Transcript "Hot" Books/Recent Reading

RECENT
READING
Tom Peters/11 July 2013
FILTER
BUBBLE
The Filter Bubble:
How the New,
Personalized Web Is
Changing What We
Read and How We
Think
—Eli Pariser
“bonding capital”
vs.
“bridging capital”
—Eli Pariser, The Filter Bubble: How the New, Personalized Web Is
Changing What We Read and How We Think
“If you’re not paying
for something, you
are the product
being sold.”
—Andrew Lewis,
MetaFilter.com (from Eli Pariser, The Filter Bubble: How the New,
Personalized Web Is Changing What We Read and How We Think)
“How much time you take
between the moment you
enter your query and the
moment you click on a result
sheds light [for Google] on your
personality.” —Eli Pariser, The Filter Bubble:
How the New, Personalized Web Is Changing What We Read
and How We Think
“It is hardly possible to overrate the
value of placing human beings in
contact with persons dis-similar to
themselves, and with modes of
thought and action unlike those with
which they are familiar. Such
communication has always been,
and is peculiarly in the present age,
one of the primary sources of
progress.” —John Stuart Mill (1806-1873)
“I believe this is
the quest for what
a personal computer
really is. It is
to capture one’s
entire life.”
—Gordon Bell
“Psychologists have a name for
fundamental
attribution error. We tend
this fallacy:
to attribute peoples’ behavior to
their inner traits and personality
rather than to the situations in
which they’re placed.” —Eli Pariser, The
Filter Bubble: How the New, Personalized Web Is Changing What
We Read and How We Think
“Some people rush for a deal, others
think that the deal means the
merchandise is subpar. Just by
eliminating the persuasion styles that
rub people the wrong way [as deduced from
prior Web behavior patterns], [the marketer] found he
could increase the effectiveness of
marketing materials from 30 to 40
percent.” —Eli Pariser, The Filter Bubble: How the New,
Personalized Web Is Changing What We Read and How We Think
“With new forms of
‘sentiment
analysis’
it’s now
possible to guess what mood one’s in.
People use substantially more
positive words when they’re up …”
—Eli Pariser, The Filter Bubble: How the New, Personalized
Web Is Changing What We Read and How We Think
“LinkedIn offers a career trajectory prediction by
comparing your resume to other peoples’ who are
in your field but further along. LinkedIn can
forecast where you’ll be in five years. … As a
service to customers, it’s pretty useful. But
imagine if LinkedIn offered the data to corporate
clients to weed out people who are forecast to be
losers. … It seems unfair for banks to discriminate
against you because your high school buddy is
bad at paying his bills or because you like
something that a lot of loan defaulters also like.
And that points to a basic problem with induction,
the logical method by which algorithms use data
to make predictions.” —Eli Pariser, The Filter Bubble: How the New,
Personalized Web Is Changing What We Read and How We Think
“Technodeterminism is
alluring and convenient
for newly powerful
entrepreneurs because it
absolves them of
responsibility for what
they do.”
—Eli Pariser, The Filter Bubble: How the
New, Personalized Web Is Changing What We Read and How We
Think
ROBOT
FUTURES
Robot
Futures
—Illah Reza Nourbakhsh,
Professor of Robotics, Carnegie Mellon
“Analytics can yield literally hundreds of
millions of data points—far too many for
human intuition to make any sense of the
data. So in conjunction with the ability to
store very big data about online behavior,
researchers have developed strong tools
for data mining, statistically evaluating
correlations between many types and
sources of data to expose hidden patterns
and connections. The patterns predict
human behavior—and even hidden human
motivations.” —Illah Reza Nourbakhsh,
Professor of Robotics, Carnegie Mellon, Robot Futures
“[Very successful websites send 99% of
their traffic to tried-and-true designs, but
risk 1% of their traffic on new variations to
discover ever better conversion rates from
visits to dollars. When Google was
choosing the right shade of blue for a
navigation bar, the company famously
performed A/B split testing across 41
shades of blue. … When numbers are large
and hundreds of millions of people are in
play, the tiniest improvements translate
into breathtaking levels of profit
improvement.” —Illah Reza Nourbakhsh,
Professor of Robotics, Carnegie Mellon, Robot Futures
“Robotics will drive this very
innovation. Landing page tuning will
bust out of the Internet and become
‘interaction tuning.’ Companies will
apply their analytics engines to all
interaction opportunities with people
everywhere: online, in the car, in a
supermarket aisle, on the sidewalk,
and of course in your home.” —Illah Reza
Nourbakhsh, Professor of Robotics, Carnegie Mellon, Robot Futures
“Human level
capability has not
turned out to be a
special stopping point
from an engineering
perspective. ….”
