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    Book Review: The Good Jobs Strategy, by Zeynep Ton

    Posted by David Foster on 19th January 2020 (All posts by )

    Retail businesses are associated with low pay and high employee turnover–especially in the case of those retailers who offer low prices–and the same is largely true of customer-service call centers.  It has been generally assumed that low wages in these operations are a necessary concomitant of low prices for consumers, and that only businesses serving a premium-price customer base can afford to pay high wages.

    Comes now Zeynep Ton, arguing that the low-wage strategy is not the only one available to retailers and other customer-service businesses that need to offer low prices, and that indeed often–usually–it is not the best strategy.  She draws connections between the pay and hiring strategy of a business and the operational basis on which it is managed.  To wit:

    Low pay and high turnover implies minimal employee training, because you can’t afford extensive training for employees who are going to leave in a matter of months.  Minimal training implies less operational flexibility, because employees will not be cross-trained for other functions.  An environment of high turnover and not-well-trained employees implies that employee functions must be strictly proceduralized, often to the point of excessive rigidity.  And the lack of flexibility driven by minimal training and experience makes it harder to build in appropriate staffing “slack” to handle peak demand situations.  The lack of slack and flexibility leads to endless emergency rescheduling of personnel, reducing morale and further increasing turnover.  (She provides some vivid examples of what this endless and short-notice rescheduling can mean to the personal lives of employees.)

    On the opposite site, higher pay can contribute to lower turnover, making more-extensive training economically viable.  Better-trained employees can more easily perform multiple functions, so that absences or staffing imbalances have a less-harmful effect.  Better-trained and more highly-motivated employees don’t need micromanagement, either by human managers or by systems and procedures.

    Ho, hum, you say, what’s new?…people, especially consultants and professors, have been writing for years about why employees should be treated well and how it pays off to do so.  How is this book different from a million of others?

    The Good Jobs Strategy is, in my view, something quite different from the typical “just treat ’em right” sort of soft, warm, and cuddly advice often found in books and LinkedIn posts.  The author ties the feasibility of the high-pay / high-expectations strategy to effective operational management, with the right systems, procedures, and incentives to enable such operational excellence.

    An interesting example the author mentions is that of Home Depot. She credits much of the chain’s early success to its high-quality associates–“knowledgeable and helpful and willing to do whatever it took to help you, even if that meant explaining to you that you didn’t actually need what you came to buy.”  The associates tended to be former plumbers, electricians, etc–and they were employed full-time.  HD grew very rapidly–“customers were driving two hours to go to its stores and, once they experienced the service and great prices, they kept coming back”

    But, with the growth came problems.  There was a lack of discipline in the stores, in how the stores communicated with headquarters, how the company selected its products, and how it communicated with suppliers.  “In 2000, bills and invoices were still processed by hand, and headquarters communicated to 1134 stores via fax because there was no companywide email.”  In 2008, two senior IT executives (newly hired from Walmart) concluded that Home Depot’s IT systems were about where Walmart’s had been in 1991.  In summary, HD had become “a classic example of a service company that did not fully appreciate the role of operations in making customers and investors happy…Operations are all those factory-like activities that a business has to carry out in order to provide whatever it is that it sells. ..In a retail store, for example, operations involves things like having the right product in the right place, having a fast checkout, and having a clean store.” Zeynep Ton says that internal measurement systems often don’t focus on such matters–at one retailer she worked with, “Twenty percent of the (store manager’s) score had to do with the store’s customer interactions.” In this chain, “mystery shoppers” would score the store on things like how the employees greeted customers and made eye contact.  But, she notes, “kindness or friendliness won’t make up for operational incompetence. ..It is hard for your dry cleaner to make you happy if you can’t wear your favorite suit to an important interview because they didn’t get it cleaned on time.”

    When Robert Nardelli became HD’s CEO in 2000, the systems and procedures problems were rapidly addressed.  Gross margins and net profit margins increased substantially.

    BUT, “the culture of cost-cutting was soon felt at the local level, where store employees, who were once at the center of Home Depot’s success and at the top of Home Depot’s inverted pyramid, became a cost to be minimized.”  The company started hiring part-timers, in the name of both staffing flexibility and cost…the knowledge level of the typical employee encountered by a customer fell noticeably.  By 2005, HD was ranked lower in customer satisfaction than was K-mart.  Same-store sales growth fell and even became negative.  Nardelli left the company in 2007.

    Zeynep Ton summarizes:  Operational designs don’t execute themselves.  They depend on having the right people, and having those people motivated to do the right things.

    The book discusses the actual complexity that exists in many seemingly-simple businesses, and the fact that individual employee decisions do make a difference. “If you are a supermarket employee shelving a case of toothpaste and all but two of the tubes fit on the shelf, should you take the two extras back to storage or would it be better to squeeze them onto the the shelf, even if it doesn’t look so good?  If a tomato looks just a little soft, should you take it to the back room now or wait until it looks worse?  Maybe it will be just fine for a customer who wants to make tomato sauce…it is hard, if not impossible, to make such work so simple and simple and standardized that anyone can do it without exercising judgment.  Things happen in real time at retail stores, and employees have to learn to react.”

    (It is incredibly refreshing to see a B-school professor thinking and writing at this level of detail and specificity)

    One interesting company discussed in the book is QuikTrip, a large chain of convenience stores combined with gas stations.  The company is very selective in its hiring….the author compares getting hired there with the difficulty of getting into an Ivy League college.  In the Atlanta area, 90% of applicants don’t even quality for an interview, and of those who do, only one out of five is selected.  Turnover rate among QuikTrip employees is only 13%, far lower than the industry as a whole.  The chain emphasizes speed and flexibility…”QuikTrip’s fast checkout is a site to behold.  One thing that makes it so fast is that any employee can use any register at any time without making the customer wait.  If you regularly shop at a supermarket, you know it’s no fun waiting for the cashier do a changeover.  The other thing that makes QuikTrip so fast is that employees have been trained to ring up three customer per minute.”  She says that the employees can even calculate change in their heads!

    Other examples discussed include Costco, Trader Joe’s, In-N-Out Burger, and the Spanish supermarket chain Mercadona.

    Read the rest of this entry »

    Posted in Book Notes, Business, Customer Service, Human Behavior, Management, Tech | 31 Comments »

    Shovel That Code

    Posted by David Foster on 11th January 2020 (All posts by )

    …into that server!

    Joe Biden gave coal miners facing possible unemployment some advice:  learn to code.

    In reality, of course, programming/coding is a skill that can exist on multiple levels.  Someone writing a simple spreadsheet model for some kind of repetitive tracking problem is working at a different level from someone writing a well-defined module within a large system for a bank, who is in turn working at a different level from someone writing interrupt-level hardware drivers for an operating system, or for someone creating the idea and user interface, as well as the code, for a new consumer-facing product.  Some of these tasks will usually pay less than what a skilled coal miner is paid, some of them will pay considerably more.

    And also, programming is not an infinite reservoir of job demand. Much work that previously required considerable high-skill programming has now been largely automated by software tools and/or by complete application systems, and considerable programming work is being offshored–see my post telemigration.

    Biden also asserted that:  “Anybody who can throw coal into a furnace can learn how to program, for God’s sake!”

    Ignoring the inherent ridiculousness of this claim as a factual assertion…does Biden actually think that manual stoking of coal furnaces is a thing in today’s economy?  Does the Bureau of Labor Statistics show a large count of people employed as stokers?

    In reality, the mechanical stoker was invented well over a century ago.  They were common in high-horsepower steam locomotives by 1900, and were and are used in coal-fired power plants.  I doubt if there was much manual stoking going on by 1940, except on steamships…and coal as a fuel for ships was rapidly on its way out by that point, as it was being displaced by oil

    Plus, Biden was talking about coal miners.  Does he think that there are coal-fired furnaces in coal mines?  If there were, you would likely get a massive explosion from igniting of any gas in the mine.

    Biden clearly understands as little about the software industry as he does about the energy industry.

    This is the man who says he was Obama’s point man on a “jobs of the future” initiative.

    Can you imagine what these people would do to the economy if they ever achieved the degree of power that they so avidly seek?

