Tag Archives: Business

How Capitalism Actually Generates More Inequality

By Geoffrey M. Hodgson – At least nominally, capitalism embodies and sustains an Enlightenment agenda of freedom and equality.

Typically there is freedom to trade and equality under the law, meaning that most adults – rich or poor – are formally subject to the same legal rules. But with its inequalities of power and wealth, capitalism nurtures economic inequality alongside equality under the law.

Today, in the USA, the richest 1 per cent own 34 per cent of the wealth and the richest 10 per cent own 74 per cent of the wealth. In the UK, the richest 1 per cent own 12 per cent of the wealth and the richest 10 per cent own 44 per cent of the wealth. In France the figures are 24 cent and 62 per cent respectively. The richest 1 percent own 35 percent of the wealth in Switzerland, 24 per cent in Sweden and 15 percent in Canada.

To what extent can inequalities of income or wealth be attributed to the fundamental institutions of capitalism, rather than a residual landed aristocracy, or other surviving elites from the pre-capitalist past? A familiar mantra is that markets are the source of inequality under capitalism. Can markets be blamed for inequality?

In real-world markets different sellers or buyers vary hugely in their capacities to influence prices and other outcomes. When a seller has sufficient salable assets to affect market prices, then strategic market behavior is possible to drive out competitors.

Would more competition, with greater numbers of market participants, fix this problem? If markets per se are to be blamed for inequality, then it has to be shown that competitive markets also have this outcome. more>

The Wounds Won’t Heal

By David French – We usually place outsized emphasis on elections that define our politics and too little emphasis on the values that define our culture.

But it was the nomination of Kavanaugh and the wrenching debate about core cultural and constitutional values that dominated American discourse these past few weeks. It’s a debate that illustrated the fundamentally different ways in which conservatives and progressives view the world, and it unlocked not just an intellectual response but an emotional response that has radicalized otherwise reasonable and temperamentally moderate individuals into believing that the other side hates even the good people in their own tribe.

And so when Ford came forward, it’s as if her allegations landed in two different countries. The good-faith residents of Redworld were skeptical and said, “Prove it.” The good-faith residents of Blueworld believed Ford and said, “Finally, she has a chance for justice.” The presumptions were diametrically opposite, and everything that followed turned on those different presumptions. more>

Updates from Adobe

BRIT(ISH): Visualizing the UK with Type
By Isabel Lea – I’ve always believed the role of a designer to be like that of a translator. For as long as I can remember, I’ve been obsessed with words and languages, and so I’ve naturally gravitated towards a kind of design that allows me to translate these things from the written to the visual, bringing them to life.

As the first Adobe Creative Resident based in the United Kingdom, I’ve been afforded the opportunity to spend a year visualizing culture and language in our everyday lives through design. BRIT(ISH) is my starting project for the residency. The project is an attempt to explore insights and ideas about being young and British during this turbulent time. I aimed to visualize often-intangible emotions in a playful way that other people can understand. Each object in the collection directly responds to quotations, insights, and stories I collected from the environment around me in the UK.

For me, projects that respond to stories and insights are often the most interesting because they add a level of unpredictability to the process and can result in something much more authentic. more>

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Four Lessons (Not) Learned From The Financial Crisis

By John T. Harvey – That’s fantastic. Good work, Presidents Bush, Obama and Trump. But just because we bailed the water out of the sinking ship doesn’t mean we patched all the holes. And while the former is a necessary first step, without the latter we won’t remain upright for long.

So what didn’t we fix that could still potentially cause a catastrophic leak? Too much. Here’s a short list of what we should have learned but didn’t.

  1. If you are going to bail someone out, bail out the debtor and not the creditor
  2. Financial institutions should be very closely supervised
  3. The market is not always right
  4. Deficit spending doesn’t cause inflation or bankruptcy

Most people assume that what financial institutions do is loan out other people’s money. That is, of course, part of what they do, but what is far more significant is the fact that they create money. I don’t just mean the intro-econ, money-multiplier story where banks make loans after the Federal Reserve injects new funds. In fact, that view is so wrong that economics professors are beginning to eliminate it from their curriculum (not nearly fast enough, but it’s getting there).