Source: Illah Reza Nourbakhsh, Professor of Robotics, Carnegie Mellon, Robot Futures
BIG
DATA
Big Data: A
Revolution That
Will Transform
How We Live,
Work, and Think
—Viktor Mayer-Schonberger and Kenneth Cukier
“As humans, we have been conditioned to look for
causes, even though searching for causality is often
difficult and may lead us down the wrong paths. In a big
data world, by contrast, we won’t have to be fixated on
causality; instead, we can discover patterns and
correlations in the data that offer us novel and
invaluable insights. The correlations may not tell us
precisely why something is happening, but they alert us
that it is happening. And in many situations, this is good
enough. If millions of electronic medical records reveal
that cancer sufferers who take a certain combination of
aspirin and orange juice see their disease go into
remission, then the exact cause for the remission
in health may be less important than the fact that
they lived.”
Source: Big Data: A Revolution That Will Transform How We Live, Work,
and Think, by Viktor Mayer-Schonberger and Kenneth Cukier
“Correlations let us analyze
a phenomenon not by
shedding light on its inner
workings, but by identifying
a useful proxy for it.”
Source: Big Data: A Revolution That Will Transform How We Live, Work,
and Think, by Viktor Mayer-Schonberger and Kenneth Cukier
“Predictions
based on
correlations lie
at the heart of
big data.”
Source: Big Data: A Revolution That Will Transform How We Live,
Work, and Think, by Viktor Mayer-Schonberger and Kenneth Cukier
“There is a
philosophical debate
going back centuries
over whether causality
even exists.”
Source: Big Data: A Revolution That Will Transform How We Live, Work,
and Think, by Viktor Mayer-Schonberger and Kenneth Cukier
“Unfortunately, Kahneman argues
[Nobel laureate Daniel Kahneman’s
very
often our brain is too lazy to think
slowly and methodically. Instead,
we let the fast way of thinking take
over. As a consequence, we often
‘see’ imaginary causalities, and
thus fundamentally misunderstand
the world.”
masterpiece Thinking, Fast and Slow],
Source: Big Data: A Revolution That Will Transform How We Live, Work,
and Think, by Viktor Mayer-Schonberger and Kenneth Cukier
Walmart: “[Using big data], the
company noticed that prior to a
hurricane, not only did sales of
flashlights increase, but so did
sales of Pop-Tarts. … Walmart
stocked boxes of Pop-Tarts at
the front of the store [and
dramatically boosted sales].”
Source: Big Data: A Revolution That Will Transform How We Live, Work,
and Think, by Viktor Mayer-Schonberger and Kenneth Cukier
“Aviva, a large insurance firm, has studied the
idea of using credit reports and consumermarketing data as proxies for the analysis of
blood and urine samples for certain applicants.
The intent is to identify those who may be at
higher risk of illnesses like high blood pressure,
diabetes, or depression. The method uses
lifestyle data that includes hundreds of
variables such as hobbies, the websites people
visit, and the amount of television they watch,
as well as estimates of their income. Aviva’s
predictive model, developed by Deloitte
Consulting, was considered successful at
identifying health risks.”
Source: Big Data: A Revolution That Will Transform How We Live, Work,
and Think, by Viktor Mayer-Schonberger and Kenneth Cukier
Editor-in-chief Chris Anderson authored a
Wired cover story titled “The Petabyte
Age.” The use of “big data” (more or less
everything, not a sample) and the
attendant primacy of correlation over
causation as the basis for discovery was
described thusly: “The data deluge
makes the scientific method obsolete.”
