The squirrel's life 's an acorn hunt: forage and hide the nut. But a feeble mind requires that it hide them by the glut. Squirrel happiness is fragile no cache is big enough to be certain it'll make it through should the winter get rough. Oh, give me the tardigrade life, not a doubt it'll survive. No food, no water, vacuum of space and the thing 's still [bleeping] alive. Rather than gathering plenty, I'd rather need much less, or, at least, not be so mindless to hoard in great excess.
My rating: 5 of 5 stars
This book is meant to provide a non-mathematical introduction to the basics of game theory, using examples that make the subject readily intuitively grasped. With this objective in mind, the book does a great job. Game Theory is an interdisciplinary subject that seeks to explain behavior in strategic games, a strategic game is one in which all players make decisions that can influence the outcome of the game. Let’s clarify, using a literal “game.” In chess, it’s meaningless to ask what the best move is without considering what the opponent has done and is likely to do – i.e. one’s best move must always take into account what the other player has done. This is in contrast to games of skill or chance (like a running race or roulette, respectively,) in which one doesn’t really need to respond / adapt to what the opponent has done (or will do) in order to win.
The reason I mention using an example that is literally a game is that Game Theory is used in a wide variety of domains, from military to business strategy, most of which don’t involve “games” in the common use of that word. The book draws from many disciplines, usually the ones where the concept at hand was initially developed – e.g. nuclear weapons strategy or marketing. While the book is a bit more heavily loaded with examples from the business world, it doesn’t ignore contributions from other sectors. Many of the games discussed will be familiar to the general reader at some level from the outset (e.g. the Prisoner’s Dilemma, Chicken, Battle of the Sexes, etc.) but one should finish reading with a better understanding of ideas like payoffs, equilibria, efficiency, sequential play (v simultaneous,) and coordination – all of which are crucial to applied strategic decision-making.
If you are interested in a starter book about strategic decision-making, this one is worth reading.
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My rating: 5 of 5 stars
As the title suggests, this is a history of comic books and graphic novels that is presented in the form of a comic book. This book turned out to be more fascinating than I expected (and, obviously, I thought it would be interesting enough to start reading it in the first place.) The added fascination, of all places, came from the economics nerd in me (I thought that guy was dead, but apparently not.) You may wonder what economics has to do with the history of comics, but it turns out that there was a long period of learning about how the unique characteristics of comic books should influence how they were most lucratively sold. At first, comics were sold just like other magazines, but eventually people realized that the fact that these periodicals told serialized stories (and that they were potentially collectable) made them a very different kind of product. And there were booms and busts along the way.
It’s not just economists who might find something surprisingly interesting in this book, there is a colorful discussion of intellectual property law as it pertained to comics. (As well as the more visceral human-interest story of the artists who created characters that made executives and actors billions of dollars, while said artists eked out a living.) Long-story-short, this book isn’t just for those interested in how artistic styles changed, or how various popular characters came to be, though those subjects are touched upon as well. It looks at the history of comics from many angles. One learns a little about the unique Japanese, Brazilian, Mexican, and African comic book markets, and one even sees how comic books played a roll in international relations. While it’s mostly an industry (macro-)level look, there is discussion of a few who individuals who changed the industry (e.g. Alan Moore.)
This is a quick read, but packed with interesting information for those of us who are basically interested in everything. It’s well drawn as well. Check it out.
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The book’s premise is simple: being neat and tidy isn’t the great virtue you’ve been led to believe, and being messy isn’t inherently a vice. Over nine chapters, Harford explores the various dimensions in which our impulse to toward tidiness can get in our way, and for which a little messiness might be the cure. Each chapter uses a central story or two as exemplars, with other stories and anecdotes providing support.
The book’s introduction sets up the idea by describing a famous concert in Köln (Cologne) by Kieth Jarrett in which the pianist reluctantly agreed to play the concert on a sub-par piano, and (it’s argued because of the limitations of that instrument) went on to produce the best-selling solo jazz album. This tale sets up chapter one, which focuses on creativity, nicely. Creativity may be explicitly the topic of chapter one, but it’s a concept that cuts across the entirety of the book. Tidiness – it is argued — is antagonistic to creativity. In the first chapter, Harford describes how David Bowie partnered up with Brian Eno, and how Eno’s “oblique strategies” – while they annoyed the musicians to no end by throwing monkey wrenches into the act of making music – were highly successful in producing a unique sound.
