August 2012
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Month August 2012

Everything You Think You Know About China Is Wrong Are we obsessing about its rise when we should be worried about its fall?

Minxin Pei:

The disconnect between the brewing troubles in China and the seemingly unshakable perception of Chinese strength persists even though the U.S. media accurately cover China, in particular the country’s inner fragilities. One explanation for this disconnect is that elites and ordinary Americans remain poorly informed about China and the nature of its economic challenges in the coming decades. The current economic slowdown in Beijing is neither cyclical nor the result of weak external demand for Chinese goods. China’s economic ills are far more deeply rooted: an overbearing state squandering capital and squeezing out the private sector, systemic inefficiency and lack of innovation, a rapacious ruling elite interested solely in self-enrichment and the perpetuation of its privileges, a woefully underdeveloped financial sector, and mounting ecological and demographic pressures. Yet even for those who follow China, the prevailing wisdom is that though China has entered a rough patch, its fundamentals remain strong.

How Google and Apple’s digital mapping is mapping us

Oliver Burkeman:

Which brings us to the core of the matter. It can be easy to assume that maps are objective: that the world is out there, and that a good map is one that represents it accurately. But that’s not true. Any square mile of the planet can be described in an infinite number of ways: in terms of its natural features, its weather, its socio-economic profile, or what you can buy in the shops there. Traditionally, the interests reflected in maps have been those of states and their armies, because they were the ones who did the mapmaking, and the primary use of many such maps was military. (If you had the better maps, you stood a good chance of winning the battle. The Ordnance Survey’s logo still includes a visual reference to the 18th-century War Department.) Now, the power is shifting. “Every map,” the cartography curator Lucy Fellowes once said, “is someone’s way of getting you to look at the world his or her way.” What happens when we come to see the world, to a significant extent, through the eyes of a handful of big companies based in California? You don’t have to be a conspiracy theorist, or an anti-corporate crusader, to wonder about the subtle ways in which their values and interests might come to shape our lives.

A manifesto for the new rules on human capital

Tom Peters:

I recently spoke at the World Strategy Forum event in Seoul, where the theme was “The new rules: reframing capitalism”. Predictably, the discussion focused on global financial infrastructure. But, as one of the few non-economist speakers, I instead argued that employment/unemployment is even more affected by the changing nature of work – and the wildly accelerating effectiveness of technology, which is encroaching on activities that employ tens of millions of people, especially in the developed world.

This is, I believe, in the mid to long term, both the number one problem and the number one opportunity for businesses and wider society. But the specifics of what follows were triggered by the debate at the event and were eventually encapsulated in what I grandly call: “A human capital development manifesto at the enterprise and national government level”.

  • Maximising what I’ll call “gross domestic development” of the workforce, driven at the level of the individual enterprise, is the primary source of growth, productivity, wealth creation and social stability.
  • Development of “human capital” should always be the top priority – albeit a commandment all too often honoured in the breach. But this is an inescapable imperative in an age in which imaginative brain-work is de facto the only plausible survival strategy for individual enterprises of consequence and higher-wage nations in their entirety. Generic “brain-work”, the traditional and dominant white-collar activities that now employ the bulk of us, is increasingly undertaken by exponentially enhanced artificial intelligence applied at ever increasing speed.

The Coming Civil War over General Purpose Computing

Cory Doctorow:

The closest approximation we have for such a device is a computer with spyware on it— a computer that, if you do the wrong thing, can intercede and say, “I can’t let you do that, Dave.”

Such a a computer runs programs designed to be hidden from the owner of the device, and which the owner can’t override or kill. In other words: DRM. Digital Rights Managment.

These computers are a bad idea for two significant reasons. First, they won’t solve problems. Breaking DRM isn’t hard for bad guys. The copyright wars’ lesson is that DRM is always broken with near-immediacy.

DRM only works if the “I can’t let you do that, Dave” program stays a secret. Once the most sophisticated attackers in the world liberate that secret, it will be available to everyone else, too.

Second, DRM has inherently weak security, which thereby makes overall security weaker.

Certainty about what software is on your computer is fundamental to good computer security, and you can’t know if your computer’s software is secure unless you know what software it is running.

Poll: 54% of Americans like the TSA

Bruce Schneier:

Despite recent negative press, a majority of Americans, 54%, think the U.S. Transportation Security Administration is doing either an excellent or a good job of handling security screening at airports. At the same time, 41% think TSA screening procedures are extremely or very effective at preventing acts of terrorism on U.S. airplanes, with most of the rest saying they are somewhat effective.
My first reaction was that people who don’t fly — and don’t interact with the TSA — are more likely to believe it is doing a good job. That’s not true.

