Archive for the 'Tech' Category

Today marks the 99th anniversary of the first radio broadcast heard by a very large number of people:  the Dempsey vs Carpentier boxing match.  (Although a Carpentier was French, he had quite a following in the United States, owing to his distinguished record as a pilot in the First World War.)

Boxing promoter Tex Ricard had the idea that radio broadcasting might be a good way to increase the popularity of prizefighting…there had previously been some broadcasts of fights in local areas with limited audiences, but what was envisaged for this broadcast was a much larger audience over a much wider area.  David Sarnoff of RCA, a strong advocate for the development of a broadcasting industry, was evidently a driving force behind this approach.  A dedicated phone line from ringside to a transmitter in Hoboken was established, and radio amateurs throughout the Middle Atlantic states were encouraged to set up their receivers in bars, auditoriums, etc, for the benefit of those people (most of the population) who did not have their own radio receivers.  The radio audience was estimated at 300,000 people.

The broadcast was not national in scope, owing to the limitations of the AM radio band, but it was a significant milestone in the the delocalization of information.  Very soon, network broadcasting, enabled by long-distance dedicated phone links, would make possible programs with truly national audiences.  The delocalization trend has continued, with television, intercontinental links via satellite and undersea cable, and the Internet, and has been a powerful driver of social, economic, and political changes.

A WSJ article suggests that if the corporations which have been proclaiming their support for black communities really want to make a difference, they should change their hiring and management practices to focus on job skills, rather than continuing to privilege college degrees. They say that “degree inflation” is rampant: as an example, 67% of postings for new production supervisors in 2015 included college-degree requirements, though only 16% of existing production supervisors had bachelor’s degrees.  (See interesting NBER paper here.)

Indeed, I’m not very comfortable with the term ‘middle skill’ which has been adopted for jobs that typically require a technical training program of some sort but do not require a college degree.  Is someone with an undergraduate sociology degree really necessarily more skilled than a CNC machinist?  The suggestion that someone with a college degree is always higher-skilled than someone without a degree has unpleasant implications of a class-bound society. The authors of the NBER paper suggest an alternative term: STARs…Skilled Through Alternative Routes, and they also suggest that many “technology” jobs shouldn’t really require a college degree.  They note that:

A long but interesting essay about Peter Thiel, who is IMO one of the more thoughtful and creative among the Silicon Valley set.

The politicization of everything…including websites like nextdoor.com, “designed for people to share useful information within a neighborhood like dates of bulky trash-pick, locations of road closings, and postings of lawn equipment for sale”…as seen by a woman who is a music historian, with a particular concentration on Russia.

Dispatches from the front lines of the knitting wars.  Can these people be trusted with knitting needles? Those things can be dangerous, you know.

A post by a police officer’s wife.

Violent protest and the intelligentsia.  Disturbing parallels between pre-revolutionary Russia and contemporary America.

A walk across a beach in Normandy.  Today, June 6, marks the 76th anniversary of the Normandy invasion..I haven’t seen much remembance of this today.

YouTube is run by a woman named Susan Wojcicki.  She has indicated that videos peddling fake or unproven coronavirus remedies will be banned, and also suggested that video that “goes against” WHO guidance on the pandemic will be blocked.

So Ms Wojcicki has established WHO as the ultimate worldwide authority on Covid-19, the  imprimatur of said authority being required for dissemination of any relevant information or opinions within Wojcicki’s domains.  One might remind her that on January 23 of this year, WHO decided not to declare that Covid-19 was a global health emergency…hence, had Wojcicki’s present rule been in effect then, any videos asserting that C-19 was, in fact, such an emergency would have been taken down!

What is the thinking behind this sort of effort to clamp down on information flow?  One can certainly understand and sympathize with a desire to avoid the dissemination of quack cures.  But how does this morph into a justification for shutting down discussion of causes, risk levels, and public-policy responses to the epidemic?

If I try to take as sympathetic a view as possible to Ms Wojcicki and those like her, I might view their actions as being motivated by a feeling of responsibility for consumer protection.  But Americans are more that just consumers: we are also (and much more importantly) citizens, participants in the public dialog and political process.  (And an interesting argument has been made that in the American system, citizens are officers of the state.)  And citizens, in order to fulfill their public responsibilities, need unfettered access to information and discussion.

