Quickthink

This is not a blog about economics or economic theory, though from time to time, I do comment on economic policy issues. I do so as a dilettante, with just enough training in the field to know my limitations. When I have commented, my focus has been on austerity policy. And the reason has less to do with theory than politics. Perhaps I should explain.

Going back to 2008, there has been an ongoing debate about how to cope with the financial crash. Even though the crash presented a new and urgent situation, the debate about what to do by and large, continued the thread of a political debate about the size of government and its spending. Fortunately, the Bush Administration held its nose and did the right thing, saving the US banking system and preventing an all out meltdown, They deserve credit for that.

But even then, some argued that government action distorted markets and made the problem worse. I thought then and think now that this is beyond the pale - a chance to score political points rather than enhance the nation’s welfare. My comments have followed Paul Krugman, who argues that if anything, the US government policy response was too small. Unemployment rather than deficits should have been the main focus.

Well, one need not be a genius or even a PhD in economics to understand that attempting to balance budgets during a recession is a fool’s errand. There are no good examples of this working and there are good examples of austerity not working. But that is exactly the policy mix that austerians have pushed and pushed and pushed - despite the growing and growing evidence that austerity brought no economic benefits and turned massive unemployment into massive long term unemployment. Never mind! One must balance the budget!

More recently, there has been a bit of a wake up call when it turned out that data relied on by austerians to prove that we must cap the debt was the product of a coding error. Oh dear!  So, is it yet time for a reckoning?

If you don’t think so, consider the recent behavior of prominent austerian Niall Ferguson.  In response to a question at an investment conference, Prof. Ferguson blurted out that John Maynard Keynes (who first theorized about the liquidity trap) didn’t care about the future. And he had no such care because he was gay and childless. Outrageous! Ferguson’s gay baiting is offensive enough. But suggesting that Keynes didn’t care about the future is the economic policy equivalent of saying that the Pope is Muslim.

Austerians like Ferguson have argued for years that our responsibility to the future requires an “either, or” approach to spending. Either we spend now and pile up debt that our children must pay or we are responsible to our children and pay down debt, supposedly freeing them from the burden. Keynes and others pointed out that this is a false choice. During a liquidity trap — as we have now — austerity does not lead to prosperity in the future. It is the irresponsible choice, not the responsible one. In this weird policy context, the government is the only actor on the stage that can keep people employed until markets wake up again. And government can borrow very cheaply, paying back the debt when society can better afford to do so.

Perhaps there is a silver lining to this rather sordid event. To his credit, the good professor apologized for his comment. But we might consider as well that this incident shows that he has no better arguments to offer.

In other words, this “emperor” undressed himself in public.

In the old days (I mean a couple hundred years ago) one could get trapped in obligations to do physical labor. The daily chores took time and effort. And they drained energy too. These days, for most of us, living is easier — at least from a physical labor point of view. Chores don’t require as much time or effort. That is the good news.

The bad news is that we are drained in another and perhaps more dangerous way - by distractions. They are everywhere in the home, at work, and in our common spaces. Psychologists are just now beginning to research how dangerous these distractions are and NYT offers some interesting results

Clifford Nass, a Stanford sociologist who conducted some of the first tests on multitasking, has said that those who can’t resist the lure of doing two things at once are “suckers for irrelevancy.” There is some evidence that we’re not just suckers for that new text message, or addicted to it; it’s actually robbing us of brain power, too. Tweet about this at your own risk.

But there is an interesting nuance. When we learn how to protect ourselves from distractions, our brain performance gets a lot better. As Steve Jobs said “focus is about saying no”. Well, perhaps it is also about preparing ourselves to say nyet.

There is a lot of head scratching going on these days about what is the next big thing coming to the web. Social networking (Facebook style) is already old school. But what is new school? No one knows for sure, but there are a few trends out there that are suggestive.

The first trend relates to video. Video platforms that free us from TV are growing at a stunning rate.This makes sense as they give more options to viewers. Put another way, viewers don’t want to be force fed content that Hollywood chooses. So, over time we will see more experiments in how to deliver more video options.