He also called the phenomenon “the end
of theory.”
Source: Big Data: A Revolution That Will Transform How We Live, Work,
and Think, by Viktor Mayer-Schonberger and Kenneth Cukier
AUTOMATE THIS:
HOW ALGORITHMS
CAME TO RULE
THE WORLD
Automate This:
How Algorithms
Came to Rule Our
World
—Christopher Steiner
April 2011. Prof Michael Eisen goes to
Amazon to buy book The Making of a Fly.
Expects price to be $35-$40. Follows
bid war for 3 days: Price hits
$23,698,655.93.
Culprit: “Unsupervised [pricing]
algorithm.” (Parallels 5/6/10 Wall
Street flash crash: Market dropped
1K points in about 5 minutes.)
From: Christopher Steiner, Automate This: How Algorithms Came to Rule Our World
“Algorithms have already written symphonies
as moving as those composed by
Beethoven, picked through legalese with
the deftness of a senior law partner,
diagnosed patients with more accuracy than a
doctor, written news articles with the
smooth hand of a seasoned reporter, and
driven vehicles on urban highways with far
better control than a human
driver.”
Automate This: How
Algorithms Came to Rule Our World
—Christopher Steiner,
“When you ask [Cloudera founder Jeffrey]
Hammerbacher what he sees as the most promising field
that could be hacked by people like himself, he responds
with two words: ‘Medical diagnostics.’ And clearly
doctors should be watching their backs, but they should
be extra vigilant knowing that the smartest guys of our
generation—people like Hammerbacher---are gunning for
them. The targets on their backs will only grow larger as
their complication rates, their test results and their
practicesare scrutinized by the unyielding eyeof
algorithms built by smart engineers. Doctors aren’t
going away, but those who want to ensure their
employment in the future should find ways to
be exceptional. Bots can handle the grunt
work, the work that falls to our average
practitioners.” —Christopher Steiner, Automate This: How
Algorithms Came to Rule Our World
Shades of Ned Ludd …
“When Emmy [algorithm] produced
orchestral pieces so impressive
that some music scholars failed to
identify them as the work of a
machine, [Prof. David] Cope
instantly created legions of
enemies. … At an academic
conference in Germany, one of
his peers walked up to him and
whacked him on the nose. …”
—Christopher Steiner, Automate This: How Algorithms Came to Rule Our World
“ … The audience then voted on the
identity of each composition.*
[Music theory professor and contest
organizer] Larson’s pride took a
ding when his piece was fingered as
that belonging to the computer.
When the crowd decided that
[algorithm] Emmy’s piece was the
true product of the late musician
[Bach], Larson winced.”
—Christopher Steiner,
Automate This: How Algorithms Came to Rule Our World
*There were three: Bach/Larson/Emmy-the-algorithm.
“ … Which haiku are human writing and which are
from a group of bits? Sampling centuries of
haiku, devising rules, spotting patterns, and
inventing ways to inject originality, Annie
[algorithm] took to the short Japanese sets of
prose the same way all of [Prof David] Cope’s.
algorithms tackled classical music. ‘In the end,
it’s just layers and layers of binary math, he says.