In the case of Twitter’s ‘fact checking’ of President Trump’s tweet about vote-by-mail, I’d say that the raw political bias is pretty evident.  Is vote-by-mail more susceptible to fraud than is conventional voting?  Considerable evidence can be amassed to suggest that it is indeed so susceptible, counter-evidence and arguments can also be presented. It is a legitimate topic for public discussion, yet Twitter chooses to treat is as if it is a matter of absolute black-and-white truth-versus-falsity on which they have to weigh in, as if it were a question of the spherical vs flat shape of the earth or the value of the acceleration of gravity.  (Although I see there are some flat-earth tweets up on Twitter right now.)  And I haven’t seen any Twitter fact-checking of the feed from the People’s Daily of China, or the official Twitter account of the Government of the Islamic Republic of Iran…or, for that matter, of the statements of Joe Biden.

We are reaching a state at which the ability to publish information and have it reach certain very large audiences is dependent on the approval of certain individuals at Twitter, YouTube, and Facebook…somewhat similar to the way in which publication of a book in England, prior to 1692, required the imprimatur of the Lord Chancellor, the Archbishop of Canterbury, or one of certain other specified officials.  The analogy is not perfect, of course, and it will be argued that it isn’t very relevant at all, because today, if Twitter won’t distribute your content, you can always try Facebook, and if that doesn’t work either, there’s always Gab or other relatively-minor platforms, or you can just put up your own website or blog…or start your own social media platform.  But, still, a very small number of entities and their officials are exercising a very high degree of control over information flow in America today.

What, if anything, can/should be done about this situation?  One argument is that nothing can be or needs to be done that Twitter etc are private property, and if they discriminate excessively, other platforms will supplant them.  Another argument is that Section 230 of the Communications Decency Act should be modified/limited…this is the provision which insulates on-line service providers such as social media companies—not only pure internet service providers or hosting companies—from certain forms of liability which are applicable to traditional publishers.  This is the direction in which President Trump’s thinking seems to be going.

There is also an interesting ‘public square’ argument which has been made, specifically by Prager University in connection with the ‘restricted’ status assigned to its videos by YouTube.  This is based on a 1945 Supreme Court decision in the case of Marsh v Alabama, in which the court ruled that Gulf Shipbuilding Company could not prohibit a Jehovah’s Witness from distributing literature in the the town of Chickasaw, Alabama, even though that town was Gulf Shipbuilding’s private property.  The argument is that the precedent also applies to on-line communities, even though these do not involve physical presence…this argument  was rejected, though, by both the district court and the Ninth Circuit…not sure whether there will be an appeal to the Supremes. (The Federalist has proposed that social media companies could be required to provide specific ‘due process’ protections for content creators, in exchange for retaining their Section 230 immunities.)

So what are your thoughts on this topic?

(This is a continuation of my Retro-Reading post, based on the April 1930 issue of Mechanical Engineering magazine.  Part One is here)

A View from the Left.  One of the most interesting things in the magazine is an excerpt from the writing of Sidney Webb, the well-known Fabian socialist.  (The magazine refers to him as a “publicist,” maybe that was 1930-speak for an activist.)

The manual-working population of the cities was, in fact, mainly composed of laborers who were lifelong hewers of wood and drawers of water whilst that of the vast stretches of farmland and forest outside the cities was as devoid of art as of letters. And the proportion of merely mechanical work in the world s production has, taken as a whole, lessened, not increased. What a multitude of laborers quarried the stones, dragged and carried the stones and lifted the stones of the cathedral walls on which half a dozen skilled and artistic masons carved gargoyles? From the building of the Pyramids down to the present day, the proportion of the world’s work of the nature of mere physical digging, pushing, carrying, lifting and hammering, by the exertion of muscular force, has almost continuously diminished….

