I was reading this Bloomberg article about the internal risk models at JP Morgan versus Goldman Sachs, and it hit me: I too had an urge for the SEC to hire the insiders at Goldman Sachs to help them “understand risk” at every level. Why not hire a small team of Goldman Sachs experts to help the SEC combat bullshit like what happened with the London Whale?
After all, Goldman people know risk. They probably knew risk even better before 1999, when they went IPO and the partners stopped being personally liable for losses. But even now, of all the big players on the street, Goldman is known for being a few steps ahead of everyone else when it comes to a losing trade.
So it’s natural to want someone from deeply within that culture to come spread their technical risk wisdom to the other side, the regulators.
Unfortunately that’s never what actually happens. Instead of getting the technical knowledge of how to think about risk, how to model a portfolio to squirrel out black holes of mystery, the revolving door instead keeps outputting crazy freaks like Jon Corzine, who blow up firms through, ironically, taking ridiculous risks at the first opportunity.
So, why does this happen? Some possibilities:
- Goldman Sachs promotes crazy freaks because they make great leaders while constrained inside a disciplined culture of calculated risks, but when they get outside they go nuts. This is kind of the model of Mormon children who are finally allowed out into the world and engage in tons of sex and drugs.
- On the flip side, perhaps Goldman Sachs keeps the people who actually understand the technical part of risk very deep in the machine and these guys never get leave the building at all.
- Or maybe, people who understand risk sometimes do go through the revolving door, but they don’t share their knowledge with the other side, because their incentives have changed once they’re outside.
- In other words, they don’t help the regulators understand how banks lie and cheat to regulators, because they’re too busy watering down regulation so their buddies can continuously lie and cheat to regulators.
Whatever the case, for whatever reason we keep using the revolving door in hopes that someone will eventually tell us the magic that Goldman Sachs knows, but we never quite get anyone like that, and that means the the SEC and other regulators are woefully unprepared for the kind of tricks that banks have up their sleeves.
It is available here and is based on a related essay written by Susan Webber entitled “Management’s Great Addiction: It’s time we recognized that we just can’t measure everything.” It is being published by O’Reilly as an e-book.
No, I don’t know who that woman is looking skeptical on the cover. I wish they’d asked me for a picture of a skeptical person, I think my 11-year-old son would’ve done a better job.
I wanted to share with you guys a few things I’ve been interested in this weekend.
First, this TED talk which for whatever reason never made it onto the TED main website. It’s by Nick Hanauer, and in it he dispels some common economic myths, much like Chapter 7 of Occupy Finance. A juicy quote: “So when businesspeople take credit for creating jobs, it’s a little like squirrels taking credit for creating evolution. In fact, it’s the other way around.”
Next, it turns out women are way better than men at orgasms, at least those where you do it all in your head – a “think off”. A full 2% of women can fantasize their way to climax (compared to, I guess, way fewer men) and there’s even training for this skill. Two questions from the mathbabe. First, do wet dreams count? Because if they do I think we’ll have to recount. Second, say I invest my time in this, and get really good at it, since it’s all hands-free and such and will make my life that much more efficient. Is this something that takes a lot of time? Can I do it whilst carrying groceries home, or whilst cooking dinner? On the subway? Between stops? Details please.
Next, here’s an important discussion of why junior people get criminally prosecuted – in this case, for the debacle that was the JP Morgan London Whale case – while the big bosses just get vaguely complained about in a civil case, and the shareholders end up paying huge fines for their misbehavior. Last two lines: “Yet it remains disquieting when the same actions result in criminal charges for some but only a civil case for others, and no individuals are held responsible for misconduct at a company. In the end, we are left to trust that prosecutors have made good decisions.” There’s no recourse for bad prosecuting either. How do we even protest bad prosecuting?
Next, I’ve been listening to some seriously catchy and funny tunes my boys turned me on to. What makes me old is how long it takes me to catch on to stuff, since I heard this one years ago, but it seems that everything that these guys touch is hilarious. Especially this one (also see “I Just Had Sex” and “Jack Sparrow“):
Finally, I’m really into knitting recently, and I recently figured out how to knit this pattern even though you’d have to pay big bucks to get the official pattern. Email me if you’re interested in the bootleg version.
Not much time this morning for blogging, but I wanted everyone to get a chance to read this amazing Huffington Post article about learning more than you ever thought possible about the female sexual organ, and then celebrating that knowledge in style.
The article is actually more inspiring than you’d think, and I found myself weeping with joy at times. I’m an easy cry, but still.
Plus, any article that has this picture is worth reading:
I watched Network last night on the advice of my friends in Occupy. More like insistence than advice, actually: they claimed I absolutely needed to see it, that it would blow me away with its prescience and wisdom.
Turns out they were absolutely right.
Here’s the thing, though. Given that Network was released in 1977, I’m hesitant to even suggest to young people today (defined as: younger than me) that they watch it because they it’s so true, its predictions are so spot-on accurate, that anyone who wasn’t alive in 1977 might not – probably cannot – appreciate how incredible it must have seemed back then. It might even seem boring to someone who is used to a world of Fox News and the internet’s filter bubble.
Then again, that’s not entirely true. It’s not just an amazing prediction about what TV and society would turn into. The other strength of the movie is that it keeps changing, in a mostly painful but sometimes hilarious way, from scene to scene, subplot to subplot, and that keeps it from being about just one idea or just one person.