Chapter two discusses collaboration, which always makes a mess. Central to this chapter is a discussion of the Hungarian mathematician Paul Erdős and the famous Erdős number that virtually all scholars are familiar with — at least those in who work in math, science, engineering, and other disciplines with a quantitative bent. It’s sort of a Kevin Bacon six-degrees-of-separation for those who make mathematics. The number describes how far removed one is from having a paper penned with this notoriously prolific mathematician (co-authored, one removed co-author, etc.,) and everyone publishing quantitative / mathematical scholarship desired a low number. The point made by Harford wasn’t just that collaboration in general is messy, but that working with Erdős, specifically, was, and it required collaborators to adjust to his peculiar, professorial ways.
Chapter three explores how tidy workplaces sometimes hinder productivity. The central case is MIT’s Building 20, which was popped up in record time to meet a wartime demand. The building housed a disproportionate amount of world-class science and engineering, and it’s argued that this was in part because its poor design put random people together on long walks to exits or toilets, and in part because – since it was a hideous monstrosity of a building – no one cared if its labs and offices were a mess or not.
Chapter four delves into the value of mess in improvisation. Of course, Jazz is revisited in this chapter, but the lead story is Martin Luther King Jr.’s most famous speech and how it came out of being forced by circumstance to abandon his usual process of extensive preparation and editing. Chapter five describes messy tactics as winning strategies. Erwin Rommel’s success by disruption and chaos creation is at the heart of this chapter as is the development of Britain’s SAS which sometimes beat Rommel at his own game by using a similar approach using smaller, more agile, and more elite forces. There is also an extensive discussion of how Amazon went from humble beginnings to being the 800 pound gorilla of online shopping.
The sixth chapter investigates the role of incentives. For an economist, this is a fascinating topic as the key to understanding economic behavior is usually to follow the incentives. Of course, unintended consequences often go hand in hand with attempts to produce / manipulate incentives. Much of this chapter describes how attempts to tie up loose ends through regulation have ended up generating worse outcomes than could ever have been anticipated.
The next chapter (ch. 7) is about automation, which could be seen as an attempt to clean up messy activities. Harford discusses the situation with self-driving cars, which it’s hoped will help to make highways safer. However, the case he concentrates on is that of flight Air France 447, which went down in part because its inexperienced pilot at the helm couldn’t cope when the fly-by-wire system designed to anticipate and smooth the pilot’s inputs into the controls suddenly went off-line. In other words, the junior pilot wasn’t used to flying messy.
Chapter 8 is about resilience, and here the author challenges the age-old economic notion that specialization always results in greater productivity. Harford suggests that diversity and intermixing of activities and people – rather than specialization and homogenization – often results in a better outcome. The final chapter takes a wider view at how being messy can help one in life. The author spends a great deal of space to the question of how on-line dating services do such a poor job – spoiler alert – they try to make the messy process of finding a soul mate neat and tidy.
The book has citations and end-notes. In the Kindle edition, these notes are hyperlinked for ease of use. There are no graphics, but they aren’t missed.
I enjoyed reading this book and found it to offer many fascinating cases. I will say, as I was reading these well-researched and interestingly described cases, I sometimes had to think hard (maybe do some mental gymnastics) to make the connection between the case at hand and the book’s central theme – leaving me to wonder if I was missing something or whether there wasn’t some shoe-horning of interesting anecdotes into the book to produce a work that was more about being interesting than about proving a particular point. That said, I would recommend the book, particularly for anyone interested in increasing their creativity, productivity, or both.
“Narconomics” is about how drug cartels are taking pages from the playbooks of big businesses like Walmart and Coca-cola. In cases like diversifying into new markets or deciding to collude with a competitor, this might not seem surprising. However, it may come as a shock to find out about the franchising and CSR (corporate social responsibility) practices of drug cartels. Other than being outside access to the justice system, and thus resorting to violence to achieve what contracts, mediators, and courts would do for other businesses, the drug business it turns out is very much a business.
Along the way a secondary story emerges that is just as interesting and even more important. It’s the story of how the drug war makes no sense from the standpoint of economic logic. Destroying fields in South America only makes for poorer farmers because their monopsonistic (i.e. single buyer) market pushes the cost of lost crops back onto them. And because raw product is such a tiny portion of retail price, their destruction has almost no effect on prices at the user end. Furthermore, as more US and European states legalize marijuana, it seems that this will have more of an effect at putting cartels out of business and ending their reign of violence than all the arms shipments and foreign aid for drug enforcement ever had.