     

     

    Posted in Big Government, Economics & Finance, Elections, Energy & Power Generation, Tech | 24 Comments »

    What Future for the Global Auto Industry? Discussion Post

    Posted by David Foster on 7th January 2020 (All posts by )

    In December, I announced an upcoming discussion of the future of the auto industry and, in particular, of the role and impact of electric cars.  In that post, I included a number of links to worthwhile reading on the subject.  Let’s do the discussion this week, in comments to this post.  I have a few thoughts to get things going:

    –It is true, as Vitaliy Katsenslson points out in his essay, that electric cars are much simpler than conventional cars…but I would qualify this statement as mechanically simpler than conventional  cars.  They are significantly more complex electrically and especially in terms of the electrochemistry of the battery…a hidden kind of complexity, but important nonetheless. From what I have read, there seems to be considerable uncertainty about the expected lifespan of new lithium-ion battery models..which lifespan, of course, has a major impact on the overall economics of electric cars.

    EVs are expected to have lower maintenance costs and requirements than conventional vehicles, based on their relative mechanical simplicity.  This is probably true, in general, although a lot of the problems with cars these days seem to be with systems other than the engine and drivetrain..airbag sensors, seat actuator motors, various sensors, etc.

    –Range limitations and “range anxiety” have been significant inhibitors to EV sales.  Vitaliy K makes the excellent point that it is much easier to set up an electric-vehicle charging station than a conventional gas station, with its underground tanks and consequent regulatory complexities, and he believes we will see tremendous growth in the number of such charging stations and consequent reductions in EV range anxiety.

    It takes about 45 minutes to an hour to fully charge an EV (using Tesla as a model and assuming a high-power charger such as Tesla’s “Supercharger’), which implies that people are going to need something else to do while their vehicles are charging, away from home or the office.  Restaurants and shopping centers become obvious venues for charging; however, this leads to another issue, that the driver may wind up being away from the car for a couple of hours or more, tying up the charger for that whole interval: this issue would need to be reflected in the pricing of the charging facility.

    Also, while it is true that setting up EV charging is simpler than opening a gas station, it is not necessarily trivial if one is setting up multiple high-capacity chargers.  A Tesla supercharger draws 150KW, so putting 30 of them in a parking lot would result in an incremental peak demand of up to 4.5 megawatts.  I doubt if the electrical systems feeding many restaurants, or even shopping centers, could accommodate 4.5MW of additional demand without some work by the utility supplying the power.

    –Efficiency:  It is true that the conversion of stored energy into motion is much more efficient in an EV than an internal-combustion-engine vehicle; this is mainly a matter of the engine thermodynamics.  BUT, if the charging electricity comes from a natural gas plant of a coal plant, you are looking at best at a 60% fuel-to-electricity conversion efficiency, and there will also be losses in power transmission and distribution.  If the electricity comes from solar or wind, then..depending on the time of day and weather conditions of the charging..you may be faced with a double battery storage situation, where energy is stored in a utility or home battery until needed for charging, and then stored again in the vehicle’s battery.  That double-storage situation carries both efficiency losses and, more significantly, additional capital costs.

    EVs do have the ability to capture much of the energy that would otherwise be lost in braking, and this is especially valuable in start-stop driving situations, as with local delivery operations, and probably extends the lifetime of the mechanical brakes.

    –Performance…EVs have excellent acceleration capability (when adequately powered) due to the torque characteristics of electric motors.  They may be able to achieve very good handling if battery installation provides for a very low center of gravity.

    –Climate…not speaking here about ‘climate change’, but about climate in its ordinary meaning.  In a conventional car, heating is basically free, using rejected heat from the engine (ignoring the energy used to power the fan, but that’s a small part of the picture), whereas in an electric car, heat must be generated using electricity from the battery, which of course has a negative impact on range.  Also, the battery itself will have lesser performance in cold weather.  (And the regenerative braking feature is also limited in very cold weather.)

    –Relative Costs…a high % of EVs today are either sold with subsidies by national/local governments, are built and sold in response to government edicts, or are bought in significant part for status purposes by individuals and organizations. Can EVs compete on cost head-to-head with IC vehicles on a nonsubsidized, free-choice basis?  This would seem to be largely a matter of how successfully battery costs are further driven down and how long battery lifespans turn out to be in actual service.

    It should be noted that electric vehicle sales in China have cooled rapidly…down 44%…since the government reduced most subsidies at the end of June.  What would be the ‘true’ demand in the US without consumer incentives and mix requirement on the manufacturers?

    Read the rest of this entry »

    Posted in Business, Economics & Finance, Energy & Power Generation, Environment, Marketing, Transportation | 41 Comments »

    Life Without Smartphones

    Posted by David Foster on 5th January 2020 (All posts by )

    A college instructor, concerned about how poorly his students were doing in the philosophy class he was teaching, tried an experiment:  for extra credit, students could give up their phones for nine days and write about living without them. Twelve students, about a third of the class, took him up on the offer.

    Without their phones, most of my students initially felt lost, disoriented, frustrated, and even frightened. That seemed to support the industry narrative: look how disconnected and lonely you’ll be without our technology. But after just two weeks, the majority began to think that their cell phones were in fact limiting their relationships with other people, compromising their own lives, and somehow cutting them off from the “real” world. 

    See some of the student comments at the link.  Note that ten of the 12 students said their phones had been compromising their ability to have real-world relationships.  And in response to a student’s comment about safety concerns when phone-less, the instructor said:

    What’s revealing is that this student and others perceived the world to be a very dangerous place. Cell phones were seen as necessary to combat that danger. The city in which these students lived has one of the lowest crime rates in the world and almost no violent crime of any kind, yet they experienced a pervasive, undefined fear.

    For perspective, though, we should consider:  How would students in say, the 1950s through the 1980s have responded if they had been temporarily denied access to dorm or apartment phones and also to pay phones?  Because since smartphones became common, pay phones have largely disappeared, and I’d imagine that dorm and apartment phones are pretty rare as well.

    I’d hazard a guess that 1950s-1980s students who were denied access to conventional telephony would have felt somewhat disconnected, but not nearly so much as present-day students without their smartphones.

    When the telegraph was first invented, a journalist marveled that “This extraordinary discovery leaves…no elsewhere…it is all here.”

    As I’ve noted before, it seems that if the wired communications reduced the sense of elsewhere, it seems that wireless communications reduces the sense of the here and now.

    Posted in Academia, Deep Thoughts, Education, Human Behavior, Internet, Tech | 5 Comments »

    The Multi-Front Attack on Free Speech

    Posted by David Foster on 4th January 2020 (All posts by )

    Free speech…free expression generally…is under attack in America and throughout the Western world to a degree not seen in a long time. I think there are some specific phenomena and (partially-overlapping) categories of people which are largely driving this attack–I’ve written about this subject previously, here, but the situation has gotten even more serious since that post, and some of the important factors were underemphasized.  Here are the current fronts, as I see it, in the war (not too strong a word, I’m afraid) on free speech.

    The Thugs. As I pointed out in my post The United States of Weimar?, illegal actions against political opponents, ranging from theft of newspapers to direct assault and battery, have in recent decades become increasingly common on university campuses, and now are well on track to being normalized as aspects of American politics. Incidents of political thuggery are reported almost daily: just the other day, pro-Trump women at an upscale DC hotel were verbally attacked and apparently physically assaulted by members of a wedding party that was heavy on Democrat attendees; including, reportedly, some top officials from the DNC. A pro-free-speech film was reportedly interrupted by two men wearing masks. Interruption of movies they didn’t like was a tactic used by the Nazis prior to their obtaining official censorship powers. The film “All Quiet on the Western Front” was plagued by Nazi disruptions when released in Germany in 1930. And attempts to shut down dissident speakers on college campuses, such as this, have become so common as to now be almost the default expectation.

    The Assassins. These individuals go beyond the level of violence practiced by the Thugs, and make credible death threats they attempt to carry out against those whose actions or believe they view as unacceptable. The majority of threats and attacks falling in this category have certainly been the doing of radical Muslims; however, some of the more extreme ‘environmentalist’ and ‘animal rights’ groups have also demonstrated Assassin tendencies. At present, however, it is those Assassins who are radical Muslims who have been most successful in inhibiting free expression. Four years in hiding for an American cartoonist. But see also Ecofascism: The Climate Debate Turns Violent, how long until this justification and practice of violence reaches the level of justifying and carrying out actual murders?