A particularly powerful scene of a jilted wife really got to me, and even though the movie isn’t particularly about that relationship, the movie manages to make it work.
And the most ridiculous scene, which involves two revolutionary groups reading over a contract with a crowd of network lawyers, might also be the most convincingly depressing: we might have our own particular emotional and political issues and rebellions, but we are all cowed by the power of money.
If you wanted to force Network to be about one thing in particular, it would have to be an argument concerning the role of the individual in the modern world. Here’s the protagonist, Howard Beale, preaching to his television audience from this YouTube clip of Network:
… when the twelfth largest company in the world controls the most awesome goddamned propaganda force in the whole godless world, who knows what shit will be peddled for truth on this tube?
So, listen to me! Television is not the truth! Television is a goddamned amusement park, that’s what television is! Television is a circus, a carnival, a travelling troupe of acrobats and story-tellers, singers and dancers, jugglers, side-show freaks, lion-tamers and football players. We’re in the boredom-killing business!
If you want truth, go to God, go to your guru, go to yourself because that’s the only place you’ll ever find any real truth! But, man, you’re never going to get any truth from us.
We’ll tell you anything you want to hear. We lie like hell! We’ll tell you Kojack always gets the killer, and nobody ever gets cancer in Archie Bunker’s house. And no matter how much trouble the hero is in, don’t worry: just look at your watch — at the end of the hour, he’s going to win. We’ll tell you any shit you want to hear!
We deal in illusion, man! None of it’s true! But you people sit there — all of you — day after day, night after night, all ages, colors, creeds — we’re all you know. You’re beginning to believe this illusion we’re spinning here. You’re beginning to think the tube is reality and your own lives are unreal.
You do whatever the tube tells you. You dress like the tube, you eat like the tube, you raise your children like the tube, you think like the tube. This is mass madness, you maniacs!
In God’s name, you people are the real thing! We’re the illusions! So turn off this goddam set! Turn it off right now! Turn it off and leave it off. Turn it off right now, right in the middle of this very sentence I’m speaking now.”
After a while, the head of the news corporation decides he’s had enough of Beale’s message and decides to give him the corporation’s perspective on the discussion. From this YouTube clip:
You get up on your little twenty-one inch screen, and howl about America and democracy.
There is no America. There is no democracy. There is only IBM and ITT and AT&T and Dupont, Dow, Union Carbide and Exxon. Those are the nations of the world today.
What do you think the Russians talk about in their councils of state — Karl Marx? They pull out their linear programming charts, statistical decision theories and minimax solutions and compute the price-cost probabilities of their transactions and investments just like we do.
We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable by-laws of business.
The world is a business, Mr. Beale!
It has been since man crawled out of the slime, and our children, Mr. Beale, will live to see that perfect world in which there is no war and famine, oppression and brutality — one vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock, all necessities provided, all anxieties tranquilized, all boredom amused. And I have chosen you to preach this evangel, Mr. Beale.
What’s incredible about Network is that, until possibly the last 2 minutes, none of it seems particularly unrealistic. It’s satire that rings so true that it manages to avoid the standard skeptical or baffled response. And although it is not uplifting, Network is incredibly thought-provoking and current.
Finally, the movie also has some show-biz advice for anyone trying to communicate a message. Namely, being consistently depressing and apocalyptic gets old, even if there’s an element of truth to it. It’s critical to balance that with hope about the power of individual action, sprinkled with outrage and impulsive energy.
I’ve been reading articles about cultures of sexism at Harvard Business School and in philosophy, both articles published in the New York Times this past week. The two of them have gotten me to speculate about the different ways that men and women experience sexist behavior.
Namely, very differently. Women, being the targets of sexist remarks and behavior, are sensitive to its barbaric nature and status-oriented putdowns – they are aware of it because it so obviously stings. Men – some men, not all – consistently seem baffled by all the fuss, and if they acknowledge the behavior, it is, in their opinion, more like having fun than being mean.
“Why would people want me to stop having fun?” they ask.
It makes me wonder if sexism is addictive. Let me explain my Sunday morning theory.
Assume that, when men perform an act of sexism, they get rewarded in their pleasure center similar to when someone takes a street drug or has sex.
So for example, say some male Harvard Business School (HBS) student encounters a female HBS colleague who is a potential competitor. To establish his dominance, he puts her down publicly on the basis of her looks. As mentioned in the article, the HBS population is obsessed with status, and this is a standard way of keeping her status low and simultaneously making her anxious and distracted.
My question is, what happens inside that man’s brain when he does that? For that matter, what happens to the brains of the other men in that group who witness that? My theory is that they all experience a kind of pleasure center stimulation, whereby their entire group is nudged up in rank over some “other,” which happens to be that woman. In some sense it’s kind of irrelevant who they put down in order to be rewarded, though, which is why they don’t think of what they did as a bad thing, just something that they vaguely enjoyed.
Go back to how differently the men and women describe their experiences after the fact of sexist environments. Men consistently don’t remember it as a negative event. From the article about sexism in philosophy:
I’m always hearing from stressed-out men, worrying aloud what “all this fuss” about sexual harassment means for them. I’ve heard it at training sessions on university sexual harassment policy: “Does this mean I can’t even tell a woman that she looks nice?” I’ve heard it in coffee lounges: “Make sure you keep your door open when you’re talking to a woman student — you never know what she might say later.” And I’ve had it confided to me, with a sigh of regret, at conference happy hours: “I’m afraid now to form any relationships with female students — they might take it the wrong way.”
