love of math and science.

After graduating from Purdue University in 2005, he joined GE Aviation as an engineer at the GE unit’s headquarters in Cincinnati. His first big success came when he found a clever way to fix a blade durability problem in a jet engine high-pressure compressor.

Additive manufacturing methods like 3D printing build parts from the ground up, layer by layer, by fusing together metal powder or plastics. The technology is suitable for prototyping and custom production, but GE is also using it to make production parts that would be difficult to manufacture using traditional methods. more> https://goo.gl/psf2a9

How Does Fascism Sneak Into Pop Culture?

BOOK REVIEW

Against the Fascist Creep, Author: Alexander Reid Ross.

By Elizabeth King – Donald Trump’s rise from real-estate businessman and washed-up reality television star to United States president has many people thinking anew about fascism.

The fascist tradition of using the arts as vehicles for expanding the movement is visible in the U.S. today, in some cases in eerily similar ways to the original rise of European fascism in the early 20th century.

In Futurism, we see some early examples of “cultural fascism,” if you will. Filippo Marinetti, founder of the Futurist movement, would be a good place to start. Futurism was founded in Italy in the early 1900s, and was one of the earliest proto-fascist and, in some cases, fascist movements. The idea [of Futurism] was to return to the noble myth [of] the new man who stands for family and tradition, but in a super-powered world of dynamism and adventure.

But if you look at the emergence of fascism and the development of fascism in its original form, one of the interesting things that you see in cultural avenues is that they are often primarily interested in disruption.

And, inevitably, there are liberals in mainstream institutions who accept the expressions of [fascist disruptors] insofar as it is expression, and insofar as it’s good to explore the arts and humanities. So there’s a tendency to accept these movements to some degree, and perhaps even adopt some of their mindsets under this position. This is incredibly dangerous, because fascism is so vitriolic and mercurial that it’s difficult to contain. more> https://goo.gl/gSRBwt

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Updates from GE

New Center Helps Scientists Reprogram The Immune System to Kill Cancer


By Tomas Kellner – Cell therapy is a complex process that involves more than manufacturing a pill. It requires a setup that resembles a biotech factory. “Cell therapy has the potential to cure everything from cancer to diabetes,” says Phil Vanek, general manager for cell therapy growth strategy at GE Healthcare. “But we need to make it affordable and scalable.”

Vanek’s business and others are racing to make that happen and deliver on cell therapy’s promise. He says that says that hundreds of patients have already benefited from CAR-T in clinical trials that have reported 80 percent success rates. Some 300,000 people could be receiving the treatment by 2024. A report by Roots Analysis estimates the T-cell therapy market, which includes CAR-T therapy, could read $30 billion by 2030.

Crucial to that race is a new cell therapy research and process-development facility called the Center for Advanced Therapeutic Cell Technologies (CATCT), which officially opened in Toronto on Thursday. It’s designed to help pharma companies, university researchers and technology companies like GE to scale faster. more> https://goo.gl/CRxNv4

Parasites, Security, and Conflict: The Origins of Individualism and Collectivism

By Daniel Hruschka – Ferdinand Tonnies, German sociologist and political activist, outlined two primary forms of sociality.

The first social form, Gemeinschaft or community, people worked together for collective goals and where individual wishes were subordinated to those of the group.

The second form, Gesellschaft or civil society, turned this relationship between individuals and the group on its head. Exemplified by modern nation-states, corporations, and voluntary clubs, Tonnies’ civil society existed to serve its members needs and wishes—not the other way around.

Often framing the distinctions in different terms, such as collectivism vs. individualism, embeddedness vs. autonomy, or particularism vs. universalism, these investigators discovered striking and reliable cross-population differences in how people endorse a group’s interests over their own goals, how people value personal relationships over impartial rules with strangers, and how they define themselves in terms of their social relationships rather than their own individual qualities and accomplishments.

Researchers have also found that a basic element of Tonnies’ Gemeinschaft—in-group loyalty—hitchhikes with a suite of other “traditional” values and behaviors.

Notably, people who are more concerned about loyalty are also more likely to value obedience to authority, to conform to group norms and to avoid impure, unnatural, unchaste and ungodly acts. more> https://goo.gl/Q3GXQj

This striking feature of Manila makes it an emblematic global city

BOOK REVIEW

A World of Homeowners: American Power and the Politics of Housing Aid, Author: Nancy Kwak.

By Nancy Kwak – In our urbanizing world, Manila, and a few other rapidly growing world cities, are not only just helpful in understanding how global cities work; they are indispensable.

The most striking aspect of life in Manila, however, lies not in physical attributes but rather in the legal status of the communities living above and around these waterways.

A city can be predominantly informal with lively black markets and mostly unregulated labor and housing. Informality does not have to occur on the margins of everyday life

Even a casual look at Manila, and other burgeoning global cities, shows that the functioning of the urban economy depends on informality. Informality allows workers to subsist on marginal incomes.

Informality provides homes where the formal market does not. Despite or perhaps because of their meager pay, these workers’ role in the global service economy is anything but marginal.

A shoe repairman sets up a roadside station where he fixes the shoes of the restaurant worker who in turn serves food to visiting investors and local business-people. Workers rest in informal settlements before getting up to drive the jeepneys that transport young men and women inexpensively to Makati’s call centers. There, they will answer questions and complaints from customers of global firms headquartered in New York, London, and more. All for a low wage.

Informality provides the foundation for local and global profits. more> https://goo.gl/T7ba1y