Archimedes’ Hot Tub

Sitting in my political economy class yesterday I watched Roberto Unger and Ricardo Hausmann debate economics. Unger asserted, and Hausmann all but conceded, that economics does not respond to empirical evidence by throwing out its models for looking at the world. Instead, it blames the world for problems with the models, as in, ‘oh, the model was right, but there was a market failure. People didn’t do what they should.’

It reminded me of the satire on economic man in Dosteovsky’s Notes from Underground:

Though man has come to see more clearly than in barbarous times, he is still far from having grown accustomed to acting as reason and science dictate. But even so you are perfectly confident that he will not fail to grow accustomed once one or two old bad habits have passed and once common sense and science have thoroughly re-educated and given a normal direction to human nature. You are confident that man will then voluntarily cease making mistakes and…refuse to set his will at variance with his normal interests. [page 24, Pevear and Volokhonsky translation]

“…our wantings are for the most part mistaken owing to a mistaken view of our profit. We sometimes want pure rubbish precisely because, in our stupidity, we see this rubbish as the easiest path to the attainment of some preconceived profit. Well, but when it’s all explained, worked out on a piece of paper (which is quite possible because, after all, it’s vile and senseless to believe beforehand that there are certain laws of nature which man will never learn) — then , to be sure, there will be no more so-called desires. For if wanting someday gets completely in cahoots with reason, then essentially we shall be reasoning  and not wanting, because it really is impossible, for example, while preserving reason, to want senselessness and thus knowingly go against reason and wish yourself harm….And since all wantings and reasonings can indeed be calculated — because after all they will someday discover the laws of our so-called free will — then consequently, and joking aside, something like a little table can be arranged, so that we shall want according to this little table.” [ibid., pp. 26-27]

If I didn’t know that homo economicus was a 20th century creation, I would’ve thought Dosteovsky was writing about it.

I like poetry that speaks to the ordinary as well as the sublime. T.S. Eliot’s ‘Burnt Norton’ starts off with

Time present and time past

Are both perhaps present in time future,

And time future contained in time past.

If all time is eternally present

All time is unredeemable.

Heady stuff indeed (and surprising — I thought Eliot would say all time is redeemable). But later Eliot writes

Go, said the bird, for the leaves were full of children

Hidden excitedly, containing laughter.

And I remember yesterday, when the laughter of my children and their friends pealed from under fallen leaves.

A piece I wrote on E-Ink and its challenges gets a mention in Dan Bloom’s This ink is for reading, a look at PrimeView, the company that bought E-Ink. PrimeView grew out of a company that got its start making toilet paper in the 1930s. There’s a real spirit of innovation there.

The Wall Street Journal updates the progress, sometimes bumpy,  that Group Danone is making in its efforts to develop emerging markets. I like how Group Danone keeps trying new things, and has borrowed ideas from countries with low income levels and brought them both to other such countries and to established markets.
I wonder if a company with a different cost structure might have succeeded in rural Bangladesh.

Blockbuster Video is becoming a dud of a business. Forbes, in What Blockbuster’s bankruptcy teaches us about economics, blames it for failing to recognize the innovator’s dilemma:

“Blockbuster concentrated on perfecting its existing service while beating competitors offering the same instead of looking into ways that outsiders might destroy its business model altogether,” writes John Tamny.

Wrong. Way back in the mid-1990s, Blockbuster was exploring how to deliver streaming video directly to customers. Its plan at the time was to use superservers from a startup called Parallan (later purchased by IBM) to handle the distribution. This was pre-Netscape IPO, but still an era when ‘convergence’ of consumer electronics and computing was expected to take over our living rooms (yes, Virginia, technology hype comes in cycles. Temper your hope with cynicism when considering the iPad).

Blockbuster obviously recognized the potential for having its business model destroyed. But the Parallan plan failed, not due to technology so much as the problems of getting distribution rights (or so I was told by my sources; Blockbuster never returned my calls and to my knowledge never publicly discussed the project). What it seems to have missed was the damage a more basic approach could do. Netflix added a return component to the book club/music club model and put a nice Web interface on it. Not nearly as cool as streaming video into the home, but it worked.

The economics lesson, then, is that simple twists take less time and investment (i.e., risk) than visionary leaps.

Michael Wolff thinks priests get into the business to molest boys. I quote: “This was a driving motivation of priests joining the church: sex with boys.”

I’m not Catholic, and have no idea whether Wolff has any religious leanings. But it’s ‘read less know less’ to say the entire Catholic priesthood is a man-boy love society. It’s like Glenn Beck suggesting the ’social justice’ movement is the same as Communism and Facism (all those far right-wingers look alike, especially when they’re disguised as liberal churchgoers. Or Mormons).

