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    Robot of the Week

    Posted by David Foster on 9th March 2019 (All posts by )

    Fedex local delivery robot.

    I can think of some conditions that might be problematic for these things to deal with.

    Posted in Customer Service, Tech, Transportation | 3 Comments »

    Freezing in the Dark

    Posted by David Foster on 2nd March 2019 (All posts by )

    There has been much concern about possible hacking of the power grid by Russia, China, and others.  Here we have a segment from Rachel Maddow, inspired by a threat analysis from the US Intelligence Community.  From the analysis:

    China has the ability to launch cyber attacks that cause localized, temporary disruptive effects on critical infrastructure–such as disruption of a natural gas pipeline for days to weeks–in the United States. Russia has the ability to execute cyber attacks in the United States that generate localized, temporary disruptive effects on critical infrastructure.

    Maddow:  It’s like negative 50 degrees in the Dakotas right now. What would happen if Russia killed the power today?  What would happen if all the natural gas lines that service Sioux Falls just poof on the coldest day in recent memories?

    What would happen?  Nothing good.  These are serious threats, and I doubt that Russia and China are or will continue to be the only entities able to conduct such cyberattacks.  And there is also plenty of risk for non-cyber attacks…physical-world sabotage…which could have similarly malign impact on energy infrastructure.

    But we don’t need to wait for a foreign adversary or domestic terrorist organization to cripple our energy infrastructure.  We can quite effectively do it to ourselves.

    In late January, it was very cold in Minnesota.  And there wasn’t a lot of wind.  Natural gas, also, was in short supply, as a result of pipeline capacity constraints.  Xcel Energy urged its gas customers to turn down thermostats and water heaters, and to use electric heaters as necessary.  The electricity was coming from primarily coal plants (40 GW) and natural gas plants (about 23 GW)–the gas plants, of course, are also dependent on pipeline capacity.

    Also in Minnesota, here’s a large solar farm covered with snow.  Wonder if it’s melted or been swept off yet?  And here’s a cautionary story from Germany, where long, still, and dim winters do not mix well with wind and solar power generation.

    Solar and wind in most parts of the US are now small enough in proportion to overall grid capacity that shortfalls can be made up by the other sources.  What happens if they come to represent the majority of the grid’s power capacity–not to mention the exclusive source of capacity, as demanded by some?

    It may be feasible to store a few hours of electricity without driving costs out of sight…but what about the situation in which wind and solar are underperforming for several days in a row?  Interconnection of sources and demands over a wide area (geographical diversity) can help, but is by no means a comprehensive solution. So far, the gas, coal, and hydro plants have been there to kick in where necessary.

    Almost every day, there are assertions that new solar is cheaper than its fossil-fuel equivalents.  This may be true in some areas if you ignore the need to match supply and demand on an instantaneous basis.  But if the fossil-fuel plants are there to handle only those periods when wind, solar, and limited battery storage aren’t sufficient to meet demand, then the total energy production against which their capital cost is charged will be much lower, and hence, the cost per unit will go up. (See the California Duck Must Die for a nice visual portrayal of how widespread solar adoption has changed the load curve for the other sources.)  In some states with net metering, a home or business owner can sell excess power to the grid when loads are low and buy it back at the same unit price when loads are at their maximum. This becomes especially problematic when “renewables” become a major part of the mix.  Unless incentives are intelligently crafted–unlikely, given politics–“renewable” sources will effectively be subsidized by conventional sources and potentially make the construction and maintenance of those conventional sources impossible.  See If Solar and Wind Are So Cheap, Why Do They Make Electricity So Expensive?

    Read the rest of this entry »

    Posted in Big Government, Business, Crony Capitalism, Current Events, Energy & Power Generation, Environment, Europe, Germany, Russia, Tech | 41 Comments »

    A Robot of the Week, Revisited

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

    In a robots of the week post a while back, I mentioned two companies that are attempting to automate the apparel-production process. Recently, one of these companies, Softwear Automation, announced that its Sewbot product is now also available on a rental basis under the banner Sewbot as a Service.  (SaaS, playing off the acronym for the currently-hot field of Software as a Service.)  From the SaaS announcement:

    From 1994 to 2005, the United States lost more than 900,000 textile and apparel jobs to offshoring.

    Fast-forward to 2018. The pendulum is swinging back and textiles are returning as lean, highly automated, environmentally conscious production facilities. Within the last six years, there have been significant announcements by foreign-owned textile companies investing in the United States, with site selection choices clustered in the Southeast including the first Chinese owned Cut Make Trim factory in Arkansas.

    Despite this industry reversal, the seamstresses are not returning. While the knowledge can be shared to upskill workers, people don’t have the  desire to work in a traditional textile factory.

    To solve this and accelerate the growth of US based textile manufacturing, Softwear Automation is announcing SEWBOTS-as-a-Service, a rental lease service to allow manufacturers, brands, and retailers to source and manufacture here in the US at a lower cost than outsourcing and with greater predictability and quality. While we understand the benefits of “Made in America”, the focus of this program is to offer US textile manufacturing more control, greater margin, faster turn times and less inventory.

    The rental rate for Sewbot is quoted as starting at $5000/month, which comes to $55/shift for a three-shift operation.Softwear is also now offering production-rate estimates for various kinds of textile products. For microfiber towels, a single operator supervising 6 robots can make 2880 towels in an 8-hour shift, compared with 223 towels for a single operator performing traditional manual activities.   Other product types which the company sees as suitable for Sewbot automation include mattress covers, pillows, automotive floormats, t-shirts, and shoes (uppers).

    Most aspects of the apparel supply chain have long been highly automated: indeed, the mechanization of spinning and weaving was the hallmark of the Industrial Revolution.  The sewing process, however, has remained stubbornly labor-intensive, largely because the flexible nature of fabric makes it hard to handle mechanically.  Softwear Automation’s solution involves the use of machine vision for precise fabric positioning.  This article at IEEE Spectrum explains a little bit about how it works.

    Depending on how well these systems turn out to work in practice, and how the technology evolves, they may turn out to be not only the robots of the week, but the robots of the year or even the decade.  Apparel-making is a vast industry, concentrated in nations which are not-so-well-off economically, and employs a large number of people. A high level of automation would likely result in much of this production being relocated closer to the markets, thus saving transportation costs and shortening supply cycles.  The consequences for countries like China, Bangladesh, and Sri Lanka could be pretty unpleasant.  For the US, the onshoring of the work would seem clearly to be beneficial.

    I don’t know enough about the industry to analyze the economics of Sewbot vs low-wage-country production in any depth, but back-of-the envelope for one product type (the towels) suggests that on a pure direct labor cost per unit basis, a US-based Sewbot can still be undercut by human labor rates below about $4/hour.  (Calculated using the rental rate:  for many companies, purchase may offer better economics.)  But production isn’t the only factor in the product cost equation, of course, and in many situations proximity to end markets will be of considerable value: especially simpler inventory control and faster response to style changes. And a Made in the USA label is surely worth at least something.  Also, the economics may be different for some of the other product types…for the t-shirts, the company is citing a unit cost of $.33 for US-based production using  Sewbot…this compares with something around $.22 for a country such as Bangladesh, and is probably cheaper than China at the current wage rates.