    The Enclosure of the Speech Commons. Whereas the Internet and especially the blogosphere offered the prospect of political expression and discussion unfiltered by the traditional media, the primary social-media providers have taken various levels of controlling attitudes toward free speech; Twitter, in my opinion, is especially bad. Partly this is ideological; partly, it probably reflects their ideas about protecting their brands. Yes, there are plenty of ways to communicate online outside of the social media platforms, but their growth has been so rapid that a large proportion of the potential audience is not easily reached outside their domains. Note also that conversations that one would have been private friends talking at home, or over the telephone are now semi-public and sometimes made fully public. Plus, they become part of an individual’s Permanent Record, to use the phrase with which school officials once threatened students.

    The Online Mobs. The concerns of the social media providers about providing online “safe spaces” does not seem to have in the least inhibited the formation of online mobs which can quickly make life unpleasant for their targeted individuals, and even destroy the careers of those individuals. Decades ago, Marshall McLuhan referred to the technology-enabled Global Village; unfortunately, it turns out that this virtual village, especially as mediated through the social media platforms, has some of the most toxic characteristics of the real, traditional village. See my post Freedom, the Village, and the Internet.

    And the mobs do not limit themselves to attacks on the target individual: they frequently attack other individuals who fail to participate in the shunning of that target person. As an example:

    A few weeks ago, shortly after I left my magazine gig, I had breakfast with a well-known Toronto man of letters. He told me his week had been rough, in part because it had been discovered that he was still connected on social media with a colleague who’d fallen into disfavour with Stupid Twitter-Land. “You know that we all can see that you are still friends with him,” read one of the emails my friend had received. “So. What are you going to do about that?”

    “So I folded,” he told me with a sad, defeated air. “I know I’m supposed to stick to my principles. That’s what we tell ourselves. Free association and all that. It’s part of the romance of our profession. But I can’t afford to actually do that. These people control who gets jobs. I’m broke. So now I just go numb and say whatever they need me to say.”

    Increasingly, it’s not just a matter of limiting what a person can say, it’s also a matter of edicting what they must say.

    Read the rest of this entry »

    Posted in Academia, Big Government, Business, Civil Liberties, Civil Society, Education, Environment, Feminism, Media, Society, Tech, Terrorism, USA | 14 Comments »

    Community Size and True Diversity

    Posted by David Foster on 29th December 2019 (All posts by )

    Interesting remarks from Tim Harford, summarizing a study of friendships among college students:

    They found that students in a large, diverse campus sought out and befriended other students very much like themselves. In smaller universities with fewer friendship options, young people had more varied groups of friends because the alternative was to have no friends at all. 

    (link)

    This reminded me of something Chesterton said:

    The man who lives in a small community lives in a much larger world. He knows much more of the fierce varieties and uncompromising divergences of men. The reason is obvious. In a large community we can choose our companions. In a small community our companions are chosen for us. Thus in all extensive and highly civilized societies groups come into existence founded upon what is called sympathy, and shut out the real world more sharply than the gates of a monastery. There is nothing really narrow about the clan; the thing that is really narrow is the clique….The men of the clique live together because they have the same kind of soul, and their narrowness is a narrowness of spiritual coherence and contentment like that which exists in hell.

    I think that Chesterton’s words represent an important truth, but by no means the whole truth. It is true that much is lost in modern society to the extent that people only associate with others like them. But it is also true that much is lost in traditional societies to the extent that people are denied the opportunity to seek out others of similar interests. And also, in traditional societies, the “fierce varieties and uncompromising divergences” of which Chesterton writes are often to a large extent mediated by standardized and ritualistic behavior.

    Posted in Academia, Deep Thoughts, Human Behavior, Organizational Analysis | 13 Comments »

    A Christmas Reading From Thomas Pynchon

    Posted by David Foster on 24th December 2019 (All posts by )

    I’ve always liked this passage from Thomas Pynchon’s great novel Gravity’s Rainbow.

    The setting: it is the grim winter of 1944, just before Christmas. The military situation in Europe is not good, and WWII seems as if it will never end. London is under attack by V-2 rockets and V-1 cruise missiles (as they would be called today.) Roger and Jessica, two of the main characters, are driving in a rural area in England and come upon a church where carols are being sung. They decide to go inside.

    They walked through the tracks of all the others in the snow, she gravely on his arm, wind blowing her hair to snarls, heels slipping once on ice. “To hear the music,” he explained.

    Tonight’s scratch choir was all male, epauletted shoulders visible under the wide necks of white robes, and many faces nearly as white with the exhaustion of soaked and muddy fields, midwatches, cables strummed by the nervous balloons sunfishing in the clouds, tents whose lights inside shone nuclear at twilight, soullike, through the cross-hatched walls, turning canvas to fine gauze, while the wind drummed there…..The children are away dreaming, but the Empire has no place for dreams and it’s Adults Only in here tonight, here in this refuge with the lamps burning deep, in pre-Cambrian exhalation, savory as food cooking, heavy as soot. And 60 miles up the rockets hanging the measureless instant over the black North Sea before the fall, ever faster, to orange heat, Christmas star, in helpless plunge to Earth. Lower in the sky the flying bombs are out too, roaring like the Adversary, seeking whom they may devour. It’s a long walk home tonight. Listen to this mock-angel singing, let your communion be at least in listening, even if they are not spokesmen for your exact hopes, your exact, darkest terror, listen. There must have been evensong here long before the news of Christ. Surely for as long as there have been nights bad as this one–something to raise the possibility of another night that could actually, with love and cockcrows, light the path home, banish the Adversary, destroy the boundaries between our lands, our bodies, our stories, all false, about who we are: for the one night, leaving only the clear way home and the memory of the infant you saw, almost too frail, there’s too much shit in these streets, camels and other beasts stir heavily outside, each hoof a chance to wipe him out…….But on the way home tonight, you wish you’d picked him up, held him a bit. Just held him, very close to your heart, his cheek by the hollow of your shoulder, full of sleep. As if it were you who could, somehow, save him. For the moment not caring who you’re supposed to be registered as. For the moment, anyway, no longer who the Caesars say you are.

    O Jesu parvule
    Nach dir is mir so weh…

    So this pickup group, these exiles and horny kids, sullen civilians called up in their middle age…….give you this evensong, climaxing now with its rising fragment of some ancient scale, voices overlapping three and fourfold, filling the entire hollow of the church–no counterfeit baby, no announcement of the Kingdom, not even a try at warming or lighting this terrible night, only, damn us, our scruffy obligatory little cry, our maximum reach outward–praise be to God!–for you to take back to your war-address, your war-identity, across the snow’s footprints and tire tracks finally to the path you must create by yourself, alone in the dark. Whether you want it or not, whatever seas you have crossed, the way home…

    Posted in Christianity, History, Holidays, War and Peace | 8 Comments »

    Media and Young Children

    Posted by David Foster on 23rd December 2019 (All posts by )

    An MRI-based study looked at the effects of:

    –simply reading a story to a child

    –telling the story with the kind of animation that might be presented on a tablet or a TV screen

    –telling the story with the aid of a traditional picture book

    For the 4-year-old kids who were studied, the MRI data was said to suggest better patterns of mental development for the third type of storytelling than for either of the other two.  Note that it was a very small study: only 27 kids, probably too few to draw any kind of definitive conclusions…but interesting.

    From the WSJ article:

    The sound of the storytelling voice on its own seemed to be “too cold” to get the children’s brain networks to fully engage. Like the second bowl that Goldilocks samples, animation of the sort that children might see on a TV screen or tablet was “too hot.” There is just too much going on, too quickly, for the children to be able to participate in what they were seeing. Small children’s brains have no difficulty registering bright, fast-moving images, as experience teaches and MRI scanning confirms, but the giddy shock and awe of animation doesn’t give them time to exercise their deeper cognitive faculties.

    There is a bit of pleasurable challenge in making sense of what he’s seeing and hearing. There is time to reflect on the story and to see its reverberations in his own life—a transaction that may be as simple as the flash of making a connection between a real donkey he once saw with the “honky tonky, winky wonky donkey” of Craig Smith’s picture book. The collaborative engagement that a child brings to the experience is so vital and productive that reading aloud “stimulates optimal patterns of brain development,” as a 2014 paper from the American Academy of Pediatrics put it, strengthening the neural connections that will enable him to process more difficult and complex stories as he gets older.

