The Economist recently featured an article on the need to package carrots as sticks to help people be more motivated. It is essentially saying that people responds more strongly to loss than gain but since companies need to make credible threats (a very game theory sort of idea) without being deemed unfair (as they would if they had threatened to dock pay) they will have to make their carrots seem like sticks.
But then, is it always about money? A couple of days back I was walking around the bookstore and I spotted a new book – Daniel Pink’sDrive: The Surprising Truth About What Motivates Us, he talks about the stuff that motivates us. We often thought of them as money but he figures out that it’s about “autonomy, mastery, and purpose”, which makes a lot of intuitive sense. The incentive systems in our world often do not drive ordinary souls to excellence. Perhaps, firms and organization must rethink their way they manage their people and this will revolutionize human resource departments and HR work.
The ideas in the book relates closely to another book I saw. It’s Richard Sennett’s documentation of the philosophy of craftsmanship, The Craftsman (reviews here and here). His definition of craftsmanship, “an enduring, basic human impulse, the desire to do a job well for its own sake” sounds like a logical consequence when an individual is well-motivated. Perhaps then, craftsmanship is the spirit to be promoted.
I subscribe via email to The Daily Green, a website that advocates green consumption as well as champions environmental initiatives by the green movement. I chanced upon this article on high gas prices in Alaska one day in my email. It took me by surprise because one would think that since Alaska produces quite a significant amount of America’s gas (gasoline, referred to as oil or petrol in the Singaporean context), one would be surprised by how expensive petrol can be in Alaska. And what caught me by greater surprise is that this article was written by a green Republican! Jim DiPeso, The Green Conservative of The Daily Green, is policy director of Republicans for Environmental Protection, and if you, like me, used to think that Republicans do not believe in saving the environment, then you thought wrong.
Coming back to this article, in the “Land of Sarah Palin”, to have oil prices higher than the rest of the country and to have stage legislators calling for fuel price regulations would be a surprise given our assumptions that Alaskan oil would fuel the state and that Republicans are against price controls or regulation. The article highlights the components of the cost of petrol, and highlights that essentially all that crude oil pumped out of Alaska goes into the global market, subject to global market pricing, which is subjected to influence by OPEC (Organisation of Petroleum Exporting Countries) as well as influence by global events that will affect demand and supply of crude oil worldwide.
In addition, Alaska’s petrol market is described as oligopolistic, i.e. players have more pricing power in a relatively-small state with little competition in supply of petrol compared to other states. Given that competition in refining and distribution of petrol is limited in Alaska, the prices would probably already been higher even if Alaskan oil went straight to Alaska. The fact that petrol producers in Alaska even need to import crude oil from other countries will debunk the myths about Alaskan-produced oil.
So essentially, the “drill, baby, drill” lobby who claim that the answer to lower petrol prices would be to open up more oilfields in Alaska are quite mistaken. Looks like The Green Conservative is pitting himself against other Republicans who belong to that lobby. And perhaps the solution might turn out to be more competition instead, which is something the Republicans should focus on instead of drilling their way out of an energy crisis in America (and give the environment a reprieve!)
The Lexington of the latest The Economist made an important point about the indirect impact of terrorism on America. Migration of brains into America has slowed, tourist has become rather fed-up with security checks that comes with a vacation in America and even conferences have moved away from there as a result of the hassle brought about by security restrictions. Perhaps improving the ‘service quality’ of border customs would improve the situation.
The interesting phenomena raised in the article is that giving illegal workers legal status will help reduce their competition with the American workers.
American blue-collar workers fear that Mexican immigrants will undercut their wages. Mr Hinojosa-Ojeda says they won’t if they are legal. The fear of deportation makes illegal workers accept worse conditions, he finds. Once legal, they demand higher wages, and no longer drag down those of the native-born.
The report on the economic benefits of immigration reform is available from Center for American Progress. The idea fits into conventional wisdom about making choices between alternatives. Removing the option of getting deported would naturally help raise the expectations of the foreign workers and make it harder for them to compete with those native-born.
