Tag Archives: Business

We need to rethink our economic assumptions

By Isabel V. Sawhill – To defeat Trump in the upcoming election, Democrats are advancing a set of proposals engineered to excite their base: a single payer health system, college for all, a guaranteed jobs program.

All are worthy of debate but perhaps the problems go deeper. Perhaps they go to the core of our beliefs about how the world works, what makes the economy tick, and how this relates to human welfare.

The dominant paradigm right now is what is sometimes called Neoliberalism which I define as a belief in the efficiency of markets. Those on the left believe that a market economy needs more than a little help from government. There are social costs and benefits that markets ignore; economic downturns are not self-correcting; and a lack of competition or transparency can harm consumers.

By addressing these and other shortcomings, government can free the market to do what it does best. Still, the central belief is that markets are the most efficient way to organize a society and by extension optimize individual freedom.

Critics of this paradigm note that it is fundamentally flawed. Human beings are not just consumers, they don’t always behave rationally, and they don’t always maximize their own well-being. They need a sense of community, they care about the welfare of others, and their sense of what matters goes well beyond a larger GDP. They respond not just to economic incentives but to the desire for respect from their peers, to social norms, and to moral or religious principles.

There is an efficient allocation of resources to go with every possible allocation of dollar votes and the distribution of dollar votes should be a communal decision arrived at by democratic means.

At the core of the neoliberal theory – arguably its most influential precept — is the idea that people are paid what they are worth.

If incomes are unequal it’s because skills and talents are unequal. The rich deserve their riches because, for the most part, they earned them. The poor lack income because they have too little education or the other skills needed to get ahead.

There is a lot that’s ignored in the wages equal marginal productivity equation: the asymmetry of bargaining power, the difficulty of discerning who contributes what, the stickiness of established wage norms and employment relationships, and the lack of competition. more>

Why the US bears the most responsibility for climate change, in one chart

By Umair Irfan – Humans are pumping more carbon dioxide into the atmosphere at an accelerating rate. But climate change is a cumulative problem, a function of the total amount of greenhouse gases that have accumulated in the sky. Some of the heat-trapping gases in the air right now date back to the Industrial Revolution. And since that time, some countries have pumped out vastly more carbon dioxide than others.

The wonderful folks at Carbon Brief have put together a great visual of how different countries have contributed to climate change since 1750. The animation shows the cumulative carbon dioxide emissions of the top emitters and how they’ve changed over time.

What’s abundantly clear is that the United States of America is the all-time biggest, baddest greenhouse gas emitter on the planet.

That’s true, despite recent gains in energy efficiency and cuts in emissions. These relatively small steps now cannot offset more than a century of reckless emissions that have built up in the atmosphere. Much more drastic steps are now needed to slow climate change. And as the top cumulative emitter, the US bears a greater imperative for curbing its carbon dioxide output and a greater moral responsibility for the impacts of global warming.

Yet the United States is now the only country aiming to withdraw from the Paris climate agreement. more>

China’s Belt and Road: The new geopolitics of global infrastructure development

By Amar Bhattacharya, David Dollar, Rush Doshi, Ryan Hass, Bruce Jones, Homi Kharas, Jennifer Mason, Mireya Solís, and Jonathan Stromseth – The growing strategic rivalry between the United States and China is driven by shifting power dynamics and competing visions of the future of the international order. China’s Belt and Road Initiative (BRI) is a leading indicator of the scale of China’s global ambitions.

Originally conceptualized as a “going out” strategy to develop productive outlets for domestic overcapacity and to diversify China’s foreign asset holdings, Beijing later branded the effort as its “Belt and Road Initiative.” While the initiative began with a predominantly economic focus, it has taken on a greater security profile over time.

China’s initiative has attracted interest from over 150 countries and international organizations in Asia, Europe, the Middle East, and Africa. This is due, in part, to the fact that the initiative is meeting a need and filling a void left by international financial institutions (IFI) as they shifted away from hard infrastructure development. But there is a real possibility that the BRI will follow in the footsteps of the IFIs, encounter the same problems, and falter.

BRI shouldn’t be seen as a traditional aid program because the Chinese themselves do not see it that way and it certainly does not operate that way. It is a money-making investment and an opportunity for China to increase its connectivity.

The initiative has a blend of economic, political, and strategic agendas that play out differently in different countries, which is illustrated by China’s approach to resolving debt, accepting payment in cash, commodities, or the lease of assets. The strategic objectives are particularly apparent when it comes to countries where the investment aligns with China’s strategy of developing its access to ports that abut key waterways. more>

Dignity for drivers: the DGB campaign for ‘fair mobility’

When is a posted worker in Europe not a posted worker? When he’s a truck driver, it seems.
By Martin Stuber and Michael Wahl – ‘A monthly pay of €1,000, no holidays, living separately from their families for two years—the bare figures alone are outrageous,’ the German magazine Stern reported on truck drivers from the Philippines who discovered the ‘wild west’ of Europe’s roads as posted workers for Polish companies. They had to share their driver cabin with a colleague and work, sleep and cook there.

