Tuesday, March 12, 2019

Multiple stages

Shakespeare (and Rush) noted that "All the world’s a stage, And all the men and women merely players". But we are all also each other's audiences, watching, interpreting, commenting on, the dramas unfolding around us.

Wednesday, February 6, 2019

Credibility Gap

In its commentary of Trump's State of the Union address to Congress, The Wall Street Journal noted how conciliatory the language was and how little Trump dwelt on some of the thornier sticking-points between him and the House Democrats. What seems astonishing to me is how irrelevant such dissecting of Trump's speeches is.

First this was clearly carefully scripted by someone in the White House other than him, and therefore doesn't really reflect his thinking. Second, he has fairly consistently said things in prepared speeches which he later contradicts in unscripted remarks or tweets. And finally, consistency really isn't Trump's thing, at least when it comes to policy; he will turn on a dime if his media boosters (Coulter, Hannity, Limbaugh etc) tell him something isn't what he "base" wants to hear. He appears neither to remember nor care what he has said in the past, and if contradicting himself serves the purpose of the moment he will without a second's though.   

All of which makes scrutiny of his prepared (and even his unscripted) utterances a complete waste of time. We need only know that he is seldom honest, has no regard for facts, data, or experts, and is motivated by instantaneous gratification and self-interest: And take whatever he says with a very large pinch of salt. 

Tuesday, January 15, 2019

After the Vote

Although it was expected that May would lose the vote on her Brexit deal, the scale of her defeat wasn't. The reaction from Brussels was predictable, too: basically, big FU from Donald Tusk and Jean Claude Junker. And perhaps that's part of the explanation. Yes, Brussels always had the better hand in the negotiations, but the lesson here is that even if you hold all the cards, you don't have to play them.

By leaving the impression that the EU was going to make it as painful as possible, MPs reacted in an economically irrational but "behavioral-economically rational" way: "If we're going to get screwed either way, deal or no deal, we're not going to give Brussels the satisfaction of getting what it wants".

So now things are going to get interesting. If Britain does look like its going to crash out, it sends exactly the signal the Brussels elite is worried about; to the populists this looks like sticking it to the man, and will embolden other leavers. Brussels should offer a substantially better deal. If it holds the line, Britain will crash out and others will be tempted to follow.   

The future of the European project has never looked more uncertain.      

Friday, January 4, 2019

O2O and IoT

In his book "AI Superpowers: China, Silicon Valley, and the New World Order",  Kai-Fu Lee explains the divergence in approaches to AI between China and the US. Chinese startups are extending more directly and deeply into the physical domain, which Lee describes as "O2O" -- online to off-line.

These off-line nodes collect data; they are part of the Internet of Things (IoT). As they become more integrated with our daily lives the data they generate will provide an opportunity to comprehend and "simulate" behavior at the individual level. Much has been made over the last twenty years of the ability to connect disparate data elements--from credit card use in the supermarket to major purchases--to build a virtual picture of behavior. This takes the idea much further, with the potential to build an accurate picture of our routines, when we rise, where and what we eat, where we work, what we do for entertainment, all off-line activities, to compliment browsing data that internet companies already collect.

GE uses a simulation of its aircraft engines, parameterized with actual engine telemetry, to predict when parts are likely to fail. Imagine this kind of modeling applied to individuals. Target already showed us how subtle changes in buying and browsing patterns enable AI engines to make inferences about pregnancy.

In "The Minority Report" Tom Cruise moves though a world in which everyone is constantly surveilled and AI-based marketing presents him with individually tailored offers in real time; but what Lee's description suggests is far more disturbing. Imagine that these simulations know where we are likely to be, for example pre-ordering a coffee at Starbucks so that is ready when we come into the store. Or perhaps it senses departures from observed patterns of behavior and makes inferences from these.

As O2O becomes more pervasive every node in the network has the potential to become an IoT data collection point; Amazon Echo is already collecting audio data. Netatmo's Smart Indoor Camera already collects and uploads video data from which it does facial recognition (to detect home intruders). Lime Scooters in San Jose for example could include cameras that collect audio and video data as well as location and personal data.