Rather, the standard scenario is one in which banks increase the money supply first by making loans to customers and then the Federal Reserve steps in second to supply the necessary reserves. Financial institutions make money out of thin air, not from someone’s savings, and if that leaves the system short of reserves then the Fed buys securities from banks. They do this to prevent interest rates from rising above their targeted rate and therefore the central bank accommodates rather than dictates when it comes to the supply of money. more>

Anthropic arrogance

By David P Barash – Welcome to the ‘anthropic principle’, a kind of Goldilocks phenomenon or ‘intelligent design’ for the whole Universe. According to its proponents, the Universe is fine-tuned for human life.

The message is clearly an artificial one and not the result of random noise. Or maybe the Universe itself is alive, and the various physical and mathematical constants are part of its metabolism. Such speculation is great fun, but it’s science fiction, not science.

It should be clear at this point that the anthropic argument readily devolves – or dissolves – into speculative philosophy and even theology. Indeed, it is reminiscent of the ‘God of the gaps’ perspective, in which God is posited whenever science hasn’t (yet) provided an answer.

Calling upon God whenever there is a gap in our scientific understanding may be tempting, but it is not even popular among theologians, because as science grows, the gaps – and thus, God – shrinks. It remains to be seen whether the anthropic principle, in whatever form, succeeds in expanding our sense of ourselves beyond that illuminated by science. I wouldn’t bet on it. more>

Lessons From The Greek Tragedy Unlearnt

By Simon Wren-Lewis – Private banks were happy to lend to the Greek government because they mistakenly believed their money was as safe as if they were lending to Germany.

Other governments first delayed and then limited Greek default because they were worried about the financial health of their own banks. They replaced privately held Greek debt with money the Greek government owed to other Eurozone governments.

From that point voters would always want all their money back. In an effort to achieve that the Troika demanded and largely achieved draconian austerity and a vast array of reforms.

The result was a slump which crippled the economy in a way that has few parallels in history. Most economists understand that in situations like this it is ridiculous to insist that the debtor pays all the money back. For basic Keynesian reasons this insistence just destroys the ability of the debtor to pay: it is not a zero sum game between creditor and debtor. This is why so much of German debt was written off after WWII.

By July 2015 the Greek government was able to pay for its spending with taxes, so all it needed was loans rolled over. The Troika would only do that if the Greek government started running a large surplus to start paying back the debt i.e. further austerity. more>

Updates from Adobe

Inside the Mind of Digital Dreamer Archan Nair
By Charles Purdy – Self-taught visual artist and illustrator Archan Nair creates complex, imaginative, and lushly colorful digital art that expresses his fascination with the interconnectedness of the universe and the mysteries of existence. Working primarily in Adobe Photoshop CC, Nair creates compositions for a wide variety of clients, including Sony, GQ, Samsung, and Nike, as well as his own personal projects.

There are many ways to create a rough canvas on which to begin building an abstract Photoshop creation in Nair’s style. Nair started with a radial gradient layer; he used the Gradient Editor dialog box to experiment until he had a gradient he liked, consisting of two tones of reddish tan. (If you’re new to the Gradient Editor, check out this primer.) He then duplicated this layer, set the duplicate’s opacity to 15%, and changed the layer’s blending mode to Color Burn.

He added a photograph of a woman on a new layer, set that layer’s opacity to 25%, and changed the layer’s blending mode to Overlay. Then he duplicated that layer and changed the duplicate layer’s blending mode to Soft Light.