    This ties in with some comments I made on my post Metaphors, Interfaces, Memes, and Thinking, which expands on some of Neal Stephenson’s ideas:

    I’d observe that as a general matter, the sensorial interface is less open to challenge than the textual interface. It doesn’t argue–doesn’t present you with a chain of facts and logic that let you sit back and say, “Hey, wait a minute–I’m not so sure about that.” It just sucks you into its own point of view.

    Posted in Deep Thoughts, Human Behavior, Media | 5 Comments »

    The Old Navy, by Daniel Pratt Mannix III

    Posted by David Foster on 16th December 2019 (All posts by )

    Admiral Mannix served in the Spanish-American War, the conflicts in Cuba and the Philippines, and the First World War.  His career spanned the years of America’s emergence as a major player on the world stage, and this book offers memorable portraits of the Navy and of America…and of much of the world…during this period.

    After spending his childhood in China (his father was a torpedo expert working for the Chinese government), Mannix entered the US Naval Academy in 1885. When the battleship Maine blew up in Havana harbor and the Spanish-American war erupted in 1898, he requested permission to leave the Academy early, and joined the battleship USS Indianapolis.

    The war resulted in a rapid American victory, despite some serious deficiencies in the American conduct of operations (such as the failure to use smokeless powder), and Mannix observed the sad passage of the Spanish admiral into American captivity, in an open boat, wearing civilian clothes loaned to him by an American captain and with his head lowered in deep dejection: “I was never so sorry for anyone in my life.”  He was impressed by the exquisite courtesy of a badly-wounded Spanish officer who had lost a leg:

    As though making his adieux after an enjoyable evening, he thanked us for our “hospitality” (no, he wasn’t being sarcastic) and expressed his profound regret for the annoyance that his unfortunate arrival had caused…I have met men of all nationalities during my years in the Navy; in “good breeding” none of them could equal the upper-class Spaniards.

    After returning to Annapolis, Mannix graduated in 1900, and he sketches what life was like in America at the turn of the last century: some of the popular songs and comedy acts, the Gibson Girl (“the loveliest of all feminine ideas”, in his view), but also the fear of riots and attempted revolution when President McKinley was assassinated in 1901…New York’s ‘streetcar rowdies’, who molested women and beat up any man who tried to stop them…and a riot in Pensacola’s red-light district which involved civilians, soldiers, and sailors (“a far rougher lot than today’s bluejackets”) and which Mannix led a landing party to suppress.

    In 1903, Mannix was assigned to a “friendly mission” of four warships to German ports, as ordered by Theodore Roosevelt.  “These ‘friendship tours’ were quite common in those days and paradoxically served a dual purpose:  they reminded the foreign power that we had a powerful Navy that could reach their home waters while at the same time allowed the people to meet Americans and learn that we were not all strange, uncivilized barbarians.”

    Assigned as an aide on the Admiral’s staff, aboard the battleship Kearsage, he met many German officers and found them mostly friendly.  The Kaiser also visited Kearsage, and Mannix was impressed that he chatted with the enlisted men as well the officers.  “Much to my surprise, he showed a sense of humor.”

    One potentially-disastrous incident involved a collision between a German (or at least Prussian) custom:  civilians on the street were supposed to give way to any uniform-wearing officer…and an American naval custom:  officers generally did not wear their uniforms when ashore.  This collision of customs lead to a physical collision, followed by the use of fists by the American officer, and a challenge to a duel.  The situation could have led to a serious diplomatic incident had it not been defused.

    Throughout his travels, Mannix enjoyed meeting people from other countries…a view that he says was far from universal.  Speaking of a luncheon given by the Lord Mayor of London, he says, “To my astonishment, most of the junior officers were reluctant to attend the luncheon and would far  rather have spent their time playing cards together or chatting in the wardroom mess.”

    Some of the officers he met at the luncheon were members of the First Life Guards, an “elite” regiment that was open only to the wealthy and titled…”Kipling referred to them contemptuously as the “fatted flunkies of the Army.”  But:

    Twenty years later I was in Constantinople and the Household Brigade of the British Army was stationed there.  I looked over the list to see if I could recognize any old acquaintances.  Among all those names there were only two or three who had titles…Where were all those young earls and baronets and honorables?  They were dead.  Most of them had died in August 1914 during the terrible retreat from Mons when the old British Regular Army virtually ceased to exist.  They were not “fatted flunkies” there.”

    Read the rest of this entry »

    Posted in Americas, Britain, China, Europe, Germany, History, Middle East, Military Affairs, USA, War and Peace | 22 Comments »

    Thoughts About Globalization and Borders

    Posted by David Foster on 14th December 2019 (All posts by )

    Richard Fernandez:

    The componentization phase of globalization has begun. One can’t roll the world back to pre-globalization days, but for it to be sustainable, things have to be encapsulated to safeguard protected memory spaces. There is a need for standard interfaces, not “open borders.” The networked world has been overwhelmed by complexity, whether it takes the form of the breakdown of trusted authority or the dazzling profusion of “collusion.” The intellectual challenge is how to make it safe for people to deal with strangers in a connected world. The problem can be solved but it can’t be solved by people who don’t think it’s a potential problem.

    See also Sarah Hoyt’s post Imagine There’s No Nations and my post Coupling.

    Additionally, a relevant article at Commentary: The Global Citizen Fraud.

    Posted in Britain, Deep Thoughts, USA | 13 Comments »

    Robot of the Week

    Posted by David Foster on 12th December 2019 (All posts by )

    Machine made out of Legos sorts Legos.

    There are apparently 3000 different types of Lego components.

    Posted in Tech | Comments Off on Robot of the Week

    Interesting

    Posted by David Foster on 10th December 2019 (All posts by )

    An artist named Jayne Riew observed that “In the days after the election, people around me struggled to make sense of what had happened. Perhaps the biggest surprise was the female vote. Among women who cast ballots, 42% were with him, not with her. Most of the women and mothers I knew were shocked or angry that other women and mothers could choose Trump over Clinton.”  The common assumption was that Trump voters must be “people who haven’t seen the world,” “resentful of our success,” “unskilled and no-tech,” “old and behind the times,” “white people who are afraid,” etc etc.

    She notes that “to reach 42%, Trump had to have drawn in women who didn’t fit the stereotype,”  and set out to do some actual research.  The resulting website, She’s With Him, is a photo essay based on interviews with 7 female Trump voters.  Worth taking a look.

    Riew’s own website is here.

    Posted in Academia, Civil Liberties, Elections, Politics, Trump, USA | 19 Comments »

    Business Stories

    Posted by David Foster on 8th December 2019 (All posts by )

    We’ve talked before here about the point that most fiction seems to be about people who are lawyers, policemen, criminals, soldiers, spies, students, politicians, and noble but struggling writers. But there are indeed some works of fiction, and some vivid personal memoirs, in which business plays a central role without being portrayed simplistically or as stereotypically evil. Here are some that I like…please add your own favorites in the comments.  (I posted this at Ricochet, in slightly different form, about a week ago)

    The Current War, a recent movie about the late-1800s power struggle to determine which technology…AC or DC…will dominate America’s electrical distribution system. Edison, Westinghouse, and Tesla are the key characters, played by Benedict Cumberbatch, Michael Shannon, and Nicholas Hoult respectively. My review is here.

    The Big Short, a 2015 film about the 2007-2008 financial crisis, based on Michael Lewis’s book. A hedge fund manager concludes that the subprime-loan market is not sustainable, and makes a billion-dollar bet against the relevant mortgage-backed securities. Based on real events. I thought it was very well done.

    God is an Englishman, R F Delderfield. Following his return to England from the Crimean War, Adam Swann identifies a business opportunity: although railroads are being built throughout the country, there will always be sources and destinations of freight which are not on the tracks. Hence, the potential for a nationwide gap-filling road haulage business based on the systematic use of horse-drawn wagons. (This is the first book of a three-book series called the Swann Family Saga.)  Reviewed here.

    Oil for the Lamps of China, Alice Tisdale Hobart. This 1933 novel is about a young American working as a sales rep in China, focused on selling oil for his employer (unnamed, but clearly based on Standard Oil) and increasing volumes by promoting the kerosene lamp as a better alternative to traditional lighting methods. The book was the basis for a 1935 movie of the same name…the film has its moments, but overall is not worthy of the book.

    Father, Son, and Company, by Thomas Watson Jr. This is the best business autobiography I’ve read. It’s about Watson Jr (the long-time CEO of IBM), his difficult relationship with his father, the company they built, and the emergence of the computing industry. It is an emotional, reflective, and self-critical book, without the kind of “here’s how brilliant I was” tone that afflicts too many executive autobiographies. I reviewed it here.