We may soon be living in a world in which artificial intelligences know more about us than we do ourselves (and unlike us they never forget). If those AIs are operated by firms, that's concerning; if they are operate by governments, as is likely in China that's terrifying.     

Sunday, November 18, 2018

Trade-off: aggregate prosperity and national autonomy

As Rana Foroohar and Ian Bremmer noted on CNN today, the world order is changing. The influence of international institution is waning while international policy in east Asia is increasingly dictated by the leaders of America and China. The trajectory of the post World War II ear, towards free trade between nations and deeper integration is going into reverse.

Most people never saw the benefits of globalization. For a majority in the West, GDP growth and stock market gains were simply abstractions, nothing more than a ticker feed on the news or sounds-bites in political speeches. Globalization, along with automation, also bought labor market disruption and kept median wage growth well below GDP and inflation. Along with the perceptions that institutions like the UN were weak and corrupt, faith in the free-market policies, at least with respect to in international trade, have come to be regarded as policies designed to enrich the haves, leaving the have-nots behind. The sense that government and the bipartisan consensus on international relations was no longer benefiting Americans lade to the election of a populist president in 20161.

At an aggregate level, the deepening of trade relations and the entanglement of countries in complex supply chains delivers economic growth but comes at the expense of national autonomy.

That was seen by policy makers after the Second World, not as a trade-off but as a double win; not only would countries be more prosperous, but the chance of armed conflict would be reduced. But as the prospect of war recedes that entanglement is seen less as a benefit ad more as an infringement on national sovereignty and self determination. The disaffection with globalization was harnessed by those who felt their local power was ebbing and flowing to centralized international bodies.               
In China the disaffection with the international order has different roots. China has concluded that the World order, with it structures systemically designed to favor developed countries by maintaining the economic status quo, was inconsistent with its economic ambitions.  So as its influence has it has grown, both economically and politically on the world sate, it has begun to create parallel and competing institutions. These now offer countries in the region a powerful incentive to defect from the existing order and join the rising Chinese sphere of influence.

These two forces, China's bypassing of the current international order, and America's withdrawal from it, is leading to a significant reshaping of international relations and the re-balancing of what has now come to be seen as a trade-off between aggregate economic growth and national autonomy. The pendulum is swinging back from global economic (and in Europe, political) integration toward bilateral deals making and greater national autonomy. The uni-polar post cold-war world order which to all intents a purposes revolved around the US is becoming bi-polar. With a weakening Europe, riven by internal tensions, both economic and political, the US and China will emerge as the foci of international relations in the 21st century.     

1. Similar trends were apparent on a smaller scale in Europe and led to Britain's decision to leave the EU

Friday, November 16, 2018

The Imperial Comma

The Imperial Comma, unlike the Oxford Comma, is not widely debated and remains happily uncontroversial. While its origins are unclear, it has been suggested that the name owes its existence to writing at the predominantly STEM institution, the Imperial College of Science, Technology and Medicine, formally Imperial College of Science and Technology. Its engineers and scientists, whose writing has a Stella reputation, often inadvertently, add commas in places in which they are, unnecessary or simply, incorrect giving rise to the term the Imperial comma.     

Wednesday, October 31, 2018

PC "generativity"

Political correctness was, without doubt, a well intentioned idea. It was supposed to encourage bigots to avoid speech that was offensive to minority groups. In the process it signaled that stereotyping was frowned upon. That was a laudable goal.

However, it seems to have had two unintended consequences. First, because banned terms are, almost axiomatically, offensive only to minorities, it afford the majority the opportunity to ridicule the construct of PC, as the majority might consider the particular language inoffensive.

Second, it has sensitized people in minority groups who might not otherwise have considered some language offensive to now be on the lookout for its use, and be offended - because they've been told it is - when they hear it. 

Friday, October 26, 2018

Will no one rid me of this turbulent priest?