After making further adjustments, Nair added a layer on which to draw some outlines of the woman’s face, using a brush with sharp edges for definition. Then he deleted the layer with the original photograph on it. more>

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A Warning From Europe: The Worst Is Yet to Come

By Anne Applebaum – That moment has passed. Nearly two decades later, I would now cross the street to avoid some of the people who were at my New Year’s Eve party. They, in turn, would not only refuse to enter my house, they would be embarrassed to admit they had ever been there.

In fact, about half the people who were at that party would no longer speak to the other half. The estrangements are political, not personal.

Poland is now one of the most polarized societies in Europe, and we have found ourselves on opposite sides of a profound divide, one that runs through not only what used to be the Polish right but also the old Hungarian right, the Italian right, and, with some differences, the British right and the American right, too.

Perhaps this is unsurprising. All of these debates, whether in 1890s France or 1990s Poland, have at their core a series of important questions: Who gets to define a nation? And who, therefore, gets to rule a nation? For a long time, we have imagined that these questions were settled—but why should they ever be?

You can call this sort of thing by many names: nepotism, state capture. But if you so choose, you can also describe it in positive terms: It represents the end of the hateful notions of meritocracy and competition, principles that, by definition, never benefited the less successful. A rigged and uncompetitive system sounds bad if you want to live in a society run by the talented.

But if that isn’t your primary interest, then what’s wrong with it?

Sooner or later, the losers of the competition were always going to challenge the value of the competition itself.

More to the point, the principles of competition, even when they encourage talent and create upward mobility, don’t necessarily answer deeper questions about national identity, or satisfy the human desire to belong to a moral community.

The authoritarian state, or even the semi-authoritarian state—the one-party state, the illiberal state—offers that promise: that the nation will be ruled by the best people, the deserving people, the members of the party, the believers in the Medium-Size Lie. more>

The Temp Economy and the Future of Work

BOOK REVIEW

Temp: How American Work, American Business and the American Dream Became Temporary, Author: Louis Hyman.

By Gabrielle Levy – The way people work is changing. Machines and computers reduce the need for labor. Companies have shifted to hiring relatively few permanent staff and opting instead to strike temporary contracts with outside workers.

Uber, the ride-sharing behemoth, is perhaps the best known of these modern companies, with its thousands of drivers operating as independent contractors, but it did not invent the form. The roots of the gig economy go all the way back to the years after World War II, with the creation of the first temp and consulting agencies, including Manpower Inc. and McKinsey & Co.

We will see work become less tied to a particular employer in lots of ways. For some people, that’s fantastic, If you’re a consultant or independent contractor and you have lots of control over your life and you get paid pretty well, then this is a fabulous turn. And if you are a gig worker and you are running errands for somebody else, it’s kind of a nightmarish turn.

Do people really want full-time work? Do they want secure work? And the answer is, yes and no.

Everybody likes to work when they want to work, just like every employer wants workers who will start and stop as needed.

How do we create a system where work can be flexible but we can still have a baseline level of security for our health and our families that allows us to take risks and be entrepreneurial and explore new economic possibilities? more>

Updates from Ciena

The Adaptive Network: Why automation alone isn’t enough
By Keri Gilder – Just imagine, instead of 70, your heart rate was at 100 beats per minute. This could be a warning sign that you are on the verge of having a heart attack.

If your doctor were to get this information in real time, they could check the readings against your medical records and see that this is completely out of the norm and then warn you to seek medical assistance immediately.

However, if your personal trainer received that same information, would they reach the same conclusion as your doctor? Your trainer has access to a different database, which might show your resting heart rate as well as the rate during high-intensity training. Knowing that you are likely exercising, they would instead conclude that there is no need to go to the hospital after all.

This clearly demonstrates that just accepting raw data without filtering and proper analysis is no longer good enough and can potentially have serious repercussions. Instead, it is critical that we have diversity of thought when it comes to how we interpret data.

This is not just true for our health or other day-to-day scenarios, but can also be applied to the communication networks that carry and house our information. more>

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