    Read the rest of this entry »

    Posted in Business, China, India, International Affairs, Tech, USA, Vietnam | 6 Comments »

    Well, This is a Cheerful Thought

    Posted by David Foster on 13th February 2019 (All posts by )

    …not.

    Twitter’s Takeover of Politics is Just Getting Started.

    Summary at Tyler Cowen’s blog:

    But what does this new, more intense celebrity culture mean for actual outcomes? The more power and influence that individual communicators wield over public opinion, the harder it will be for a sitting president to get things done. (The best option, see above, will be to make your case and engage your adversaries on social media.) The harder it will be for an aspirant party to put forward a coherent, predictable and actionable political program.

    Finally, the issues that are easier to express on social media will become the more important ones. Technocratic dreams will fade, and fiery rhetoric and identity politics will rule the day. And if you think this is the political world we’re already living in, rest assured: It’s just barely gotten started.

    See also my post freedom, the village, and social media.

    Posted in Civil Liberties, Civil Society, Culture, Deep Thoughts, Politics, Tech | 20 Comments »

    Even Smart People Get It Wrong Sometimes

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

    Economist Art Laffer:

    “China is a huge plus to the U.S. because without China there is no Walmart, and without Walmart there is no middle class or lower class prosperity in America.”

    Actually, the US was known for broad-based prosperity long before either Walmart or China was a significant factor.  It was really only in the 1980s that Walmart’s expansion really took off…and it was then by no means as China-dependent as it has more recently become.  Indeed, starting in 1984 and extending at least through the early 1990s, Walmart was a strong supporter of the Crafted with Pride in the USA campaign, which was launched by textile entrepreneur Roger Milliken, among others.

    China’s presence in the global marketplace was greatly expanded by the Permanent Normal Trade Relations bill, which was signed by President Clinton in October 2000, as well as by China’s own economic-liberalization policies.  (Some data on the growth of Chinese exports over time, here)

    Real mean US household income, which is effectively a measure of price levels as well as wages/salaries, grew from $71773 in 1985 to $93887 in 2000.  Fifteen years later, in 2015, it had risen to only $95887.  (2017 dollars)

    Real median household income  grew from $51455 in 1985 to $59938 in fifteen years later, in 2000. In 2015, this indicator had actually declined to $58476.  (It grew to $61372 by 2017)

    There are a lot of factors that affect an economy, of course, and it would be unfair to conclude that the slowdown in American household income growth was caused by the vast expansion of trade with China.  Maybe it would have been even worse without Chinese imports and exports?

    National Review writer Robet VerBruggen cites “research” suggesting that “consumers save hundreds of billions of dollars per year thanks to expanded trade with China, and six-figure sums for every manufacturing job lost.  (Tucker) Carlson may be right that cheap junk from China doesn’t make us happy in any fundamental way, but it would put serious strains on family budgets if all that junk got expensive again.”

    Maybe. But I doubt if the strains would really be all that serious over time. If manufacturers did not have vast reservoirs of low-wage labor available for production of a particular product, then the incentives to improve productivity when making that product with high-wage labor would be greatly increased. Capital investment that makes no sense when you are paying workers $1.50/hour may make great sense when you have to pay $15/hour.  Furthermore, product designs themselves can often be changed in minor ways to make them more manufacturable; again, this would help reduce the cost impact of domestic or other high-wage-country manufacturing.

    I doubt if the strains on family budgets resulting from such changes in production-labor costs would have anywhere near the impact that has resulted from dysfunctional public schools (resulting in a need to pay for private schooling or move to a pricier neighborhood), unreasonable constraints on home-building, and out-of-control administrative and facilities spending by universities, coupled with irresponsible marketing of degree programs and student loans by same.

    One thing that has definitely been beneficial about China’s export trade is the drastic reduction in poverty in that country; this reduction is indeed something that we should all celebrate.  I suspect, however, that given economic liberalization, China could probably be doing just as well or almost as well with an economic approach that is not so extreme in its trade orientation but more focused on satisfying domestic demand…and this would probably be much more sustainable for them in the long run.

    Also, here are some additional links on US wage trends for anyone who’s interested:

    Read the rest of this entry »

    Posted in Business, China, Economics & Finance, Tech, USA | 29 Comments »

    Do You Have Lamarr in Your Car?

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

    It has been suggested that the short-range wireless protocol known as Bluetooth should instead have been called Lamarr, in honor of the actress/inventor Hedy Lamar.

    Hedy (maiden name Kiesler) was born in Vienna in 1914. From her early childhood she was fascinated by acting–and she was also very interested in how things worked, an interest which was encouraged by her bank-director father.  She began acting professionally in the late 1920s, and gained fame and notoriety when she appeared–briefly nude–in the film Ecstasy.  It was followed by the more respectable Sissy, in which she played the Empress Elisabeth of Austria.

    In 1933, Hedy married the arms manufacturer Friedrich Mandl, finding him charming and fascinating and also probably influenced by his vast wealth.  She was soon turned off by his Fascist connections and his extremely controlling nature–rather ridiculously, he even tried to buy up all copies and negatives of Ecstasy.  He did not allow her to pursue her acting career, but did require her to participate, mainly as eye-candy, in high level meetings with German and Italian political leaders and with people involved in military technology.  What she heard at these sessions both interested and alarmed her.

    Finding her marriage intolerable and the political situation in her country disturbing, Hedy left and first came to London. There she met MGM head Louis B Mayer, who offered her an acting job at $125/week.  She turned down the offer, but booked herself onto the same transatlantic liner as Mayer, bound for the USA.  On shipboard, she impressed him enough to receive a $500/week contract.  He told her that a name change would be desirable, and she settled on “Lamarr”…the sea.

    With the outbreak of war in Europe, Hedy followed the news closely.  For reasons that are not totally clear, she began thinking about the problems of torpedo guidance:  the ability to correct the weapon’s course on its way to the target would clearly improve the odds of a hit.  She had heard the possibility of a wire-guided torpedo discussed over dinner at Mandl’s…but this approach had limitations.  Radio was an obvious alternative, but how to prevent jamming?

    As an anti-jamming technique, she hit on the idea of having the transmitter and the receiver change frequencies simultaneously and continuously…she may have been inspired partly by the remote-control radio receiver which was available at the time, possibly either she owned one or had seen one at somebody else’s home.  With synchronized frequency changes at both ends of the radio link, jamming would be impossible unless an enemy knew and could emulate the exact pattern of the changes.  But how to synchronize the transmitter and the receiver?

    Enter Hedy’s friend George Antheil, who called himself “the bad boy of American music.”  Antheil was fascinated by player pianos and had created and performed compositions which depended on simultaneous operation of several of these players.  Maybe the punched paper strips used by player pianos could provide a solution to the frequency-hopping problem?