    A Man in Full, by Tom Wolfe. The central character of this 1988 novel is Charlie Croker, an Atlanta real-estate developer who has gotten himself into way too much debt. Other characters include Charlie’s current and former wives, the Black mayor of Atlanta, the bankers who must deal with the debt problem, and a warehouse worker at one of the Croker enterprises. The book also casts a not-very-complimentary light on the Atlanta society/arts scene.

    Trial by Fire, Stephen Buck. The adventures of a Honeywell field engineer in the early days of process-control computing. The book’s title reflects the point that the industrial processes being controlled frequently involved combustion, sometimes in scary circumstances. Much of the author’s work took place outside the US, in countries ranging from Poland to Brazil.

    Read the rest of this entry »

    Posted in Academia, Arts & Letters, Aviation, Biography, Book Notes, Britain, Business, Economics & Finance, Film, Tech, Transportation, War and Peace | 8 Comments »

    What Future for the Global Auto Industry?

    Posted by David Foster on 7th December 2019 (All posts by )

    **An upcoming Chicago Boyz group discussion**

    There is much media and analyst discussion lately concerning possible sea changes in the auto industry..which would, of course, likely have major impacts throughout the economy and on society as a whole.  Some of the driving factors worth considering include:

    –The government incentives put in place in many countries…in some cases not just incentives but absolute requirements…in favor of electric cars

    –The emergence and growth of ride-sharing services such as Uber and Lyft

    –The development of partial ‘autopilot’ functions for cars, and the anticipated development of full automatic driving at some future point

    –The apparent reduction of interest among young adults and older children in driving and automobile ownership

    –Technological factors, including the continued improvements in battery energy storage capacity–but still very limited in comparison to liquid fuels…the continued incremental improvements in internal-combustion engines…and the emergence of new manufacturing technologies, including 3-D printing aka ‘additive manufacturing’.

    I’d like to have a group discussion of the possible future direction and shape of the industry…let’s do this sometime next week.  If you’re interested in participating, here are some links that are worthwhile thought-starters.

    Vitaliy Katsenslson is a fund manager; his blog is Contrarian Edge–I generally like the way he thinks.  Concerning electric cars in general and Tesla in particular, he says:

    You don’t really know the company until you buy the stock. It has happened to mea few times. We did hundreds of hours of research, bought a stock, and that act of buying activated new senses. I started seeing new angles. Something similar happened to me with Tesla, except I didn’t buy the stock, I bought a car.

    His ownership experience, and the thoughts triggered by the “activated new senses”, are captured in an 11-part series of posts.  You can get it emailed to you by signing up here.

    https://contrarianedge.com/signup-for-tesla-article/

    Concerning self-driving cars, here are three articles reflecting various degrees of enthusiasm versus caution:  from Forbes, from Investor’s Business Daily, and from Road/Show.  Also this Financial Times article, which is about the difficulties involved in the interaction of automated systems with humans in other cars or with human pedestrians.

    An interesting general discussion of AI misinformation and hype…not primarily focused on driverless cars although it does touch on that subject.

    Concerning battery technology, here’s a link on the trends in $/kWh and the future possibilities.  See also my 2017 post on battery materials constraints.

    Homework:  Please take a look at the above articles, at least the ones that aren’t behind paywalls..  I’ll put up a post as a place for discussion sometime next week.

    Posted in Business, Energy & Power Generation, Tech, Transportation | 20 Comments »

    Retrotech: Email and Text Messaging, 1932-Style

    Posted by David Foster on 30th November 2019 (All posts by )

    From here.

    This is the service that would be known as TWX…apparently, the name had not yet been assigned when this ad came out.

    Posted in Advertising, Tech, USA | 8 Comments »

    Diseconomies and Dysfunctions of Scale

    Posted by David Foster on 24th November 2019 (All posts by )

    Why are short-line railroads able to survive, and sometimes thrive, in an industry dominated by a few giant companies?  An article at Railway Age suggests some answers. These points are relevant, I believe, in other industries as well.  To excerpt summarize the points in the article:

    –Short lines are formed with a much lower manpower cost structure that includes more-flexible work rules.

    Short lines are very effective at negotiating service and shared capital project business deals with their face-to-face local customers. That was always a hurdle when the corporate headquarters of a railroad like Conrail was hundreds of miles away in Philadelphia compared to sites like Cairo, Ill., or Kewaunee, Wisc. 

    –Short lines are focused directly upon industrial development along their limited geography service tracks. They are not distracted by competitive locations that want their location to be the next job creation site.

    –Short lines have a simple way to calculate customer profitability as a guide for managing their service responsiveness.

    –There is an ease of doing business with short lines. The difficulty of transacting business has long been an internally acknowledged Class I issue. Local small railroads have successfully addressed this with local managers dealing one-on-one with local customers.

    –The short line railroads have worked to grab growth opportunities. They developed local community and state railroad DOT programs that gave them access to development and rehabilitation capital.

    Most of these advantages could, in principal, be achieved by the large railroads through improved organization design and better internal measurements/incentives. And similarly in other industries…but it rarely seems to actually work out that way.  Re the profitability-measurements point, the article notes that Class I’s have tried for decades to calculate and then share with their remote train crews information about branch line financials. The Class I’s even tried to create regional cluster profit centers that would better focus attention on local branch line customers and new business development.  The results were at best a mixed success.

    and hence

    Selling off or otherwise leasing “troubled lines” to a smaller company typically became the favored big railroad divestiture business process.

    Any thoughts on similar factors at work in other industries?

    Posted in Business, Management, Transportation | 17 Comments »

    Regular and Irregular Channels

    Posted by David Foster on 18th November 2019 (All posts by )

    Some of the witnesses at the ongoing Congressional hearings seem quite disturbed at the use of “irregular channels” for decision-making and implementation, supplementing and bypassing the “regular” channels. (here, for example) Reminds me of a Churchill story…

    In February 1940, Churchill was not yet Prime Minister but rather was First Lord of the Admiralty. He received a letter from a father disappointed that his son had been turned down for a commission, despite his qualifications and his record. Churchill suspected class prejudice and wrote to the Second Sea Lord, saying that “Unless some better reasons are given to me, I shall have to ask my Naval Secretary to interview the boy on my behalf.”

    The Second Sea Lord, unhappy with the meddling from above, responded to the effect that it was inappropriate to question the decisions of “a board duly constituted.” To which Churchill replied:

    I do not at all mind “going behind the opinion of a board duly constituted” or even changing the board or its chairman if I think injustice has been done. How long is it since this board was re-modeled?… Who are the naval representatives on the board of selection? Naval officers should be well-represented. Action accordingly. Let me have a list of the whole board with the full record of each member and his date of appointment.

    General Louis Spears was present when Churchill, after taking the above hard-line, saw the candidates. After chatting with the boys, Churchill explained the matter to Spears:

    “They have been turned down for the very reason that should have gained them admission. They are mad keen on the Navy, they have it in their blood, they will make splendid officers. What could be better than that they should rise higher than their fathers did? It is in their fathers’ homes that they grew to love the Navy, yet they have been turned down because their fathers came from the lower deck,” and he pouted and glared with fury.

    Read the rest of this entry »

    Posted in Britain, Current Events, History, Management, Miscellaneous, Organizational Analysis, Politics, Trump | 16 Comments »

    Robot Gets Hired, Tries Hard, But Can’t Do the Job

    Posted by David Foster on 16th November 2019 (All posts by )

    At Boeing.

    Those fearing imminent mass unemployment driven by robots and AI should be following stories like this.  They also should be looking at the actual productivity numbers.

    See also the details of work and the realities of automation.

    Posted in Aviation, Business, Economics & Finance, Tech | 21 Comments »

    Anniversary: The End of the Berlin Wall

    Posted by David Foster on 10th November 2019 (All posts by )

    November 9 marked the 30th anniversary of the fall of the Berlin Wall.

    Peter Robinson, who drafted President Reagan’s speech including the line Mr. Gorbachev, tear down this wall!, has some thoughts.

    Bill Brandt offers some remembrances and some video clips.

    Bill’s post mentioned Anna Funder’s excellent book Stasiland:  Stories from Behind the Berlin Wall, which I reviewed here.

    An interesting website by a former East German MIG-21 pilot.

