340 (24 October 2018)

Welcome to week 340!  The articles below caught my attention this week.  What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  Article titles preceded by [SR] require a subscription.

Please let me know if you have questions or comments.

(17 October 2018):The Retail Apocalypse Can’t Keep Tractor Supply Co. DownBloomberg Businessweek

——–“Last year about 8,200 stores in the U.S. shut their doors for good, according to the International Council of Shopping Centers. . . . Niche rural retailers such as Tractor Supply, which sells obscure and often unwieldy products from fencing to llama kibble, have proved resilient.  The 80-year-old business has seen sales grow 56 percent in the past five years, to $7.3 billion.  Since 2012, Tractor Supply has added 723 locations, and it plans to open 500 more in the U.S. over the next decade.  Apparently the retail apocalypse hasn’t hit the hinterlands.”  Tractor Supply’s tag line is “Everything you need for life out here” and it “informs every decision at Tractor Supply.  The farmers, ranchers, and hobbyists the company caters to ten to have above-average income and below-average cost of living.  They don’t have the time or inclination to wait for products to come from the internet.”

********One thing that comes through clearly in the article is that Tractor Supply knows its customers well.  “Roughly 15 percent of all products in a particular store are unique to the region.  In New Jersey, for example, the salt licks are laced with selenium, a bone-strengthening mineral that’s in short supply in the local soil.”  Tractor Supply isn’t resting on its laurels, though; it is embracing online operations with deliberation.  The company “has giant lockers in about 400 of its stories so customers can claim a digital purchase without having to check out or make small talk.  And each location has a computer kiosk where a customer can order any of the company’s 100,000 items.”  As CEO Gregory Sandfort notes, “It’s a really interesting way of taking a 15,000-square-foot box and making it as large as you want it.”  All this ordering isn’t being done in the store: “Tractor Supply is increasingly seeing its best customers place orders from their pastures.”

********While we are on the subject of retail, there is a lot to like in “With each department store that closes, a world vanishesThe Washington Post.  Journalist Micheline Maynard recalls her youthful work at Jacobson’s, a “long-gone Michigan department store.”  The occasion for her reminiscence?  Sears bankruptcy announcement, an event that also has implications—more sales—for Tractor Supply.  Maynard provides a glimpse of what it was like to work her way up in the store, learning its culture and becoming ever more knowledgeable about her customers—teaching them when necessary—and the products she sold.  By providing a valuable look of what is lost when a retail business closes, Maynard leads one to ask, “What remains in its stead?”

(18 October 2018):HBO’s ‘Price of Everything’ Doesn’t Pull Any PunchesBloomberg.com

********This is a review of HBO’s documentary “Price of Everything,” which looks at “the influence of money on the contemporary art world.”  It will be “in limited release on Oct. 19 and on HBO Nov. 12.”  Directed by Nathaniel Kahn, he creates an image of the art world that is “frequently scathing.  Wealthy investors treat art as an asset class, much like stocks and bonds.  Works that might once have ended up in museums are now more likely to decorate the apartments of the superrich in London, New York, and Singapore.”  This last point is developed with a sorrowful note in the review appearing in The New York Times.  On the occasion of the auction of an art work, art critic Jerry Salz says: “I’m sad to be saying goodbye” as he is unlikely to see “the auctioned-off work again in his lifetime.”  With the sale of the work, it passes into a private sphere from which its emergence into the public sphere is uncertain.

(19 October 2018): [SR]You’re a Bad Investor?  That Can Be GoodThe Wall Street Journal

********This is broadly a review of The Formula: The Universal Laws of Success, by Albert-László Barabási, which will be released on November 6th.  (I don’t understand the title of the article.)  The author is a network scientist at Northeastern University, among his other books are Linked: The New Science of Networks (2002) and Bursts: The Hidden Pattern Behind Everything We Do (2010).  (These earlier books were not enthusiastically reviewed by Amazon customers, especially the latter.)  What I found of greatest interest in the review (by WSJ columnist Jason Zweig) is the distinction between performance and success.  “Performance is deeply linked to the individual” and the “best in the world are barely separated from each other.”  But success is “the collective response of the community to your performance and how well it acknowledges or rewards you for that.”  In brief, performance is individual, while success is a network phenomenon.  I’ll be looking for more opportunities to learn about the book.