Like what?  The first revolution is in finance and it is already happening. Kickstarter et al will get better at merging financing and marketing for new shows. With more financing, we will see more producers emerging in different places. Some will strive to look like Hollywood and some will strive to be anti-Hollywood. But we will see an explosion of styles if we see an explosion of financing. With more styles, we will need better curation. We will get more opportunities to get behind the scenes and connect with stars, directors and producers.

The second relates to chat. Commenting has gotten very old school. It doesn’t stimulate connectivity and we want more options to get into the flow. Twitter and Facebook are not bad. But they don’t make it easy enough to add value to a thread of thinking. They are not close enough yet to enjoyable conversation. Podcasting and media connections around podcasting may offer more potential. Or some other way that we can seamlessly add layers to content.

So two trends to watch - more video related options and better conversations. What do you think?

I listened to Dan Pink’s podcast “Office Hours” the other day where he interviewed the Heath brothers. They have written a pretty cool book on decision making called “Decisive”. I trust Dan’s judgment, and he gave it a rather effusive thumbs up.

So, do you have trouble with decision making? Most of us would say “no” and say it without thinking. In fact, research shows that we are not as good at this as we think. The Heath brothers think you can get better if you focus on the process of decision making. BTW, this is something that Peter Drucker advocated a long time ago. and they and Peter are right.

Here is a 4 step process that you might consider using (WRAP)

• Widen your options - avoid false choices
• Reality check - avoid confirmation bias by trying to disprove what you want to believe
• Attain distance - don’t let fear of something new hold you back
• Prepare to be wrong - set trip wires for post decision checks on whether your choice was appropriate

This is not the full message, just a heads up. But it is worth noting that we are not as good at decision making as we think —- and especially when we fell overwhelmed in crisis.

From Giga - Google announced that people are watching around 6 billion hours of video streamed from YouTube —- every month. That is a lot of video streaming and I think the number will get a bigger. BTW, the number doubled from last year.

That’s a story worth tracking. And BTW, this is not just about YouTube. Check out this quote from BI

TV ratings have declined -1.2% since 2010. Meanwhile, Netflix subscriptions grew nearly 70% during the same period.

Streaming seems to be replacing TV.

There is something magical about the phrase “hidden gem”. Gems are, of course, things of great beauty. They have real and symbolic beauty. So one would seek out a “hidden gem”. Of course! Lead the way!

Well. today I discovered that I live in one. Lonely Planet ranks Tartu among the hidden gems of Europe. Tartu does have its charms. And now I will look more closely.

Taking over an idea from Caillois, Csikszentmihalyi writes that there are four classes of games. These are games of competition (agon), games of chance (alea), games of extreme sensation (ilinex) and games of alternative reality (mimicry). Games in each category offer opportunities for us to go beyond the boundaries of our ordinary experience, and of course, we crave all of them.

The first three categories are well known as distractions:for example, agon in competitive sports, alea in gambling, and ilinex in amusement park rides. But the fourth category - mimicry -  seems much broader and more nuanced. The arts in general fit in here but especially story telling. And this type of game is more than a mere distraction. To the contrary. one can argue that mankind cannot make meaning outside of the context of story lines.

How does it work? Stories transport us to a time and place that is in some respects better than our own where we meet heroes. So, for example, we thrill to tales of Viking exploits not because of the savagery they imposed but because of their bravery and curiosity.

I find it a bit odd that while we instinctively warm up to stories, we tend to be leery of  real world adventures. Csikszentmihalyi offers a plausible explanation. To feel the thrill of the game, we must avoid being overwhelmed by the challenge it imposes. In life, the risk of being overwhelmed is too real for many of us. We don’t feel protected enough to master ever greater challenges. One might say that we play the game of life as defense rather than offense.

Why go on about this? Because I sense that next generations will fear reality less than I did when I was young. They will play more real games with life. And that means they will gravitate to mentors who can help them level up.

Schools don’t do this. Careers? Well, not in the sense that I mean. To see that, check out this video of a very young guy, Taylor Wilson, who wants to build small nuclear reactors. The video is not so much that young Mr. Wilson has this idea.What is interesting is his confidence about realizing this adventure before he goes to university. This is an example of the gaming generation.

