Thinks 332

Michael Dell: “”I have this deep-seated belief that a lot of people don’t realize their full potential because they’re too afraid to fail and too afraid to make mistakes. There’s so many ups and downs and twists and turns. In the first couple of years of business [we] could have failed at least 10 times, with all sorts of things that were going on. But that’s reality, and that’s how I think great businesses are built.” [via cnet]

John Chamberlain: “Once capitalism is seen as a profit-and-loss system, with everyone at the mercy of the sovereign consumer’s whims as he balances one marginal desire against another, the incidence of anticapitalistic criticism must shift. The capitalist who can make money in a consumer-oriented system is the one who shrewdly anticipates the customer’s desires, and under such a dispensation profit – far from being “surplus value” – becomes the deserved reward for acumen.” [via CafeHayek]

Donald Boudreaux: “Deficit financing allows today’s citizens-taxpayers to push the costs of today’s government activities onto future generations. Deficit financing thus enables today’s citizens-taxpayers to live at the expense of others. And people able to live at the expense of others will live excessively expensively. Access to deficit financing loosens the limits on government growth. Therefore, a balanced-budget requirement would indeed limit the growth of government…When you buy a car with borrowed funds, you – the same individual who borrows the funds – are the individual responsible for repaying them. So you borrow and spend prudently. But with deficit financing by government, the individuals who borrow the funds (that is, today’s citizens-taxpayers and their political representatives) are not the same individuals who are responsible for repaying them. That responsibility falls on other people; it falls on future citizens-taxpayers, many of whom aren’t yet born. Therefore, access to deficit financing gives today’s citizens-taxpayers (and their political representatives) freedom to spend more lavishly than they would were they required to pay for all government projects out of current taxes.”

Thinks 331

Rita McGrath: “One of the great puzzles in business is why some entrepreneurs benefit tremendously from the unfolding of a strategic inflection point, while others who “saw” it equally clearly disappeared into the mists of forgotten business lore. One explanation is that introducing even prescient innovations into an unripe ecosystem is as much a recipe for disaster as failing to innovate in the face of a pending inflection point. Being ahead of one’s time is as miserable as being too late…A strategic inflection point consists of what Andy Grove called a 10X shift in the forces that affect a business. As he pointed out, such a change represents a technological transition in which an older regime is in the process of being replaced by a newer one. If a business is prepared to navigate such a transition, by retiring older technologies, embracing newer ones, and transitioning their activities, an inflection point can represent a valuable opportunity for growth. It can also presage a decline in business as older ways of doing things are replaced with new ones and revenues erode accordingly.”

Atanu Dey on CORE (a curriculum to learn about the economy): “We have to be taught and we have to learn how to think about our world, just like we have to be taught how to read, write, reason logically and do arithmetic. Unlike comprehending and speaking natural languages, we cannot instinctively read, write, reason or do arithmetic; we have to learn. Reading, writing and doing arithmetic is “unnatural.”… India is what it is (desperately poor) because the vast majority of Indians prefer socialism over capitalism. Indians are not systematically stupider or lazier than other more prosperous collectives; they are just systematically more ignorant. Poverty is not necessarily the result of moral failure; most often it is the outcome of a broad-based societal ignorance of basic truths and principles about human nature and society.”

Read: Never by Ken Follett

Thinks 330

Shane Parish: “There is nothing that gets in the way of success more than avoidance. We avoid hard conversations. We avoid certain people. We avoid hard decisions. We avoid evidence that contradicts what we think. We avoid starting a project until we’re certain of the outcome…Everything becomes harder until we stop avoiding what’s getting in the way. The longer you wait the higher the cost.”