An article in The Economist raised a rather interesting but oft-neglected problem: the proliferation of labels and categories where countries are haphazardly shuffled in, without consideration for historical or geographical accuracy. I first encountered this in JC Geography, when we were taught to evaluate (it’s amazing though that we have to be taught how to evaluate, but this is the A-levels for you) the tendency of geographers to pigeon-hole countries into monikers like the North and the South or Third World, Second World and First World, which can be highly inaccurate and neglects discrepancies or outliers. In the topic of Globalisation, we were taught that to divide the world into a simplistic North-South divide would be to forget about what it really means to be geographically in the Northern hemisphere or Southern hemisphere. Developed countries like Australia and Singapore, for instance, would be technically south of what is in the North in the divide but that does not mean these countries are economically comparable to other countries in the South.
Pardon if what I just described to you sounds confusing, but you will get a better idea if you read The Economist article, which gives many more examples of blatant generalisations in history and geography. Even labels we consider absolutely normal or acceptable might hint of insensitivities. We often refer to South America as Latin America, but this term smacks of colonialism, and the continent while still speaking mainly Spanish and Portugese is certainly wielding its own influence rather than continue to be within the Latin or European sphere of influence.
These labels are certainly convenient, but we should never forget that they must be questioned every now and then to check their relevance. Like, even the oft-used ‘developed’ and ‘developing’ countries could be questioned in terms of the spheres they cover and how to categorise countries. For instance, would Singapore be a ‘developed’ or ‘developing’ country? And based on what indicators?
Something for the GP (General Paper) and Geography student to think about.
A couple of weeks back, I stumbled upon the concept of Goodhart’s Law and I can’t help wondering if the same is true of corporate performance indicators. Perhaps the case is weaker for corporate performance indicators but the idea may still hold some truth.
The Law based on Goodhart’s formulation in 1975 is “any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes“
It is initially more or less based on the conduct of monetary policy and has much to do with statistics. But in the corporate setting, tying CEO’s financial rewards to share prices has somewhat the same sort of effect. Without the coupling of the 2 variables – share prices and CEO financial compensation, the share prices would ordinarily reflect the performance of the company, which is a proxy for the outcome of the management of the firm under the CEO (although people might argue that it is inaccurate, but in business, outcome is still the most important). When they are linked, CEOs might become obsessed with raising share prices of the firm and neglecting the core management of the firm.
The same applies for lower level sort of work. For example, if the waiting time at the government clinic is used as a measure for performance then doctors and nurses might quickly try to go through the patients and speed up consultation to hit their performance target rather than provide quality care and service. Likewise, if too much emphasis is on delivering good food at a local restaurant, service might be compromised, which explains why the boss of the pizzeria down the street has real bad attitude. Perhaps this is just part of human nature, the narrow focus of our minds.
With so many people obsessed with the Internet in China and yet even more obsessed with curbing the addiction of them, Google should be making money in China. But apparently it didn’t quite beat Baidu.com that much and thus decided on a ‘New Approach‘.
The Economistdiscusses the issue at length, citing how Google has come to this after experiencing hackers attacks. They also talked about the similar kind of problem other big sites are facing from China.
Tech Crunch noted that Google’s stance in this case is more about business; perhaps the hacking attacks have been around for a long time and Google has gathered the evidence but lately, they reviewed their business and decided that the cost of maintaining the engineers and censorship is too heavy given the gains they made.
When our Climate Change summit comes up with a result that is claimed to be “Better than Nothing“, and that we have to somewhat console ourselves what an underwhelming Copenhagen accord have been or might be useful, we might actually want to find a new planet. One to live in of course.
Days ago I stumbled upon a recent dispute between Fox and Time Warner Cable. The basic idea of the dispute was that Fox wanted more money from Time Warner for carrying their channels and Time Warner didn’t want to. The whole thing ended up with publicity campaigns on both sides (Rolloverorgettough.com for Time Warner Cable and Keepfoxon.com for Fox) to make use of TV viewers’ support to raise their bargaining power. They eventually settled the dispute so viewers will continue seeing Holmer Simpsons munching on doughnuts.