    Posted in Aviation, Book Notes, Germany, History, Leftism | 7 Comments »

    Retrotech — With a Future?

    Posted by David Foster on 7th November 2019 (All posts by )

    Before there were electronic digital computers, there were mechanical analog computers. Although now obsolete for practical computation, these devices might actually have an useful future ahead of them–in education.

    Mechanical analog computation (analog means that calculation is done by measuring rather than by counting) goes back to the Greek Antikythera mechanism (65 BC), which was used to predict the positions of heavenly bodies. The modern era of analog computing began with the work done by James Thompson and his brother William (Lord Kelvin) in the 1870s. First, James Thompson created a mechanical device that performs the calculus function of integration.

    Lord Kelvin applied this device…along with other mechanisms for addition and trigonometric functions…to create a mechanical tide-prediction system. These tide predictors had a pretty good run: the invention was announced in 1876, and some of these systems were still in use in the early 1970s!

    For those who haven’t studied calculus, integration can be thought of as a kind of continuous addition.  Imagine a hose with a fluctuating flow rate filling a pool: by integrating the rate of flow, you can calculate the volume of water added to the pool.

    The basic concept of a mechanical integrator is shown below.

    mechanical-integrator-modified

    If the vertical shaft is turned at a constant rate, and the small wheel is moved in and out according to the changing value of some some variable Y, then the rotation of the horizontal shaft Z will represent the integral of Y with respect to time.  If Y is the rate of flow of the a hose, Z will be the total volume  added to the pool. If Y represents the acceleration of a vehicle, then the output shaft will give that vehicle’s speed at any moment.  Connect the output to the input of another integrator, and you will get the distance traveled.

    Vannevar Bush, who would become Roosevelt’s science adviser during WWII, combined the integrator and other computing mechanisms to create a highly general mechanical computer, called a differential analyzer. Completed in 1931, it was not restricted to a single application, but could be programmed–with a wrench and screwdriver to alter the connections–for a wide range of problems. Complex chains of calculation were possible, including the ability for a result at one stage to be fed back as input at an earlier stage–for example, the speed of a simulated vehicle affects its air resistance, which in turn influences its acceleration…which integrates back to its speed.

    Other differential analyzers were built in the U.S.,  Norway, and Britain, and were used for applications including heat-flow analysis, electrical network stability analysis, soil-erosion studies, artillery firing table preparation, and studies of the loading and deflection of beams. It is rumored that a British analyzer was used in the planning for the bouncing-bomb attack on German hydroelectric dams during WWII. Differential analyzers appeared in several movies, including the 1951 film When Worlds Collide  (video clip). The ultimate in mechanical analog computation was the Rockefeller Differential Analyzer, a rather baroque (and very expensive) machine built in 1942. It was decommissioned in 1954, on the belief that the future of calculation would belong to the electronic computer, and especially the electronic digital computer.   Following the decommissioning, the mathematician Warren Weaver wrote:

    It seems rather a pity not to have around such a place as MIT a really impressive Analogue computer; for there is vividness and directness of meaning of the electrical and mechanical processes involved… which can hardly fail, I would think, to have a very considerable educational value. A Digital Electronic computer is bound to be a somewhat abstract affair, in which the actual computational processes are fairly deeply submerged.
    Read the rest of this entry »

    Posted in Education, History, Science, Systems Analysis, Tech | 27 Comments »

    Movie Review: The Current War

    Posted by David Foster on 1st November 2019 (All posts by )

    This movie is focused on the interaction among Thomas Edison, George Westinghouse, and Nikola Tesla in the competition to create and build out America’s…and the world’s…electrical infrastructure.  It has gotten mixed and generally not-very-enthusiastic reviews; I thought it was well-done and definitely worth seeing.  Visually, it is striking and sometimes even beautiful, thus worth seeing on the big screen.

    The movie gets the outline of the history right; also, I think, the essence of the characters.  Edison is a brilliant inventor and self-promoter who is committed to his DC-based distribution system and will do some more-than-questionable things to get it universally adopted.  Westinghouse, who had invented the railroad air brake (among other things) and already built a large company, sees the value of alternating current, which can be stepped up and down in voltage via transformers and hence can be economically transmitted over long distances.  Tesla, a Serbian immigrant and brilliant inventor, provides the missing link in the form of a practical motor that can run on AC power.  The relationships of Edison and Westinghouse with their respective wives are highlighted, and the future utility mogul Samuel Insull appears as Edison’s young secretary.

    I was happy to see the movie’s positive portrayal of Westinghouse, a great man who has tended to be overshadowed by the more-glamorous figures of Edison and Tesla.  (The legions of Tesla fans may be unhappy that Tesla did not get a more central role in the film.)

    If this movie sounds interesting to you, better see it soon; I don’t think it’s going to be in the theaters for very long.

    Posted in Business, Energy & Power Generation, Film, History, Tech | 20 Comments »

    Book Review: Red Plenty, by Francis Spufford

    Posted by David Foster on 27th October 2019 (All posts by )

    Red Plenty by Francis Spufford

    —-

    The idea of centralized economic planning is a very seductive one.  It just seems to make sense that such planning would lead to more efficiency…less waste…and certainly less unnecessary human suffering than an environment in which millions of decision-makers, many of them in competition with one another, are making their own separate and uncoordinated decisions, resulting in pointless product redundancy, economic cycles driving unemployment, and lots of other bad things.

    Red Plenty…part novel, part nonfiction…is about the Soviet Union’s economic planning efforts as seen from the inside.  The characters include factory managers, economic planners, mathematicians, computer scientists, and “fixers.”  Published in 2010, Red Plenty is now quite timely in view of the current vogue for socialism in American political discussion.

    Marx drew a nightmare picture of capitalism, when everything was produced only to be exchanged; when true qualities and uses dropped away, and the human power of making and doing itself became only an object to be traded.  The alternative? A dance to the music of use, where every step fulfilled some real need, did some tangible good, and no matter how fast the dancers spun, they moved easily, because they moved to a human measure, intelligible to all, chosen by all.

    How might this actually be accomplished? Stalin mocked the idea that planning an economy required much in the way of intellectual depth or effort.  Get the chain of command right, Stalin seemed to be saying, build it on the right ideological principles, and all that was left was a few technical details, a little bit of drudgery to be carried out by the comrades at Gosplan with the adding machines.  But it turned out to be a little more complicated than that.

    Maksim Maksimovich Mokhov is one of the lords of the Gosplan file room, in which there are hundreds of folders, each tracking the balances and plans for a particular commodity. A good man, who takes his job seriously, Maksim has risen as high as you could go at Gosplan before the posts become purely political appointments..his was the level at which competence was known to reach its ceiling…Not just a mechanical planner, he realizes that the file folders  cast only the loosest and most imperfect net over the prodigious output of the economy as the whole, and has worked to understand the stress points, the secret path dependencies of the plan.  His specific responsibility is the chemical and rubber sector, and he is particularly concerned, at the time when he enters the story, about problems in the viscose subsector.

    Arkhipov, Kosoy, and Mitrenko run one of the most important plants in the viscose supply chain, and they are three worried men.  The plan goals aren’t being met, and they know that the path to career death is separated by only a few percentage points of plan fulfillment from the other one, the upward path, the road to glory and local fame. (A couple of decades earlier, it wouldn’t have been just career death on the table.) This plant makes two viscose-derived products, yarn and tire cord.  The yarn line works fine, the tire cord line, not so much…but no problems with the machine can be found.  There is no prospect of getting a replacement machine in any relevant timeframe.

    Arkhipov and his associates come up with a plan to solve their problem…read the book to see what it is and how it turns out.

    Nikita Khrushchev, in September 1959, told a crowd that “the dreams cherished for ages, dreams expressed in fairytales which seemed sheer fantasy, are being translated into reality by man’s own hands.”  Modern technology, combined with the benefits of a planned economy would make it possible.

    Because the whole system of production and distribution in the USSR was owned by the state, because all Russia was (in Lenin’s words) ‘one office, one factory’, it could be directed, as capitalism could not, to the fastest, most lavish fulfillment, of human needs.  

    The American exhibition in Moscow in mid-1959 (site of the “kitchen debate” between Khrushchev and Nixon) was attended by 3 million Soviets (including some of the characters in this book), and although many of them thought that the American claims of broad-based prosperity were exaggerated or worse, the experience surely helped feed the longing for a better life for the Soviet Union’s ordinary people.