Steam beer? Never heard of it … until this afternoon. I have heard of a lot of other types of beer and some of these are quite good. Rye beer, for example. Too bad rye beer is hard to get. But then I popped over to Saveur for an afternoon chill and bumped into Ken Weaver. Ken is into steam beer, it seems. And now I want one. Is it worth a trip to San Fransisco? It might just be.

Ok. King Richard III was trapped on the battlefield at Bosworth. His army was defeated and he was at extreme personal risk from his enemies. Shakespeare gives him the immortal line “… My kingdom for a horse!”

Here is the young king (his facial structure was rebuilt from his recently discovered skeleton)

But the problem was not so easily solved. There was no escape. He had to die. And he was killed on the battlefield. But what happened after he was killed? Well, his body lay there, right? But did his consciousness disappear?

Probably not right away. Consider this:

Consciousness After Death: Strange Tales From the Frontiers of Resuscitation Medicine | Wired Science | Wired.com
http://www.wired.com/wiredscience/2013/04/consciousness-after-death/all/

For those of you who don’t feel like reading the article, it relates to a doctor whose job is to bring you back from the dead —- if he can. And these days, doctors can do this within a limited time frame given the right conditions. And they do it. That is amazing enough. But there is something more weird about this. Those brought back often report that they could see and hear what was going on around their body … while they were supposed to be dead.

What is this? Whatever it may be, it is not neural activity. There is none. It is something else that the doctor cannot explain. And it raises the question about where our consciousness comes from.

Does this matter? Consider this. If King Richard was nothing more than a bag of bones and neurons, his consciousness would have died with him and his story was finished. But if his consciousness existed beyond that bag of bones and neurons, the story was not completely over yet. It may not be over now.  So too for all of us.

And on a more day to day level — are we just bags of bones? Or does our consciousness use those bags of bones? Can we transcend our bags of bones in ways not well explored?

Mysticism? ESP? No no. I am not advocating that we start pretending to do stuff that we actually cannot. I am just responding to the data that has been offered to us by the good doctor.  Something that we cannot explain — yet.

And we might see the “flow” of experiences that we call conscious thought differently. Csikszentmihalyi exhorts us to focus on doing things rather than being someone. And if our consciousness is larger than that one self anyway, the advice sounds rather obvious.

Back in 1989, Peter Drucker published a book called “The New Realities“. The basic idea of the book is that the societal changes we will see in the future are based on current trends that are pretty well known now. In other words, we know the issues (the “realities”), we just are not sure about how to address them yet — but we will figure this out over time, even while the media and our political systems are distracted by a million other things.

He wrote this about organizational structure of the future

The typical large organization, such as a large business or a government agency, twenty years hence will have no more than half the levels of management of its counterpart today, and no more than a third of the number of “managers.”

Why? Because these organizations will be “information based”.  I don’t know if Peter’s prediction about the size of management has come true yet. I suspect that it has not. But the trend is moving in that direction. Dave Cashen offers some visions about how some organizations are ditching “command and control” hierarchy for new structures that are less top heavy.

These are examples of “distributed expertise” systems. Rather than concentrating power in one place (like the top of the organizational pyramid), power is dispersed through a system that uses it as needed. This trend has been at work since societies started experimenting with “social mobility” back in the 19th century. Wider access to education made it viable in the 20th century. And as the pace of societal learning accelerates in the 21st century, distributed learning systems are likely to further gain, while command and control based systems do less. BTW - as the Steve Jobs story shows, this does NOT mean that we don’t need leadership. To the contrary, we need new types of leaders.

So what is needed to make this happen? Drucker suggested we focus on the following

• improving rewards, recognition and career paths
• strengthening unified vision
• improving management in an organization of task forces
• ensuring a flow of new top managers

I think this is almost right. The one quibble that i have is with the third bullet point. I think that cooperation between organizations will lessen the coordination tensions within any single organization.

So how does this look? Another way of asking this, is where is the starting point? And my vote is for better “unified vision”. The bigger the agreement on an essential goal, the more focus we can bring to bear on the issues involved. For a really big “unified vision” check out Amery Lovins TED talk on “reinventing fire. The type of vision that Lovins offers goes way beyond any one organization - it is about building an “ecology” around solving an urgent problem facing humanity in the 21st century.

Cool stuff.