    US Patent 2282387, issued to Hedy Kiesler Markey (the name reflecting a brief unsuccessful marriage) and George Antheil, implemented this approach.  The feeding of the paper strip on the launching ship and that inside the torpedo would be started simultaneously, and the holes in the strips would select the frequencies to be used at any given time…88 rows are mentioned, offering 88 frequency choices, but obviously this number could be smaller or larger.  Commands to the rudder of the torpedo would be sent via modulation of a carrier wave on the always-changing frequency selected.  (The two inventors had retained an electrical engineer to assist with specification of some of the details.)

    Read the rest of this entry »

    Posted in Biography, Book Notes, Culture, Film, Media, Tech, War and Peace | 18 Comments »

    Sneaky Robots and Robotic Bureaucrats

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

    An artificial intelligence program was assigned the task of turning satellite images into street maps.  It was graded by comparing reconstructed images (reconstructed from the map) and comparing them with the original; also, by the clarity of the street map.  The grades were used by the program to continually improved its performance.

    But what the program sneakily learned to do was to encode details of the original image into the street map, in a manner invisible to humans, thereby optimizing its grade on the reconstructed image…independently of how well the street map…which was the actual desired product…actually reflected the original image.

    Humans, also, often respond to incentives in ways very different from those expected by the designers of those incentives…as many creators of sales commission plans and manufacturing bonus plans have discovered.  Bureaucracies, especially, tend to respond to the measurements placed on them in ways that are not consistent with the interests of the larger organization or society that they are supposed to be serving.  See Stupidity, Communist-Style and Capitalist-Style and The Reductio ad Absurdum of Bureaucratic Liberalism.

    Posted in Big Government, Business, Deep Thoughts, Management, Russia, Tech | 1 Comment »

    Freedom, the Village, and Social Media

    Posted by David Foster on 9th December 2018 (All posts by )

    This rerun (retitled from the original) inspired by Glenn Reynolds’ decision to deactivate his Twitter account.

    I’ve reviewed two books by German writer Hans Fallada: Little Man, What Now?, and Wolf Among Wolves (the links go to the reviews), both of which were excellent. I’ve also read his novel Every Man Dies Alone, which is centered on a couple who become anti-Nazi activists after their son Ottochen is killed in the war…it was inspired by, and is loosely based on, the true story of  a real-life couple who distributed anti-Nazi postcards and were executed for it.

    I thought this book was also excellent…the present post, though, is not a book review, but rather a development of some thoughts inspired by a particular passage in the story.

    Trudel, who was Ottochen’s fiancee, is a sweet and intelligent girl who is strongly anti-Nazi..and unlike Ottochen’s parents, she became an activist prior to being struck by personal tragedy: she is a member of a resistance cell at the factory where she works.  But she finds that she cannot stand the unending psychological strain of underground work–made even worse by the rigid and doctrinaire man (apparently a Communist) who is leader of the cell–and she drops out. Another member of the cell, who has long been in love with her, also finds that he is not built for such work, and drops out also.

    After they marry and Trudel becomes pregnant, they decide to leave the politically hysterical environment of Berlin for a small town where–they believe–life will be freer and calmer.

    Like many city dwellers, they’d had the mistaken belief that spying was only really bad in Berlin and that decency still prevailed in small towns. And like many city dwellers, they had made the painful discovery that recrimination, eavesdropping, and informing were ten times worse in small towns than in the big city. In a small town, everyone was fully exposed, you couldn’t ever disappear in the crowd. Personal circumstances were quickly ascertained, conversations with neighbors were practically unavoidable, and the way  such conversations could be twisted was something they had already experienced in their own lives, to their chagrin.

    Reading the above passage, I was struck by the thought that if we are now living in an “electronic village”…even a “global village,” as Marshall McLuhan put it several decades ago…then perhaps that also means we are facing some of the unpleasant characteristics that–as Fallada notes–can be a part of village life. And these characteristics aren’t something that appears only in eras of insane totalitarianism such as existed in Germany during the Nazi era. Peter Drucker, in Managing in the Next Society, wrote about the tension between liberty and community:

    Rural society has been romanticized for millenia, especially in the West, where rural communities have usually been portrayed as idylic. However, the community in rural society is actually both compulsory and coercive…And that explains why, for millenia, the dream of rural people was to escape into the city. Stadluft macht frei (city air frees) says an old German proverb dating back to the eleventh or twelfth century.

    Read the rest of this entry »

    Posted in Blogging, Civil Liberties, Civil Society, Current Events, Deep Thoughts, Media, Tech | 25 Comments »

    A Retrotech Adventure

    Posted by David Foster on 2nd December 2018 (All posts by )

    The Essex Steam Train and Riverboat leases 22 miles of railroad track from the state of Connecticut, and owns several steam and diesel locomotives plus various rolling stock. They operate regular passenger excursions plus seasonal specials.  Essex also offers a training and experience program for people who would like to learn a little bit about operating a steam locomotive.  Being interested in steam power, I signed up.

    The program includes some written material to be reviewed at home, a group classroom session of about an hour, and then an individual hour operating a locomotive under the guidance of an experienced engineer.

    On arriving, I was surprised at the scale of the operation.  Although I was there in the off season (early November), judging by the parking lot and the number of railcars the place must be quite busy during prime months.  First was the class, which covers safety rules and basic steam locomotive principles.  It was taught by the railroad’s machinist, who described himself as the “spare parts department.”  Next was a group visit to the locomotive cab to familiarize ourselves with the layout of controls and indicators.

    For our group, the locomotive was #40, a Mikado type built in 1920.  (The name “Mikado” became popular because an early batch of locomotives of this type was sold to the Japanese Railways.)  #40 started its life hauling logs and lumber in the West, then pulled passenger and freight trains in North Carolina until it was retired circa 1950…purchased by the Essex for restoration in 1977.  The locomotive has a rated boiler pressure of 180 psi and can generate a tractive effort of 35,000 pounds.

    On a steam locomotive, the cutoff point of steam admission to the cylinders can be controlled by the engineer.  Early cutoff lets the steam do more of its work expansively, improving fuel economy at the cost of some reduction in power.  The reverser sets the cutoff point as well as controlling the direction of travel–while the reversers on early locomotives were manually-operated and required considerable strength to operate (and sometimes led to broken arms), the reverser on #40 is a fingertip control, using air pressure to do the hard work.

    It was a drizzly and somewhat chilly day, but very comfortable in the locomotive cab. (The boiler backhead is very hot, do not touch!)  Basic controls and indicators include the throttle, the reverser, the boiler pressure gauge, the injectors, the boiler water glass, and the brakes with their associated pressure gauges.

    Read the rest of this entry »

    Posted in Business, Energy & Power Generation, History, Tech, USA | 4 Comments »

    What Will be the Fate of Brick & Mortar Retail?