And it must not be forgotten that, in Western civilization to-day, the actual numbers of men and women engaged in daily work of distinctly intellectual character, which is thus not necessarily devoid of art, are positively greater than at any previous time. There are, of course, many more such workers of superior education, artistic capacity, and interesting daily tasks in Henry Ford’s factories at Detroit than there were in the whole city of Detroit fifty years ago! Along side of these successors of the equally exceptional skilled handicraftsmen of the Middle Ages there has come to be a vast multitude of other workers with less interesting tasks, who could not other wise have come into existence, and who represent the laborers of the cities and the semi-servile rural population of past times, and who certainly would not themselves dream of wishing to revert to the conditions of those times. It may be granted, that, in much of their daily tasks (as has always been the case) the workers of to-day can find no joy, and take the very minimum of interest. But there is one all important difference in their lot. Unlike their predecessors, these men spend only half their waking hours at the task by which they gain their bread. In the other half of their day they are, for the first time in history, free (and, in great measure, able) to give themselves to other interests, which in an ever- increasing proportion of cases lead to an intellectual development heretofore unknown among the typical manual workers. It is, in fact, arguable that it is among the lower half of the manual workers of Western civilization rather than among the upper half, that there has been the greatest relative advance during the past couple of centuries. It is, indeed, to the so-called unskilled workers of London and Berlin and Paris, badly off in many respects as they still are and notably to their wives and children that the Machine Age has incidentally brought the greatest advance in freedom and in civilization.

Rather different from the view of our present-day leftists, wouldn’t you say?  Indeed, both the American New Deal and the Soviet Communist Party were huge supporters of hydroelectric dams… today, many of the Progs want to tear them down.

I’ll continue in a future post with some other highlights from the magazine, including the articles on transportation and metalworking.

During the ‘rona era, I have received a pretty nice benefit – more time. Time to do other things than work, that is. I now understand what they mean when people who fly privately say that private jets are like “time machines”. While private jets harvest time and the ‘rona has made me inherit time, the end game is the same. While I’m making less money, my life sure is more enjoyable. So maybe I actually have more treasure now. I’m digressing.

In this extra time I have been studying French and watching old movies on FXM and Turner Classic Movies. I love looking at the historical technology (i.e. dial phones), elaborate sets both in sound studios and in locations around the world, and the differences in culture between “then” and “now”. The history of movie making is also interesting to me. We like to take Spring Break in LA and I always try to hit one of the studios for the museum and historical tours they offer.

This morning’s feature was “Intent to Kill“, a somewhat ridiculous movie with some nice cinematography. As with anything, you win some and you lose some.

The movie is in black and white. When I looked up the movie I saw that it was filmed in 1958 and thought to myself “Didn’t they have color movies way before then?”. My Google-fu was strong this morning, and now I have the answer to that question. This is a fascinating article for those who like movies (especially old ones) or for those who are interested in economics and old tech.

I have a copy of Mechanical Engineering magazine for April 1930. It marks the 50th anniversary of the American Society of Mechanical Engineers, and contains not only commentary on the past, present, and future of mechanical technology, but also some thoughts concerning the social/economic impact of this technology. Very interesting reading, some of it relevant to today’s issues.

There are excerpts from an address given by the ASME President in 1881:

When the last generation was in its prime our factories were in operation twelve or thirteen hours; “Man’s work was from sun to sun, and woman’s work was never done.”  today man works ten hours, and woman is coming to a stage where she will work where, when, and how she pleases.  Then three yards an hour was the product for a single operative; today ten yards per worker are produced….A single mill operative at Fall River, Lowell, or Providence makes each year cloth enough to supply 1500 of the people who pay her wages by sending her tea.

From the 1930 article on Fifty Years of Power:

Turn back to 1880…It was a machine age, true, but only in spots–and very small spots at that. Along the streams of Eastern communities, mainly in New England, Pennsylvania, and Ohio, were dotted little mills.  Water power determined their original location.  Steam aided their growth.  Within their walls spindles whirred and rolls turned almost as in a modern plant.

Step out of these nuclei of power and the machine age of that day disappears.  On the streets, the horse and buggy, the oil lamp, or gas at best, and the lamp lighter.  Horses for the street and for the plow…In the home, the oil lamp and scrub-board.  Pick and shovel in the ditch. Hod carriers on construction.  Ten-and twelve-hour days of back-breaking labor.  In the worker’s cottage, food and a little sleep…No time or money for reading, music, or play.

Points made in the multiple articles on steam power: the transition from hand-fired furnaces in power stations to mechanical stoker firing…increased steam pressures…and the transition from reciprocating engines to steam turbines.  The result was that cost per kilowatt-hour generated fell from 3.1 cents in 1883 to .77 cents in 1929.

Interestingly, only about half the power consumed in factories in 1930 was in the form of purchased electricity…the rest was self-generated, in the form of either self-generated electricity or of direct mechanical drive.  One type of reciprocating steam engine…the Uniflow..is seen as having a continuing applicability in horsepowers too low for efficient use of the steam turbine.