I don’t think men are lying. I think they actually experience sexist events as positive and benign.
It also makes sense how men react when sexism is addressed by the higher authorities in the form of sensitivity training. When men are forced into a room to talk about sexism and norms of appropriate behavior, they’re super uncomfortable and don’t seem to know why they’re there (again, not all men). They for whatever reason don’t think discussions about sexism apply to them, like it’s a women’s issue.
On the other hand, as we saw in the HBS article, forcing men to talk about it at length does seem to actually help, in spite of their protests. The article focuses on women’s behavior, I think overly much, but it’s just as much about men as it is about women. True, women undermine themselves by competing with each other to be perfect and sexy and brilliant (but not too brilliant), etc., but really it’s about getting them men to stop with their nonsense, right?
And what might be happening is that, along with the positive feedback which stimulates the pleasure center, through this training they might also be developing a second, negative feedback around sexist comments, which would mean that eventually, if that second feedback grew strong enough, it would no longer feel so good to be sexist.
I mean, how do you break someone of their addictive habits? I guess you could destroy the pleasure center altogether, but that seems extreme except for the really most annoying HBS folks. Probably what you’d want to do is counteract the effect with an opposing effect. Thus sensitivity training.
Of course, this theory applies equally well to other forms of discrimination. And it’s not obvious how to address it even if it’s true. But at least, if we thought about it this way, it would throw light on the baffling disconnect whereby such problems are glaringly obvious to some while remaining utterly invisible to others.
Yesterday’s New York Times ran a piece by Gina Kolata on randomized experiments in education. Namely, they’ve started to use randomized experiments like they do in medical trials. Here’s what’s going on:
… a little-known office in the Education Department is starting to get some real data, using a method that has transformed medicine: the randomized clinical trial, in which groups of subjects are randomly assigned to get either an experimental therapy, the standard therapy, a placebo or nothing.
They have preliminary results:
The findings could be transformative, researchers say. For example, one conclusion from the new research is that the choice of instructional materials — textbooks, curriculum guides, homework, quizzes — can affect achievement as profoundly as teachers themselves; a poor choice of materials is at least as bad as a terrible teacher, and a good choice can help offset a bad teacher’s deficiencies.
So far, the office — the Institute of Education Sciences — has supported 175 randomized studies. Some have already concluded; among the findings are that one popular math textbook was demonstrably superior to three competitors, and that a highly touted computer-aided math-instruction program had no effect on how much students learned.
Other studies are under way. Cognitive psychology researchers, for instance, are assessing an experimental math curriculum in Tampa, Fla.
If you go to any of the above links, you’ll see that the metric of success is consistently defined as a standardized test score. That’s the only gauge of improvement. So any “progress” that’s made is by definition measured by such a test.
In other words, if we optimize to this system, we will optimize for textbooks which raise standardized test scores. If it doesn’t improve kids’ test scores, it might as well not be in the book. In fact it will probably “waste time” with respect to raising scores, so there will effectively be a penalty for, say, fun puzzles, or understanding why things are true, or learning to write.
Now, if scores are all we cared about, this could and should be considered progress. Certainly Gina Kolata, the NYTimes journalist, didn’t mention that we might not care only about this – she recorded it as unfettered good, as she was expected to by the Education Department, no doubt. But, as a data scientist who gets paid to think about the feedback loops and side effects of choices like “metrics of success,” I have a problem with it.
I don’t have a thing against randomized tests – using them is a good idea, and will maybe even quiet some noise around all the different curriculums, online and in person. I do think, though, that we need to have more ways of evaluating an educational experience than a test score.
After all, if I take a pill once a day to prevent a disease, then what I care about is whether I get the disease, not which pill I took or what color it was. Medicine is a very outcome- focused discipline in a way that education is not. Of course, there are exceptions, say when the treatment has strong and negative side-effects, and the overall effect is net negative. Kind of like when the teacher raises his or her kids’ scores but also causes them to lose interest in learning.
If we go the way of the randomized trial, why not give the students some self-assessments and review capabilities of their text and their teacher (which is not to say teacher evaluations give clean data, because we know from experience they don’t)? Why not ask the students how they liked the book and how much they care about learning? Why not track the students’ attitudes, self-assessment, and goals for a subject for a few years, since we know longer-term effects are sometimes more important that immediate test score changes?
In other words, I’m calling for collecting more and better data beyond one-dimensional test scores. If you think about it, teenagers get treated better by their cell phone companies or Netflix than by their schools.
I know what you’re thinking – that students are all lazy and would all complain about anyone or anything that gave them extra work. My experience is that kids actually aren’t like this, know the difference between rote work and real learning, and love the learning part.
Another complaint I hear coming – long-term studies take too long and are too expensive. But ultimately these things do matter in the long term, and as we’ve seen in medicine, skimping on experiments often leads to bigger and more expensive problems. Plus, we’re not going to improve education overnight.
And by the way, if and/or when we do this, we need to implement strict privacy policies for the students’ answers – you don’t want a 7-year-old’s attitude about math held against him when he of she applies to college.
