Tag Archives: Connectivity

How Platform Monopolies Fail

Technology platform tend towards monopoly. Whether physical or virtual, platforms provide a level playing field for other actors to use to their advantage. The predictability of monopolies allows other actors to plan for the future, and the technological stabilization they present make the road ahead a lot less frightening for most involved. Monopolies cannot and do not “charge whatever they want” — they price their goods so that they capture a portion of the value they provide that is still low enough to deter other potential competitors from entering the market.

Markets fail through either lack of empathy or lack of understanding. Lack of empathy occurs when the monopoly is blind to the political concerns of other stakeholders, and they therefore use their power to break the monopoly. For instance, in the United States, the left-of-center turned strongly against the physical sciences after the Vietnam War, at the same time at the right-of-center was agitating against government control. The Bell System, by continuing to fund physics research while relying on government control of rates, thus back unempathetic to other actors, and was broken up.

General Motors was a much more empathetic monopoly. They encouraged the growth of the United Auto Workers, allowing both the capital and labor sides of the organization to strongly influence the Republican and Democratic parties, respectively. GM cleverly overcharged for their products, allowing niche competitors such as Ford and Chrysler to survive (and providing a veneer of competiton), while keeping those marginal companies captive through the threat of lower prices. Indeed, GM as an organization was so empathetic that management and labor was bailed out by the Bush and Obama administrations! Unfortunately for GM,the shock of high oil prices lead to a decline nonetheless.

In the US education system, the Teachers Front Organizations opeated as a monpoly for nearly a century, until being replaced by the federal-academic complex.The reason was both lack of empathy and an external shock. The lack of empathy was exhibited primarily from the Teachers Front Organizations’ lack of concern with State power or Employer’s seeking workers that can be hired. The external shock was first the sexual integration of the American workplace, followed by globalization.

I imagine that if either of these things had not been there — if the Teachers Front Organizations had not been lacking in empathy, if the workplace had not been integrated, or if globalization had not occured, the Teachers Front Organizations would stil be the platform monpoly in the US educational system. If the workforce had not been integrated, teaching would not have suffered from the lobotomy of low wages, as the sexism discount would have still brought many high-performing women into teaching. Likewise, if globalization had not occured, large employers would not have faced the stress of tring to hire a proportionate fraction of their labor force in the United States while facing a disproportionate incompetent labor force in the form of public school graduates.

The consequences of this failed monopoly are as hard for teachers as the failure of the Bell System or GM where for their stakeholders. The teacher leadership in the United States has left everyone — including teachers — down.

Monopolies do not last forever. And monopolies are not all bad. But the Teachers Front Organizations died as a monpoly because it was bad at its most basic job: survival

Democracy and America’s Non-Integrating Gap, or, I’m glad I don’t live in Cleveland!

An interesting article, “City of Cleveland sues lenders over foreclosures.

Cleveland, a city currently with about half its 1930 population, is a good example of America’s non-integrating gap: those ares within the United States generally unequipped for life in a free-market democracy.


A Failed State?

Cleveland is both helped and hurt by being within the United States. The subprime mess, which Cleveland is suing over, is an example of this. For those who haven’t paid attention to the embarrasing fiasco, the excess capital in much of the world led to very low interest rates on “variable rate” mortgage, allowing many people who would have been unable to afford a home at the time a chance to move into it. Without the safety of the American property and adjudication systems, money would have never felt safe enough to wash into Cleveland: hence, many new Cleveland home-owners.

However, Cleveland’s dying for a reason, and my guess is that one of the many factors in the city’s death-spiral is low general intelligence. One consequence of low intelligence is reduced ability to calculate risk, shortened time preferences, and plain foolish decision making. So instead of using the historic opportunity of cheap capital, many Clevelanders promptly blew their windfall on houses they could not possibly afford. And thus Cleveland, which if it was a country would never have been trusted with so much cash in the first place, is now saddled with debt.

So now a most-likely incompetent government of a most-likely incompetent city is suing the source of the greatest generosity to hit it in some time.

A recent post by Curzon over at Coming Anarchy includes this quote from Robert Kaplan:

Hitler and Mussolini each came to power through democracy. Democracies do not always make societies more civil-but they do always mercilessly expose the health of the societies in which they operate… The lesson to draw is not that dictatorship is good and democracy bad but that democracy emerges successfully only as a capstone to other social and economic achievements.

Indeed, and it’s quite likely that Cleveland is not at a level of “social and economic achievements” that would allow it to function as a democracy, but still has an elected city government anyway.

Too bad for the people of Cleveland.

Labor, capital, climate change, and The Gap

Commenting on a surprisingly utilitarian post by Eddie, a517d0gg writes

It seems to me that a lot of people (you, Soob, TDAXP) are contrarian on climate change for the sake of being contrarian.

I can’t speak for Eddie or Soob, but Adrian’s assessment of my motives is incorrect.

Essentially, the controversy on climate change boils down to one line:

Certain capital-producing activities are altering the nature of certain stocks of capital.