    Leonid Vitalevich Kantorovich pioneered the application of mathematics to the optimization of economic activities…these methods surfaced as a possible toolkit for the planning organizations circa 1960. Could these methods help achieve Khrushchev’s stated goal of broad-based prosperity?

    For example, consider several factories, producing a common set of products but with different efficiency characteristics.  Which products should be made by which factories in order to optimize overall efficiency? A set of equations can be constructed representing the constraints that must be observed–labor, machine utlization, etc–and the relative weighting of the variables to be optimized.  Although these techniques have been used to a considerable degree in capitalist countries, they would seem tailor-made for a starring role in a planned economy.  Selling the new methods in the Soviet Union, though, could be tricky:  the linear-programming term “shadow prices”, for example, sounded like something that might have politically-dangerous overtones of capitalism!

    One of the first applications involved potatoes, the distribution of same. The BESM (computer) is using Leonid Vitalevich’s shadow prices to do what a market in potatoes would do in a capitalist country–only better. When a market is matching supply with demand, it is the actual movement of the potatoes themselves from place to place, the actual sale of the potatoes at ever-shifting prices, which negotiates a solution, by trial and error.  In the computer, the effect of a possible solution can be assessed without the wasteful real-world to-ing and fro-ing, and because the computer works at the speed of flying electrons rather than the speed of a trundling vegetable truck, it can explore the whole of the mathematical space of possible solutions, and be sure to find the very best solution there is, instead of settling for the good-enough sollution that would be all there was time for, in a working day with potatoes to deliver.

    And even in the planned Soviet economy, there is still a market in potatoes, right here in Moscow, the leftover scrap of capitalism represented by the capital’s collective-farm bazaars, where individual kolkhozniks sell the product from their private plots…The market’s clock speed is laughable.  It computes a the rate of a babushka in a headscare, laboriously breaking a two-rouble note for change and muttering the numbers under her breath…No wonder that Oscar Lange over in Warsaw gleefully calls the marketplace “a primitive pre-electronic calculator.”

    So put the BESM to work minimizing distance that the potatoes have to travel..a proxy for efficiency and freshness:  price is not a consideration, since the state selling price of potatoes has been fixed for many years.  But BESM can only work with abstract potatoes: Not, of course, potatoes as they are in themselves, the actual tubers, so often frost-damaged or green with age or warty with sprouting tublices–but potatoes abstracted, potatoes considered as information, travelling into Moscow from 348 delivering units to 215 consuming organizations…The economists recognize the difficulty of getting a computer model to mirror the world truly.  They distinguish between working at zadachi, ‘from the problem’, and of fotografii, ‘from the photograph’…This calculation, alas, is from the photograph.  It deals with potato delivery as it has been reported to Leonid Vitalevich and his colleagues.  There has been no time to visit the cold-stores, interview the managers, ride on the delivery trucks. But the program should still work.

    The author notes that “the idea that the computer had conclusively resolved the socialist calculation debate in socialism’s favour was very much a commonplace of the early sixties.”

    But despite all the planning paperwork, despite the attempts at computerization, people like Chekuskin remain essential to keep the Soviet economy functioning at all.  He is a fixer, he works the system to ensure that his customers–factories, for the most part–can get the parts and materials they need in order to keep operating.  Before the revolution, he was a salesman: now, the economic problem is not selling, but buying.  Chekuskin explains what a real salesman was, back in the day:

    You’re thinking of some fellow who works in a sales administration, sits by his phone all day long like a little king, licks his finger when he feels like it, and says, “You can have a litttle bit”…That’s not a salesman.  You see, the world used to be the other way up, and it used to be the buyers who sat around examining their fingernails, hard enough as that is to imagine.  A salesman was a poor hungry bastard with a suitcase, trying to shift something that people probably didn’t want, ’cause back in those days, people didn’t just get out the money and buy anything they could get their hands on.  They had to be talked into it.”

    But with Communism, the things changed.  Back then, people didn’t want to buy.  Now, they don’t want to sell.  There’s always that resistance to get past.  But the trick of it stays the same:  make a connection, build a relationship.

    Volodya, is a young propagandist recently assigned to the huge locomotive plant in Novocherkassk, a dismal town that also features a university.  Unfortunately, it was classified by the planners as a “college town”, in need of the calorific intake required to lift pencils and wipe blackboards, but there were forty thousand people living and working in the industrial zone out by the tracks now, and between the students and the loco workers, a locust would have been hard put to it to find a spare crumb. White bread was a distant memory, milk was dispensed only at the head of enormous queues.  Sausages were as rare a comets.  Pea soup and porridge powered the place, usually served on half-washed plates.

    Eventually, people can’t stand it anymore–and decisions by two separate planning organizations have the result that on the very same day, food prices are increased and so are the production quotas at the locomotive factory.   There is a raucous mass protest, featuring signs like MEAT, BUTTER, AND PAY and CUT UP KHRUSHCHEV FOR SAUSAGES.  The loco plant manager, Korochkin, does not handle the situation well, and the rage grows.

    The ensuing catastrophe is vividly described as it is observed by the horrified Volodya.  Troops open fire on the protestors:  26 people are killed an 87 wounded.  Death sentences and long prison terms are handed down.

    This was a real event:  it happened in 1962.  News about the events did not appear in the state-controlled press for thirty years.

    Read the rest of this entry »

    Posted in Book Notes, Capitalism, Deep Thoughts, Economics & Finance, Leftism, Management, Markets and Trading, Russia, Systems Analysis, Tech | 37 Comments »

    The Cuban Missile Crisis, as Viewed From a Soviet Launch Facility

    Posted by David Foster on 22nd October 2019 (All posts by )

    This month marks the 57th anniversary of the Cuban Missile Crisis, which brought the world dangerously close to thermonuclear war.

    Several years ago,  I read  Rockets and People, the totally fascinating memoir of Soviet rocket developer Boris Chertok, which I reviewed here.

    Chertok’s career encompassed both military and space-exploration projects, and in late October 1962 he was focused on preparations for launching a Mars probe. On the morning of Oct 27, he was awakened by “a strange uneasiness.” After a quick breakfast, he headed for the missile assembly building, known as the MIK.

    At the gatehouse, there was usually a lone soldier on duty who would give my pass a cursory glance. Now suddenly I saw a group of soldiers wielding sub-machine guns, and they thoroughly scrutinized my pass. Finally they admitted me to the facility grounds and there, to my surprise, I again saw sub-machine-gun-wielding soldiers who had climbed up the fire escape to the roof of the MIK. Other groups of soldiers in full combat gear, even wearing gas masks, were running about the periphery of the secure area. When I stopped in at the MIK, I immediately saw that the “duty” R-7A combat missile, which had always been covered and standing up against the wall, which we had always ignored, was uncovered.

    Chertok was greeted by his friend Colonel Kirillov, who was in charge of this launch facility. Kirollov did not greet Chertok with his usual genial smile, but with a “somber, melancholy expression.”

    Without releasing my hand that I’d extended for our handshake, he quietly said: “Boris Yevseyevich, I have something of urgent importance I must tell you”…We went into his office on the second floor. Here, visibly upset, Kirillov told me: “Last night I was summoned to headquarters to see the chief of the [Tyura-Tam] firing range. The chiefs of the directorates and commanders of the troop units were gathered there. We were told that the firing range must be brought into a state of battle readiness immediately. Due to the events in Cuba, air attacks, bombardment, and even U.S. airborne assaults are possible. All Air Defense Troops assets have already been put into combat readiness. Flights of our transport airplanes are forbidden. All facilities and launch sites have been put under heightened security. Highway transport is drastically restricted. But most important—I received the order to open an envelope that has been stored in a special safe and to act in accordance with its contents. According to the order, I must immediately prepare the duty combat missile at the engineering facility and mate the warhead located in a special depot, roll the missile out to the launch site, position it, test it, fuel it, aim it, and wait for a special launch command. All of this has already been executed at Site No. 31. I have also given all the necessary commands here at Site No. 2. Therefore, the crews have been removed from the Mars shot and shifted over to preparation of the combat missile. The nosecone and warhead will be delivered here in 2 hours

    Chertok, who at this point was apparently viewing the Cuban affair as a flash in the pan that would be resolved short of war, was concerned that moving the Mars rocket would cause them to miss their October 29 launch date, and suggested that the swap of the rockets be delayed for a few hours. Kirillov told him that this was impossible, and that he should go to the “Marshal’s cottage,” where some of his associates wanted to see him. Chertok’s response:

    Yes, sir! You’re in charge! But, Anatoliy Semyonovich! Just between you and me do you have the courage to give the ‘Launch!’ command, knowing full well that this means not just the death of hundreds of thousands from that specific thermonuclear warhead, but perhaps the beginning of the end for everyone? You commanded a battery at the front, and when you shouted  ‘Fire!’  that was quite another matter.