Action on the European level is urgently needed to tackle such cross-border ‘day labor’.

Europe, however, seems to shy away from this solution. European decision makers have failed once again to create new rules on road haulage, in advance of the looming elections to the European Parliament in May. Where some saw too much liberalization, others demanded even more deregulation—and in the end there was no European consensus, neither on posting rules nor on driving and rest times.

Drivers who deliver services on behalf of western-European companies under an eastern-European working contract commonly only benefit from eastern-European minimum wages—around €500 a month. more>

‘Hate Is Way More Interesting Than That’: Why Algorithms Can’t Stop Toxic Speech Online

Researchers have recently discovered that anyone can trick hate speech detectors with simple changes to their language—and typos are just one way that neo-Nazis are foiling the algorithms.
By Morgan Meaker – Erin Schrode didn’t know much about the extreme right before she ran for Congress. “I’m not going to tell you I thought anti-Semitism was dead, but I had never personally been the subject of it,” she says.

That changed when The Daily Stormer, a prominent neo-Nazi website, posted an article about her 2016 campaign.

For years, social media companies have struggled to contain the sort of hate speech Schrode describes. When Facebook founder Mark Zuckerberg spoke before the Senate in April of 2018, he acknowledged that human moderators were not enough to remove toxic content from Facebook; in addition, he said, they needed help from technology.

“Over time, we’re going to shift increasingly to a method where more of this content is flagged up front by [artificial intelligence] tools that we develop,” Zuckerberg said.

Zuckerberg estimated that A.I. could master the nuances of hate speech in five to 10 years. “But today, we’re just not there,” he told senators.

He’s right: Researchers have recently discovered anyone can trick hate speech detectors with simple changes to their language—removing spaces in sentences, changing “S” to “$,” or changing vowels to numbers. more>

Updates from Ciena

The implications behind service and content provider requirements for coherent optical solutions
By Helen Xenos – In 2007, I was asked to write a white paper about this really cool new “coherent technology” our team was working on and explain how the coherent receiver would completely revolutionize optical networks as we knew them. As I tried to get started, I quickly learned that the only source for content were the engineers actually working on the project – my efforts of scrolling through pages upon Google search pages netted zero information.
Article
The evolving coherent optical networking landscape: a deep dive

In the end, I wrote the paper by transcribing what a dear co-worker and mentor, Michel Belanger, who was one of the designers, patiently explained to me (it took several hours). He made sure I understood the significance of coherent technology and how it would change the game in optical networks.

Fast forward a dozen years – there is no shortage of information pertaining to coherent technology, and there are about a dozen coherent module and system suppliers. Coherent optical systems have become the networking foundation that underpins the digital economy that we know today.

Network providers are ubiquitously deploying coherent to scale networks for capacity, reduce transport costs and provide a better end-user experience to their customers. In fact, they are now looking at expanding the role that coherent technology plays in the network and deploy it in space and power/optimized applications in addition to traditional infrastructure, submarine and data center interconnect (DCI) build-outs.

As coherent technology plays an increasingly critical role for successful network evolution, we must step back and ask ourselves:

  • What do network providers need from their coherent solution partners to succeed?
  • What are the implications of the divergent customer and networking requirements to the suppliers of the technology?

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Updates from Ciena

4 critical requirements for the next-gen photonic layer
By Paulina Gomez – Today’s market dynamics are making it harder for network providers to effectively compete in an environment where revenue per bit is declining, and network bandwidth requirements are exploding. In the face of these business challenges, network providers are realizing they must evolve and transform their networks towards a more programmable infrastructure that can scale and respond on demand, to meet changing customer expectations and unpredictable traffic requirements.

While coherent optics are a critical element in enabling a programmable optical infrastructure, alone they are not enough to fulfill operators’ requirements for successful network transformation.

So what else is needed?

The photonic layer is the foundation of this programmable infrastructure, leveraging the latest coherent optical technology to deliver maximum scale at the lowest cost per bit. When examining the requirements of metro and long-haul infrastructure applications, including global data center interconnect (DCI) networks, there is a growing need for an agile, resilient and intelligent photonic layer.

This Reconfigurable Add-Drop Multiplexer (ROADM)-based optical foundation leverages flexible, instrumented photonics and Layer 0 software control to scale the network for maximum capacity at the lowest space, power, and cost per bit. more>

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Can Sustainable Agriculture Survive Under Capitalism?

By Sophie Yeo – Agriculture is responsible for around 9 percent of the United States’ greenhouse gas emissions—from fertilizer releasing nitrous oxide, for instance, or from cows emitting methane. And large-scale farming isn’t just bad for the environment; the application of pesticides has serious health implications for those who work on farms. Recent studies have linked high pesticide exposure to a poor sense of smell and a doubled risk of cardiovascular disease among Latino farm workers.