Hmm. A potential problem. What is then needed is a judgement of the productivity benefits of the capital-producing activities (very large, as they compound over time) and a judgement of the alteration of capital-stocks. For instance,

  • sea levels will rise (bad)
  • the cost of the rising sea levels is trivially low (good)
  • rainfall in certain parts of Africa will lessen (bad)
  • rainfall in Africa overall will increase (good)
  • there will be more deaths from heat (bad)
  • there will be many times less deaths from cold (good)

&c.

Climate change is thus a “problem” we are near the optimal solution for already. While certain technological adjustments can doubtless be made, there are more pressing matters.

One such more important issue is shrinking the Gap. Essentially, the problemof the Non-Integrating Gap is:

The opportunity cost of not shrinking the Gap is an alteration in the quality of the labor supply.

Another potential problem. IT can be analyzed by examining the opportunity cost of not shrinking the Gap and the nature of the alteration conducted on the labor supply.

tdaxps_new_map_md
A problem worth thinking about

Compared to shrinking the gap, labor loss in the present environment is very high. Apart from the “bottom billion” being almost completely unmonetized, biological plays a role, too. Unhygenic and primitive living conditiosn leads to an increase in exports of diseases from the Gap, while the co-evolution of genes and culture by natural selection continually optimizes the population of the Gap for a world less and less like the one everyone else lives in.

However, shrinking the Gap has its own opportunity costs. Certian things, which we may otherwise not want to spend:

  • billions, if not trillions, on defense (Leviathan and Systems Administration)
  • subversion of the constitutional order (“Ethan Allen” is right on this one)

and more

While climate change is a trivial problem with a trivial solution, the Gap is a complex problem with a complex solution. It’s both more worthy of attention and more interesting to think about.

And that isn’t “contrarian” at all.

Globalizaiton and Genocide

My friend Jason of SDP emailed me yesterday, asking about genocide, globalization, and ideology. Specifically, considering that neither race nor society are going away, does globalization have a chance to end genocide?

My answer: Yes.

Genocide — purposefully killing a large fraction of your own population — only works when you can get away with it. This means that it has to be either profitable or at least not terribly costly. In Rwanda, for instance, the massacred Tutsis didn’t just leave bodies behind — they also had farmland that needed to be disposed of. (In parts of Rwanda where there were no Tutsis, the Hutu hordes helpfully killed fellow Hutus, accomplishing the same land reform without the ethnic overtones).

Likewise, the German attacks against the Jews in the 1930s and 1940s were enabled by the disintegrating world economy that allowed Germany to “go it alone” away from the discipline of international capital markets. In the first phase, the Nazi regime confiscated wealth from the Jewish upper-class to fund a growing welfare state. (If 1990s Rwanda was “land reform,” then 1930s Germany was “capital reform.”) After the War had started, Hitler’s regime faced roughly equal costs in interning Jews and killing them. They chose the latter.

Certainly there are genocides — mass butchery — today. In Darfur, a nasty party of the nasty non-integration gap — people kill each other as they have for the past few thousand years. In much of the western world, late-term abortion puts Herod to shame. But a Darfuri and an infant a month from birth have the same economic value to you — zero — so they aren’t protected by the globalized order.

The Abolition of Linguistic Ghettos

Wilford, J.N. (2007). Languages die, but not their last words. New York Times. September 19, 2007. Available online: http://www.nytimes.com/2007/09/19/science/19language.html?hp.

While focusing on antiquarian relics, the article points to good news: globalization is reducing the number of widely spoken languages.

Languages are not unique creatures with rights of their own, but tools used by people to know the world, provide for their families, and live life. The power of languages — like the power of most platforms — is proportional to the number of people who speak it. When a language’s speakers abandon their traditional tongue and embrace a more popular method of communication — like the rise of German over Low German or Mandarin over Manchu — both peoples benefit.

Two eggs, one basket

Phil Jones doesn’t update it enough, but one of my favorite blogs is Platform Wars. Nowadays, two high profile platform wars are being fought in the living room:

  • Microsoft XBOX 360 v. Sony PlayStation 3
  • HD-DVD v. Sony BluRay

Sony’s PlayStation is behind the XBOX, partially because of the high price of inculding a BluRay disc palyer (the XBOX onl plays regular DVDs, though an HD-DVD add-in is available). However, the same thing that turns the PlayStation into an expensive game machine also means that, for those that buy it, it’s also a free BluRay machine: This has allowed Blu-Ray purchases double HD-DVD disc buys.

As The Economist says:

Why, then, have Blu-ray discs lately been outselling HD DVD versions by two to one? Because Sony cannily included a Blu-ray player in its latest video-game console, PlayStation 3. And while PS3 has not met expectations of selling 6m consoles in America, some 1.4m have nevertheless been snapped up since their launch last November. Market researchers reckon that most—90% by some reckoning—of Blu-ray discs are played on PS3 consoles.

If Sony’s big gamble pays off, including a BluRay player into the PlayStation will allow them to win the war against HD-DVD, and then (as all PlayStations will double as Blu-Ray players) allow them to seamlessly publish games in Blu-Ray format while Microsoft scrambles to think of something new. If it doesn’t work, however, Sony will be left with a uselessly expensive console on top of a re-run of the beta-max fiasco.