James Buchanan: “Persons, whether they be scientists, moral philosophers or ordinary folk, can be roughly classified into two sets – those who are described as having a liberal predisposition and those who do not. And by a “liberal predisposition” I refer, specifically, to an attitude in which others are viewed as moral equals and thereby deserving of equal respect, consideration and, ultimately, equal treatment.” [via CafeHayek]

Read: The Judge’s List by John Grisham


Thinks 329

Tyler Cowen: “It’s…important to understand that the payments market in the United States is a $100 trillion dollar market. Yes, $100 trillion. Any firm that captures even a small share of this market is going to be big. Credit cards are actually a small part of payments, about $7 trillion with roughly a 2% transaction fee or a $140 billion market. (Quick check. Credit card companies had 2020 revenues of $176 billion).  ACH debit and credit transfers are the big market, $65 trillion, which at a .5% transaction fee amounts to a $325 billion market (this is retail price, wholesale is lower). Thus, payments revenue is on the order of $465 billion. A small share of $465 billion is a very big market (and that is just the US market)…. Crypto payments are in principle at least an order of magnitude cheaper than ACH payments…Crypto payments are the future.”

Michael Munger: “The argument for markets is not the perfection of markets or of the price mechanism. It’s the imperfection of the world, in which this is the best system for elaborating division of labour to foster specialisation. Of course division of labour also existed in Pharaonic Egypt. But in free markets you break out of the small command economy and don’t need to know the person that you’re buying things from. It cuts the transactions cost of impersonal exchange. There is no alternative system that increases the wealth of most people, most of the time, by more. Or that reduces poverty by more, not even close.”

Paul Bloom: “The simplest theory of human nature is that we work as hard as we can to avoid such experiences. We pursue pleasure and comfort; we hope to make it through life unscathed. Suffering and pain are, by their very nature, to be avoided. The tidying guru Marie Kondo became famous by telling people to throw away possessions that don’t “spark joy,” and many would see such purging as excellent life advice in general. But this theory is incomplete. Under the right circumstances and in the right doses, physical pain and emotional pain, difficulty and failure and loss, are exactly what we are looking for…The importance of suffering is old news. It is part of many religious traditions, including the story in Genesis of how original sin condemned us to a life of struggle. It is central to Buddhist thought—the focus of the Four Noble Truths…In the search for a meaningful life, simply seeking pleasure isn’t enough. We need struggle and sacrifice.”

Thinks 328

BizReport: “The granddaddy of digital marketing – email – is getting renewed interest from several sectors. That is a key takeaway from new LiveIntent data. Their researchers are linking this renewed interest in upcoming changes in data collection, usage, and storage that make it more important than ever for businesses to own first-party data.”

FT: “Proponents of mRNA argue that combating Covid-19 is just the start and that its wider adoption heralds a revolution in modern medicine. Cures for some forms of cancer are among several areas being explored. Pharmaceutical companies are now turning their attention to the power of mRNA to tackle a range of illnesses from flu to heart disease and HIV. Very early vaccine trials are also under way for the Zika virus, yellow fever and rare diseases such as methylmalonic acidemia, where the body is unable to break down proteins.”

Donald Boudreaux: “Deficit financing – by enabling people today to free-ride on people tomorrow – allows government to expand its size and reach beyond that which would be obtained if government were required to fund all of its current expenses out of current revenues, with no opportunity for deficit financing. In short, deficit financing paves a path for the unwarranted and wasteful expansion of government activity. Only someone who is convinced that government will undertake only economically worthwhile projects regardless of the means of financing – or someone who doesn’t understand economics – can look favorably upon deficit financing by government.”

Thinks 327

McKinsey on food delivery: “Even as the food-delivery ecosystem continues to expand, its economic structure is still evolving. Considerations such as brand, real estate, operating efficiency, breadth of offerings, and changing consumer habits will determine which stakeholders win or lose as the industry develops. Potential regulatory constraints, including possible changes to how drivers are compensated, will figure into the reshuffling. And while the industry has experienced explosive growth during the global pandemic, delivery platforms, with few exceptions, have remained unprofitable. As DoorDash chief operating officer Christopher Payne told the Wall Street Journal recently, “This is a cost-intensive business that is low-margin and scale driven.”