First result on a simple search for statistics about homosexual priests collects a number of references to surveys and thumbnail estimates of the number of gay priests. The highest number suggested credibly is 50 percent. Another references 3,000 pederasty cases, a terribly high number (not that anything higher than zero wouldn’t be terrible). But wait — it estimates twice that many priests are in adult relationships with homosexuals, and four times as many are sleeping with adult women. That’s an awful lot of men acting out to disguise their real longings.
Wolff is a columnist and can’t be expected to temper himself. He’s too busy salivating over the stories breaking about European priest pederasty bringing down the pope. (I wonder what he’ll make of the news out of the Vienna Boys Choir.)
Let’s cry Wolff ourselves — he’s not really saying that only men who like boys become priests. He knows better than that, and knows we do, too. He’s saying all priests are gay, and all gay men want to sleep with boys.

Yeah, okay,  I’m guilty both of a tired pun and twisting his words. Still, I wonder if Newser’s big enough for Wolff to get heat over his absurd generalization.

Goldman Sachs warned that bad press is now one of its ongoing business risks. The Wall Street Journal noted the ‘New Risk’:

In its annual report, the New York company [Goldman]  said “adverse publicity” could have “a negative impact on our reputation and on the morale and performance of our employees, which could adversely affect our businesses and results of operations.”

The Journal refrained from asking whether Goldman’s employees will need raises to keep them from fleeing the firm for all those on Wall Street the press loves. But it did tuck in this note at the end: Goldman Sachs’ board “rejected demands from shareholders that the firm investigate excessive pay and take steps to recoup some of the awards given to executives.” Guess Goldman didn’t read the Supreme Court decision about how business works.

A new Kaiser Family Foundation study says that kids 8 to 18 spend almost 8 hours a day immersed in electronic media. My kids might like to do that, but they’re not even here and awake 8 hours a day in most cases. They’re at school, or playing sports, or at a friend’s house (playdates are increasingly video-game driven, it is true).
But on school days, the TV is off during meals. They go to an after-care program that limits screen time to 30 minutes or so. When they come home, they spend at least an hour or two on homework, or basketball practice, or piano, or Cub Scouts, or some family project. The TV is generally off during meals. After dinner, they finish their homework or they read or they play until it’s time for bed, when we work on things like spelling, and we read. But even if we had the TV on the entire time they were awake, it would amount to no more than four hours of electronic media.
Obviously they don’t yet have cell phones. Though the older one *really* wants one. ‘Dad, can i get a cell phone? When can I get a cell phone? So-and-so has a cell phone and he’s in 5th grade. So I can get a cell phone when I’m in 5th grade, right? Dad, can I get a cell phone?’

I’m old-fashioned and still think of  phones as need-based, things you get when you need to make calls (i.e., I want to know where you are). I don’t disagree with articles like this one, Why an iPhone could actually be good for your three-year-old, and I have told other parents that gaming helps kids learn to collaborate, an important life skill. I also know that gaming is a kind of social currency for kids, especially boys, just like sports. I know my son wants a cell phone for gaming and sending text messages, and because kids he likes have them and he wants to be like them. But I also know how easy it is to do something you’ll regret online. I can only imagine what sort of stuff I would have posted in my youth.

So I’m starting now to help instruct him on what to do and not to do online. I set up a Web-based email for him, so his email use isn’t tethered to my computer forever (though practically speaking, it’s tethered there for now). I’m there to help him learn about spam and to make sure he doesn’t click on things. I’m not there to read his emails (though he does ask for spelling help).
I hope he doesn’t abandon everything else for the sake of the screen. But if he does, maybe he’ll become a national champion, like this kid.

Sandy Pentland, an MIT researcher who looks back to look forward, says that our pre-language communications skills are so important that
“We think face time with colleagues is vital, as much as 2.5 times as important to success as additional access to information. Results aren’t final, but we think we can increase productivity by 10% at no cost just by rearranging the environment to promote more employee interaction.”

More on his thoughts on why this is so in this interview on whether we can measure the power of charisma.

“Compulsively readable” was what the Boston Globe had to say about Shankar Vedantam’s new book, “The Hidden Brain.” I met Shankar via the Templeton-Cambridge Journalism Fellowships, and I’m  not surprised. All of us who know him admire his work ethic, his clearheadedness and his extraordinary ability to make obscure things make sense. I’m looking forward to reading the book — and hoping he’ll give a reading while he’s here.