It is interesting how Lauren Collins explained in The New Yorker how Time Warner Cable was basically using a forced-decision device since there’s a spectrum of other options available to them. Time Warner Cable could have just absorbed the price increases and sacrifice their profits. By running the Ad campaign, they’re signaling to Fox that they’ll not accept any changes to the pricing of the deal – either get paid the same or no more screenings of Fox programmes; effectively introducing a Morton’s fork. At the same time, like what Collins mentioned in the article, “The strategy in a nutshell: couch potatoes as human shields.” The company handling Time Warner Cable’s campaign, Purple Strategies is pretty amazing; they are basically specialist in positioning stand in public for organizations or political bodies in ways that allow them to maneuver themselves under different circumstances.
The incorporation of strategic movements in corporate lives is going to become increasingly common, which gives us more reason to check out Dixitt and Nalebuff’s Thinking Strategically or their newer Art of Strategy.
Trapped on our little island of Singapore, we hardly wonder what our handphones are capable of; here in Singapore we typically use it to text, call, surf, as a phone book to retrieve contact details of people, a personal organizer and even a camera. Singaporeans makes extensive use of their phones and our preferences are varied, a reflection of our melting pot of diversity. And as the briefing in the latest issue of The Economist shows, mobile phones are indeed a great reflection of the culture of the people using them.
The article mentioned a couple of interesting quirks about people using mobile phones around the world:
Japanese use their phones to text and surf intensively because using phones to make or receive calls on board trains and some other public places are thought to be extremely rude.
Spaniards reject voicemail because they think it’s rude not to receive calls from others when they call, even when the receiver is busy with matters.
Chinese will interrupt conversations to receive calls because they are afraid to that they’d miss a business deal; at the same time they use knock-offs handphones that often have extensive functions, even capable of using two SIM cards.
Americans are willing to endure limited cellular coverage; perhaps fearing the hassle involved in changing operators.
Italians, Greeks and Finns would switch operators if they find their coverage limited and yet are fearful of the effects of electro-magnetic radiation, which probably is more ubiquitous than in America.
Indians use mobile phones as torchlights.
Africans usually use ‘beeping’ (ie. give the person a ring) to contact people and signal them to call back when they’re low on pre-paid credits.
Indeed, mobile phones are changing everyone’s lives everywhere; one just needs to know the name given to these devices in different societies and cultures to understand their importance. In fact, Iraqis thought more highly of the proliferation of mobile phones as a result of the American invasion than their supposed liberation.
I read Origins of Wealth about 2 years ago and got introduced to the idea of complexity, which was elaborated for markets (specially that of financial markets) by Benoit Mandelbrot in The (Mis)Behaviour of Markets. Below is a discussion about the wider applicability of the concept of evolution I’ve learnt about from the book and some insights I’d like to share with more academic audiences. These ideas relates to the stuff Kevin Kelly was talking about on TED.com I introduced in a reading package. This long piece was penned during the time I read Origins of Wealth:
Reading Eric D Beinhocker introduced me to the concept of Evolutionary Systems, which I hope to talk about. It’s definitely a great book and I am so glad I bought it (despite the price – my price elasticity of demand for books is very very low). The reason I have decided to pen this short piece on Evolutionary Systems is that I see its application in a wide spectrum of reality and I would like to demonstrate how this idea can help weave ‘Man & Nature’ with ‘Science & Technology’, domains that our General Paper is currently delving into.
