Ridiculous: “Why Oxfam is getting it wrong about poverty” – CapX

Bilge from a right-wing pseudo-intellectual. I’ve never heard of this guy before, but he seems to be an expert in deception rather than analysis.

As it’s Davos time, Oxfam has issued its traditional demand for a handout.  Their wealth report this year informs us that a mere eight people have more wealth than the bottom 50 percent of the world’s population. This is entirely true of course. But Oxfam’s solution is that we should take it from the rich and […]Source: Why Oxfam is getting it wrong about poverty – CapX

This is an example of deceptive reasoning. Here’s my quick analysis:

Worstall writes:

>The result is that entrepreneurs get to keep some 3 per cent of the value of their creations. The other 97 per cent of the value flows to us consumers out here.
….
>Poverty exists and obviously we’d prefer that it didn’t. That’s why we need more rich people not fewer: because we need someone to create value for the rest of us to consume.

So he is equating “rich people” to “entrepreneurs” to “creators of value.” If only that were true. Although a small number of tech entrepreneurs get most of the publicity (Steve Jobs, Bill Gates, etc), most of the giant corporate profits are coming from increasing market power/decreasing competition in many markets. For example, few outside the industry think that the “financial services” industry (e.g. investment banking) creates value comparable to the huge profits it makes.

He is also using misdirection to imply that Sam Walton’s heirs were the entrepreneurs who created Walmart’s economic value!

Finally, he keeps using a “3 percent” number to imply that “the masses” get 97 percent of increasing economic value, and the ultra-rich get only 3 percent. In fact median income has not grown for several decades. While the overall GDP has doubled in the last 30 years, the extra income has gone entirely to the upper ten percent. (Median household income rose by 8% in the last 30 years.)
Sources: http://www.multpl.com/us-gdp-inflation-adjusted/table
https://fred.stlouisfed.org/series/MEHOINUSA672N

A slightly different way of measuring. Compare black and red lines.

figure-9-e1455724425470

So the blog post is a dishonest piece of fallacious reasoning. Is this typical of the Adam Smith Institute, where he is apparently based? Is this the average reasoning level of right-wing intellectuals today?

By the way, I’m sure there are problems with Oxfam’s report – just not the ones he claims.

Each new generation needs to learn the lesson of Theranos: appearance ≠ reality

Every 10 years or so, a conspicuous bubble bursts, and in doing so it resets the expectations of the next generation of young adults.

  • Enron
  • 2008 financial collapse
  • Now Theranos

Reading this article, I’m astonished at how little substance the adulation of Elizabeth Holmes was based on. And how much secrecy her investors allowed her. Given that she was claiming that her system would be ~100x better than established technologies, why didn’t they demand evidence? Why was it left to a reporter to figure out that the emperor had no clothes? And, was she nothing more than a successful con-artist with no genuine scientific expertise?

“In a searing investigation into the once lauded biotech start-up Theranos, Nick Bilton discovers that its precocious founder defied medical experts—even her own chief scientist—about the veracity of its now discredited blood-testing technology.”

Source: Exclusive: How Elizabeth Holmes’s House of Cards Came Tumbling Down | Vanity Fair

#firstsevenjobs

#firstsevenjobs is an interesting example of crowdsourcing research

  • Dishwasher (^3) (Exeter, Harvard, and a summer job)
  • Lifeguard (Local swimming hole)
  • Library assistant (^2) (Harvard. One was work and one was a sinecure. I’m still really fast at putting things in alphabetical order.)
  • Sci. programmer (Smithsonian Astrophysical Observatory)
  • IT salesman (IT startup company)
  • Business programmer (Xerox. My first taste of a really big company, and I hated it.)
  • Energy consultant (DC consulting firm)

from Twitter https://twitter.com/RogerBohn

August 10, 2016 at 10:11PM

via IFTTT

Why Elon Musk’s New Strategy Makes Sense — Really??

Claim: “The history of architectural innovation is on his side. Source: Why Elon Musk’s New Strategy Makes Sense” by Joshua Gans

I’ve seen many people encouraging Musk’s integration of Solar City with Tesla, but it strikes me as a weak move. There is some synergy between electric cars and home PV, but electric energy is mostly fungible. Only if local utilities use really dumb pricing schemes for solar power would it be useful to bypass them if you have an EV. (Admittedly, many utilities do exactly that.)

Second, his closing argument contradicts a lot of other analysis.  I have not read Gans book. But he writes that:

As I outline in my book, The Disruption Dilemma, the companies that have thrived in the face of architectural disruption of this kind are those that have kept all the parts close and in control rather than spread them out.

But, “keeping all the parts under your control” rules out 99% of startups. And it also seems historically incorrect. IBM, when it started the IBM-PC revolution, did so by surrendering control of almost everything, including the OS, processor, hard drive, and applications. IBM made all of these things for its mainframes, but it revolutionized the industry by NOT controlling them for personal computers. And this was certainly architectural disruption – the shift from a closed to an open architecture.

I’ll have to look at his book. Or ask my friend Liz Lyons down the hall, who was his student.

Can Motorola establish a new smartphone platform?

Every electronics company dreams of starting a new platform that other firms adopt and build on. It’s one of the few paths to riches  in electronics (think: iPhone, Android, Blu-Ray, CDMA, Steam, Playstation). Check out extensive writing by my friend Michael Cusumano and his colleague Annabelle Gawer, such as this article in Sloan Management Review. (May be behind a paywall.) Although even if successful, the originator may have to make so many deals that it does not capture much rent. (Think: Android again, Blu-Ray again, Wi-Fi, 4G, HDTV, etc.) And doing it successfully is very hard, even for large companies.

moto-1935  A  related dream is modularity without sacrificing performance. This has been discussed for cell phones for many years, although in the past I have been skeptical. This article, though, sounds as if Motorola has a chance at doing both. Technically, it sounds like a good concept, if they can pull it off as well as the article suggests. Of course, technical excellence is  never sufficient to become a standard. And Motorola, with all its ownership turmoil in recent years, is not very credible. But I’m heartened to think that the goal of a modular smartphone may be technically realistic, which would be great for consumers. (It’s important that Moto is not talking about creating a new operating system or app platform. Just look at Nokia and Microsoft to see how hard that is.)

Video version of the Wired article.

Continue reading