… Cope says Annie’s penchant for tasteful
originality could push her past most human
composers who simply build on work of the past.,
which, in turn, was built on older works. …” —
Christopher Steiner, Automate This: How Algorithms Came to Rule
Our World
Legal industry/Pattern
Recognition/Discovery (ediscovery algorithms):
500 lawyers to …
ONE
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
Lionbridge/IBM: GeoFluent
Evaluated as successful
in customer-service
transactions; medical diagnosis
Medical knowledge from labs,
descriptions, via pattern
recognition/intuition
Watson/IBM: Beats human
Jeopardy players w/ puns, other
idiosyncratic word play
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
StatsMonkey: Sports
writing (Readers
cannot tell difference)
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
REALITY IS BROKEN:
WHY GAMES MAKE
US BETTER AND HOW
THEY CAN CHANGE
THE WORLD
Reality Is Broken:
Why Games Make
Us Better and How
They Can Change
the World —Jane McGonigal
MMORPG/Massively
Multiplayer Online
Role-Playing Game
Source: Jane McGonigal, Reality Is Broken: Why Games Make
Us Better and How They Can Change the World
“Why exactly are we competing with each other to do
the dirty work? We’re playing a free online game
called
Chore Wars
—and it just
so happens that ridding our real-world kingdom of
toilet stains is worth more experience points, or XP,
than any other chore in our apartment. … A mom in
Texas describes a typical Chore Wars experience: ‘We
have three kids, ages 9, 8, and 7. I sat down with the
kids, showed them their characters and the
adventures, and they literally jumped up and ran off to
complete their chosen task. I’ve never seen my 8year-old son make his bed. I nearly fainted when my
husband cleaned out the toaster oven.’ …”
—Jane McGonigal,
Reality Is Broken: Why Games Make Us Better
and How They Can Change the World
“You get a sense of the scale and
intricacy of the task by considering
the sound effects alone: The game
contains 54,000 pieces of audio and
40,000 lines of dialogue. There are
2,700 different noises for footsteps
alone depending on whose foot is
stepping on what.” —Sam Leith on Halo 3,
from Jane McGonigal, Reality Is Broken: Why Games Make
Us Better and How They Can Change the World
“The popularity of an unwinnable game like
Tetris completely upends the stereotype
that gamers are highly competitive people
who care more about winning than
anything else. Competition and winning are
not defining traits of games—nor are they
defining interests of the people who love to
play them. Many gamers would rather keep
playing than win. In high-feedback games,
the state of being intensely engaged may
ultimately be more pleasurable than the
satisfaction of winning.” —Jane McGonigal, Reality Is
Broken: Why Games Make Us Better and How They Can Change the World
“When we are playing a
well-designed game, failure
doesn’t disappoint us. It
makes us happy in a very
peculiar way: excited,
interested, and most of all
optimistic.”
—Studies from M.I.N.D. Lab, Helsinki, in Jane
McGonigal, Reality Is Broken: Why Games Make Us Better and How They Can
Change the World
“It may have once been true
that computer games
encouraged us to act more with
machines than with each other.
But if you still think of gamers
as loners, then you’re not
playing games.” —Jane McGonigal, Reality Is Broken:
Why Games Make Us Better and How They Can Change the World
“World of Warcraft is the
singlemost powerful IV
drip of productivity ever
created.”
—Brian, friend, in Jane McGonigal,
Reality Is Broken: Why Games Make Us Better and How They Can
Change the World
3-D
PRINTING/
FAB LABS
Fab Labs/Fabrication
Labs/Fabulous Labs/digital
fabrication machine/parts
themselves are digitalized/3-D
printer/MIT Center for Bits and
Atoms/ Prof Neil Gershenfeld/
$5K: “large-format computercontrolled milling machine can
make all the parts in an IKEA
flat-pack box” customized for
the individual/Etc./Etc.
Source: “How to Make Almost Anything,” Beil Gershenfeld, Foreign Affairs/11-12.2012
It’s Getting a Little Weird Out*
Bradesco’s biometric ATM
sensors/blood flow (Economist 0519)
Oscar Pistorius’ sprinting
acumen/approved for
London (WSJ 0602)
DelFly/lighter than your
wedding ring (Economist 0602)
*Kurzweil’s Singularity is nigh?!
RACE
AGAINST
THE
MACHINE
Race AGAINST The
Machine: How the Digital
Revolution Is Accelerating
Innovation, Driving
Productivity, and
Irreversibly Transforming
Employment and the
Economy
—Erik Brynjolfsson and Andrew McAfee
“The root of our problem is not
that we’re in a Great Recession
or a Great Stagnation, but rather
that we are in the early
Great
Restructuring. Our
throes of a
technologies are racing ahead,
but our skills and organizations
are lagging behind.”