    Posted by David Foster on 24th November 2018 (All posts by )

    The traditional retail industry, and the real-estate operations that provide space for it, are not, for the most part, doing too well these days.  Billions of dollars that would once–not long ago–have been purchased in a local physical space are now purchased online and shipped from a warehouse that may be hundreds or thousands of miles away.  Many services, too, that would formerly have been obtained in a local location are now obtained online…travel agencies, for example, have been largely supplanted by online services.

    So, here’s a question to think about:  What kinds of businesses are likely to continue to require local presence, and perhaps even to increase in their local presence needs?

    And what kind of businesses are currently major users of local space, but are likely to need a lot less in the future?

    An example in the first category would surely be restaurants/bars.

    An example in the second category would be, IMO, branch banks.

    Your thoughts?

    Posted in Business, Real Estate, Tech, USA | 72 Comments »

    A Critique of Electronic Health Records Systems

    Posted by David Foster on 22nd November 2018 (All posts by )

    …with extension to other kinds of application software.

    At the New Yorker, of all place:  Why Doctors Hate Their Computers.

    See also this 2012 article in the Atlantic.

    [Jonathan adds: See also this 2009 Chicago Boyz post and discussion.]

    Posted in Big Government, Business, Medicine, Tech | 8 Comments »

    New! – Your Mildly Anxious Pre-Election Tech-Grouch Haikus

    Posted by Jonathan on 5th November 2018 (All posts by )

    Elections coming.
    Bad or worse – not good or bad –
    Is the real question.

    —-

    New Google inbox
    Maximizes confusion.
    But, Google knows best.

    —-

    Social media:
    People at each other’s throats
    Over little things.

    —-

    That damned noise again. . .
    Some app, can’t ID which one.
    This is the future?

    —-

    (Feel free to add your contributions in the comments.)
     

    Posted in Poetry, Politics, Society, Tech | 9 Comments »

    Sputnik Anniversary Rerun – Book Review: Rockets and People

    Posted by David Foster on 4th October 2018 (All posts by )

    Today being the 61st  anniversary of the Sputnik launch, here’s a rerun of a post about a very interesting book.

    Rockets and People, by Boris E Chertok

    Boris Chertok’s career in the Russian aerospace industry spanned many decades, encompassing both space exploration and military missile programs. His four-volume memoir is an unusual document–partly, it reads like a high school annual or inside company history edited by someone who wants to be sure no one feels left out and that all the events and tragedies and inside jokes are appropriately recorded. Partly, it is a technological history of rocket development, and partly, it is a study in the practicalities of managing large programs in environments of technical uncertainty and extreme time pressure. Readers should include those interested in: management theory and practice, Russian/Soviet history, life under totalitarianism, the Cold War period, and missile/space technology. Because of the great length of these memoirs, those who read the whole thing will probably be those who are interested in all (or at least most) of the above subject areas. I found the series quite readable; overly-detailed in many places, but always interesting. In his review American astronaut Thomas Stafford said “The Russians are great storytellers, and many of the tales about their space program are riveting. But Boris Chertok is one of the greatest storytellers of them all.”  In this series, Chertok really does suck you into his world.

    Chertok was born in Lodz, Poland, in 1912: his mother had been forced to flee Russia because of her revolutionary (Menshevik) sympathies. The family returned to Russia on the outbreak of the First World War, and some of Chertok’s earliest memories were of the streets filled with red-flag-waving demonstrators in 1917. He grew up on the Moscow River, in what was then a quasi-rural area, and had a pretty good childhood–“we, of course, played “Reds and Whites,” rather than “Cowboys and Indians””–swimming and rowing in the river and developing an early interest in radio and aviation–both an airfield and a wireless station were located nearby. He also enjoyed reading–“The Adventures of Tom Sawyer and Huckleberry Finn met with the greatest success, while Harriet Beecher Stowe’s Uncle Tom’s Cabin gave rise to aggressive moods–‘Hey–after the revolution in Europe, we’ll deal with the American slaveholders!” His cousin introduced him to science fiction, and he was especially fond of Aelita (book and silent film), featuring the eponymous Martian beauty.

    Chertok remembers his school years fondly–there were field trips to study art history and architectural styles, plus a military program with firing of both rifles and machine guns–but notes “We studied neither Russian nor world history….Instead we had two years of social science, during which we studied the history of Communist ideas…Our clever social sciences teacher conducted lessons so that, along with the history of the French Revolution and the Paris Commune, we became familiar with the history of the European peoples from Ancient Rome to World War I, and while studying the Decembrist movement and 1905 Revolution in detail we were forced to investigate the history of Russia.” Chertok purused his growing interest in electronics, developing a new radio-receiver circuit which earned him a journal publication and an inventor’s certificate. There was also time for skating and dating–“In those strict, puritanical times it was considered inappropriate for a young man of fourteen or fifteen to walk arm in arm with a young woman. But while skating, you could put your arm around a girl’s waist, whirl around with her on the ice to the point of utter exhaustion, and then accompany her home without the least fear of reproach.”

    Chertok wanted to attend university, but “entrance exams were not the only barrier to admission.” There was a quota system, based on social class, and  “according to the ‘social lineage’ chart, I was the son of a white collar worker and had virtually no hope of being accepted the first time around.” He applied anyhow, hoping that his journal publication and inventor’s certificate in electronics would get him in.” It didn’t–he was told, “Work about three years and come back. We’ll accept you as a worker, but not as the son of a white-collar worker.”

    So Chertok took a job as electrician in a brick factory…not much fun, but he was soon able to transfer to an aircraft factory across the river. He made such a good impression that he was asked to take a Komsomol leadership position, which gave him an opportunity to learn a great deal about manufacturing. The plant environment was a combination of genuinely enlightened management–worker involvement in process improvement, financial decentralization–colliding with rigid policies and political interference. There were problems with absenteeism caused by new workers straight off the farm; these led to a government edict: anyone late to work by 20 minutes or more was to be fired, and very likely prosecuted. There was a young worker named Igor who had real inventive talent; he proposed an improved linkage for engine and propeller control systems, which worked out well. But when Igor overslept (the morning after he got married), no exception could be made. He was fired, and “we lost a man who really had a divine spark.”  Zero tolerance!

    Chertok himself wound up in trouble when he was denounced to the Party for having concealed the truth about his parents–that his father was a bookkeeper in a private enterprise and his mother was a Menshevik. He was expelled from the Komsomol and demoted to a lower-level position.  Later in his career, he would also wind up in difficulties because of his Jewish heritage.

    The memoir includes dozens of memorable characters, including:

    *Lidiya Petrovna Kozlovskaya, a bandit queen turned factory supervisor who became Chertok’s superior after his first demotion.

    *Yakov Alksnis, commander of the Red Air Force–a strong leader who foresaw the danger of a surprise attack wiping out the planes on the ground. He was not to survive the Stalin era.

    *Olga Mitkevich, sent by the regime to become “Central Committee Party organizer” at the factory where Chertok was working…did not make a good first impression (“had the aura of a strict school matron–the terror of girls’ preparatory schools”)..but actually proved to be very helpful to getting work done and later became director of what was then the largest aircraft factory in Europe, which job she performed well. She apparently had too much integrity for the times, and her letters to Stalin on behalf of people unjustly accused resulted in her own arrest and execution.