Indeed, the advertising section at the back of the magazine contains an ad from the Skinner Engine Company noting that the newly-built New Yorker Hotel had chosen five Uniflow engines to generate electricity for the hotel rather than purchasing power from a utility. They claim that hundreds of engines have been installed in stores, office building, hospitals, and factories, and that the savings over utility power has proved so great that the engines brought greater returns on money invested and on floor space than any other department in the business.

Refrigeration was apparently a hot area (sorry) in 1930, and there’s a pretty long article on the topic.  One thing I hadn’t known is that some cities had central systems for cooling, in which chilled brine was circulated through pipes to individual refrigerators in homes and businesses…the refrigerator could then be very simple, with no active parts other than a thermostat-actuated valve. Such systems were in use in Boston and in New York City as early as 1890.  Sort of a “cloud” approach to refrigeration—Cooling as a Service!

Textiles were a very important industry in the US in 1930, and there is a long article on the subject. One interesting subtopic within the article has to do with dyes:

The first use of the chemical or aniline colors dates back to about 1850, when the chemists of Germany presented several new colors obtained by subjecting various fabrics to the action or absorption of liquor holding a derivative of coal tar in solution…America did not make much progress in this direction owing to certain complications and the lack of consolidated action.  What was produced here was in most cases equal to the imported product, but owing to the greater facilities for producing the color, the greater attention given to research, substantial government financial aid, and, primarily, the exceedingly low labor cost abroad, competition was out of the question.  Hence up to 1914 we had practically no dye industry and depended on Germany not only for dyes but also for many valuable pharmaceutical preparations as well as for phenol, the basis for many of our explosives.  

This problem was solved by intensive efforts during the First World War, and “whereas the value of our dye products in 1882 was $1.8 million, which increased to about $3.3 million in 1914–but with the aid largely of foreign intermediates–we now have over 200 firms producing $220 million worth of products, all more or less directly connected with this and allied industries.”

The article briefly discussed an intriguing piece of textile technology–the knot-tying mechanism:

Fifty years ago it was considered a mark of superiority to tie a perfect “weaver’s” knot, a knot that would properly unit the ends of the yarn and stay united while it was passing through the different processes…the number of operators who could tie rapidly and skillfully a series of these knots was limited.

One of the handiest mechanical devices one can see in the industry is known as a “knotter,” which forms a smoothly-tied, not-slipping knot…Just a handful of mechanism, but in the particular processes where it is used it shows an economy of operation estimated at 50 per cent in time and an unlimited amount in patience.

The author goes on to say that now (in 1930) there is equipment for collective tying of knots, bringing 2000 ends of warp together and uniting them by tying in eleven minutes.  Pretty intelligent-seeming for a purely mechanical system!

The woodworking industry was also important in the US in the 1930s, and the author of the article on this industry notes that it had only been fairly recently that this industry had emerged from small-scale operations into mass production. (The author distinguishes between “intimate industries,” those having to do with the home, and “non-intimate industries” such as mining, iron & steel, and transportation, arguing that the non-intimate industries have tended to be mechanized earlier than the intimate ones…not sure this paradigm is really consistent with the very early mechanization of textile spinning and weaving.) There’s an intriguing observation about the emergence of the automobile industry and the characteristics of different American regions:

It is a rather interesting side light on New England industry that the building of automobile bodies first started in the carriage and buggy shops of Amesbury and other parts of northern Massachusetts, while the first gasoline motors and steam engines were made in the machine shops of Hartford, New Haven, and Bridgeport.  New England had the genius to invent and develop the highly skilled product that was the forerunner of the modern automobile.  New England, however, fell short in vision and daring, and her factories were unwilling to venture their capital and reputation in such as risky experiment as the building of “horseless carriages” that were considered only as a luxury.  It required the daring and venturesome spirit of the Middle West to nurture and develop the tremendous automobile business of Detroit and the neighboring cities.

This is probably long enough for a single post…I’ll continue with excerpts and comments in a later post, to include the magazine’s articles on aviation, railroads, sea transportation, and machine shops…also, some additional social/political commentary.

Many people in government–including President Trump and several Congresspeople–have expressed dismay about the ‘stimulus’ checks sent to organizations such as Harvard University and Shake Shack.  I haven’t observed much curiosity, though, about why these checks got sent out in the first place.

Was the CARES act so written as to require money to be sent to such organization?  I haven’t read through this very large document, but here it is if anyone feels inspired to do so.

