A Blog by Jonathan Low


Sep 21, 2014

Is Technology Making Us All Bureaucrats?

The things that are supposed to make us free do sometimes end up enslaving us. Voluntarily (mostly) and in a nice way (usually), but the burdens associated with automobiles and electricity and computers and yes, the broader array of technological devices can sometimes add to our responsibilities and obligations.

The institutions that govern our commercial and political lives have imposed increasing degrees of effort on the consuming and voting public, using technology to transfer action and cost. Society has assumed these added tasks that were once performed by professionals with nary a peep. A entire stratum of professional attainment has been eliminated, supposedly in the interest of efficiency. But the benefits have largely flowed to those making the assignments, not to those doing the work. How else to explain the stagnation and even decline of household income for the vast majority?

The tasks we have been assigned are mundane and frequently annoying. They are often bureaucratic in nature, having mostly to do with compiling and communicating information to others who then assess, aggregate - and sell the fruit of that labor to others. Which is why there is an increasing demand for some sort of payback by those not only generating the data but providing it to others who then capture the profit. The growing calls for redistribution, while nettlesome to those who have benefited, should instead be reassuring: for, after all, they demonstrate conclusively that the capitalist market system remains dominant. For the time being. JL

David Graeber comments in The Baffler:

Just as industrial automation in the eighteenth and nineteenth centuries had the paradoxical effect of turning more and more of the world’s population into full-time industrial workers, so has all the software designed to save us from administrative responsibilities turned us into part- or full-time administrators.

The MOOC Revolution That Wasn't

It could be that the problem with utopian solutions to the transfer of wisdom start from a false premise: that every new idea has to do two things - improve distribution and make someone money.

Naturally, given the trend in this society, the first thing that happened when MOOCs became a thing was that a bunch of  those with inside information rushed to create businesses whose purpose was to capture the profits assuredly inherent in this bold new approach to learning.

There were two problems: one was that saving money, which is what many institutions wanted to do with this new found opportunity is quite different from making money. The other was that the emphasis appeared to  focus on volume rather than effectiveness. This harkens back to the earliest days of the dotcom boom when the use of metrics like eyeballs, or how many people clicked on a site, was confused with the notion that they would magically be transformed into cash-yielding customers.

That none of these dreams has yet come to pass is not surprising given the harsh realities of figuring out how to make money from the web. The more worrisome outcome is that many institutions have seized on this as a means of reducing their costs but without any sort of quality control to measure impact or outcomes. Some universities are now insisting that students take a certain number of courses online - even if they are resident at the institution - assuming that they want to graduate in the normal four year term. Why they should be paying to sit in their dorm rooms or rented apartments and watch someone on the web not yet been adequately explained. The implicit theory is that those offering degrees, certifications or other validations of learning know taking courses in person is more effective and popular - so they are now charging extra for the privilege.

Eventually society will figure out how to combine the online and offline to maximum effectiveness. It will also presumably get smarter about discerning the elements of value. JL

Dan Friedman reports in TechCrunch:

The future of online learning isn’t about accessibility: it’s about taking what we already know works offline and combining it with what you can only do online to create the most engaging experience. Quick fixes that sound good in the press don't work in the long term.

The Middle Class Is Not Buying Talk About Good Times: And They Have a Very Good Reason

Recent reports suggest that something of a financial rebound is under way. Job growth is more robust, 'average' net worth is recovering and one can almost hear strains of the band striking up 'Happy Days Are Here Again.'

Except, of course, that in the rush - once again - to parse the big data and leave the details to The Little People, those averages, when deconstructed, tell a very different story.

The reality appears to be that those who maintained the wherewithal to continue investing in securities, especially stocks, have seen their incomes and household net worth rise. But that effect seems to have impacted a very small slice of the demographic pie; and it happens to correspond with the very limited group who never suffered (much, in relative terms) during the financial crisis.

In other words, the rich got richer because they could afford to assume economic risks that most could not.And, to paraphrase the ad, for everyone else there's uncertainty.

The data, as the following article explains, shows that the putative middle class remains worse off than they did before the crisis and recession. And this at a time when growing global demand has caused inflationary pressure on a range of household necessities. The reality is that just as opportunity and performance remain unevenly distributed across the population, so, too, does perception. JL

Neil Irwin reports in the New York Times:

Middle-class American families’ income is lower now, when adjusted for inflation, than when the recovery began half a decade ago.

Sep 20, 2014

Facebook Is An Acceptable Way to Serve Legal Papers, New York Judge Rules

Wow. This gives the concept of adding friends a whole new meaning. 

Legal systems around the world have slowly and sporadically acknowledged the importance of digital life by melding the tangible with the intangible. This has becoming increasingly true with regard to document submission. Some courts will not even accept physical copies anymore.

