does the Harvard Business School, Michael Porter, teach the essence of business strategy is the elimination of competition, by regulation if possible. Is this legal? Is this basically socialism or communism? – Quora

Original question on Quora: Why does the Harvard Business School, Michael Porter, teach the essence of business strategy is the elimination of competition, by regulation if possible. Is this legal? Is this basically socialism or communism?

My response: Trying to pin this on Michael Porter is ridiculous. He says no such thing. Based on the way the question is phrased, I wonder if there is an ideological purpose in asking it.

But in any case, there is a serious issue behind the question, namely an increasing level of oligopoly (decreasing levels of competition) among companies in many US industries. See, for example, “Big Companies Are Getting a Chokehold on the Economy Even Goldman Sachs is worried that they’re stifling competition, holding down wages and weighing on growth.”  or.

“America Has a Monopoly Problem—and It’s Huge”.

One theory about this trend is that it is partly due to growing power of corporations in Washington. That, in turn, may be traced partly to the increasing role of money in elections, largely as a result of the infamous Supreme Court “Citizens United” decision. For example, the way Trump’s massive tax cuts were put together without any hearings and in a VERY short period of time, and the amount of “goodies” for many industries in the resulting package, would never have happened with previous massive changes in taxes.

An effective strategy in some highly concentrated industries is to persuade the government to selectively regulate your industry, in ways that favor large and established companies. That is, all companies may experience higher costs because of a regulation, but if your company can respond more cheaply than anyone else, it is still a net win for you. An example is pharmaceuticals. For example pharma companies increasingly use the legal system, regulations, and side deals to keep generic drugs off the market for years after drug patents expire. The industry has also been very effective at keeping foreign competitors out – e.g. blocking imports by individual citizens from Canada.

(I buy one medication at $1 per pill from abroad, when it costs $30/pill at the local Rite-Aid. But it takes a lot of research and effort.)

Source: (32) Why does the Harvard Business School, Michael Porter, teach the essence of business strategy is the elimination of competition, by regulation if possible. Is this legal? Is this basically socialism or communism? – Quora

Car repossession: Big Data +AI tools are not value-neutral

Does recent technology inherently favor capitalists over workers?

There is a lot of concern about AI potentially causing massive unemployment. The question of whether “this time will be different” is still open. But another insidious effect is gaining speed: putting tools in the hands of large companies that make it more expensive and more oppressive to run into financial trouble. In essence,  harder to live on the edges of “The System.”

  •  Cars with even one late payment can be spotted, and repossessed, faster. “Business has more than doubled since 2014….”  This is during a period of ostensible economic growth.
  • “Even with the rising deployment of remote engine cutoffs and GPS locators in cars, repo agencies remain dominant. … Agents are finding repos they never would have a few years ago.”
  • “So much of America is just a heartbeat away from a repossession — even good people, decent people who aren’t deadbeats,” said Patrick Altes, a veteran agent in Daytona Beach, Fla. “It seems like a different environment than it’s ever been.”
  • “The company’s goal is to capture every plate in Ohio and use that information to reveal patterns. A plate shot outside an apartment at 5 a.m. tells you that’s probably where the driver spends the night, no matter their listed home address. So when a repo order comes in for a car, the agent already knows where to look.”
  • Source: The surprising return of the repo man – The Washington Post

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Hollywood as a model for academic research

Academia has a problem: the value, necessity, and practices of collaboration are increasing, but the system of giving credit is inadequate. In most fields, there are only 4 levels of credit:

  • None at all
  • “Our thanks to Jill for sharing her data.” (a note of thanks)
  • First Authorship (This is ambiguous: it may be alphabetical.)
  • Listed as another author

In contrast to this paucity, modern empirical paper writing has many roles. Here are a dozen roles. Not all of them are important on a single paper, but each of them is important in some papers.

  • Intellectual leadership.
    • Source of the original idea
  • Doing the writing
    • Writing various parts, e.g. literature review
    • Doing the grunt work on the stat analysis. (Writing and running the R code)
    • Doing the grunt work of finalizing for publication. (Much easier than it used to be!)
    • Dealing with revisions, exchanges with editors, etc.
  • Source of the data.
    • Funder of the data
  • Raised the funding;
    • Runs the lab where the authors are employed
    • Source of the money: usually an agency or foundation, but sometimes the contracting author is listed as a coauthor.

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Irrational tax cuts won’t raise long term economic growth

I recently received the following on a Dave Farber’s “Interesting People” list, a collection of techies with interest in Internet policy issues. Why discuss it now, since the tax bill has been passed? It is important for all to realize how much the Republicans in Washington no longer believe in basing their decisions on  reality  (“facts”). It is very hard to believe this, but the evidence is now overwhelming, and the consequences will continue to be grave. I wrote the following quick response.
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It seems completely reasonable and even desirable to take actions such as lowering corp taxes,  lowering taxes on productivity and reducing regulation to get the economy growing at the 3-4%  range.

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Fraudulent academic journals are growing

Gina Kolata in the NY Times has been running a good series of articles on fraudulent academic publishing. The basic business model is an unholy alliance between academics looking to enhance their resumes, and quick-buck internet sites. Initially, I thought these sites were enticing naive academics. But many academics are apparently willing participants, suggesting that it’s  easy to fool many promotion and award committees.

All but one academic in 10 who won a School of Business and Economics award had published papers in these journals. One had 10 such articles.

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Explaining  Negative Electricity Prices 

When my colleagues and I developed the theory of real time electricity prices back in the dark ages (1982), we were amused to see that our equations allowed for the optimal price to be negative. Power companies would pay consumers to use more electricity! At the time, we thought it was a paradoxical case that was unlikely in practice, except possibly in the middle of the night in systems with lots of nuclear units.

Fast forward 30 years, and negative prices are a regular occurrence in real systems, including in Texas and California. And now they are even happing in the middle of the day. But there is still a puzzle: why don’t generators stop generating the moment the price goes negative?

Several blog posts from Berkeley’s great Energy Institute, and my response to one of them, show that real power systems can have a lot of unanticipated phenomena. Take together, these probably explain these apparently strange behaviors.

Source: Is Solar Really the Reason for Negative Electricity Prices? – Energy Institute Blog.   and from Catherine Wolfram, Is the Duck Sinking?
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Photovoltaics in Mission Bay neighborhood = 30% wasted

TL;DR In Southern California should put PV on houses and buildings that are far from the coast, because coastal areas are cloudy much of the summer. But the actual pattern is the opposite. I estimate a 30% magnitude of loss. Even my employer, UCSD, has engaged in this foolishness in order to appear trendy.

The bumpiness of this graph shows the effects of coastal weather in August.

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