In it she makes the point that lobbyists for tech companies have overemphasized the role of the entrepreneur in our nation’s technological advances, and likewise underemphasized the role of the state. From the article:
Whether an innovation will be a success is uncertain, and it can take longer than traditional banks or venture capitalists are willing to wait. In countries such as the United States, China, Singapore, and Denmark, the state has provided the kind of patient and long-term finance new technologies need to get off the ground. Investments of this kind have often been driven by big missions, from putting a human on the moon to solving climate change. This has required not only funding basic research—the typical “public good” that most economists admit needs state help—but applied research and seed funding too.
One of her examples was the internet itself, which brings me back – my mom was involved with that project.
Some of my earliest memories are going with my mom to fix something at BBN where she had superuser access on the internet back when it was populated by very few people – the president and some army generals. And no, she didn’t have any kind of clearance, they didn’t think very hard about computer security back then, but on the other hand my mom is scrupulously honest and would never read anyone else’s mail. And it was all done through DARPA or other Department of Defense funding.
Funny story. When I was little, my mom was in charge (with some other people, on a rotation) of keeping the internet running, which she would refer to as “being on call”. She’d leave, sometimes in the middle of the night, to get these massive computers booted back up. I’d go with her if nobody else was around to watch me, and I remember she’d sometimes get underneath these massive metal boxes, and I’d just see her feet sticking out at the bottom, not unlike a mechanic under a car at a garage.
Anyway, the story is that one time she was on call on Christmas Eve and got called in on an emergency, and in my stocking the next morning I got “IOU” notes. That makes for a pretty crappy Christmas morning when you’re 8! My personal sacrifice for the internet.
Going back to the “state vs. entrepreneur” debate. One thing Mazzucato didn’t mention, but that I will, is the issue of waste. People talk all the time about how wasteful the state is – how there are too many people, and they don’t do much, and they never get fired – but they don’t appreciate how very wasteful the world of start-ups is. Most new companies fail entirely and never do anything at all constructive. I personally have seen hundreds of people working on projects for years in the realm of “entrepreneurs” that everyone knows will do nothing. Talk about waste!
Next, let’s go to why this all happens. It’s all about taxes. From the article:
In this era of obsession with reducing public debt—and the size of the state more generally—it is vital to dispel the myth that the public sector will be less innovative than the private sector. Otherwise, the state’s ability to continue to play its enterprising role will be weakened. Stories about how progress is led by entrepreneurs and venture capitalists have aided lobbyists for the U.S. venture capital industry in negotiating lower capital gains and corporate income taxes—hurting the ability of the state to refill its innovation fund.
Totally agreed. It’s a beautiful story aimed at confusing people about whether Apple or Google or GE should pay any taxes at all.
But here’s where I don’t follow her, when she suggests a possible solution:
It is time for the state to get something back for its investments. How? First, this requires an admission that the state does more than just fix market failures—the usual way economists justify state spending. The state has shaped and created markets and, in doing so, taken on great risks. Second, we must ask where the reward is for such risk-taking and admit that it is no longer coming from the tax systems. Third, we must think creatively about how that reward can come back.
There are many ways for this to happen. The repayment of some loans for students depends on income, so why not do this for companies? When Google’s future owners received a grant from the NSF, the contract should have said: If and when the beneficiaries of the grant make $X billion, a contribution will be made back to the NSF.
It’s not that I don’t like the idea in principle. But a problem with the corporation/ people debate is that one critical way that corporations are not like people is in terms of long-term liability. People work at corporations, and when it’s convenient for them, they leave and go somewhere else or start a new company (whereas it’s harder to change bodies). That makes sense in many situations, but it wouldn’t be consistent with her tax-me-when-you-get-rich plan.
In other words, say I form a company that gets NSF funding, comes up with something brilliant, and starts to make huge profits. Then, in order to avoid losing any of my hard-earned dough, I dissolve my company, fire most of the workers, and then start up a new company that doesn’t owe anything to the NSF. I can’t see how this doesn’t happen, and I can’t see how the NSF fights back against it. Lawyers, please explain why I’m wrong.
Personally, I think the real solution is to stop listening to lobbyists and raise taxes, or at the very least make the tax rates effective rather than nominal.
I hear lots of people, mostly young, saying they’re not going to say something by email, as a default condition, in order to avoid documenting something awkward. If it’s controversial or if the subject makes them at all uncomfortable, they’re prone to trying to have that conversation by phone or in person. They avoid email.
I get that. After all, in this age of digital records, nothing ever goes away. If they’re going to say something they don’t want to be held to, then it’s only natural they’d not want to do it in a permanent way. On the other hand, if you’re saying something you want other people held to, that’s another story.
More than half the time, when I’m witness to this issue, I’ve noticed it’s actually the wrong decision, and it ends up protecting the wrong person’s interest. People should realize that documenting sensitive issues is often just as important, and often to your advantage, as not documenting sensitive issues. It also clarifies things and avoids prolonged misunderstandings.
Two made-up examples to demonstrate how to use email.
So, say you feel like your contributions to a long-term project are being ignored, and other people are starting to jockey for credit for your work. Here’s my advice. Write an email to everyone in the project and mention that you’ve done A, B, and C, and are planning to work on D. Don’t complain or whine about how much work you’ve done, but mention specifics, along with the number of hours you’re putting in.
It might seem slightly weird, but feel free to make some excuse for it like you “just want to check in and see where people are on the project or something, since there hasn’t been much of a formal effort to keep track of stuff”, and invite other people to also document their work. Force clarity. It’s good for you, not bad, to have clarity. If people don’t want to give you credit for something, they’ll have to write back and explain themselves, which is unlikely.