When Henry II asked "Will no one rid me of this turbulent priest?", this is widely accepted as a rhetorical question that was to all intents and purposes an implicit command; indeed it caused four knights of the realm to murder Thomas a Becket in Canterbury Cathedral.

So when another leader complains, vilifies and demonizes his enemies, is too much of a stretch to lay at least some of the blame at his feet when an ardent (and more than usually unhinged) supporter takes him at his word and sends pipe bombs to his lord and master's enemies?   

Tuesday, October 23, 2018


There is little doubt that Jamal Khashoggi was tortured and killed in the most horrifyingly barbaric fashion by members of Saudi Arabian security forces in the Saudi consulate in Istanbul on October 2nd. It also seems likely that the brutal assassination was ordered by Crown Price Mohammad bin Salman.

The incident has reveled some unpleasant truths. First, it highlights just how undemocratic regimes like the Saudi monarchy exercise power, in ways that would be unacceptable in Western democracies. It illustrates graphically the corrupting influence of highly concentrated power perpetrate brutality, and just how uncivilized some people can be. Some have remarked that Al Queada, the Taliban, and ISIS are living by values that the West left behind in the middle ages, yet here is a state actor behaving as if the Enlightenment had never happened.

Second, the incident shows how a complex web of relationship moderates what would otherwise be universal outrage and condemnation. Bob Gates noted on Armanpour & Co that Saudi Arabia has been a useful and important strategic ally in the Middle East, and has at least since 9/11, provided the US with important security information.  Trump, in originally excusing and thereby implicitly condoning the murder, noted that the kingdom makes substantial purchases of US weapon systems and that supports American jobs (while simultaneously taking large numbers of Yemeni lives). It is shocking but hardly surprising that he favors money over rights and values.

And finally it gave us the sordid sight of Televangelist Pat Robertson, supposedly an expounder of Christian values telling us that one man's murder shouldn't derail a multi-billion arms deal. 


Sunday, October 14, 2018

Democracy - a Failed 100 Year Experiment

Although political systems that involve a plurality in decision making are not new, the idea of truly universal suffrage is; it first appeared in New Zealand in 1893, arrived in Britain 1928, and was not fully implemented in the United States until the Voting Rights act of 1965. Universal suffrage is thus a relatively new model of governance and has been evolving in the century since its adoption and it may be too early to tell whether Churchill's observation "that democracy is the worst form of Government except for all those other forms that have been tried from time to time" is indeed correct. China is currently pitting that assertion to the test.

Many have argued that for the US to retain its role as the worlds leading power, it must continue to support the rules based order, and by extension must nurture the international coalition of allies and partners it has built since the Second World War. Its ability to introduce Judaeo-Christian values as a component in international relations is a major contribution to civilization writ large, replacing the amorality of great power politics. Yet this ability to project values is waning.

During the Cold War, the American model was widely seen as superior to the juxtaposed alternative, Communism, which was philosophically flawed ("the end justifies the means") and demonstrably inferior in practice.  After the fall of the Berlin Wall, the US model was assumed to have won by default ; but that model had two components, once though to be inseparably intertwined; democracy and the prosperity attributed to free markets. China has shown this not to be the case.

The emerging Chinese model demonstrates that democracy is not essential for free markets, a rising middle class, declining rates of poverty and increasing wealth. At the same time, the US is finding that political deadlock and polarization is hampering long term strategic initiatives essential to maintain its economic leadership in the world, specifically a failure to maintain, let alone renew, crumbling infrastructure, declining investment in education, and the starving of funds for initiatives to promote research and development. It has also failed to evenly share the gains from globalization which has resulted in stagnation and even decline in prosperity for a significant proportion of the population. 

American style democracy is increasingly widely being viewed as less effective in generating prosperity, when compared to the Chinese model; freedom, it might be argued, is of little import when you can't put food on the table. And it is not only the US that is struggling with the unintended consequences of universal suffrage. Look no further than Brexit, the shift to the right in Hungary and Poland, all of which challenge the globalists' view of a rules based order. 