Interesting times!

Be Resilient, Part II: How to Measure Agility

In the previous post, I measured resilience by the amount of effort required to perturb a system. In this page I will discuss a related element, agility, which is shown by systems that do not experience perturbation in spite of risk factors. For instance, an economy that is extremely dependent to variation in the flow of capital would be a capital-wise non resilient economy. A person who is extremely dependent on nurse for support would be labor-wise a non resilient person. A household that required their home not to be destroyed by a hurricane would be land-wise a non-resilient home.

Yet each of these resilience-challenged entities express agility if they continue successful operation in spite of a perturbation. If the economy keeps humming, if the patient stays alive, if the home does flood in spite of storms, all of them demonstrate agility.

Given that, I will use the following definition

agility, n:
the capacity to enforce the presence or flow of land, labor, or capital such that system perturbations do not result in system transformations

Agility can thus be seen as a form of power over circumstances. A capital-dependent economy can have agility through contracts or a powerful friends (a pillaging army). A labor-dependent patient can have agility through contracts or powerful friends (mafia buddies). A land-dependent family have have agility through contracts or powerful friends (guys strong enough to lift sandbags).

It follows that agility is by nature a social phenomenon that is dependent on the quality of the relationships between an entity and others.

A nation suffering an oil-shock that responds by successfully occupying the striking oil fields, however, would demonstrate agility. (Of course, if that nation occupies the oil wells clumsily and stupidly such that the system changes from one state to another, then no agility is demonstrated).

To measure agility, we take the minimum amount of capital, land, or labor that is required to enforce the flow or presence of the perturbing fluctuation in capital, land, or labor from the amount possessed. For instance, a house during Katrina would not have agility, because it is impossible to trade labor or capital to make up for the fluctuation in land. We might approximate this from a pattern of responses to perturbations. If a patient has experienced a number of nursing strikes, for instance, but has maintained care for himself, then he has a historic record of agility.

Of course, one can have agility but not resiliency, though that is a post for another time…


Be Resilient, a tdaxp series
1. How to Measure Resilience
2. How to Measure Agility
3. How to Measure Resiliency
4. The Importance of Measurement

Comments on Verticalization and Progress

Complexity Rising: From Human Beings to Human Civilizations, A Complexity Profile,” by Yaneer Bar-Yam, NECSI Research Projects, http://necsi.org/projects/yaneer/Civilization.html.

A recent article on complexity and human civilization has set the blogosphere on fire: Stephen DeAngelis, Larry Dunbar, Mark Safranski, and Curtis Gale Weeks have all commented on it. Particularly fascinating has been this graphic:

which, actually, is wrong. A history of civilization, scene through vertical rulesets, would look closer to:

Why? Because the history of human civilization has been the history of steadily increasing vertical control. 17,000 years ago, when the human brain began shrinking, man became a social animal and the State of Nature was overturned. The parts of the human brain that were lost deal with the ability to navigate pure network structures — aggression and weariness. The success of the verticalization of human affairs took another step forward with the foundation of the Modern State and national police forces. A work still incomplete in many parts of the world, including Iraq, the Modern State has led to a hundred-fold decrease in murder of the past few centuries.


Verticalization of Society

Indeed, our greatest hope for peace is for another ratcheting up of vertical control. Thomas Barnett’s Leviathan – a global military force that puts down aggression everywhere — is an answer to the question for an analogy to Thomas Hobbes — a state police force that puts down aggression within borders — on a world stage. The evolutionary psychologist Steven Pinker described the need for

a worldwide democratic leviathan that would penalize the aggressive competition, defuse the Hobbesian traps, and eliminate the cultures of honor that hold between the most dangerous perpetrators of violence of all, nation-states.

The end of war can result only from the greatest verticalization of power in human history.

Visualizing Critt’s New Game

As I earlier mentioned, Critt Jarvis of Connecting in Conversation has released version .05 of his new game. His pdf version looks like:

critts_new_game_old

I wanted to understand how he was looking at it, so I redrew it in three different ways. Read more to see different interpretations.


First, I I defined everything in the diagram as an object. This means that the outer pentagrams are directly connected to “Relationships,” “Logistics,” and “Boundary.” In turn, relationships are connected to “People” while “Boundary” is connected to an implicit “Outside World.”

critts_new_game_0
Next, I assumed that “Logistics” is not some all encompassing entity, but connected two neighboring pentagons. This is possible but non obvious.

critts_new_game_1

Last, I assumed that “Relationships” are actually relations, so that the outer pentagons connect directly to “People.”

critts_new_game_2

That same simplification, but keeping logistics as an object connecting all the outer pentagons together, is:

critts_new_game_3

Alternatively, “Logistics” touches boundary in Critt’s version, so maybe the game is better mapped:

critts_new_game_4

Of course, I may be wrong on all of these. Am I getting close, Critt? Or barking up the wrong tree?