Second example, the opposite of the first. Say someone has written an email which documents something which you don’t agree with that involves you. Say, for example, that someone writes to a group of people saying they agreed with you on such-and-such a deal (“Cathy has agreed to work on A”), which didn’t actually happen.
Instead of going to talk to that person, just write back to the entire group saying what the actual deal is (“Actually, there’s been a misunderstanding, and I am not planning to work on A”). You should clarify quickly and often, because you need to realize that other people use email as a way of documenting stuff too. If you ignore that email, people will assume you actually did agree to that.
I don’t want to sound like a lawsuit waiting to happen – I’ve never actually been involved in a lawsuit. But by thoughtfully documenting stuff before it becomes an issue I definitely think I’ve consistently avoided problems becoming worse, especially problems related setting expectations.
Finally, if someone has done something really inappropriate, like sexual misconduct or harassment or something, document it, even just to yourself. Send yourself an email saying exactly what happened, like a journal entry. You might need that documentation later, and now you have an exact timestamp on how things went down.
I was giving unwanted advice to my friend the other day, complaining to him about how he’s this absolutely fantastic, wonderful young person – all true – and he’s wasting his time feeling like he’s wasting his time.
Look, he’s obsessed over time. He’s always complaining about being late, or being too slow, or being rushed, and he never thinks he has time to do anything. He’s too old to embark on something.
He’s on tenure track, so that might be part of the problem, but on the other hand he’s gonna get tenure, even he admits that, so not really.
I was telling him to stop worrying about time and just enjoy being awesome. Here I am, quite a few years older, and I’m not at all rushed when it comes to accomplishment. Maybe it’s because I’m a woman and many of my favorite role models are women who change their careers at the age of 75, become potters or writers or poets or what have you. I don’t think I’ll ever need to feel like it’s too late to do something I really want to do. If I’m still alive there’s still time.
“Anyway,” I end my speech, “I’m just saying this because I want you to be happy.”
“Happy?” he says, “please don’t say that. You don’t actually want me to be happy. Come on, you can do better than that.”
And that’s when it hit me. I don’t want him to be happy. I just want him to have better suffering. Instead of suffering about the amount of time he has to do things, which is a self-produced drama, I want him to strive for goals and accomplishments without the noise of crappy I’m-too-late suffering.
I want him to have meaningful suffering, not happiness.
I mean, it depends on what you mean by happiness, but in that conversation he made me realize that wishing happiness on someone is a pretty bland goal. Maybe even an unkind goal.
In fact, it’s the goal I say I wish for my kids when I really hope they’re safe. I’m not so sure “happy” is all that different from “doesn’t get involved in the world too much, stays out of trouble, and is safe”. If you don’t believe me, check out this guy (hat tip Chris Wiggins), whose stated goal is to be happy but whose practice is to ignore all things that interrupt his world view and to make silly lists.
Example from my life. If a friend of mine got his college savings, bought an apartment in Paris, and spent his days combing the catacombs of Paris, I’d want to hang out with that guy. If my son did the same thing, I’d want to convince him not to do it, and to go to college instead. After all, I’d argue, it’s for his own good, he should get an education. I’d tell him I was urging this because I want him to be happy.
First, as a parent I’ll strive to spend less time protecting my children from harm and more time letting them seek their own adventures. I want more for them, frankly, than that they’re happy/safe.
Second, I want to start urging my friends to find meaningful suffering. Strive for something and be temporarily miserable when you don’t get it. Hate the world enough to never be satisfied with how shitty things are, love the world enough to stay engaged with it anyway.
Yesterday I told people about the book my Occupy group is coming out with. I said I needed $350 to cover the printing costs, and I asked for small donations. Anything beyond that means more books get printed (still true!).
Today I’m super happy to say I’ve collected pledges summing to $596, which means we’ll be able to make many more copies of the book than expected, and distribute them to many more people. And it’s really been a group effort: 15 different people pitched in with amounts between $20 and $100. It means they’re all part of the project.
What was particularly awesome for me about the “Crappy Kickstarter” was the personal emails I got with words of encouragement for the blog and the book.
You guys seriously rock, and I feel very lucky to be your friend. Thanks!
I’ve had a bit of a bee in my bonnet for a while now about how we’re expected to assume that big is better when it comes to businesses. It started when I wrote this post about how women CEO’s are considered unambitious for wanting their businesses small enough to manage.
In other words, there might be some selection bias in my next few examples, so full disclosure. And yet I’ll give them to you anyhow.
First, an example of a extra corruption in a large business. I recently met HSBC whistleblower Everett Stern, profiled by Matt Taibbi here. He told me about the stuff he’d seen going on in HSBC, whereby there was rampant money laundering for terrorists (his region of interest was the Middle East). When asked why nobody’s gotten into trouble, his answer was simple: too big to jail.
Or if you’re not convinced too-big-to-jail is a real problem, just look at the state of the London Whale case: two low-level indictments and basically nothing else for lying to regulators and changing their books to pretend they had less losses.
Next, in the category of it’s-actually-good-to-be-small, you might have seen this tiny New York Times article about two email provider companies which folded rather than giving up their customers’ data. Can anyone imagine Facebook or Google doing that? The big business version of this is “hiring really fancy lawyers” I guess, but it doesn’t seem to work as well.
I’m wondering if this generalizes: in general, can we claim that small companies have less to lose and therefore have more ethics?