Ruchir Sharma: “Merkel has defied the normal evolution of power, which is that leaders grow stale with years in office and leave on a low. Those who endure tend to grow arrogant or complacent over time, and get caught in scandal or are overtaken by events. Most lose momentum and support, usually well before their first decade is up…The consistent knock against Merkel is that she was a bore from the start, a timid reformer who left a long to-do list, from energy supply to digital competitiveness. But sins of policy omission should not overshadow the human tendencies she rose above: pride, greed, sloth. Power corrupts and time erodes but neither had much effect on Merkel. Go back more than a century and it’s rare to find any major leader who ruled so long but went out on such a high.”

Paul Milgrom (2020 Nobel Prize Winner in Economics): “We think water rights are going to be important. I don’t have a design in mind for that yet, because the legal rights are a big part of the problem, determining exactly what rights farmers have to their water, to the groundwater, to the surface water, how surface water recharges the ground. If you extract too much groundwater and cause the structure to collapse, then you can destroy it permanently, and then it’ll never recharge. How do you create markets that are viable, and so that we have sustainable water use? Just like we had to change rights in radio spectrum to make it work, we’ll probably have to make some adaptation of rights in the water markets, too. Just like in radio spectrum, when we come up with the design, it’s going to need to have good bones because it will be changed, because there’ll be political interests that will force us to make changes.”

Thinks 326

WSJ on the metaverse: “[We will soon have] a virtual world where our digital avatars and those of people in our communities and around the globe come together to work, shop, attend classes, pursue hobbies, enjoy social gatherings and more. Immersive videogames and virtual concerts have given us a taste of this world. But visionaries say the metaverse, as this world has been dubbed, will be far more engaging and robust, not only mirroring the real world in all its three-dimensional complexity but also extending it to allow us to be and do what previously could only be imagined. Walk on the moon in your pajamas? Watch a baseball game from the pitcher’s mound? Frolic in a field of unicorns—or be a unicorn yourself? In the metaverse, tech visionaries say, just about anything will be possible.”

Ninan: “The government’s programmes should be expected to generate some momentum, but the macro-economic numbers are not encouraging. Total investment in the economy in 2021 is estimated at 29.7 per cent, down from 39.6 per cent a decade back. The fiscal deficit for Union and state governments combined is 11.3 per cent, up from 8.3 per cent in 2011. The debt-GDP ratio is now 90.6 per cent, up from only 68.6 per cent. The much better indicators of a decade back did not last, and growth slowed. One must hope the opposite happens now, with today’s energy and optimism being sustained.” More from Rathin Roy: “Unlike China, Bangladesh and Vietnam, India’s savings rate is forecasted to decline reflecting the permanent scarring caused by the pandemic. The investment to GDP ratio is not forecasted to rise appreciably till 2024. India’s ability to walk its big talk as an investment destination, though always fragile, has therefore taken a further credibility hit after the pandemic. Finally, India had the worst fiscal deficits before the pandemic and despite an insipid fiscal response to the pandemic, will have higher levels of debt and fiscal deficits in 2024 than it did in 2019. The silent fiscal crisis prior to the pandemic is urgently driving a programme of asset sales, but these will only plug the fiscal hole; there will not be resources left to increase the investment to GDP ratio above the IMF forecast and bring India back to its pre-2019 growth potential if we continue with business as usual. This is a grim outlook.”

David Brooks: “A nation is a community of people that, at best, is held together by a common story. When I was a kid, I was told a certain triumphalist story about America, which was loaded with words like “superpower” and “greatest.” That triumphalist story sounds tinny in 2021, and it seems to have been rejected by many in the younger generations. As that story has faded, our country has fractured, without a cohering national narrative.” What is India’s story?

Thinks 325

Merkle CEO Michael Komasinski: “The best thing about today’s advertising is the strong focus on the customer experience. Building marketing strategies that place the customer at the center of every interaction makes advertising less superficial. We can now tangibly and positively change how customers experience a brand across the entire customer journey…Hands down, the largest issue in online advertising is the lack of data transparency and control standards. We need a common set of policy rules and technical standards that enforce transparency on behalf of consumers. It would be ideal from a performance perspective to have a unified “source of truth” attribution number that Google, Facebook, Adobe, etc. could align to and optimize from.”