    *Frau Groettrup, wife of a German rocket scientist, one of the many the Russians took in custody after occupying their sector of Germany. Her demands on the victors were rather unbelievable, what’s more unbelievable is that the Russians actually yielded to most of them.

    *Dmitry Ustinov, a rising star in the Soviet hierarchy–according to Chertok an excellent and visionary executive who had much to do with Soviet successes in missiles and space. (Much later, he would become Defense Minister, in which role he was a strong proponent of the Soviet invasion of Afghanistan.)

    *Valeriya Golubtsova, wife of the powerful Politburo member Georgiy Malenkov, who was Stalin’s immediate successor. Chertok knew her from school–she was an engineer who became an important government executive–and the connection turned out to be very useful. Chertok respected her professional skills, liked her very much, and devotes several pages to her.

    *Yuri Gagarin, first man to fly in space, and Valentina Tereshkova, the first woman.

    *Overshadowing all the other characters is Sergei Korolev, now considered to be the father of the Soviet space program although anonymous during his lifetime.  Korolev spent 6 years in labor camps, having been arrested when his early rocket experiments didn’t pan out; he was released in 1944.  A good leader, in Chertok’s view, though with a bad temper and given to making threats that he never actually carried out.  His imprisonment must have left deep scars–writing about a field trip to a submarine to observe the firing of a ballistic missile, Chertok says that the celebration dinner with the sub’s officers was the only time he ever saw Korolev really happy.

    Chertok’s memoir encompasses the pre-WWII development of the Soviet aircraft industry…early experiments with a rocket-powered interceptor…the evacuation of factories from the Moscow area in the face of the German invasion…a post-war mission to Germany to acquire as much German rocket technology as possible…the development of a Soviet ballistic missile capability…Sputnik…reconnaissance and communications satellites…the Cuban missile crisis…and the race to the moon.

    Some vignettes, themes, and excerpts I thought were particularly interesting:

    Read the rest of this entry »

    Posted in Aviation, Big Government, Biography, Leftism, Management, Military Affairs, Russia, Society, Space, Tech, Transportation | 4 Comments »

    Summer Rerun: Catalist, “The 480”, and The Real 480

    Posted by David Foster on 30th August 2018 (All posts by )

    There was much discussion in 2014 of Catalist, a database system being used by the Democratic Party to optimally target their electioneering efforts…see Jonathan’s post here.  I’m reminded of Eugene Burdick’s 1964 novel, The 480.  The book’s premise is that a group within the Republican party acquires the services of a computing company called  Simulation Enterprises, intending to apply the latest technology and social sciences research in order to get their candidate elected.  These party insiders have been inspired by the earlier work of the 1960 Kennedy campaign with a company called Simulmatics.

    Simulmatics was a real company.  It was founded by MIT professor Ithiel de Sola Pool, a pioneer in the application of computer technology to social science research. Data from 130,000 interviews was categorized into 480 demographic groups, and an IBM 704 computer was used to process this data and predict the likely effects of various alternative political tactics.  One question the company was asked to address by the 1960 Democratic campaign, in the person of Robert F Kennedy, was:  How best to deal with religion?  There was considerable concern among some parts of the electorate about the prospect of choosing a Catholic as President.  Would the JFK campaign do better by minimizing attention to this issue, or would they do better by addressing it directly and condemning as bigots those who would let Kennedy’s faith affect their vote?

    Simulmatics concluded that “Kennedy today has lost the bulk of the votes he would lose if the election campaign were to be embittered by the issue of anti-Catholicism.  The simulation shows that there has already been a serious defection from Kennedy by Protestant voters. Under these circumstances, it makes no sense to brush the religious issue under the rug.  Kennedy has already suffered the disadvantages of the issue even though it is not embittered now–and without receiving compensating advantages inherent in it.”  Quantitatively, the study predicted that Kennedy’s direct addressing of the religion issue would move eleven states, totaling 122 electoral votes, away from the Kennedy camp–but would pull six states, worth 132 electoral votes, into the Democratic column.

    It is not clear how much this study influenced actual campaign decision-making…but less than three weeks after RFK received the Simulmatics report, JFK talked about faith before a gathering of ministers in Houston.  “I believe in an America where religious intolerance will someday end,”  Kennedy said,  “where there is no Catholic vote, no anti-Catholic vote, no bloc voting of any kind.” (Burdick’s novel also suggests that the Kennedy campaign used Simulmatics to assess the effects of a more-forthright posture on civil rights by the campaign, and furthermore to analyze Kennedy’s optimal personality projection during the debates–I don’t know if these assertions are historically correct, but the religion analysis clearly was indeed performed.)

    Considerable excitement was generated when, after the election, the Simulmatics project became publicly known.  A Harper’s Magazine article referred to to the Simulmatics computer as “the people machine,” and quoted Dr Harold Lasswell of Yale as saying, “This is the A-bomb of the social sciences.  The breakthrough here is comparable to what happened at Stagg Field.”  But Pierre Salinger, speaking for the Kennedy campaign, asserted that “We did not use the machine.”  (Salinger’s statement is called out as a lie in the recent book, The Victory Lab: The Secret Science of Winning Campaigns.)

    In Burdick’s novel, the prospective Republican candidate is John Thatch, head of an international engineering and construction company.  Thatch has achieved popular renown after courageously defusing a confrontation between Indians and Pakistanis over a bridge his company was building, thereby averting a probable war.  Something about Thatch’s personality has struck the public imagination, and–despite his lack of political experience–he looks to be an attractive candidate.  But initially, the Republicans see little hope of defeating the incumbent Kennedy–“the incumbent is surrounded by over four years of honorific words and rituals,” a psychologist explains.  “He seems as though he ought to be President.  He assumes the mantle.”  This outlook is deeply disturbing to a Republican senior statesman named Bookbinder, who strongly believes that defacto 8-year terms are bad for the country…but if it is true that Kennedy is unbeatable, then the best the Republicans can hope to do is lose as well as possible.  Things change when Kennedy is assassinated and the election becomes a real contest.

    Bookbinder and Levi, another Republican senior statesman, are introduced to Simulation Enterprises by a young lawyer named Madison (Mad) Curver and his psychologist associate (quoted above), a woman named Dr Devlin.  Mad and Dr Devlin explain that what Sim Enterprises does is different from the work done by garden-variety pollsters like the one they have just met, Dr Cotter:

    “The pollster taps only a small fragment of the subject’s mind, attention, background, family influence, and habits.  The Simulations thing, just because it can consider thousands of elements influencing the subject, even things he may not know himself, gets much better results.”

    “And one further thing, Book,” Mad said.  “Simulations Enterprises can predict what people will do in a situation which they have never heard of before.  That was the whole point of the UN in the Midwest example.  No one has gone out there and asked them to vote on whether we should get out of the UN, but Dev outlined a procedure by which you can predict how they will react…if they ever do have to vote on it.