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
Explanations for Slow Recovery
Cyclical
Stagnation
Rise of BRICS+
“End of Work”/
Accelerated Pace* of
Technological Change
*The “second half of the chessboard”
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
Worst in 30 Years!
“The number of Americans in the labor force —
those who have a job or are looking for one —
fell by nearly half a million people from February
to March [2013], the government said Friday. And
the percentage of working-age adults in the
labor force — what's called the participation
It's
the lowest such figure
since May 1979.”
rate — fell to 63.3 percent last month.
Source: AP/0407.13
+400,000
-2,000,000
+400,000*/-2,000,000**
“new computing technologies
that destroy middle-class [whitecollar] jobs even as they create
jobs for highly skilled workers
who can exploit them”
*Manufacturing jobs
added USA 2007-2012
**White-collar jobs lost USA 2007-2012
Source: Financial Times, page 1, 0402.13
(“Clerical Staff Bears Brunt of US Jobs Crisis”)
3 million jobs unfilled/6%
unemployment per se/50%
companies with shortfall in
skilled people/college degree
not required: “The numbers of
the undertrained are
staggering.”/MA: 100K jobs @
$75K; 40% SMEs report
“difficulty finding skilled
craftsmen to replace retirees”
Source: Nina Easton/ Fortune/11.2012
2nd Half of the Chessboard
Squares 1-32; 4B grains =
1 large field
Squares 33-64; pile bigger than
Mt Everest
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
“The median
worker is losing
the race
against the
machine.”
—Erik Brynjolfsson and
Andrew McAfee, The Race Against the Machine
“A bureaucrat is
an expensive
microchip.”
—Dan Sullivan, consultant and executive coach
“The median worker is
losing the race against
the machine.”
—Erik Brynjolfsson and
Andrew McAfee, The Race Against the Machine
“A bureaucrat is an
expensive microchip.”
—Dan Sullivan, consultant and executive coach
”… breakage of the historic link
between value creation and job
creation”: “The median
worker is losing the race
against the machine.”/
Great Recession: “lack of
hiring rather than
increase in layoffs”
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
40 Years: Median inflation adjusted wages,
men 30-50 with jobs, 1969-2009: $33K,
Source: “The Slow Disappearance of the American
Working Man,” Bloomberg Businessweek/08.11
Post-Great Recession: Equipment
expenditures +26%; payrolls flat/
“Great Recession … lack of hiring
rather than increase in layoffs”/“…
breakage of the historic link between
value creation and job creation”
The “U-shaped Curve”
Phenomenon:
High-skilled Waaaaay Up!!!
Low-skilled: Stable/Up
Middle: Down/Down/Down
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
Q3 2011/BLS
+3.1/Non-farm productivity growth
+3.8/Non-farm output
+0.6/Non-farm hours worked
+5.4/Manufacturing productivity
+4.7/
-0.6 /
Manufacturing output
Manufacturing hours
worked
Source: Bureau of Labor Statistics/03 November 2011
China
too/Foxconn:
1,000,000
robots in next
3 years
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
SBTC/Skill-Biased
Technical Change:
“race between
education and
technology”
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
Fab Labs/Fabrication Labs/Fabulous
Labs/digital fabrication machine/
parts themselves are digitalized/
3-D printer /MIT
Center for Bits and Atoms/ Prof Neil
Gershenfeld/ $5K: “large-format
computer-controlled milling machine
can make all the parts in an IKEA flatpack box” customized for the
individual/Etc./Etc.