It’s certainly true that, at the very least, small companies live and die based on the relationship of trust that they have with their customers, so to the extent that their customers have ethics, then the companies need to consider them. Larger firms, on the other hand, can hire PR firms to fix their image after the fact if things go wrong.
What do you think? Is there research on this?
Update: First of all, sure there’s research on this, if you think accounting fraud is a good proxy for corruption. Second, now that I think about it, small companies having less to lose can also be a super bad thing, if you want to get away with bad shit. And for that matter, if you consider little subsidiaries of big companies as “small companies”, or for that matter McDonalds’ franchises, they already are.
Also, as a friend of mine pointed out over email, small companies are often inefficient (so: no unionization) and are used as a political baby seal to justify all sorts of crappy policies, as we’ve of course seen.
That is, I would suggest, how you’re going to feel when you read this article about a school for Silicon Valley style entrepreneurship (hat tip Peter Woit). Even just the name of the school – the Draper University of Heroes – feels like an Onion article, never mind the visuals:
So, what do these young people
learn do to become douchebag heros? Here’s what:
- They pledge allegiance every morning to their personal brands,
- They submit to a full two days of coding and excel lessons,
- Then they get down to the real work of sun tanning by the pool and go-kart racing,
- They hang out with VC Tim Draper, an investor in Tesla (the new conspicuous consumption choice among pseudo-progressive capitalists, as I learned at FOO),
- They read books, or at least they own books, including Donald Trump’s The Art of the Deal, The Wall Street MBA, and Ayn Rand’s The Fountainhead,
- and all this for just $9,500 for an eight week program!
How does it end? From the article:
In lieu of diplomas, Draper U. students receive masks and capes printed with their superhero nicknames and are instructed to jump on each of a series of three small trampolines placed in a line in front of them. While bouncing from trampoline to trampoline, they’re told to shout, “Up, up, and away!” Then they assemble for a group photo.
“The world needs more heroes,” Draper says. “And it just got 40 more of them!”
Here’s the thing. It’s no accident that there are way more men than women here. This school is very similar in design and intent to the society built by Neil Strauss, who wrote The Game and taught a bunch of guys how to pick up “hot” women for sex – Aunt Pythia discussed it here.
Why do I say that? Because it’s fundamentally a confidence-boosting ritual, where a bunch of guys convince themselves that their prospects are good, their goals are attainable, their narcissistic world view is honorable, and it’s just a question of acquiring the right magic tricks to entrap their prey. It just happens to be about money instead of sex in this case.
There is a difference, of course. Whereas the pick up artists only needed to trick drunk women for a few hours in order to sleep with them, these “Silicon Valley Heroes” have to trick way more people for way longer that they should get investment. That doesn’t make it impossible for something like this to work, though, just harder.
This just in from zazzle.com: Stacks Project cups and shirts, to celebrate the recent upgrade on Stacks Project viz.
You should really read Nagpal’s guest blogpost from Scientific American (hat tip Ken Ribet) yourself, but here’s just a sneak preview, namely her check list of survival tactics that she describes in more detail later in the piece:
- I decided that this is a 7-year postdoc.
- I stopped taking advice.
- I created a “feelgood” email folder.
- I work fixed hours and in fixed amounts.
- I try to be the best “whole” person I can.
- I found real friends.
- I have fun “now”.
I really love this list, especially the “stop taking advice” part. I can’t tell you how much crap advice you get when you’re a tenure-track woman in a technical field. Nagpal was totally right to decide to ignore it, and I wish I’d taken her advice to ignore people’s advice, even though that sounds like a logical contradiction.
What I like the most about her list was her insistence on being a whole person and having fun – I have definitely had those rules since forever, and I didn’t have to make them explicit, I just thought of them as obvious, although maybe it was for me because my alternative was truly dark.
It’s just amazing how often people are willing to make themselves miserable and delay their lives when they’re going for something ambitious. For some reason, they argue, they’ll get there faster if they’re utterly submissive to the perceived expectations.
What bullshit! Why would anyone be more efficient at learning, at producing, or at creating when they’re sleep-deprived and oppressed? I don’t get it. I know this sounds like a matter of opinion but I’m super sure there’ll be some study coming out describing the cognitive bias which makes people believe this particular piece of baloney.
Here’s some advice: go get laid, people, or whatever it is that you really enjoy, and then have a really good night’s sleep, and you’ll feel much more creative in the morning. Hell, you might even think of something during the night – all my good ideas come to me when I’m asleep.
Even though her description of tenure-track life resonates with me, this problem, of individuals needlessly sacrificing their quality of life, isn’t confined to academia by any means. For example I certainly saw a lot of it at D.E. Shaw as well.
In fact I think it happens anywhere where there’s an intense environment of expectation, with some kind of incredibly slow-moving weeding process – academia has tenure, D.E. Shaw has “who gets to be a Managing Director”. People spend months or even years in near-paralysis wondering if their superiors think they’re measuring up. Gross!
Ultimately it happens to someone when they start believing in the system. Conversely the only way to avoid that kind of oppression is to live your life in denial of the system, which is what Nagpal achieved by insisting on thinking of her tenure-track job as having no particular goal.
Which didn’t mean she didn’t work hard and get her personal goals done, and I have tremendous respect for her work ethic and drive. I’m not suggesting that we all get high-powered positions and then start slacking. But we have to retain our humanity above all.