    Again Bookbinder had the sharp sense of unreality.  Unreal people were being asked invented questions and a result came out on green, white-lined paper…and when you got around to the real people six months later with the real question they would act the way the computer had said they would.

    Read the rest of this entry »

    Posted in Advertising, Book Notes, Elections, History, Human Behavior, Politics, Polls, Predictions, Tech, USA | 18 Comments »

    Retrotech, Revitalized

    Posted by David Foster on 24th August 2018 (All posts by )

    A triple-expansion steam engine, which was used for water pumping in Phillipsburg NJ, has been restored to operating condition thanks to a small group of dedicated volunteers.  The engine, which pumped 6 millions gallons per day to a reservoir 265 feet above its level, was built in 1913 and was in continuous operation until 1969, when it was put into standby status (the pumping duties having been taken over by electric pumps) and finally removed from service in 1982.  Here’s a video of its final run in 1982, which has turned out to not be so final.

    The boilers have not yet been restored; test runs were done using a portable commercial rent-a-boiler as the steam source.  The team intends to restore one of the boilers as well in the future.

    When people think about the vast improvements in health and lifespan over the past century and a half, attention tends to be focused on antibiotics, better medical care, x-ray and scanning equipment, etc.  Public water systems, enabled initially by waterwheels and especially by engines like this one, played an important role as well.

    The restoration team has a Facebook page, here.

    See also my posts 301 Years of Steam Power and 175 Years of Transatlantic Steam.

    Posted in Energy & Power Generation, Health Care, History, Tech | 7 Comments »

    The Question the WSJ Didn’t Ask

    Posted by David Foster on 13th August 2018 (All posts by )

    The Wall Street Journal, on its editorial page, writes about a company called Standard Textile, whose economic viability is apparently being threatened by the 25% tariffs on imports of its main production input:  a type of fabric sourced from China and known as greige, which I believe is basically the fabric as it comes off the loom, unfinished and un-dyed.  The company is especially concerned because finished products from China which compete with its own products are tariffed at only 6.7%.   WSJ uses this example to argue that Trump is all wrong on tariffs, and does so in the rather superior manner (the title of the piece is ‘a looming trade lesson’) which is common among those who ascribe any objections to absolutely free trade as based on nothing but economic ignorance or political demagoguery.

    I will stipulate that it seems rather dumb to tariff raw materials and intermediate goods at a higher level than finished products made from these inputs.  But..is it really true that greige fabrics are available only from China?  A few minutes of searching suggests that they are available from India, and from at least some US suppliers.  Maybe there is some particular variant of the products that is only made by a specific Chinese supplier, or maybe Standard has negotiated such a great deal with their supplier that no one else will match the price–it would be interesting to know.

    The big question that the WSJ didn’t ask is:  Why is this fabric (if it is truly unavailable in the US) not manufactured here?  Textile manufacturing is not generally a labor-intensive activity, it is very different on this measure from the transformation of the textiles into apparel and other finished products.  It was one of the first industrial activities to be mechanized, and automation in this field has advanced steadily over a couple of centuries.  Moreover, textile manufacturing uses significant amounts of power, and I’ve read about Chinese firms that moved to the US specifically because the electricity was cheaper and more reliable.  So the usual arguments about why a particular item needs to be made in China or other non-US setting…labor costs, less-stringent environmental restrictions…don’t seem to really apply here.

    Most likely, greige manufacturers tend to locate in Asia and other non-US locations because that is where their customers are…’customers’ here referring not to end consumers but to apparel manufacturers and others who buy the material as an input to their own processes…and geographical proximity is of value in being able to fill orders rapidly and without excessive shipping costs.  So this is an example of how supply chains are interconnected, and how losing one industry in a chain tends to pull other industries away also.  The same point has also been demonstrated in consumer electronics manufacturing, where the supply chain is now so centered in Asia, especially China, as to make it difficult for a company to produce these products in the US even if they want to.  (And ‘supply chain’ in this sense does not include physical products, it also includes certain services.  I have been told by the CEO of a medical electronics startup that she would find it difficult to manufacture in the US due to absence of certain specialized services; I believe she mentioned RF test facilities)

    A serious analysis of America’s trade situation should involve more than quoting David Ricardo and lecturing people about their supposed economic ignorance.  The WSJ article would have been more intellectually-honest and more useful had it also given examples of American manufacturers who are benefitting from the modified tariffs; these examples certainly exist.

    Best of luck to Standard Textile.  Hopefully, (a) the tariffs, if they remain in place, will be adjusted to level the rate between imported fabric and imported finished goods, and (b) US manufacturers of this fabric will come into being.

    Posted in Business, China, Miscellaneous, Tech, Trump, USA | 20 Comments »

    Rickover

    Posted by David Foster on 26th July 2018 (All posts by )

    Recently watched an excellent documentary on Admiral Hyman Rickover, creator of the nuclear Navy. There’s quite a lot in the documentary that is relevant to today’s issues and concerns, for example:  circa 1972, the CIA had assured the Navy that the top speed of Russian attack subs was about 22 knots.  Rickover suspected that they were wrong, and he directed a carrier which was being shadowed by a Russian sub to gradually increase speed.  When it reached 30 knots, the shadowing sub was still there.

    Which provides one more interesting data point at a time when we are being lectured about the need to treat the conclusions of the “intelligence community” with reverence.

    In a 1974 speech, Rickover told of an ancient people called the Locrians:

    These people gave freedom of speech to all citizens. At public meetings anyone could stand up and argue for changes in law or custom, on one condition. A rope was placed around his neck before he began to speak and, if what he said did not meet with public approval, he was forthwith hanged. That, no doubt, prevented disturbing the even tenor of familiar customs and ways of life.

    I have encountered some in the Navy who look with nostalgia on this ancient custom.  But we must face the stark fact that an uncriticized society cannot long endure.

    Quite a few organizations in America today are following in the footsteps of the Locrians–the universities, especially, but also certain Silicon Valley companies.  And not only them.

    I learned of this documentary about the same time I read about a professor who was disturbed that Hispanic students that she interviewed credited their success to their own hard work and self-reliance rather than to affirmative action.

    Rickover was Jewish, and he entered the Navy at a time when Jews were not common in that service…and the negative attitudes toward Jews which were prevalent in the society at large were also quite common in the Navy, perhaps even stronger there than outside.  (The Academy yearbook pages for both Rickover and the only other Jewish midshipman in his class were conveniently perforated for easy removal.)

    And I wondered:  If Rickover had been influenced by professors and others endlessly and excessively beating the Victimhood drum, would he have been able to achieve the success and the great accomplishments that he did?  Or would he have just folded up and concluded that it was hopeless, that Jews had no chance in the Navy?

    Well, probably not Rickover–he was an extraordinarily tough and resilient man.  But there probably are a lot of people who have high potential, though maybe not on the Rickover level, and who are being inhibited and will be inhibited in achieving that potential due in substantial part to such preaching.