    Kirillov:

    There’s no need to torment me. I am a soldier now; I carry out an order just as I did at the front. A missile officer just like me, not a Kirillov, but some Jones or other, is standing at a periscope and waiting for the order to give the ‘Launch’ command against Moscow or our firing range. Therefore, I advise you to hurry over to the cottage.

    At the cottage, four men were seated at a table playing cards while a fifth was trying to glean the latest news from a radio and Lena, the housekeeper, was in the kitchen drying wine glasses. It was suggested that since Chertok didn’t like playing cards, he should help Lena fix the drinks. This involved a watermelon and lots of cognac.

    I took the enormous watermelon and two bottles of cognac out of the fridge. When everything was ready, we heard a report that U.N. Secretary General U Thant had sent personal messages to Khrushchev and Kennedy. Once again, Voskresenskiy took the initiative and proposed the first toast: “To the health of U Thant, and may God grant that this not be our last drink!” This time we all drank down our toast in silence and very solemnly, realizing how close we now were to a situation in which this cognac and this watermelon could be our last.

    Still hoping to avoid the cancellation of the Mars mission, Chertok went to another cottage and, with considerable difficulty, made a forbidden call to S P Korolev, overall head of the Soviet rocket program, who was then in Moscow. Korolev told him that things were being taken care of and not to worry.

    It was already dark when I returned to the Marshal’s cottage. On the road, a Gazik came to an abrupt halt. Kirillov jumped out of it, saw me, swept me up in a hug, and practically screamed: “All clear!” We burst into the cottage and demanded that they pour “not our last drink,” but alas! The bottles were empty. While everyone excitedly discussed the historic significance of the “All clear” command, Lena brought out a bottle of “three star” cognac from some secret stash. Once again the Mars rockets were waiting for us at the launch site and in the MIK.

    Reflecting on the crisis many years later, Chertok wrote:

    Few had been aware of the actual threat of a potential nuclear missile war at that time. In any event, one did not see the usual lines for salt, matches, and kerosene that form during the threat of war. Life continued with its usual day-to-day joys, woes, and cares. When the world really was on the verge of a nuclear catastrophe, only a very small number of people in the USSR and the United States realized it. Khrushchev and Kennedy exercised restraint and did not give in to their emotions. Moreover, the military leaders of both sides did not display any independent initiative nor did they deviate at all from the orders of their respective heads of state. Very likely, Khrushchev wasn’t just guided by the pursuit of peace “at any cost.” He knew that the U.S. nuclear arsenal was many times greater than ours. The Cubans did not know this and viewed Moscow’s order to call off missile preparation and dismantle the launch sites as a betrayal of Cuba’s interests. President Kennedy had no doubt as to the United States’ nuclear supremacy. The possibility of a single nuclear warhead striking New York kept him from starting a nuclear war. Indeed, this could have been the warhead on the R-7A missile that they didn’t roll out of the MIK to the pad at Site No. 1.

    (cross-posted at Ricochet)

    Posted in Book Notes, Cuba, History, Russia, Space, War and Peace | 3 Comments »

    Journalists

    Posted by David Foster on 20th October 2019 (All posts by )

    Financial Times recently had an article about a projected luxury dirigible.  Being an airship fan, I wish the venture success. I was struck, though, by a paragraph in the article contrasting the planned aircraft, called the Airlander, with the airships of the 1930s with their “flammable hydrogen fuels.”

    Uh…no.  None of the airships of the 1930s used hydrogen as a fuel.  Some of them used hydrogen as a lifting gas, which is a totally different thing from the fuel consumed to power the craft forward. And most American airships didn’t use hydrogen for any purpose…the American airships that came to bad ends mostly did so as a result of weather-related structural failure…which point, one would have thought, might have been relevant to someone writing about the possible future of airships.

    But airships are a pretty esoteric subject, after all, so maybe it’s unreasonable to expect a journalist to spend (or get his assistant to spend) half an hour actually learning something about whatever he is writing about.  So let’s talk about something that isn’t esoteric at all, but rather about as timely and important as it gets.  Energy.

    I’ve noticed that in articles about energy storage…of which there have been a lot…the writer rarely seems to grasp that kilowatts are not the same thing as kilowatt-hours, and you can’t express the storage capacity of a battery or other storage system in kilowatts. It would be like stating the capacity of your car’s gas tank in horsepower.  (The same principle applies to megawatts and megawatt-hours, or gigawatts and gigawatt-hours)  Yet all the time, I see articles…not just in the general media but also in the business media…talking about the wonderfulness of a battery or whatever that can store 4 megawatts.

    For example, here’s a Barrons article referring to a town which has installed batteries “that can hold two megawatts of power.”  Actually, the batteries at this facility can hold 3.9 megawatt-hours of energy…the 2 megawatts of power is about the rate at which energy can be added to or drawn from the system, and has nothing to say about the amount stored.  So if you withdraw power at 2 megawatts, you can do so for a little under 2 hours before the battery storage is exhausted. You need the megawatt-hour number to know that; “2 megawatts” tells you nothing about the storage capacity.

    Turning now to television journalism:  I think Tucker Carlson is far superior to most TV commentators in terms of focusing on issues in some depth, rather than just obsessively circling in on whatever is hottest at the moment.  But when recently introducing a guest who was going to talk about a highly-questionable sale to China that was made during the Clinton administration, he said that sale had been of “machine parts.”  Actually, it was of machine tools, as the guest correctly explained.

    Machine tools are one of the essential cornerstones of industry, and have been for a long time.  Shouldn’t a person who frequently writes and/or speaks about economic issues know what a machine tool is and why it matters?  Maybe I’m misinterpreting, but I think Tucker’s “machine parts” phrasing indicates that he has no such awareness.

    Ben Rhodes, an Obama operative, said of the current generation of reporters:  “The average reporter we talk to is 27 years old, and their only reporting experience consists of being around political campaigns. That’s a sea change. They literally know nothing.”

    No doubt true of a large number of those younger reporters who Rhodes manipulated while feeling contempt for. But there are journalists–older and younger–who do have a pretty good grasp of history, geography, and comparative political systems…some of them even have some education or reading in political philosophy.  But even among these, knowledge of technology–and by “technology” I do not mean just “computer stuff”–is pretty close to nonexistent.

    And with the vastly increased influence of government over all aspects of the economy–and the even greater (much greater!) influence being sought by the current Democratic Party–such knowledge is pretty important.

    Posted in Aviation, Education, Energy & Power Generation, Media, Tech, Transportation | 26 Comments »

    What, Exactly, Is CNN?

    Posted by David Foster on 16th October 2019 (All posts by )

    …and what are NBC and ABC?

    When referencing these networks…for example, when talking about CNN’s increasingly-extreme political bias, ABC’s running of a video supposedly from Syria which was actually from Kentucky, or the reports about widespread abuse of women at  NBC, people tend to simply refer to them as “CNN”, “ABC”, or “NBC”, as if they were independent entities.  But they’re not.

    CNN is owned by AT&T.  NBC is owned by Comcast, and ABC is owned by Disney.

    The history is that CNN was part of Turner Broadcasting, which merged with Time-Warner in 1996.  Following a whole host of acquisition and divestiture transactions (which included a very expensive experience with AOL), Warner Media was acquired by AT&T in 2018.  NBC was acquired by GE in 1986 as part of its reacquisition of RCA; the networks was put into a joint venture with Comcast in 2009, and the GE share of the venture was bought out by Comcast in 2013. Disney acquired ABC in 1996 as part of its acquisition of Capital Cities/ABC Inc.

    Given how these entities have been shuffled around, it may be understandable that people refer to them simply by the names of the networks; still, I think the proper way to refer to CNN would be “CNN, a subsidiary of telecommunications giant AT&T” and similarly for the others.

    Posted in Business, Media, Miscellaneous, Tech | 15 Comments »