Bottomline, let’s perfect the art of ignoring the system when it’s oppressive, since it’s a useful survival tactic, and also intrinsically changes the system in a positive way by undermining it. Plus it’s way more fun.
My title today is the subject line of a message I received from my buddy Jordan Ellenberg. Thanks for making things so easy for me to blog this morning, Jordan!
So here’s the subject: a Silicon Valley entrepreneur’s self-help book, including advice on how to quantify and measure your sex life, among other things – every other thing, in fact.
Just in case you’ve missed it, there’s a movement afoot among certain people to collect data about themselves on the level of heart rate, daily exercise and eating patterns, and the like, with the goal of self-improvement.
It’s got a name – the Quantified Self movement – and if I haven’t mentioned it before, it’s because honestly, it’s too easy, and I generally speaking like a challenge.
I saw a bunch of these guys at the health analytics conference I went to a couple of months ago, and let me tell you, they’re weird, and they know it, and they don’t care.
They honestly feel sorry for people who don’t have a Ironman Triathlon (or four) to train for via wireless excel spreadsheets. I mean, how do those people know whether they’ve actually improved? How do they know if they’ve eaten enough carbs? How do they know if they’ve slept??
As far as these Quantified Selfers (QSers) are concerned, it’s only a matter of time before everyone is, like them, making themselves perfect, and they’re the vanguard with nothing to be defensive about.
So anyhoo, those QS guys are convinced that they’re accomplishing something with all of their number collecting and crunching, like maybe they’ll live forever or something (after curing cancer), and they’re just so douchey I feel sorry for them. Blogging about them and trashing them would be like a mean older kid in the playground telling a bunch of little kids that there’s no Santa Claus.
Why do that? Why pop their bubble?
Here’s why: it’s just plain fun, especially now that they’ve ventured into sexy territory with their spreadsheets.
Here are a couple of questions for the Quantified Sexual Selfers (QSSers) in the audience, please get back to me.
- Yes or no: nothing says “hot ‘n’ steamy” like a fitbit readout of historical orgasms.
- Where does the sensor band get attached, and does it come with a vibrating option?
- Are your orgasms more satisfying before or after syncing your daily data with Stephen Wolfram’s?
- What’s your metric of success, and how do you know your girlfriend ain’t gaming the system?
In 1985, when I was 12 years old, I went to communist Budapest by myself, for a month. I’d met and befriended two Hungarian families when I was 11 and they were living next door to me for a year in Lexington, Massachusetts, and when they went back to Budapest they invited me to visit.
So it wasn’t like I didn’t have a place to sleep when I got there, but even so, my parents decided that yes, a trip across the world into a country that needed a visa to enter, that didn’t have a hard currency, and that didn’t have consistent phone lines at post offices (never mind at people’s homes, that was out of the question) was a great place for their 12-year-old daughter to visit by herself.
I also almost didn’t make the correct connection in Zurich, and I am seriously wondering what would have happened if I’d missed my flight. How would I have connected with my hosts? Where would I have slept? What would I have done for money?
I did make my flight, though, and I did meet my hosts, and the worst thing that happened to me was that when the cows got sick, I got sick – very sick. And to be fair, I turned 13 when I was there.
I came home appreciating milk pasteurization, and to a lesser extent milk homogenization. I was skinnier and less spoiled, I knew what really good peaches tasted like, and I was completely sick of paprika. Overall it was a good trip, and I’m glad I went.
And if I or my parents had been more cautious, I wouldn’t have gone. Goes to show you, sometimes it’s good not to think too hard about what could go wrong.
Unfortunately, I’m older now, and my 13-year-old just got on a plane to San Francisco by himself to attend a Model UN camp at Stanford. And all I can think about it what might go wrong.
Don’t get me wrong, it didn’t stop me from putting him on the plane. I’m trying to channel my parents’ benign neglect child-raising technique from which I benefitted so tremendously. He’s got a working cell phone, plenty of cash, and my BFF Becky will be within driving distance of him over there.
Hey, it’s not like he’s going to North Korea – which is, by the way, where he requested to be sent – and I’m pretty sure the milk there is pasteurized, as long as you avoid farmer’s markets.
It’s another whimsical Sunday morning, a perfect time to re-examine assumptions, and the one I’m working on this morning is when smaller business is actually better, where by “better” I might mean from the perspective of someone inside the business or from the perspective of the public.
I came to this question by way of two articles I’ve read recently.
First up we have this article from the Wall Street Journal, written by Sharon Hadary, which is entitled, “Why Are Women-Owned Firms Smaller Than Men-Owned Ones?” and basically wrings its hands about how self-defeating women are when it comes to owning businesses, how they never dream big enough.
Hey, that seems super irrational of women! They’re so self-limiting! Don’t they know that it’s not enough to own your own business, that you should really aspire to owning a business that is really huge?
But you know what? I’ve got a new way of looking at “irrational behavior.” Namely, assume it’s totally rational and figure out what assumptions you’ve got wrong. Let’s stop here and apply this approach. From the article:
Women start businesses to be personally challenged and to integrate work and family, and they want to stay at a size where they personally can oversee all aspects of the business.
Well that was kind of too easy. Turns out that right there, in the article, there’s a rational explanation for a so-called “irrational behavior.” Which is not to say that the writer respects that explanation, of course. Much of the rest of the article focuses how you can convince CEO women that they’re being idiots to think like that.