    Posted in Human Behavior, Immigration, Judaism, Military Affairs, Science, Tech, USA, War and Peace | 10 Comments »

    Rerun: The Dream(liner) and the Nightmare (of Social Toxicity)

    Posted by David Foster on 22nd July 2018 (All posts by )

    The FAA has issued an Emergency Airworthiness Directive against the Boeing 787 Dreamliner. The AD requires that the battery system be reviewed and modified as necessary to eliminate the danger of fires such as those that have recently occurred on these aircraft. The changes needed could presumably involve manufacturing processes, sourcing of components, electrical-system design, or some combination of these things.

    The FAA’s action here seems to me like simple and reasonable prudence. It is not uncommon for new aircraft types to encounter problems during their early operational days, and the 787 is an innovative plane in many ways, especially in the use of electrical means to replace functions traditionally done by hydraulic systems and by engine bleed air.  There may well turn out to be simple fixes that can be quickly implemented to resolve the issue; on the other hand it’s possible that the fix will involve signficant redesign and will cost Boeing and the airlines considerable money. Purely as speculation, I’d guess that the worst-case result for the study required by the AD would be the mandated replacement of the plane’s lithium-ion batteries with conventional aircraft batteries, at some sacrifice in the plane’s useful load and some redesign both of the relevant control systems and of some interior spaces.

    But the purpose of this post is not to talk about 787 technical issues, as much fun as that might be.

    After clicking on the Yahoo report about the AD issuance yesterday, I took a look at some of the comments, and a depressing experience it was. Here are some samples:

    Makes you wonder if Boeing did not have the FAA inspectors in their back pocket while certifying this airplane “air worthy”? Maybe a few bucks went along stuffing their respective back pockets as well. Good example of certifying government agencies working too close with the manufacturer.

    For the FAA to say it’s safe and then ground the planes, all credibility and trust in competence is out the window.

    Were they just going to wait until the costs of wrongful death lawsuits surpassed the cost of fixing the problem?

    They do lots of testing but just like windows they release it to the public and then we will fix all bugs in the system

    Parts made in China

    #$%$ batteries made in China and a world-class American airplane manufacturer fell for their cr@p product. Do you think that perhaps Chinese agents were behind deliberately sabotaging our country’s product?

    Dream gone bad. Overseas outscourced components on the cheap, assembled by redneck scabs in South Carolina.

    Just one more example of the FINE work being produced by wonderful, hardworking and dedicated union workers.

    Just more retaliation from Obama for the move to non- union South Carolina.

    no one care anymore all the factory workers just go to work to try to make $$$$$ and this it is hard too the pride in making or to build something does not exist anymore!!!!!!!!!!!!

    Too bad the GOP helped rich buddies ship all the manufacturing jobs to china? Expertise comes with manufacturing. Burger jobs make poor planes?

    Read through several pages of comments like these, and the overwhelming overall impression is one of social toxicity…of people glaring furiously at one another, quick to assume that anything to goes wrong in any aspect of life is due to either malice or incompetence or both. It is a picture of generalized resentment and distrust, coupled with entitled ignorance.

    Read the rest of this entry »

    Posted in Aviation, Big Government, Civil Society, Human Behavior, Tech, USA | 7 Comments »

    A Jobs-Based Complaint About Technological Change, circa 1850

    Posted by David Foster on 20th July 2018 (All posts by )

    Come all ye bold wagoners turn out man by man
    That’s opposed to the railroad or any such a plan;
    ‘Tis once I made money by driving my team
    But the goods are now hauled on the railroad by steam.
     
    May the devil get the fellow that invented the plan.
    It’ll ruin us poor wag’ners and every other man.
    IL spoils our plantations wherever it may cross,
    And it ruins our markets, so we can’t sell a hoss.
     
    If we go to Philadelphia, inquiring for a load,
    They’ll tell us quite directly it’s gone out on the railroad.
    The rich folks, the plan klonopintabs they may justly admire,
    But it ruins us poor wag’ners and it makes our taxes higher:
     
    Our states they are indebted to keep them in repair,
    Which causes us poor wag’ners to curse and to swear.
    It ruins our landlords, it makes business worse,
    And to every other nation it has only been a curse.
     
    It ruins wheelwrights, blacksmiths, and every other trade,
    So damned be all the railroads that ever was made.
    It ruins our mechanics, what think you of it, then?
    And it fills our country full of just a lot of great rich men.

    Read the whole thing here.

    Posted in Tech, Transportation | 6 Comments »

    Are Professors Undercutting Women in STEM?

    Posted by David Foster on 15th July 2018 (All posts by )

    …and, if so, which professors?

    It has often been asserted that (male) professors in engineering, math, computer science, etc are causing a shortage of women in STEM by projecting the attitude that women are unwelcome in their fields.  I’ve always thought this seemed rather unlikely as a common thing–though no doubt it happens in some  cases–if the assertion is meant to apply to the events of the last 20 years or so.

    Comes now Barbara Oakley, herself a professor of engineering:

    Professors have profound influence over students’ career choices. I’m sometimes flabbergasted at the level of bias and antagonism toward STEM from professors outside scientific fields. I’ve heard it all: STEM is only for those who enjoy “rote” work. Engineering is not creative. There’s only one right answer. You’ll live your life in a cubicle. It’s dehumanizing. You’ll never talk to anyone. And, of course, it’s sexist. All this from professors whose only substantive experience with STEM is a forced march through a single statistics course in college, if that.

    My colleagues in the humanities unthinkingly malign STEM in front of me. Their bias has become so deeply ingrained that they don’t think twice. My students tell me it’s worse when I’m not around.

    She also argues that the differing patterns of math vs verbal skills in men and women tends to make women more susceptible to the anti-STEM shots taken by the professors of which she is speaking:

    Many studies, including a critical review by Elizabeth Spelke in American Psychologist, have shown that on average men and women have the same abilities in math and science. But as Mr. Reges notes, women tend to do better than men verbally—a consequence of early developmental advantages…Consider a student who gets an A in every subject. Let’s call her Nadine. She’s the type of student who could excel in whatever she chooses. Her engineering professors might be telling her that an electrical engineering degree is a great career choice that will open doors and pay well. But her non-STEM professors may be telling her something completely different: “You won’t use your fantastic writing skills. And besides, you’ll just sit in a cubicle crunching numbers.” Nadine can begin to feel she’s untrue to her full set of talents if she picks engineering. So Nadine jumps the STEM ship.

    Only anecdotal evidence is presented; still, given the level of bitterness that seems to pervade today’s academia, the STEM-slamming behavior that Oakley describes doesn’t seem all that unlikely.

    Thoughts?

    Posted in Academia, Arts & Letters, Human Behavior, Science, Tech | 10 Comments »

    Disruption – Scaling an Application

    Posted by Carl from Chicago on 1st July 2018 (All posts by )

    Today in the NYT they had an article about an online dating app called “Raya”. This tool is designed to let exclusive rich / celebrity folks match rather than being mixed in with everyone else on Tinder.