As universal suffrage becomes increasingly associated with poor economic outcomes and national economic decisions that do not benefit the plurality, the perceived attractiveness of America Style democracy will decline relative to the Chinese free-market one party system. As China continues to rise economically, and extend its soft power in the developing world, so will support for its system and by extension its values. There will come a point at which the majority of countries see China rather than the US as the exemplar system. As countries reforming their political system in the developing and the developed world look for models, it seems likely that they will adopt variants of the Chinese model rather than the US model, and universal suffrage will not be embedded in those reforms. Saudi Arabia, for example is currently reforming its monarchy-based system; but a model in which power remains fairly concentrated will clearly be more attractive to Mohammed bin Salman, than a democratic republic. And if China has show us anything it is that people will put up with what the West characterizes as human rights violations in return for order, predictability and prosperity.

\When the Chinese model comes to be broadly viewed as the exemplar, it will over time become the most widely adopted system of governance; and democracy, like Communism before it will be seen in the reviewed mirror of history as an interesting, but ultimately failed, experiment.

Sunday, September 30, 2018

Constitutional crisis? It's already here

Much talk in the last two years has been about the constitutional crisis that wold ensure were Trump to cut short Mueller's investigation into Russian interference in the election. While that would indeed be appalling, the constitutional crisis has been growing quietly for several months.

Members of Trump's own Cabinet (for example Tillerson, Mattis  and Cohen) have been hiding information and memos, not acting on Trump's directives and generally only implementing policy that they consider acceptable.

Now that's a constitutional crisis!

In-judicial Temprament

After Blasey-Ford's compelling testimony before the Senate Judiciary Committee on Thursday, Bret Kavanaugh stepped into the spotlight seething with anger and self-pity.

His strong emotions, alternating between anger and self-pity, suggest one of two things. Either his guilt is manifesting as hostility, or his sense of entitlement is turning out outrage when, perhaps for the first time in his life, something he badly wants is being denied him. Paradoxically, perhaps, the latter affords support for the former; his sense of male entitlement might, at age 17, have extended to "getting his way" with women.

Whether Blasey-Ford's recollection that Kavanaugh was the perpetrator is accurate or not (and I happen to believe that it is), his reaction and the ensuing deeper dive into his past, raises four troubling question as to his suitability for a Supreme Court Justice.

First, he seems to lack the cerebral calmness that one should rightly expect of a Supreme Court justice. Anger, however understandable it may seem to some,  is only serves to cloud his judgement, and calls into question his ability to decide impartially. Some cases that come before the Court will evoke strong emotions; an inability to control them is problematic.

This is of particular concern given his evident political bias. While some who serve in a political capacity, in Kavanaugh's case in the Bush administration, but are themselves relative politically independent, that is clearly not the case here. Kavanaugh has nailed his colors very clearly to the mast. At a time when the legitimacy of institutions of all kinds (SCOTUS, Congress, academia to name but three) are increasingly being questioned, this only serves to further undermine public confidence in the Court.

His testimony also revealed a troubling lack of respect for the institution that is hiring him for the position. While it might be argued that one quality in a Supreme Court justice is not being supplicant to the other branches of government, a degree of civility and decorum is called for and Kavanaugh proved unable to muster either. That was poor political judgement.   

Kavanaugh's nauseating self pity suggest something else; an inability to empathize with Blasey-Ford and sexual assault victims more generally. Were he indeed innocent of the accusations leveled  against him he would be able to be much less strident in his denials and more sympathetic to the pain of his accuser. 

Finally, veracity; questions are being raised about his shading of the truth. His self-proclaimed choir-boy image is being called into question from all sides. People who knew him say he drank heavily in college and was often incoherently drunk. If he is willing to dissemble about his drinking how much store can one place in his statements concerning Blasey-Ford?

Whichever way the final vote goes, and I hope, though I don't expect it will, that the decision does not go in his favor, the incident has been another black eye for Congress, and for the GOP and the Administration in particular.

