Hayek and Business Management

Arnold Kling:

Chris Dillow writes,
 
 If extensive knowledge is possible, then bosses might be able to manage big companies well. If not, then centrally planned companies will be inefficient. Sure, perhaps competition will eventually weed out egregious incompetence, but market forces might not grind so finely as to eliminate all inefficiency
 
 Pointer from Mark Thoma.
 
 I cannot emphasize enough how much I agree with this. Because I spent 15 years in business, I got an opportunity to see large organizations close up. I saw that in a large business, the top management cannot keep track of more than about three major initiatives at a time. I saw that compensation systems have to be frequently overhauled, because employees learn to game any system that stays in place for more than a couple of years. I saw the “suits vs. geeks” divide, as specialists in information technology or financial modeling had difficulty communicating with executives who had only general knowledge.
 
 The notion of large, efficient organization is an oxymoron. If you think that large corporations have overwhelming advantages, then you have explained why IBM still dominates the computer industry, while Microsoft and Apple never really got amounted to much of anything. I like to say that if you are afraid of large corporations then you have never worked for one.

Why Energy Storage is About to Get Big – and Cheap

Ramez Naam:


 I’ve been writing about exponential decline in the price of energy storage since I was researching The Infinite Resource. Recently, though, I delivered a talk to the executives of a large energy company, the preparation of which forced me to crystallize my thinking on recent developments in the energy storage market.
 
 Energy storage is hitting an inflection point sooner than I expected, going from being a novelty, to being suddenly economically extremely sensible. That, in turn, is kicking off a virtuous cycle of new markets opening, new scale, further declining costs, and addition

The End of Asymmetric Information

By Alex Tabarrok and Tyler Cowen:

Might the age of asymmetric information – for better or worse – be over? Market institutions are rapidly evolving to a situation where very often the buyer and the seller have roughly equal knowledge. Technological developments are giving everyone who wants it access to the very best information when it comes to product quality, worker performance, matches to friends and partners, and the nature of financial transactions, among many other areas.
 
 These developments will have implications for how markets work, how much consumers benefit, and also economic policy and the law. As we will see, there may be some problematic sides to these new arrangements, specifically when it comes to privacy. Still, a large amount of economic regulation seems directed at a set of problems which, in large part, no longer exist.

“Weaponization of information”

The Economist:

Countries in the front line of Moscow’s “weaponisation of information”, in the words of Peter Pomerantsev and Michael Weiss, two analysts, have long sought to draw attention to the problem. The European Union is at last listening. Heads of government, meeting in Brussels as we went to press, were expected to ask Federica Mogherini, the EU’s foreign-policy chief, to produce a plan to counter Russia’s “disinformation campaigns” by June. Before that the EU will launch a task force (working name: Mythbusters) charged with monitoring Russian media, identifying patent falsehoods and issuing corrections.

PageRank Approach to Ranking National Football League Teams

Verica Lazova & Lasko Basnarkov:

The Football World Cup as world’s favorite sporting event is a source of both entertainment and overwhelming amount of data about the games played. In this paper we analyse the available data on football world championships since 1930 until today. Our goal is to rank the national teams based on all matches during the championships. For this purpose, we apply the PageRank with restarts algorithm to a graph built from the games played during the tournaments. Several statistics such as matches won and goals scored are combined in different metrics that assign weights to the links in the graph. Finally, our results indicate that the Random walk approach with the use of right metrics can indeed produce relevant rankings comparable to the FIFA official all-time ranking board.

How Millennials Get News: Inside the habits of America’s first digital generation

American Press Institute:

Much of the concern has come from data that suggest adults age 18-34 — so-called Millennials — do not visit news sites, read print newspapers, watch television news, or seek out news in great numbers. This generation, instead, spends more time on social networks, often on mobile devices. The worry is that Millennials’ awareness of the world, as a result, is narrow, their discovery of events is incidental and passive, and that news is just one of many random elements in a social feed.
 
 A new comprehensive study that looks closely at how people learn about the world on these different devices and platforms finds that this newest generation of American adults is anything but “newsless,” passive, or civically uninterested.

A day in the war between the city and its mountains.

Justin Nobel:

The San Gabriel Mountains are waging war on Los Angeles and Ed Heinlein’s chainsaw is screaming in the late afternoon sun. It’s January 2015 and Heinlein, who has a friendly paunch and paws sheathed in mud-stained work gloves, is carving up avocado trees. They were drowned the previous year when a series of mud freight trains roared out of the hills above his house. “Welcome to mud central,” says Heinlein, “The assistant fire chief tells me it’s the most dangerous property in L.A.”
 
 Heinlein is a retired elementary school teacher, current Christian minister, and has a preacher’s tendency to speak in terms of fire and brimstone. He lives in Azusa, a scenic nook in the foothills of the San Gabriel Mountains, which rise 10,000 feet above the city of Los Angeles. Aware that the mountain range’s mud war is far from over, Heinlein has spent more than $100,000 to protect his property behind a trio of steel and concrete walls. Immediately surrounding his home is a final barrier, consisting of about 400 sandbags, 60 sheets of plywood and heavy plastic sheeting. It is a mighty fortification, so complete that Heinlein and his family cannot even exit their backdoor.

“This isn’t a supply chain, it is a ritual Apple is performing to bring themselves up to the standards necessary to compete against companies with centuries of experience.”

Atomic Delights:

Jonny Ive often speaks of care. It is an odd word to use as it doesn’t imply the traditional notion of “craftsmanship” in the classic, handmade sense. Nor does it imply quality or precision in the way a Japanese car manufacturer or German machine tool maker would. “Care” implies a respect for the raw materials and end result, with little concern about what it takes to link those two ends of the production chain together, and we see that highlighted with the Watch. Apple could very easily have forgone forging to create stainless steel cases, just like everyone else. Hardening gold alloy with cold working could have been eliminated, putting them on par with the rest of the industry. Nobody will see or feel the inside pocket for the microphone on the Sport, yet it has been laser finished to perfection.
 
 I see these videos and I see a process that could only have been created by a team looking to execute on a level far beyond what was necessary or what will be noticed. This isn’t a supply chain, it is a ritual Apple is performing to bring themselves up to the standards necessary to compete against companies with centuries of experience.