But the news that New York now finds Facebook an acceptable way to serve papers is significant because it is (or fancies itself) the epicenter of global legal action. This may hasten the advent of social media as a growing source of legal activity. The case in point, interestingly, involves a divorced male spouse demanding that his ex-wife continue to pay child support. He requested to use Facebook because his ex-wife refused to respond to email or letters but was active on the social network.

That a man receiving child support from a woman - and that the child in question is over the age of 21 simply underscores how notions of tradition are changing.

It may also raise Facebook users' concerns about its sometimes self-serving approach to privacy to a new level of paranoia. JL

Jeff Roberts reports in GigaOm:

Under the rules of service, people can use a variety of methods to deliver a document, including delivering it in person or to their lawyer or, in some cases, by email. If those don’t work, they can apply to the court to try another method — such as, in this case, social media.

The Calculus of Contagion: Employing Math to Manage Epidemics

Ebola and ISIS (or The Islamic State) have more in common than it may first appear. Both do great harm to their host populations - and appear to grow exponentially with little hope of control by authorities struggling to figure out how to contain them.

The good news is that research has produced mathematical models that can assist in identifying an epidemic's salient characteristics and point the way towards eventually isolating and then eliminating the causal factors. In the reverse, it should be added, marketers have drawn on both epidemiology and the rise of cults to attempt to determine if they can create conditions that inspire consumers to flock to their products or services.

The challenge is not so much in the science, as the following article explains, but in the public will to do what is necessary to effect the appropriate change. JL

Adam Kucharski reports in Aeon:

The difference between a raging epidemic and a passing fever comes down to a single number

How Come Porsche Is Still Putting Its Name on Blackberries?

Co-branding is one of those concepts that sounds really good in theory. Two enterprises with some positive characteristics identify an opportunity to mutually benefit from the commingling of their marques and the implied strengths behind them.

Hey, Taco Belle Dorito Locos come to mind.

But in the realm of technology or anything else just a tad more complicated than burgers, fries or chalupas, the potential risk goes up while the concommitant transference of value is a less certain proposition. There are a lot more moving parts, the chance of something you dont control going wrong increases - and the opportunity for a negative association expands exponentially.

So Porsche, given its reputation for design and performance, has made what many believe to be a curious decision to permit the use of its name in concert with the Blackberry, a once mighty brand which has become more of a punchline than a global standard of late. Blackberry's technology is aged, its market share has plummeted and whatever positive transference Porsche may derive is limited to the cash that Blackberry must trade in return for the Porsche Design imprimatur given that it has little intangible value to offer.

The answer, in the end, could be that Porsche's reputation is sufficiently well-established that the Blackberry relationship may simply advertise the fact that Porsche's design services and brand are so valuable that other, desperate companies are willing to pay large sums for it. Though perhaps cynical, the inherent brand value is reinforces with limited downside since so few people buy the product. The question is whether, in the relatively transparent internet age, such agreements are worth the potential risk. JL

Kyle Stock reports in Business Week:

From a marketing perspective, the trick in these so-called co-branding exercises is making sure the whole is greater than the sum of the parts so that the association pays off for both companies. That better be really good if it says “Porsche” on it.

Sep 19, 2014

Why Don't Restaurants Charge for Reservations?

It is a basic tenet of economic theory: if demand rises, services and prices should rise to meet it.

So, given the exponential growth of 'foodie' culture around the world and the great -sometimes comical - obsession with great ingredients, chefs and restaurants, why don't such establishments take advantage of their popularity to cash in?

After all, the life of a dining spot, however popular, can be as short as that of a may fly and the technology now exists to capture that demand, even to insist on charging a premium for securing it. A convenience - or trophy depending on the time, place and personality - for which many would be only too happy to pay.

The answer has, in large measure, to do with intangibles, as the following article explains. Regulars, eg loyal customers, can make up 30-40 percent of revenues and profits. And as we know from other corners of the consumer economy, loyalty generates greater margins. But loyal customers expect to receive benefits, not confer them. Which leads to another complication - perception. Lines, wait times, the impossibility of landing a dinner  reservation before 10PM until next leap year; all of that is part of the drama and romance, the sizzle that sells the proverbial steak.

There is, finally, the challenge with which technology has socked the rest of the economy: ruthless productivity often just isnt much fun. The friction to which efficiency experts refer with disdain is part of what makes the experience.

That said, new services are beginning to spring up designed to take advantage of precisely this asymmetric supply and demand opportunity. Variable pricing as with airline reservations may soon become the norm - which could be an important hospitality industry sell signal. You heard it here first. JL

Alex Mayyasi reports in Price Economics:

In the restaurant business, allocating scarce reservations by social capital is a cherished part of “the experience”; allocating them by actual capital is the equivalent of slipping the maitre d’ a twenty.