Source: “How to Make Almost Anything,” Beil Gershenfeld, Foreign Affairs/11-12.2012
Night to Day = 6 Years
DARPA Grand Challenge
2004: No dice
Google 2010: 140K miles in
driverless cars
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
Lionbridge/IBM: GeoFluent
Evaluated as successful
in customer-service
transactions; medical diagnosis
Medical knowledge from labs,
descriptions, via pattern
recognition/intuition
Watson/IBM: Beats human
Jeopardy players w/ puns, other
idiosyncratic word play
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
Legal industry/Pattern
Recognition/Discovery (ediscovery algorithms):
500 lawyers to …
ONE
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
Bachelor’s degree, age
25-34: 40% F; 30% M
Graduate degree
students: 60% F; 40% M
Source: Sydney Morning Herald /26.03.12
StatsMonkey: Sports
writing (Readers
cannot tell difference)
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
Standard optimization
problem, 1998-2003:
43,000,000-fold speed
improvement; 1,000X
processor speed; 43,000X
algorithms better
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
China
too/Foxconn:
1,000,000
robots in next
3 years
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
Post-Great Recession:
Equipment
expenditures
+26%; payrolls flat
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
USA/Agriculture
1800: 90%
1900: 41%
2000: 2%
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
The “U-shaped Curve” Phenomenon:
High-skilled Waaaaay Up!!!
Low-skilled: Stable/Up
Middle: Down/Down/Down
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
SMEs!
Source: Race AGAINST the Machine, Erik Brynjolfsson and Andrew McAfee
“In the wake of the 2012 presidential election, some political commentators have
written political obituaries of the "red" or conservative-leaning states, envisioning a
brave new world dominated by fashionably blue bastions in the Northeast or
California. But political fortunes are notoriously fickle, while economic trends tend to
be more enduring.
“These trends point to a U.S. economic future dominated by four
growth corridors that are generally less dense, more affordable,
and markedly more conservative and pro-business: the Great
Plains, the Intermountain West, the Third Coast (spanning the Gulf
states from Texas to Florida), and the Southeastern industrial belt.
“Overall, these corridors account for 45% of the nation's land mass
and 30% of its population. Between 2001 and 2011, job growth in
the Great Plains, the Intermountain West and the Third Coast was
between 7% and 8%—nearly 10 times the job growth rate for the
rest of the country. Only the Southeastern industrial belt tracked
close to the national average.
“Historically, these regions were little more than resource colonies or low-wage labor
sites for richer, more technically advanced areas. By promoting policies that
encourage enterprise and spark economic growth, they're catching up.”
Source: Joel Kotkin, Wall Street Journal, 0225.13
“We are in no danger of running
out of new combinations to try.
Even if technology froze today, we
have more possible ways of
configuring the different
applications, machines, tasks, and
distribution channels to create new
processes and products than we
could ever exhaust.” —Erik Brynjolfsson and Andrew
McAfee, The Race Against the Machine: How the Digital Revolution Is
Accelerating Innovation, Driving Productivity and Irreversibly Transforming
Employment and the Economy
human
beings are
entrepreneurs. When we were
Muhammad Yunus:
“All
in the caves we were all self-employed
. . . finding our food, feeding
ourselves. That’s where human history
began . . . As civilization came we
suppressed it. We became labor
because they stamped us, ‘You are
labor.’ We forgot that we are
entrepreneurs.” —Muhammad Yunus/
The News Hour/PBS/1122.2006
“Human
creativity
is the ultimate
economic
resource.”
—Richard Florida
USA 1996-2007
Highest rate
entrepreneurial activity
(firms founded):
Ages 55-64
Lowest rate: Ages 20-34
Source: Dane Stangler, Kauffman Foundation (Economist)
“The average age of a
startup founder is 40. And
high-growth startups
are nearly twice as
likely to be launched by
people over 55 as by
people 20-34.”
—Vivek Wadhwa,
Kauffman foundation (Time/0325.13)
“The prospect of contracting a gofer on an a
la carte basis is enticing. For instance, wouldn’t it
be convenient if I could outsource someone to
write a paragraph here, explaining the history of
outsourcing in America? Good idea! I went ahead
and commissioned just such a paragraph from Get
Friday, a ‘virtual personal assistant- firm based in
Bangalore. … The paragraph arrived in my in-box
ten days after I ordered it. It was 1,356 words.
There is a bibliography with eleven sources. … At
$14 an hour for seven hours of work, the cost came
to $98. …” —Patricia Marx, “Outsource Yourself,” The New Yorker,
01.14.2013 (Marx describes in detail contracting out everything associated
with hosting her book club —including the provision of “witty” comments
on Proust, since she hadn’t had time to read the book—excellent
comments only set her back $5; the writer/contractor turned
out to be a 14-year-old girl from New Jersey.)
