Welcome! 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.
(5 August 2019): “You 2.0: Tunnel Vision” Hidden Brain
********Economists talk a lot about scarcity. Simply put, individual wants are effectively infinite but means to satisfy wants are clearly finite. One can’t satisfy every want, so one must choose. This is the abstract idea of scarcity. But for many people scarcity is not abstract—it is a lived experience. This 37-minute episode of Hidden Brain, first broadcast in 2017, points to the cognitive consequences of scarcity—a shrinking of perspective that results in a focus on what is lacking. Here are some examples:
When you’re hungry, it can be hard to think of anything other than food. When you’re desperately poor, you may constantly worry about making ends meet. When you’re lonely, you might obsess about making friends. . . . Researchers say this form of tunnel vision can affect our ability to see the big picture and cope with problems in our lives.
This is developed in interviews with psychologists. You can read the transcript here.
********A point that intrigued me occurred late in the episode, around is the notion of design for “fault tolerance,” which begins at 31:06. Evidently airplane cockpits are now designed with an expectation that pilots will make mistakes. When a mistake is made, the flight system alerts the pilot of the mistake so it can be corrected. What if design for fault tolerance became a part of our thinking about poverty and education?
(7 August 2019): “The Birth of the Modern American Debt Collector” JSTOR Daily
********This post briefly relates the story of how the Massachusetts Hospital Life Insurance Company (MHLIC), created in 1823, reconfigured how agricultural loans were made, transforming relatively personal relationships with lots of flexibility, to relatively impersonal relationships with great rigidity, thereby creating “a new, bureaucratic way of doing business.” In doing so the company sought “to teach farmers to accept the demands of the growing financial order.” This story is reminiscent of the imposition of the “discipline of the clock” in lab in labor markets as industrialization grew. The post is built upon the article “’A Great Machine’ or a ‘Beast of Prey’” A Boston Corporation and its Rural Debtors in an Age of Capitalist Transformation,” a link to which can be found at the end of the post.
(8 August 2019): “Being Paid to Borrow Money Isn’t So Bad” Bloomberg.com
********This piece is about the increasingly prevalent phenomenon of negative interest rates, the “being paid borrow money” part of the title. The article concludes with this: “Negative interest rates can be unsettling, and not just for savers. But they’re merely reflective of the world around us. The developed world is aging, and uncertainty—whether political, economic or technological—is rising everywhere. The supply of risk-free investments is scarce, and savers will have to be willing to pay for them.”
(9 August 2019): “America’s Obsession With Beef is Killing Leather” Bloomberg.com
——–“U.S. consumers are eating more beef, more than they have in a decade. But a byproduct of the carnivorous hankering is piling up, unloved and unwanted. Shoppers who once coveted leather jackets and shoes are instead scooping up cheaper, synthetic alternatives, reflecting a growing ambivalence toward this former staple of American closets. The glut of cowhides has caused prices to plummet, rendering many worthless. And just as the American love for meat has caught on around the globe, so too has the abandonment of leather, from clothing to car seats. Hides are even starting to go to landfills while the smaller leather processors are going out of business.”
********Briefly, the increase in the demand for meat leads to an increase in the supply of hides, which is happening at the same time there has been a decrease in the demand for hides due to consumers wanting fewer leather items for ethical reasons or the fashion of the moment. Taken together, the price of hides has plummeted, with many going to the landfill rather than being turned into a product. An important early treatment of the joint supply of meat and hides was developed by Alfred Marshall, Principles of Economics, 8th ed, (1920), Book V, Chapter VI, “Joint and Composite Demand. Joint and Composite Supply.”
(13 August 2019): “’Kochland’ Measures the Reach of a Politically Influential Corporate Giant” The New York Times
********This is a review of Kochland: The Secret History of Koch Industries and Corporate Power in America, by Christopher Leonard. The reviewer, Jennifer Szalai, notes that Leonard “adds to a growing shelf that includes Jane Mayer’s” Dark Money and Daniel Schulman’s Sons of Wichita. “Schulman focused on the Koch family story, while Mayer investigated the Koch-funded war chest for a conservative political agenda, including a stubborn denial of climate science. Leonard peers into the black box of the enormous energy conglomerate itself: ‘Kochland’ is a corporate history, lucidly told.” A corporate history of a private company presents challenges, as it “isn’t beholden to the same transparency requirements of a publicly traded company, where shareholders expect to see the books.” But seven years of research on Koch Industries have provided a compelling story of “one of the largest privately owned companies in the world.”
********Two things in the review especially caught my attention. First, the idea of “Market-Based Management . . . , which boiled down to treating employees like entrepreneurs and exposing them to market discipline.” I searched for that title and find two books by Charles G. Koch: Market Based Management: The Science of Human Action Applied in the Organization (2007), which is rather pricey, and The Science of Success: How Market-Based Management Built the World’s Largest Private Company (2007), which is not too pricey. The two books seem closely related and seem to draw inspiration from Human Action: A Treatise on Economics. Second, the negative experiences from that violating regulations led Koch to “imprint” on employees the need for “10,000 percent compliance” with the law, i.e., the importance of “obeying 100 percent of the laws 100 percent of the time.” But Koch Industries “has also looked for ways to transform the regulatory regime—hence the vociferous lobbying by a division blandly called Koch Companies Public Sector and the ‘dark money’ chronicled in Mayer’s book.” Koch certainly seems to be able to follow an argument wherever it goes.
(13 August 2019): “A Boom Time for the Bunker Business and Doomsday Capitalists” The New York Times
——–“Americans have, for generations, prepared themselves for society’s collapse. They built fallout shelters during the Cold War and basement supply caches ahead of Y2K. But in recent years, personalized disaster prep has grown into a multimillion-dollar business, fueled by a seemingly endless stream of new and revamped threats, from climate change to terrorism, cyberattacks and civil unrest. Bunker builders and brokers have emerged as key players in this field. And they see the interior of the country, with its wide-open spaces, as a prime place to build. Aiding them is history. During the Cold War, the military spent billions of dollars constructing nuclear warheads and hiding them in underground lairs around the nation, often in Kansas, Nebraska, Oklahoma and New Mexico. Those hideaways, emptied of their bombs, are now on the market and enterprising civilians are buying them (relatively) cheap and flipping the properties. Eager customers abound.”
********The story of how missile silos are being repurposed as condominiums for the fearful is not to be missed. (University of Kansas anthropology professor John W. Hoopes, who has studied end-of-world myths, notes that “Fear sells even better than sex . . . If you can make people afraid, you can sell them all kinds of stuff . . . and that includes bunkers.” The Survival Condo of Larry Hall in Kansas has sold all 12 apartments at prices beginning at $1.3 million, selling all of the units within months. More development is underway. I was instantly curious when I read about “Prepper Camp, a three-day disaster-preparedness and homesteading expo in North Carolina, [that] has turned into a survivalist’s Burning Man.” It is being held in Saluda September 27-29.
May you have a good week!