Sustainable agriculture offers a way to bypass these pitfalls. Instead of filling their baskets at Walmart, ethically minded consumers can buy local and organic produce directly from the farmer who grew it, whether at farmers’ markets or through a community-supported agriculture program, reducing food miles and avoiding the industrial contamination and erosion associated with conventional agriculture.

But Ryanne Pilgeram worries that this improved model of agriculture is fundamentally incapable of surviving in a corporatized America—and that the sacrifices these people are making to survive are steadily chipping away at their claims of sustainability.

One problem is the price of the produce.

Then there’s the problem that the system ultimately rests on a sequence of compromises and sacrifices that the farmers themselves must make, regardless of their ideological commitment to the cause. These sacrifices are personal, environmental, and social. “Only the select few, the … richest amongst us are really taking care of land in a truly sustainable way,” one farmer reported.

“The economic system that we have in place makes it impossible, really, to create a socially just food system. It’s not possible under capitalism,” Pilgeram says. more>

Globalization at a Crossroads

By Gordon Brown – Whether or not one realizes it, 2018 may have been a historic turning point. Poorly managed globalization has led to nationalist “take-back-control” movements and a rising wave of protectionism that is undermining the 70-year-old American-led international order. The stage is set for China to develop its own parallel international institutions, auguring a world divided between two competing global-governance systems.

Whatever happens in the next few years, it is already clear that the 2008-2018 decade marked an epochal shift in the balance of economic power.

Whereas around 40% of production, manufacturing, trade, and investment was located outside the West in 2008, over 60% is today.

For decades after its formation in the 1970s, the Group of Seven (G7) – Canada, France, Germany, Italy, Japan, the United Kingdom, and the US – essentially presided over the entire world economy. But by 2008, I and others had begun to discern a changing of the guard. Behind the scenes, North American and European leaders were debating whether it was time to create a new premier forum for economic cooperation that would include emerging economies.

These debates were often heated. On one side were those who wanted to keep the group small (one early US proposal envisioned a G7+5); on the other side were those who wanted the group to be as inclusive as possible. To this day, the results of those earlier negotiations are not fully understood.

The current trade conflict between the United States and China is symptomatic of a larger transition in global financial power. On the surface, the Trump administration’s confrontation with China is about trade, with disputes over currency manipulation thrown in for good measure. But from Trump’s speeches, one gathers that the real battle is about something bigger: the future of technological dominance and global economic power.

While Trump at least detects the growing threat to American supremacy, he has ignored the most obvious strategy for responding to it: namely, a united front with US allies and partners around the world. Instead, Trump has asserted a prerogative to act unilaterally, as if America still rules over a unipolar world. As a result, a trail of geopolitical ruin already lies in his wake. more>

How a World Order Ends

And What Comes in Its Wake
By Richard Haass -A stable world order is a rare thing. When one does arise, it tends to come after a great convulsion that creates both the conditions and the desire for something new. It requires a stable distribution of power and broad acceptance of the rules that govern the conduct of international relations. It also needs skillful statecraft, since an order is made, not born. And no matter how ripe the starting conditions or strong the initial desire, maintaining it demands creative diplomacy, functioning institutions, and effective action to adjust it when circumstances change and buttress it when challenges come.

Eventually, inevitably, even the best-managed order comes to an end. The balance of power underpinning it becomes imbalanced. The institutions supporting it fail to adapt to new conditions. Some countries fall, and others rise, the result of changing capacities, faltering wills, and growing ambitions. Those responsible for upholding the order make mistakes both in what they choose to do and in what they choose not to do.

But if the end of every order is inevitable, the timing and the manner of its ending are not. Nor is what comes in its wake. Orders tend to expire in a prolonged deterioration rather than a sudden collapse. And just as maintaining the order depends on effective statecraft and effective action, good policy and proactive diplomacy can help determine how that deterioration unfolds and what it brings. Yet for that to happen, something else must come first: recognition that the old order is never coming back and that efforts to resurrect it will be in vain.

As with any ending, acceptance must come before one can move on.

Although the Cold War itself ended long ago, the order it created came apart in a more piecemeal fashion—in part because Western efforts to integrate Russia into the liberal world order achieved little. One sign of the Cold War order’s deterioration was Saddam Hussein’s 1990 invasion of Kuwait, something Moscow likely would have prevented in previous years on the grounds that it was too risky. Although nuclear deterrence still holds, some of the arms control agreements buttressing it have been broken, and others are fraying.

The liberal order is exhibiting its own signs of deterioration. Authoritarianism is on the rise not just in the obvious places, such as China and Russia, but also in the Philippines, Turkey, and eastern Europe. Global trade has grown, but recent rounds of trade talks have ended without agreement, and the World Trade Organization (WTO) has proved unable to deal with today’s most pressing challenges, including nontariff barriers and the theft of intellectual property.

Resentment over the United States’ exploitation of the dollar to impose sanctions is growing, as is concern over the country’s accumulation of debt. more>