ADDICTION
BY DESIGN
Machine Gambling
66% revenue
85% profit
Source:
Natasha Dow Schüll, Addiction By
Design: Machine Gambling in Las Vegas
Machine Gambling
“Pleasing” odor #1 vs.
“pleasing” odor #2:
+45% revenue
Source: “Effects of Ambient Odors on Slot-Machine Useage in
Las Vegas Casinos,” reported in Natasha Dow Schüll,
Addiction By Design: Machine Gambling in Las Vegas
“When Friedman slightly curved
the right angle of an entrance
corridor to one property, he was
‘amazed at the magnitude of
change in pedestrians’ behavior’
(the percentage who entered
increased from one-third to
nearly two-thirds).” —Natasha Dow Schüll,
Addiction By Design: Machine Gambling in Las Vegas
THE MYTH OF
AMERICAN
DECLINE AND THE
GROWTH OF A
NEW ECONOMY
Daniel Gross, The Myth
of American Decline and
the Growth of a New
Economy
“Not Dead Yet”
BRIC/2011: $11T/$4K per capita
USA/2011: $16T/$48K per capita
USA/2000: 4% population/30% world GDP
USA/2010: 4% populattion/28% world GDP
USA productivity: ’07/1.7%; ’08/2.1%; ’09/5.4%; ’10/2.4%; ’11/4.1%
FDIC institutions: 4Q/2008/-$38B; 2Q/2011/+$29B
1/2008 to 9/2011: USA consumer savings 0% to 6%/$2.1T saved
Foreign Direct Investment: 2003: $64B; 2008: $328B; 2009: $134B;
2011: $200B+
Exports/2009: USA $1.53T ($1.06T goods, $0.47T services);
Germany $1.36T; China $1.33T
USA/Refined petroleum products/1Q 2011: Imports 2.16M BPD;
Exports 2.49M BPD
“New economy”: Apple (>Exxon) + Google + Facebook ~ $1T
market cap
Source: Daniel Gross, The Myth of American Decline and the Growth of a New Economy
iPad/$4 billion
of $300 billion negative
USA trade balance with
China (2011)
Cost/Profit Components:
Total labor 7%
(Chinese labor: 2%)
Materials 31%
Distribution: 15%
Profit: 47%
$275 = Imputed
Landed iPad cost:
USA negative trade balance with China
(Actual China cost: $10)
Source: Personal Computing Industry Centre (Economist)
Cost*/Profit Components:
Total labor 7%
(Chinese labor: 2%)
Materials 31%
Distribution: 17%
Profit: 47%
$275 = Imputed
Landed iPad cost:
USA negative trade balance with China
(Actual China cost: $10)
*Biggest non-USA component:
Korea
Source: Personal Computing Industry Centre (Economist)
Q3 2011/BLS
+3.1/Non-farm productivity growth
+3.8/Non-farm output
+0.6/Non-farm hours worked
+5.4/Manufacturing productivity
+4.7/Manufacturing output
-0.6/Manufacturing hours worked
Source: Bureau of Labor Statistics/03 November 2011
It’s Getting a Little Strange Out*
DelFly/lighter than your
wedding ring (Economist 0602)
Oscar Pistorius’ sprinting
acumen/approved for
London (WSJ 0602)
*See Ray Kurzweil, The Singularity Is Near:
When Humans Transcend Biology; key
chapter, “GNR: Three Overlapping Revolutions”
(GNR: Genetics, Nanotechnology, Robotics)
“In some sense you can
argue that the science
fiction scenario is already
starting to happen. The
computers are in control.