    From my perspective, the interesting fact isn’t what the application is “about”, but how easy it is to build a scale a worldwide tool with all necessary functionality. From what I can gather in the article:

    • The entire company is run with only 13 people, including technical staff
    • The platform is exclusive to Apple iOS, and costs $7.99 / month (if you are accepted, which is rare), with additional up-charges
    • This world-wide, fully functional app was built with limited investment and seed funding
    • The app was built and launched quickly, in likely a year or so (based on the dates provided in the article)
    Let’s look at how modern platforms and capabilities have enabled this sort of rapid delivery, scaling and enabling of a business model.  In the past, building a business such as this would have been a large-scale project.  By building it on the Apple iOS platform, however, the developer is able to tap into a huge amount of existing infrastructure, including:
    • Apple basically provides distribution through the iPhone, operating system, and entire infrastructure of the App store which includes billing 
    • Increasing power of the phone itself (likely all these rich and famous folks are on the latest models) enables advanced features and fast responses, as well as a consistent experience for users
    • The platform and embedded capabilities allow for rapid builds and prototyping, upgrades and security
    It is astonishing that such a ubiquitous and enabling platform exists, with the ability to scale to an essentially infinite degree, with little (to no) up front investment.  This platform and environment facilitates rapid prototyping, the ability to grow quickly (if there is demand for your app), and provides an entire environment for notifications, customization, etc… that you can leverage.
    If someone would have told you ten years ago that you could
    • Build a piece of software that can reach customers around the world
    • Scale up at a rapid rate with little or no upfront investment
    • Have billing, notifications, user experience, etc…. mostly done for you “out of the box”
    You’d think that they were dreaming.  And yet it is here, today.
    What are the implications of this?  I think that a lot of the assumptions that we make about how strong incumbent positions are, how fast challengers can emerge, and how low the barriers to entry are for many markets are incorrect.  Since the key demographics are already all mobile (and the majority of the highest income US consumers are on iOS), you can jump quickly into Apple and evolve rapidly.
    Since many companies today make little or no profits and “value” is the stream of future cash flows (when presumably the company will be profitable and able to capture and hold market share and customer revenues), the fact that competitors can rapidly come into your space with little incremental investment should make long-term investors shudder.  
    Cross posted at LITGM

    Posted in Economics & Finance, Tech | 9 Comments »

    Extremely Cool, but…

    Posted by David Foster on 25th June 2018 (All posts by )

    A Gloster Meteor in flyable condition–the Meteor being Britain’s first operational jet fighter–has come to the US on a permanent basis.  The jet has been purchased by the World Heritage Air Museum, which is located near Detroit.  It will be at the EAA Oshkosh show this July, along with two other early British jets.

    The prototype Meteor first flew on March 5, 1943, and the type’s first use was against the V-1 cruise missiles that plagued London.  Meteors were sent to the Continent in early 1945, they were restricted in their operating area for fear of having downed aircraft captured by the Germans or the Soviets and were used for airfield defense and ground-attack missions.

    I believe this was the only flyable Meteor in the UK except for two owned by the Martin-Baker company and used to test ejection seats…as working aircraft these planes probably aren’t available for public display very often, if at all.  It’s great to have a Meteor in the US, but I would have thought that given this airplane’s historical significance, someone in the UK would have raised the money to keep it flying there.

    Posted in Aviation, Britain, History, Military Affairs, Tech, War and Peace | 5 Comments »

    Disruption – Online Ordering

    Posted by Carl from Chicago on 24th June 2018 (All posts by )

    The retail restaurant industry already is an area of fierce competition. Just think of all the restaurants in your community vying for your attention and business. And this is also an industry with slim margins and a high mortality rate – even after a couple years’ away from Chicago, many of the local restaurants we used to patronize have turned over in one form or another.

    Since I’ve lived in a “big city” environment for decades, I am used to just walking over to a nearby restaurant to eat or potentially pick up a delivery. However, that isn’t an option for everyone, and digital delivery through various methods is now an important differentiator between chains and individual firms.

    The NYT had an article titled “App Takes Orders for Mom-and-Pop Pizzerias” about a company called Slice that offers a tool for small, individually owned pizza restaurants to offer sophisticated ordering capabilities in multiple methods in order for them to compete with chains like Dominos which run a significant portion of their business through online ordering. Small chains typically cannot build their own specific tools and will need to purchase these capabilities as a service.

    Slice sends customers’ online orders to the restaurants through their preferred method — email, fax or phone. Restaurants deliver the meals with their own couriers. For each order processed, Slice receives a $1.95 commission, or around 6 to 7 percent of order totals on average, Mr. Sela said. In contrast, GrubHub charges up to 18 percent of the order to process online sales for its clients.

    In a business with small margins, giving up 18% or even 6-7% of revenues off the top line seems to be a very significant cost, but at least it allows these restaurants to “even the playing field” with larger chains.

    Read the rest of this entry »

    Posted in Economics & Finance, Tech | 2 Comments »

    An Interesting and Timely IPO

    Posted by David Foster on 22nd June 2018 (All posts by )

    I’ve been aware for some time of a company called Avalara, which is in the cloud-based tax-compliance business.  In the US, Avalara keeps track of the vast array of sales tax rates, which are imposed not only at the state level but often also at municipal and county levels.  Avalara integrates with a number of electronic commerce platforms, which can pass destination address info to the system and thereby obtain the appropriate tax rate in real time and include it in the end customer’s charges at checkout.

    The company did its Initial Public Offering on June 13, and AVLR quickly jumped from its IPO price of $24 to about $45 , putting its market capitalization at about $2.9 billion.  Yesterday, the Supreme Court issued a decision that has great implications for Avalara’s business…as well as for the businesses of hundreds of thousands if not millions of on-line retailers and the consumers who buy from them–and as of this moment AVLR is trading at $52.16, with a market cap of $3.32 billion.

    What the Court apparently ruled is that states can impose sales taxes on on-line transactions (and, I would presume, classical mail-order transactions as well) even when the seller does not have a physical “nexus” (such as a warehouse, and office or a factory) in that state. (And you can be sure that most of them will take advantage of this opportunity.)   This is really “just” a cost problem for very large on-line merchants such as Amazon, but the compliance issues for smaller businesses are going to be considerable.  Avalara seems well-positioned to help with this problem, but the ruling is still going to be far more burdensome to the smaller on-line merchants than to the large ones.

    See discussion of the sales tax issue at the Instapundit post.

    Regarding Avlara, I have not analyzed this company as a potential investment and am not giving an opinion on it for that purpose either pro or con, certainly not giving investment advice here.

    Posted in Big Government, Business, Internet, Taxes, Tech | 28 Comments »

    This Post is Not About Footwear

    Posted by David Foster on 19th June 2018 (All posts by )

    100th anniversary of the flip-flop

     

    The quintessential digital device.

    Posted in History, Tech | 6 Comments »