Saturday, September 29, 2018

James G March - an appreciation

James March passed away yesterday. Much will be written in the days ahead about his writing, his contribution to the literature, and the enormous impact he has had in a career spanning sixty years. There is nothing I can add to the accolades that will come from scholars far smarter and more accomplished than me.  I can only add to the appreciation of his life some personal memories of an extraordinarily generous man. 

I first came across his work, as many do, when I was a first year doctoral student in 1995. I was fascinated by his paper "Exploration and Exploitation in Organizational Learning". To better understand the paper I tried to replicate his model and failed - so I found his email on the then very new Internet and sent him a message asking if he could help me getting the model to work.

Almost immediately, he replied, not just with suggestions, but with the source code. I was astounded that a scholar of his stature would take the time not just to respond thoughtfully, but to ingenuously share his code. That led to a meeting a year later when he visited Fontainebleau, an interesting discussion, and an offer of a glass of wine were I ever to be in the Bay Area. It was an offer I gratefully accepted four years later.

The next phase in my life came when Judith asked me to go back to California. I asked Jim if there might be a way for me to have access to Stanford's libraries as I finished my PhD. His solution, and one that was phenomenally rewarding, was to invite me to Scancor as a visiting scholar.  For 3 years I had the privilege of attending talks and classes at Stanford, and most importantly of continuing our conversations about learning and model. 

Despite his great knowledge, experience and wisdom, he suffered fools like me with warmth, patience and understanding. He was truly one of a kind. I will miss you, Jim March.            

Sunday, August 19, 2018

John Brennan and Trump's vindictiveness

The revocation of ex-CIA director John Bernnan's security clearance is neither particularly surprising, given what we know about Trump's character, nor, in and of itself, particularly significant. It is, however, more evidence, if any were needed, of Trump's proclivity for discarding long established norm's of proper conduct to further his personal agenda.

As the serious news media have noted, Trump's "hit list" of those he is considering for similar treatment all have in one thing common; their vocal criticism of his conduct. None are likely to moderate their criticisms in the face of Trump's threat, indeed the opposite is likely. And while Trump doesn't value their counsel on national security matters, their successors and other IC colleagues might; so the IC is potentially less well severed as a result of Trump's decision. It seems likely that Trump acted impulsively and without much consideration of the wider national security ramifications of his actions.

But the bigger message this sends is that all widely accepted norms are up for grabs and subject to Trump's personal whims. This is broadly consistent with his admiration for authoritarian leaders, who he envies for the lack of constraint from their countries' institutions they enjoy. In his allegedly shady business dealings, he did much as he pleased and he has brought that mind-set into the White House.

It is not just the international institutional order that is under threat as Richard Haas sets out in his book "A World in Disarray: American Foreign Policy and the Crisis of the Old Order"; it is also the norms of domestic politics and even socially acceptable behavior that are being trampled.  Of course, he is not the only guilty party here; Mitch McConnell's refusal to hold confirmation hearings for Merrick Garland is another example, as is the GOP's refusal to stand by the principles they have long espoused such as support for free trade, opposition to tariffs and abhorrence of the budget deficit. And Trump's tacit support for white supremacists and his misogynistic and degrading treatment of women are undermining the albeit slow social progress that has been made in the country over the last half century.

Brennan's remark about treason may have been over the top (unless of course he knows something we don't yet know, which given is access to intelligence is quite possible), but his concerns about the lasting damage Trump is doing to the country are well founded.   

Wednesday, August 15, 2018

Market-based resource allocation

Capitalism, in its purest form, relies on the "invisible hand" -- the premise that self-interest alone, in the context of free markets, will lead to the Pareto-optimal distribution of resources. However, it is not clear that such as Pareto-optimal distribution is the same a compassionate society's preferred distribution of resources.

For example, if resources are moved to where they can be most productively used, then the severely disabled or sick, to the extent that they are less "productive", would likely be short changed if not completely abandoned. So an allocation commensurate with a caring society is not one that would likely be realized by free markets alone. Hence the need for government and moderation/management of markets.