Evolutionary systems obeys certain characteristics of evolution – a process that can proceed infinitely without an equilibrium (in the traditional sense though you have no problem isolating periods of time and define them as a moment of equilibrium, albeit one that vanishes rather quickly). In Beinhocker’s words, the system is governed by the ‘evolution algorithm‘ that searches for the fit ‘interactors’ in the ‘fitness landscape’. I hope this is not too overwhelming for general interest readers. I’ll deviate briefly from my main focus on ‘Man-Nature & Science-Technology’ Argument (MNST) to explain the terms I have just introduced. ‘Interactors’ are basically agents within the system, like man within nature, technology within society and so on. ‘Evolution Algorithm’ refers to the seemingly systematic formula in which interactors constantly evolve to adapt to changing conditions within the system (whether the changes are results of endogenous or exogenous factors). Finally, the ‘fitness landscape’ refers to how fit the different characteristics the interactors can possibly assume would be given that they really manifest in the system. This is a little complex but just take it that the ‘landscape’ refers to a library of collection of strategies for interactors to survive within the system. How good the strategies are is constantly changing and what evolution does is to pick out the best of all these strategy constantly, occasionally eliminating some lousy ones and so on. This process is essentially what quantifies evolution.
Having established this, I must propose that it is nature that has created this process of evolution, and this mindless but innovating process – it is no different from the laws of physics laid down by the very same nature, as well as the interactors of systems, and even systems itself. I shall not engaged in any quarrels on intelligent design right here and mindlessly assume all my readers to be intelligent followers of the idea of ‘design without designers’. In my MNST argument, I believe that nature lays down the ground rules for things to happen and whatever happens is part of nature, and the natural order. Therefore, Science & Technology is not only part of nature but relies on the laws and forces that nature has laid down in order to work. Man, has essentially leveraged on the evolution algorithm to construct ever increasingly sophisticated stuff.
Okay, now you are saying Man is emulating nature, so isn’t he trying to play God or something? Well, yes and no. Evolution, all these while, have only searched through all the possible lifeforms, object shapes, idealized forms, whatever you can conceive, using a very crude method of trial and error that closely resembles the perturbation that cutting edge physics theorist use to approximate Unified theories. Whatever characteristics that the agents may have that can help him given the existing conditions would be played out and then depending on what characteristics survive the conditions, the evolution process duplicates or eliminates the characteristics according to the fitness assessed. As such, evolution have so far been a slow and extremely painful process of extinction, disasters. The intensification of the use of deduction by man has allowed the evolution to speed up. Logical deduction has allowed quicker elimination of flawed characteristics or strategies for interactors and so they are not even played out in reality. Technologies are products of elimination both by deduction and by the market. The residual stuff that remains are basically what’s left after evolution has stripped it of its unfit cousins. Nature has essentially created man, who in turned, emulated the same innovation (ie. evolution process) that spawned the specie of homo sapiens itself in an attempt to ground its kind in the entire of a new reality – a science-tech reality.
The problem (a sort of disequilibrium occurs) when the changes in fitness landscape triggered by endogenous factors (in this case the emergence and proliferation of products of deductive evolution) has arisen a little too fast for the evolution algorithm of nature itself to catch up. Evolution is on-going because the emergence of a new strategy or at least the manifestation of it can easily alter the fitness landscape and changes the fitness of existing strategies that may have worked well for a long time (and thus harder to fade away).
The appearance of technology – a product of deductive evolution sent out ripples across the fitness landscape that radically altered the fitness of individual characteristics because products of deductive evolution are often able to extract itself from existing manifestations (all the intermediate evolving stages were transversed in the minds of the innovator). This made it hard for the other interactors, with strategies that are rendered useless, to be able to adapt quick enough. Because of that, man has taken a big bold step to dictate the paths of evolution, to alter genes, to tailor species to the new fitness landscape after the rise of technologies that caused the original patterns of existence to undergo an overhaul. I must say, this may have been one of the natural pathways evolution has decided to assume. Mankind have been selected through this mindless innovating algorithm to further its function. Nature overseen the process and will continue to oversee it. Nature cannot cease to be.
Nature, is essentially just a set of laws, forces governing everything. That carbon was chosen to be the main elemental building block of life is perhaps a result of evolutionary process itself. The rest that we classify as nature are mere manifestations of these laws. Man’s being is part of this algorithm, and so is Science & Technology, a subset of man, and thus Nature itself.
The original entry I wrote on my personal blog can be accessed here.