(19 October 2018):A Harvest That Requires Flooding, Floating and PumpingThe New York Times

********Ever wonder how cranberries are grown and harvested?  This is your chance to learn as Thanksgiving 2018 comes into view.  The process is more complex than I had thought, involving flooding fields, draining fields, and flooding them again so that ice might protect the plants for next year’s crop.  Cranberry production, it appears, is climate sensitive.

********Speaking of cold, another Wisconsin-based article caught my attention this week: “See inside one of the world’s coldest workplaces in Wisconsin” Milwaukee Journal Sentinel.  Freezers at Chr Hansen, “a food ingredient company based in Copenhagen, Denmark,” store “bacteria cultures used to make cheeses, yogurts and other dairy products, as well as wine and meat products.”  Temperatures in the freezer near 70 degrees below zero Fahrenheit.  Those working in the freezers get a 20-minute break every two hours to warm up.  The suits worn by the workers “have a ‘tilt alarm’ that sounds if a worker falls inside a freezer, initiating a quick rescue response.”  There is a one-minute video to give you a sense of what working in the freezers is like.

********Here is one more addition to the Wisconsin thread: “A tale of two states: Wisconsin is twice as likely to imprison people as MinnesotaThe Economist.  The brief summary of the article provided gives a clear instance of the invisible foot—legal and political forces that affect human behavior: “Mass incarceration is a political choice.  It can be undone.

(21 October 2018): [SR]The Value of Artwork After an Artist’s DeathThe Wall Street Journal

——–“It is a morbid question, but one that many buyers of art ask: ‘If the artist dies, will the price of my artwork go up?’  The surprising answer: probably not.  And in the rare instance that the prices do increase, it may take years to happen.”  Reputation and marketing play a role.  Sometimes an artist dies too young and may miss out on the ability to improve and the greater reputation that would result.  And some artists are very effective promoters of their work—when they die, that promotion disappears.  Also, the death of an artist can also result in “a rush to market of sellers convinced that the artist’s death will lead to instantly higher prices.  Instead, with the increased supply, prices tend to tank.”  But “falling prices aren’t preordained.  How a late artist’s estate is being run can have big impact on the prices of the artist’s works.”

********The author of this article works very deliberately in the context of supply and demand—the invisible hand.  It occurred to me that this subject must have been addressed previously “in the literature” and I found “Reputation, Price, and Death: An Empirical Analysis of Art Price Formation,” Economic Inquiry 29,3 (July 2011): 697-715.  A pdf of a working paper that preceded the article can be found online.

(22 October 2018): [SR]’The Job’ Review: Of Callings and CareersThe Wall Street Journal

——–In The Job: The Future of Work in the Modern Era, journalism professor Ellen Ruppel Shell has written “an unconventional book, providing a vantage point far removed from the economics-based analyses that tend to dominate discussion of the American labor market.  Through stories of jobs in places like the Brooklyn Navy Yard, a cooperatively owned laundromat in Cleveland and a small Finnish sausage factory, the author conjures fresh insights about work as a social institution whose value extends far beyond the dollar amount printed on a paycheck.  Ms. Shell feels that it’s imperative ‘to sort out and fiercely protect those critical elements of work that are essential not only to our economy and our democracy but to our very humanity.’”

********In her analysis Shell notes that some people see their work as a “job,” some as a “career,” and some as a “calling” and provides useful perspective on each, not the least of which is that having a “calling” is not necessarily preferable to a career or a job.  In the course of her analysis she “directly challenges two nuggets of conventional wisdom . . . First, ‘follow your passion’ . . . Second, better education and more skills are not a cure-all.”  In all, The Job looks like a good vehicle to obtaining a wider view of the role of meaning of work today.  Publishers Weekly has a brief review of the book.

May you have a good week!

Bruce

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