Of course, that mindset is not the entire story. And to the extent that women’s businesses are small against their will because of sexist behavior and being locked out of credit markets and/or big boy deals, that’s obviously bullshit.
[If I ever become a CEO, I can well imagine wanting to grow it way past the point of understanding or controlling it, because I'm all about being a big swinging dick (BSD), due to my highly robust natural testosterone levels. Because let's face it, that's what this is about.]
But if women don’t actually strive to be a BSD in a too-large-to-oversee Fortune 500 company because they’re happy running a smallish profitable business that allows them to see their kids, then why is that a sad story?
Now let’s move to a New York Times article, or really a series of articles, about CEO pay and how it’s big and only getting bigger. As my buddy Suresh explained to me, this is totally inevitable because, as the sizes of companies grow, the size of the CEO’s compensation grows.
Be nerdy with me for a second: if company A and company B merge, you now have a company that’s bigger than A or B, but you only have one CEO whereas you used to have two. So there’s that already, but it doesn’t completely explain it.
Think about the assets of this new company. To the extent that a CEO is supposed to be in charge of 1) not losing, and 2) actually growing these assets, they get some percentage of their “added value”, and that means they get twice as much credit for adding value in a company that’s twice as big.
Now I won’t go deeply into whether CEO’s actually add value – I think, at least in big-ass companies, and in the best-case scenario, CEO mostly they just ooze confidence and allow people to get work done. And I’m not saying this rule of thumb for a certain percentage of assets is reasonable, since it’s a cultural decision. But I do think just complaining about CEO pay being too big is missing the point.
Instead, I think we need to ask whether we think businesses are actually better off being bigger, and for whom. Economists go on and on about how you get economies of scale, but not if things are too big to understand, and not if the real economy of scale is devoted to politics and forming public policy – look at Monsanto for example.
Do you know what I really love? Maps. All kinds of maps. If you come to my house, you won’t see standard artwork on the walls, but instead you’ll see: knitting, hanging musical instruments, and maps.
In my kitchen I have a huge map of New York City, which I purchased from Staples for $99 when I moved to the city in 2005, as well as a large subway map, and more recently a bike map. I’ve got New York covered.
And whenever I go to a new city, I enjoy staring at a good map for a few hours, figuring out how to get from place to place by walking or taking a subway or bus. I’m never interested in driving, because I don’t own a car nor do I enjoy riding cabs.
Here’s the map of Stockholm I’ve been staring at for the past few weeks:
It’s a bus map of Stockholm. We smartly bought 7-day passes our first day here, and since kids 12 and younger are free and 13-year-olds are subsidized, this has been a huge win. We’ve been whizzing around the city daily. Buses are really the way to go.
Now, if you’re from certain American cities, you might disagree. You might think buses are slow and painful. But not here! They come every few minutes, more often than subways, and they seem to magically glide from stop to stop (the stops are more infrequent here than in New York, one reason they’re much more efficient). It’s like an unguided tour every time you go anywhere, my favorite kind!
I’ve gotten so excited about (and so proficient at) getting from point A to point B on the bus system, I’ve taken to calling myself the “Bus Queen (of Stockholm),” with practically no self-consciousness whatsoever, even though everyone here speaks perfect English and can hear me brag incessantly to my kids (to their credit, the older ones roll their eyes appropriately).
My four-year-old, who thinks everything I say is true, has asked his older brother to build a Minecraft World called “Bus Queen” in honor of my title, which he has done. As I understand it, the Minecraft villagers internal to Bus Queen World are just about done erecting a Town Hall in my honor. I go!!
One of the great boons of the bus system here in Stockholm is that, unlike Citibikes in New York, you can take a sick and drugged-up 4-year-old on the bus and go places you otherwise wouldn’t be able to walk to. This has been pretty convenient for all of us, believe you me.
But here’s the sad part: there’s a bus strike today in Stockholm and a few other Swedish cities. The bus queen, sadly, may have no throne on which to sit on this, her last day of reign (because we’re coming home tomorrow).
This strike makes me realize something about workers’ conditions in the U.S. which I haven’t thought about since the 2005 New York transit workers’ strike. Namely, Americans don’t have a lot of sympathy for striking workers compared to Europeans. Partly this is because we Americans prize convenience over other people’s conditions (“Can the bus drivers please return to work until after I’ve left Stockholm? The Bus Queen beseeches you!”), and partly this is due, I’m guessing, to the fact that there’s so much income disparity in the U.S. that there’s always some other group of workers worse off than the people striking.
I’m not sure where to start with deconstructing this pick-up-artist wannabe clan, but let’s just START WITH THE ALL CAPS. Who does that? Update: turns out THE NAVY DOES THAT.
I’m thinking of crashing this Meetup with a posse of sufficiently ridiculous and hilarious friends.
First the good news: I can easily imagine what kind of person I’d love to attract for this action (namely, anyone who thinks this is ludicrous, in a fun way, and wants to join me) but, and here’s the other good news, I’m having trouble figuring out the perfect thing to do once we get there. Let’s think.
First thought: line dance with boas, singing “I will survive.” Maybe not that exactly, but something to intentionally and directly contrast the oppressively normative nature of a bunch of straight guys looking for “hot” women using a formulaic approach involving magic tricks. Bonus points, obviously, for ill-fitting cocktail dresses that emphasize jiggling flesh.
In other words, let’s take a page out of this book, one of my all-time favorite Occupy actions:
Other ideas welcome!