We just live in their
world.” —Danny Hillis, Thinking Machines
“Unless mankind
redesigns itself by
changing our DNA
through altering our
genetic makeup,
computer-generated
robots will take over
the world.” – Stephen Hawking
THE SHAREHOLDER
VALUE MYTH: HOW
PUTTING SHAREHOLDERS
FIRST HARMS INVESTORS,
CORPORATIONS, AND
THE PUBLIC
Lynn Stout, professor of
corporate and business
law, Cornell Law school,
author The Shareholde,r
Value Myth: How Putting
Shareholders First Harms
Investors, Corporations,
and the Public
“The notion that corporate law
requires directors, executives, and
employees to maximize shareholder
wealth simply isn’t true. There is no
solid legal support for the claim
that directors and executives in U.S.
public corporations have an
enforceable legal duty to maximize
shareholder wealth. The idea is
fable.” —Lynn Stout, professor of corporate and business law,
Cornell Law school, in The Shareholder Value Myth: How Putting
Shareholders First Harms Investors, Corporations, and the Public
“Courts uniformly refuse to actually
impose sanctions on directors or
executives for failing to pursue one
purpose over another. In particular,
courts refuse to hold directors of
public corporations legally
accountable for failing to maximize
shareholder wealth.” —Lynn Stout,
professor of corporate and business law, Cornell Law school,
in The Shareholder Value Myth: How Putting Shareholders First
Harms Investors, Corporations, and the Public
“What about shareholders’ rights to sue
corporate officers and directors for
breach of fiduciary duty if they fail to
maximize shareholder wealth? Such a
right turns out to be illusory. Executives’
and directors’ duty of loyalty to the
corporation bars them from using their
corporate positions to enrich themselves
at the firm’s expense, but unconflicted
directors remain legally free to pursue
almost any other goal.” —Lynn Stout,
professor of corporate and business law, Cornell Law school,
in The Shareholder Value Myth: How Putting Shareholders First
Harms Investors, Corporations, and the Public
“From a legal perspective, shareholders do not,
and cannot, own corporations. Corporations
are independent legal entities that own
themselves, just as human beings own
themselves. … Shareholders own shares of
stock. A share of stock is simply a contract
between the shareholder and the corporation, a
contract that gives the shareholder very limited
rights under limited circumstances. In this
sense, stockholders are no different from
bondholders, suppliers, and employees. All have
contractual relationships with the corporate
entity. None ‘owns’ the company itself.”
—Lynn Stout, professor of corporate and business law,
Cornell Law school, in The Shareholder Value Myth: How Putting
Shareholders First Harms Investors, Corporations, and the Public
“[a corporation] can be
formed to conduct or
promote any lawful
business or purpose”
—from Delaware corporate code (no mandate
for shareholder primacy), per Lynn Stout,
professor of corporate and business law,
Cornell Law school, in The Shareholder Value Myth:
How Putting Shareholders First Harms Investors,
Corporations, and the Public
“On the face of it,
shareholder value is the
dumbest idea in the world.
Shareholder value is a
result, not a strategy. …
Your main constituencies
are your employees, your
customers and your
products.” —Jack Welch, FT, 0313.09, page 1
“Too Much Cost, Not Enough Value”
“Too Much Speculation, Not Enough
Investment”
“Too Much Complexity, Not Enough Simplicity”
“Too Much Counting, Not Enough Trust”
“Too Much Business Conduct, Not Enough
Professional Conduct”
“Too Much Salesmanship, Not Enough
Stewardship”
“Too Much Focus on Things, Not Enough Focus
on Commitment”
“Too Many Twenty-first Century Values, Not
Enough Eighteenth-Century Values”
“Too Much ‘Success,’ Not Enough Character”
Source: Jack Bogle, Enough! (chapter titles)
“Managers have lost dignity over the
past decade in the face of widespread
institutional breakdown of trust and
self-policing in business. To regain
society’s trust, we believe that business
leaders must embrace a way of looking
at their role that goes beyond their
responsibility to the shareholders to
include a civic and personal
commitment to their duty as
institutional custodians. In other
words, it is time that management
became a profession.” —Rakesh Khurana & Nitin Nohria,
“It’s Time To Make Management a True Profession,” HBR/10.08
“On the face of it,
shareholder value is the
dumbest idea in the world.
Shareholder value is a
result, not a strategy. …
Your main constituencies
are your employees, your
customers and your
products.” —Jack Welch, FT, 0313.09, page 1