How Paperbacks Transformed the Way Americans Read

Andrew Shaffer:

Half a century before e-books turned publishing upside down, a different format threatened to destroy the industry.

Here’s a little perspective: In 1939, gas cost 10 cents a gallon at the pump. A movie ticket set you back 20 cents. John Steinbeck’s The Grapes of Wrath, the year’s bestselling hardcover book, was $2.75. For a nation suffering 20 percent unemployment, books were an impossible expense.

But in just one day, Robert de Graff changed that. On June 19, 1939, the tall, dynamic entrepreneur took out a bold, full-page ad in The New York Times: OUT TODAY—THE NEW POCKET BOOKS THAT MAY TRANSFORM NEW YORK’S READING HABITS.

The ad was timed to coincide with the debut of his newest endeavor, an imprint called Pocket Books. Starting with a test run of 10 titles, which included classics as well as modern hits, de Graff planned to unleash tote-able paperbacks on the American market. But it wasn’t just the softcover format that was revolutionary: De Graff was pricing his Pocket Books at a mere 25 cents.


Forecasting Financial Crisis:

Inspired by Google’s PageRank, the authors of a new paper create DebtRank, a measure of connection centrality. The vertical axis in the following diagram shows DebtRank (centrality) the horizontal axis asset shows size relative to the total network and the color indicates fragility/leverage. Institutions such as Wachovia, RBS and Barclays were relatively small but because of their centrality and fragility they imposed big risks on the system.

How Radio Will Kill the Radio Star

Shirley Halperin:

“There’s no room on the radio for a new Howard Stern today,” says Tom Leykis. The firebrand talk show host is among the few former FM personalities who could command a Stern-like contract, thanks to stellar ratings in 25 markets over 12 years. But after CBS Radio pulled the plug on his show in 2009 (paying out his $20 million-plus contract), Tom Leykis didn’t jump to a terrestrial station or to satellite, opting instead to create his own Internet radio network symbolically dubbed “The New Normal.” With four fully licensed music stations streaming some 50,000 songs along with his own daily call-in show, 400,000 tuned in during launch week in April and 1.7 million in its first month — “more than the cumulative audiences of 14 Los Angeles radio stations,” Leykis boasts. With a $1 million investment of his own money, he expects to be profitable by the end of the year.

Leykis, 56, says he left his first love not because he couldn’t get paid, but because he believes traditional radio is dying. Thanks to iPods, podcasts and hundreds of satellite stations, radio audiences are getting older (more than a third of talk-radio listeners are 65 and up) and the personalities are aging out of relevance. “KABC’s new show is hosted by Geraldo Rivera, who’s 68; John and Ken [John Kobylt and Ken Chiampou] came on KFI in 1992, Bill Handel in 1988, Rush Limbaugh in 1989,” notes Leykis of the L.A. market’s top English-language stars. The spring chicken, he says with a laugh, is 48-year-old Tim Conway Jr. At 37, KIIS star Ryan Seacrest is actually younger, but it is telling that L.A.’s youth-targeted alt-rock outlet KROQ has had the same morning hosts, Kevin and Bean (Kevin Ryder and Gene Baxter), for more than 20 years. Pop station KAMP’s Carson Daly, 39, first appeared on KROQ in the mid-’90s.

Harvard cracks DNA storage, crams 700 terabytes of data into a single gram

Sebastian Anthony:

A bioengineer and geneticist at Harvard’s Wyss Institute have successfully stored 5.5 petabits of data — around 700 terabytes — in a single gram of DNA, smashing the previous DNA data density record by a thousand times.

The work, carried out by George Church and Sri Kosuri, basically treats DNA as just another digital storage device. Instead of binary data being encoded as magnetic regions on a hard drive platter, strands of DNA that store 96 bits are synthesized, with each of the bases (TGAC) representing a binary value (T and G = 1, A and C = 0).

To read the data stored in DNA, you simply sequence it — just as if you were sequencing the human genome — and convert each of the TGAC bases back into binary. To aid with sequencing, each strand of DNA has a 19-bit address block at the start (the red bits in the image below) — so a whole vat of DNA can be sequenced out of order, and then sorted into usable data using the addresses.

How Visa Works

Eduardo Mourao:

Visa uses bribery, blackmail and fear to win contracts.

I built a small credit card company, we have around 500k users and 2k merchants. We focus primarily on the low-income families, our service is free to users, just merchants have to pay (and our price is 60% lower than visa’s) that’s how we could outmaneuver pretty much all the big guys in the employee-benefits market. We are a company of just 12 employees now, we live in the cloud, our costs are just a very tiny fraction of the cost our competition faces, they could never compete with us on a level playing field. They were all screwed and they know it, and we received some buyout offers, which we refused.