The book consists of ten chapters, each of which addresses an area of business practices that have been taken up by the drug cartels. Chapter one is about supply chains, and in the case of cocaine there is a rather long one. The raw product is grown in South America and must be infiltrated into the US—usually through Mexico. (For a while there was a prominent Caribbean route, but it was shut down—at least for a while.) This is where we learn about how the cartels adapt to eradicated crops, as well as how the product is marked up at various stages of the operation.
Chapter 2 is about the decision to compete versus collude. We mostly read about the competition, because in a lawless market competition equals violence. However, over time cartels have been increasingly willing to agree on distribution of territory. Although, there are also clever means to compete unique to criminal enterprises, such as engaging in violence in someone else’s territory to cause the police to crack down there—thus making it harder for said opposition.
Chapter 3 is about human resources, and the different approaches used to handle problems in this domain. In the movies, a drug cartel employee who fouled up always gets a bullet to the brain, but it seems that this isn’t always the case—though it certainly happens. Different countries and regions have differing labor mobility. In some cases, there is no labor mobility. (i.e. if one has a gang’s symbols tattooed all over one’s body, one can’t interview with a rival gang and Aetna sure as hell isn’t going to hire you.)
Chapter 4 is about public relations and giving to the public. One doesn’t think about drug lords engaging in CSR, but in some cases they may be more consistent with it than mainstream businesses. The cartels face an ongoing risk of people informing on them, and at least some of those people can do so without their identities becoming known. Violence is often used to solve problems in this domain, but it can’t do it all. That’s why drug lords build churches and schools, and often become beloved in the process.
Chapter 5 explores “offshoring” in the drug world. This may seem strange, but drug cartels, too, chase low-cost labor. But it’s not just about lowering costs, it’s also about finding a suitable regulatory environment—which in the cartel’s case means a slack one. An interesting point is made that all the statistics on doing business are still relevant to the drug business, but often in reverse. That is, if Toyota is putting in a plant, it wants a place with low corruption, but if the Sinaloa want to put in a facility–the easier the bribery the better.
Chapter 6 describes how franchising has come to be applied to drug cartels—famously the Zetas. The franchiser provides such goods as better weaponry in exchange for a cut of profits. Of course, there’s always a difference in incentives between franchisers and franchisees when it comes to delimiting territory, and this doesn’t always work out as well for drug dealers as it does for McDonald’s franchisees.
While the bulk of the book focuses on cocaine and marijuana, Chapter 7 is different in that most of it deals with the wave of synthetic drugs that has popped up. The topic is innovating around regulation, and so it’s certainly apropos to look at these drugs. If you’re not familiar, there are many synthetic drugs that are usually sold as potpourri or the like. Once they’re outlawed, the formula is tweaked a little. In a way, these “legal highs” may be the most dangerous because no one knows what effect they’ll have when they put the out on the street.
In chapter 8 we learn that the drug world hasn’t missed the online retail phenomena. Using special web browsers, individuals are able to make transactions that are not so difficult to trace. In an intriguing twist, the online market may foster more trust and higher quality product than the conventional street corner seller ever did.
Chapter 9 examines how drug traffickers diversify—most notably into human trafficking. Exploiting their knowledge of how to get things across the border, they become “coyotes.”
The last chapter investigates the effect of legalization, and it focuses heavily upon the effects that Denver’s legalizing marijuana has had in Denver, in the rest of the country, and on the cartels. Wainwright paints a balanced picture that shows that not everything is perfect with legalization. E.g. he presents a couple of cases of people who ingested pot-laced food products intended for several servings, and did crazy stuff. However, the bottom line is that legalization (and the regulation and taxation that comes with it) seems to be the way to go if you want to really hurt the cartels and stem the tide of violence, as well as to reduce the number of people showing up at the ER having ingested some substance of unknown chemical composition.
There is an extensive conclusion, about the length of one of the chapters that delves into the many ways our approach to eliminating drug use is ill-advised and dangerous. This connects together a number of the key points made throughout the chapter.
I found this book fascinating. Wainwright does some excellent investigative reporting—at no minor risk to life and limb. If you’re interested in issues of business and economics, you’ll love this book. If you’re not into business and economics, you’ll find this book to be an intriguing and palatable way to take on those subjects.
This is a section of Brigade Road in Bangalore–one of the city’s retail districts.