NYT on why Thoreau lives on: “Thoreau suggested that the busyness of life — the frenetic pace of our jobs, the demands of our bank accounts, the status that we seek and never find — should never be the exclusive focus of living. Can we, as Lightman puts it in his essay, free ourselves from the “rush and the heave of the external world”? This is the lesson of Walden Pond: that our immediate concerns usually obscure the important ones, and almost always distract us from what is ultimate, the chance to live and die with the knowledge that we have tried to “truly live.””

Renée DiResta on Amplified Propaganda: “You don’t need fake accounts to spread ampliganda online. Real people will happily do it…Today there is simply a rhetorical war of all against all: a maelstrom of viral hashtags competing for attention, hopping from community to community, amplified by crowds of true believers for whom sharing and retweeting is akin to a religious calling—even if the narrative they’re propagating is a ludicrous conspiracy theory about stolen ballots or Wayfair-trafficked children. Ampliganda engenders a constellation of mutually reinforcing arguments targeted at, and internalized by, niche communities, rather than a single, monolithic narrative fed to the full citizenry. It has facilitated a fragmentation of reality with profound implications. Each individual act of clicking or resharing may not feel like a propagandistic act, but in the aggregate, those acts shape conversations, beliefs, realities.”

Thinks 324 on the importance of a subscription model: “Compounding growth of customer relationships is what makes subscription revenue models so powerful. Long-term subscribers become more valuable to your business. Revenue flows linearly from marketing to sales and finance in a traditional business model. However, subscription businesses have cyclical income. Subscription models allow businesses to lock customers in for an extended time. In a long-term relationship, companies can modify their products and services to meet customers’ needs and grow with them.”

The Limits of Democracy: “Democracy may be the best form of governance available to us, but it can easily yield suboptimal outcomes. That is especially true with a progressive ideology, a populism focused on restricting trade, good intentions captured by special interests, or idolatry toward the state. Democracy, to be socially viable, must be bounded by what F. A. Hayek (1960) called “a constitution of liberty.” Without limited government—with effective levels of federalism, an independent judiciary, and a constitution that promotes liberty—the mixed blessing of democracy can become a dog’s breakfast of inefficiency, corruption, incompetence, and injustice.”

The Economic Mentality of Nations: “In virtually every country there are people who passionately defend free markets, while others have very interventionist mentalities…To measure popular attitudes toward economic values, we have created the Global Index of Economic Mentality (GIEM).”

Thinks 323

Adam Grant on the new work environment: “We need boundaries to protect individual focus time too. On remote teams, it’s not the frequency of interaction that fuels productivity and creativity—it’s the intensity of interaction. In a study of virtual software teams by collaboration experts Christoph Riedl and Anita Woolley, the most effective and innovative teams didn’t communicate every hour. They’d spend several hours or days concentrating on their own work and then start communicating in bursts. With messages and bits of code flying back and forth, their collaborations were literally bursting with energy and ideas. One effective strategy seems to be blocking quiet time in the mornings as a window for deep work, and then coming together after lunch. When virtual meetings are held in the afternoon, people are less likely to multitask—probably in part because they’ve been able to make progress on their own tasks.”

Ninan: “Election results and “wallet economics” seem less synchronous in India than elsewhere. Tamil Nadu with a superior performance threw out its ruling party, while Kerala with relatively bad performance re-elected the Left Front. On the other hand, look at nationwide elections. India wasn’t “shining” enough for the BJP to win in 2004. The subsequent years of rapid poverty reduction got the Congress re-elected in 2009. Five years later, the onset of a slowdown helped usher in Narendra Modi. And he remains popular though per capita consumption has been stagnant for four years. Perhaps his skill at alternative narratives (hard work, infrastructure, welfare measures, identity politics) makes the difference. So people don’t ask themselves whether they were in fact better off four or five years earlier. That’s how it often works out with charismatic leaders.”

Michael Munger: “Economic revolutions do not care what we think of them. For people who believe they are the centre of the universe, or for technocrats who want to pull strings and push levers to ‘run things’, that can be very disquieting. But failing to understand that economies are organic complex systems can cause problems that make things much worse. These systems have internal dynamics that operate independently of the will of the state, or of any individual for that matter.” [via CafeHayek]