Was the language of the law so ambiguous that it was interpreted by the detailed implementers as requiring such funding, even though that was not Congressional intent?

Was it simply a matter of a coding error in a program that had to be written or modified very hastily in order to send out millions of checks?

I’m curious about the lack of curiosity re this matter.

Waiting for Good Dough.  Excerpts of some thoughts on central banking and monetary policy, from a newsletter issued by Paul Singer’s hedge fund, Elliott Management.  Best post/article title I’ve seen in a long time.

Remote work in industry during the pandemic and maybe afterwards…some thoughts from the CEO of GE Digital.

Skills development in industry.  Career progression doesn’t always have to involve college education.

Grim excerpts and critiques an Atlantic article which is a rather hysterical attack on a class of people who are very different from the author.

Venture capitalist Marc Andreessen (he was coauthor of the first widely-used web browser and cofounder of Netscape) writes about the need for America to focus on building things. Surely most of us here will agree with that spirit, but a lot of his specifics seem dubious to say the least. Stuart Schneiderman offers some thoughts; worthwhile comment thread.

A cat and a dog offer differing views about the merits of the work from home approach.

The US Naval Institute has posted some links to their archives.  This one is interesting:  a 1912 think piece on the future of the submarine, written by then-lieutenant C W Nimitz.

Link

Historian Niall Ferguson cites “the most succinct statement I’ve yet seen of the “massive enduring social and economic change post-pandemic” hypothesis.”

Offices>>Remote Work
NFL, NBA>>Esports
Movie Theaters>>Streaming
TV News>>YouTube stars
College>>ISAs, MOOCs
K-12>>Internet homeschooling
Corporate journalism>>Citizen journalism
EU/EEC>>27 sovereign states

I’m surprised he didn’t also include Stores>>Home delivery.

Of course, the degree to which these changes happen and are sustained will be largely a matter of how long the coronavirus pandemic lasts and how definitively it is suppressed.  But even if coronavirus continues as a recurrent plague, none of these trends are likely to be absolute.  For example: Offices>>Remote work…my own experience with new-business initiatives, both in existing corporations and in startups, suggests that there really is a lot of advantage in the in-person human interaction. Some of these never would have gotten started in the first place unless such interaction had taken place.  And, of course, there are a lot of things that can’t be done at home, including most manufacturing and all construction work. Ditto transportation.  And I’m not sure what TV News>>YouTube stars has to do with coronavirus or other epidemics, given that neither modality need involve person-to-person contact.

Assuming that coronavirus is largely or completely suppressed, what are the long-term effects likely to be?  Are there now so many people who will have been exposed to the convenience of on-line grocery shopping that they will feel little need to visit physical grocery stores?  Will spending half a day at the mall ever again be a thing?  Will people want to be densely packed into a movie theater or will they just decide that streaming movies at home (especially with large screens that I bet a lot of people are buying under the current circumstances) is just as good and a lot cheaper?  How about airline travel (or sea travel) for vacations?

Colleges..traditionally, the on-campus college experience was (at least supposed to be valued) for free discussion and interaction with professors.  Yet much of this has already been suppressed, both via giant lecture classes and by fear of creating offense.  College was also valued for its social opportunities, especially those involving dating and mating and the finding of spouses.  Yet reports indicate that this has become pretty awkward due to the administrative sex police and their frequent condemnation of people (especially men) with no form of due process.  Plus, people are now getting married a lot later, so the pressure to find someone during one’s college years is less-strong than it used to be.

In his tweet, Niall Ferguson also makes the excellent point that “I’d be more persuaded if there were evidence of comparable changes after the (much more lethal) 1918-19 influenza pandemic.”  Although media influence in those days was much less comprehensive and continuous; also, many alternatives that exist today (such as work-from-home as opposed to work-at-the-office) really weren’t feasible in those days.

Thoughts?

GE Healthcare, which is ramping up ventilator production, is using 3-D printing both to make parts directly and to make molds for injection molding.  However, the chief engineer for advanced manufacturing at Healthcare says that some of the 3D-printing companies he has been talking to are shut down due to government edicts that deemed their work nonessential.

It sounds like they will get around this barrier…“We have a map of all the companies that have excess capacity, and so we’ll divert whatever print work we need to whatever company has got the ability right now, on top of the equipment we have at GE”…but I expect that there is going to be a lot of this sort of thing. There is no way that local or state officials can understand the supply chain dependencies that exist between a seemingly-minor local business and a major national priority somewhere up a level or two (or more) in the product structure. In some cases, all it might take is a letter from the top-tier manufacturer certifying the importance of the work the supplier is doing, but in many cases I suspect that the only rapid solutions will require Federal involvement.