Fun fact: in India–for reasons I don’t know–franchisors don’t exercise control over or coordinate the locations of their stores. For this reason, one may have two Reebok stores in a given block and five within walking distance. It’s actually not unlike Waffle House is (or, perhaps, used to be) in the Atlanta metro area where one might have Waffle Houses catty-corner from each other. Usually, a company or franchisor wants to control the density of stores so that they don’t cannibalize each other out of business and leave their more disciplined competitors to snatch up market share.
If I had to guess why this seems to work here, I would say it has to do with high density of wealth and low labor cost for retailers. There are–in absolute terms–a lot of people in the city with disposable income but they are concentrated in certain areas so it doesn’t make as much sense to spread out your stores. Plus, with low labor costs, the price of keeping a store up is relatively low. Of course, it may have nothing to do with either of those issues, but rather be rooted in India’s bizarre regulatory environment.
There’s perennial hope in the West that India will succeed. Having won the Cold War, advocates of democracy and rule of law aren’t eager to replay it and have a Communist country win–not even one that yields to market forces in large part. Citizens of democratic nations want reaffirmation that democratic rule and rule by law, not men, is the superior paradigm. We acknowledge that such a system is rarely easy, but live with the words of Winston Churchill ringing in our ears:
Democracy is the worst form of government, except for all those other forms that have been tried from time to time.
When I found out that I was moving to India, I read all that I could find on India in magazines I subscribed to, such as Foreign Affairs, National Geographic, and Wilson Quarterly. Needless to say, there was a lot to read. Besides India’s nuclear programs, both energy and weapons, I hadn’t followed its role in the world. These articles took me on a roller coaster ride. If one went back many years, no one expected much of India. Then, a few years back, massive enthusiasm blossomed that India was going to rocket off and leave India in its dust. Then I got to the most recent articles, which did yet another turnabout–saying that India’s growth had been ephemeral and no one should expect much from the country in the near future.
India has a number of advantages. Almost everyone who is capable of publishing is fluent in the de facto international language of business and academic publication–namely English. India has as abundant a supply of cheap labor as anywhere. Indians have a culture that values education. They are building a first-class university system by, in part, having sent students to the very best of academic institutions globally. Their universities are attracting foreign students. This, in combination with such a big population, has given them the potential to build impressive student bodies.
So, why isn’t India competitive? The first thing that should be stated is that things are never as simple as they appear in aggregate. In some domains, India is competing quite nicely–and not just with China. Here in Bangalore, it’s apparent that large IT companies see big advantages in doing business in India.
I made a recent trip to Hampi and was amazed to see how successful India was in building up wind power generation in central Karnataka. India is 5th in installed wind capacity overall. Many democracies have difficulty getting traction with wind because the public views the turbines as an eyesore.
Still, India has its problems. Political and Economic Risk Consultancy (PERC) surveyed business leaders about Asian bureaucracies and found India to be the worst bureaucracy in Asia. On a 1 to 10 scale, where 10 is the worst possible, India rated a 9.21. This isn’t a surprise in the least. It seems to be common knowledge that business leaders who move to India do so in spite of India’s governance, not because of it. India’s bureaucracy hasn’t embraced the IT-revolution. It’s interesting being in Bangalore, where IT-companies are state-of-the-art, and being asked for the same copies of documents a half-dozen times because the information is only stored on non-networked PC hard-drives–and paper files are collected but don’t seem to be organized in any way.
An ethos of corruption is ubiquitous in India. Police officers have been known to sit in parks and solicit “admissions fees” from tourists. I’m pretty sure I saw a shakedown in progress this past week when our car went through a toll booth on a toll road we had already paid for and two guys standing outside in front of the toll-taker insisted that our driver pay for the toll that he had already paid not ten minutes before. Being from a country where corruption is punished severely, I’m ignorant of the process of bribes. (I suspect this is why I’ve had so little success in getting anything done that involves the Indian bureaucracy.) For a less anecdotal experience, one can turn to the “Corruption Perceptions Index,” which places India in the bottom half among all nations.
One may wonder how a democracy retains a culture of corruption. Usually, citizens of a democracy get fed up and start voting their disapproval. At the Bangalore Literature Festival, I heard an interesting policy panel featuring a politician, a retired general, and a policy pundit. It was said that there is a high degree of apathy among the Indian middle class. Indian voter turnout rates are generally below 60%. There’s a belief that those most capable of affecting change are relatively happy and, thus, unwilling to rock the boat. I don’t know how true this is, but it seems that India is having trouble defeating some of the problems that wither on the vine in the face of a politically active public.
It also seems that there is a segment of the population who are completely cowed. This is a legacy not only of colonial repression but also of caste repression. While castes have been done away with, there remains a large segment of the population who are accustomed to doing just as they’re told without questioning and without making moves to get ahead. Perhaps, because they believe they exist in a world in which there’s no getting ahead.
India’s abundance of cheap labor may be a curse as well as a blessing. While cheap labor has brought in foreign direct investment, it has also contributed to a business culture that doesn’t seem to value increased productivity. As an example, if one goes into a small shop in Chicago or Copenhagen or even Beijing, it’s likely that a single salesperson will show one merchandise, ring it up, and bag it. If it’s a big store, there may be a two person interaction–salesperson and cashier. In an Indian store, a salesperson will show one merchandise, a clerk will write up an invoice, one will take that invoice to a cashier, that cashier will take one’s money and hand one a carbon-copy of the “paid” stamped invoice and direct one to a pick up window, a bagger will bag your purchase, and a “checker” will check your receipt and hand you the bag. I love specialization as much as the next economist, but this is a Rube Goldbergesque approach to retail operations.
If India wants to be a first-rate power, it needs to take on corruption, bring its bureaucracy into the 21st century, and its population needs to realize they can have a more satisfying life than waiting around for someone to need them for a momentary job. The citizenry needs to value good governance, and businesses need to figure out how to increase productivity.
My rating: 3 of 5 stars
The title says it all. The authors, Stephen Moore and Julian Simon, discuss 100 trends in 20th century America that give one reason to be optimistic about the future. These trends are grouped into the following areas: health, nutrition, wealth, poverty, children’s issues, labor, leisure, housing, transportation & communications, innovation, information technology, education, safety, environmental protection, natural resources, socio-cultural indicators, sports, women’s issues, racial issues, and freedom & democracy.
One of the co-authors, Julian Simon, died before publication of this book, but is famous for a bet that he made with Paul Ehrlich. The bet was that any five commodities of Ehrlich’s choosing would decline in price over the subsequent decade. Ehrlich, author of The Population Bomb, was a doomsayer, and believed the five commodities and most others would become more expensive. In other words, Ehrlich was betting resources would become more scarce as they were used up, but Simon believed our technological advances in discovery and extraction would outstrip our consumption. Simon won the bet. All five commodities became cheaper, though some have pointed out that if they had gone double or nothing over another decade the tables would have turned.
The authors attribute the world’s 20th century success to three technologies: electricity, vaccines/medicines, and the microchip. In answer to the question of why the United States did particularly well, the authors point to freedom as the main driver. Neither of these hypotheses are systematically evaluated in this work; they’re just presented with anecdotal support. I say this not so much as harsh criticism, but so as to make the reader aware that it is not that kind of book. The bulk of the book is one page of text for each trend, plus a line or bar graph to visually depict the trend.
This book makes some excellent points. People have a tendency towards pessimism, hence all the dystopian, zombie, nuclear holocaust literature. There’s also a common fallacy that there was once a golden age of humanity in the past that is never to be surpassed. One may find it hard to believe that it’s getting better all the time, but one can’t argue with the numbers. Life expectancy is up. Infant mortality is down. Housing is less crowded. We have more symphonic orchestras. On a host of issues, the quality of life of Americans has risen.
The previous paragraph notwithstanding, there’s room for criticism. While one can’t argue with the numbers, in some cases one might find oneself asking whether they are the right numbers or whether they tell the whole story. For example, the section on disease shows a strong decline across a range of diseases. However, it doesn’t cover any of the many chronic disease that arose in the 20th century and disproportionately affect wealthy countries such as diabetes and crohn’s disease. It’s hard to know how much of the trends represented are a function of data availability (covering so much ground, they had to rely on second-hand data) and how much reflects selection bias intended to support their argument. As implied in the preceding paragraph, some of the measures are undeniably the right ones. However, the reader may find themselves wondering about others.
It would be interesting to see an update to the study. For example, GDP growth is shown to be higher on average among the freest nations. However, with countries like China and Vietnam rocketing upward in GDP in recent years, it would be interesting to see if this trend has held.
There’s a CSPAN Book TV program with Moore available here.
Even though this book is 13 years old, I’d still recommend it. Given all the doom and gloom as of late, it might be a particularly good time to pick it up.