A lot of people…office workers, students…are going to be getting their first experience of remote working, and a lot of organizations are going to be getting either their first experience or a greatly expanded experience in managing this kind of work.  What will be the long-term effects of this?…will people eagerly return to their brick-and-mortar working environment as soon as it is safely possible?

Certainly, there are a lot of workers who would welcome the opportunity to avoid their daily commutes.  And there are a lot of employers who would be happy to save a lot of money on office space.

And there are surely some parents who would welcome the opportunity to keep their kids at home…there are also more than a few who have arranged their lives and their work schedules around the assumption that their kids will be in school for several hours every weekday.

Many of the remote working experiences are surely going to be suboptimal, however, given that there has been little if any leadtime to prepare systems, content, and procedures.

So what do you think?..a return to things the way they were, or permanent change?

I think President Trump is quite sincere about his oft-stated desire to drive up the wages of low-income workers…especially young and non-college workers…and he does seem to be having some success at this quest.  It has struck me for a while that while this is a very good thing from the standpoint of the overall society, it is also likely to pressure business profit margins, with possible consequences for the stock market as well as for Fed policy.

Yesterday the WSJ noted that “wages for 20- to 24-year olds are increasing twice as fast as for other workers…Overall job satisfaction in 2018 was the highest since 1994.”  At the same time, “90% of blue-collar businesses report operating with unfilled positions, and 29% say this has made them reduce output or turn down business.  Rising wages together with sluggish productivity growth are crimping corporate profits.  Between the fourth quarter of 2014 and the second quarter of 2019, profits for nonfinancial corporations  declined 17% and 46% for manufacturers.   The article quotes the Conference Board:  “The US will not be able to maintain its current standard of living unless the US government acts to significantly increase immigration, improve labor force participation, and, together with employees, raise labor productivity growth.”  To which the WSJ writer adds:  “Maybe the only short-term fix is to increase legal immigration–unless Americans want to see their living standards decline and more jobs exported.”

Higher wages do of course drive productivity improvement…the US has been a pioneer in the mechanization of work in large part because it has been a high-wage country, and that mechanization has helped to enable further wage increases.  This doesn’t always require any new inventions:  there are always productivity tools available that will make sense to a business that is paying $25/hour for labor but would not make sense to one paying $15/hour.  The process isn’t instantaneous, though.

Concerning immigration as a solution to labor shortages: commentators sometimes lose sight of the fact that GDP per capita matters for broad-based prosperity, not just absolute GDP.  And the only way to increase GDP per capita is through productivity improvements and higher labor force participation rates.  Increasing the raw number of workers doesn’t do this.

The Conference Board statement appears to put a lot of emphasis on things that the government should do, and the WSJ emphasizes more (legal) immigration.  Some increases in legal immigration may well be a good idea…as would increases in American fertility rates…but the main issues, I think, are productivity and the labor force participation rate.  The actual productivity numbers don’t reflect all the talk about (and even the realities of) robotics and AI.  Maybe this is largely just a matter of implementation lags, maybe it reflects increasing bureaucratization and ‘compliance’ costs throughout our economy.

My concern is that margin pressure may lead (in conjunction with other factors, like already-high valuations) to a sharp stock-market decline, which could have electoral implications.  Such decline might also lead to many deferrals of productivity-improving investments.  Alternatively, Fed concerns about rising wage rates as a possible signal of incipient inflation could lead the central bank to increase interest rates excessively as a preventative.

And any electoral result which substantially increases Democratic party power could lead to massive upsurges in legal and illegal immigration, with consequent wage pressures, demoralizing many workers who are now on an positive track and deferring the need for productivity investments.  Any attempt to deal with such wage pressures by establishing high Federal-level minimum wages would add much rigidity to the systems, creating problems of many kinds.

Discuss, if you feel so inclined.

Here’s a piece that mentions some of the technological, social, and economic trends that were important in the 1920s, and goes on to discuss seven tipping points that the author thinks will be key in the 2020s.

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.

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…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?

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.

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.

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Machine made out of Legos sorts Legos.

There are apparently 3000 different types of Lego components.

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.

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**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:

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.

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.

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.

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!