Thursday, July 26, 2018

Loyalty and Potential Exposure

Figure 1
I was wondering today why Trump is said to put so high a value on loyalty while appearing not to reciprocate.

Loyalty, after all is not transactional - you are loyal to someone whatever they do. But Trump is nothing if not transactional in all his dealings, something many commentators, even the dolts on Fox, have noted.

It dawned on me today that loyalty may not be the right term (any more than "trust" is an appropriate term for Denzel Washington's crew in training day - great film, J Brandon White).

What Trump may mean is simply not giving up where the bodies are buried. And it is highly transactional; keep quiet and in return you are included in the inner circle; defect and you become an enemy, a target.

And the corollary is that the greater the expected (negative) value of legal jeopardy, the greater the need for this variant of loyalty (see Fig 1)

Wednesday, July 25, 2018

Pompeo and circumstance

Secretary of State Mike Pompeo was very careful in his testimony to Congress today. When asked if the North Koreans had made a commitments to  denuclearize (which oddly includes chemical and biological weapons), he said only that "North Korea understands the US position". Spin it all you want but that's not a commitment.

And when asked about what Trump had committed to in Helsinki, he repeatedly stated only that the official US position had not changed. That wasn't the question asked, and sheds no light on what commitments Trump may, in a momentary lapse in judgement, have made to Vladimir Putin.

Sunday, July 22, 2018

Negotiating with adversaries

Several people have made the point that talking to our adversaries is important. John Bolton noted that FDR met with Stalin (although that was at the end of the WWII); Nixon went to China; Reagan talked privately to Gorbachev (the Walk in the Woods). That's fine in principle, but it's not what many people are concerned about.

While there are always risks associated with this more unscripted approach, two things are have been tacitly assumed; first that the President's only agenda is advancing America's interests, and that he is sufficiently well informed and competent to do so. In Trump's case neither condition is met.

Many serious and well informed commentators including John Brennan, Leon Panetta, and even Dan Coats, Trumps own DNI, have explicitly or implicitly lamented Trump's comments and questioned the wisdom of his approach. Many are wondering whether he is putting personal interests above country.

What serious people are concerned about is not whether such Presidential diplomatic initiatives are a good idea as a means of changing the trajectory of bilateral relations, but whether Trump can be trusted to pull it off. The evidence so far suggests their concerns are well founded.

Process, Transparency, Autonomy and Accountability

Trump has been roundly criticized for his handling of the Helsinki Summit. He met Putin without going though the process that normally accompanies such a high-level diplomatic meeting - the prior talks between lower level officials to clarify an agenda, to negotiate and establish goals that both sides could reasonably expect to announce with satisfaction to their citizens. That didn't happen, at least on the US side (one assumes it probably did in the Kremlin).  Now the summit has concluded, many in the our government don't know what went on, and what was agreed to. Keeping secrets from his own top level officials, people Trump appointed is remarkable for its lack of transparency.  How might Trump's choice to take this highly unconventional approach be explained?

The answer, I think is autonomy and accountability (or rather lack thereof). By not setting out goals in advance, Trump feels he could frame any outcome, whatever it might be, as a negotiating triumph. That gives him enormous negotiating freedom and autonomy. Engaging in a formal process in which others help set the agenda reduces his his negotiating autonomy. Not being clear about what he wants to accomplish and not being transparent about what is said means he can't be held accountable. No one can point to goals not achieved, since neither the goals not the outcomes are stated.

This approach, maximizing autonomy and minimizing accountability, might have suited a one-person business, whether that was his real estate dealing or his reality TV show, but is poorly suited to international relations. A failure in either of Trumps two prior careers, such as a badly negotiated sale or a drop in ratings, would have been disappointing for him personally, but would not have had mattered much for anyone outside his family.  In negotiating with Russia, failure affects everyone in the US and to some degree has implications for every person on the planet. That's why his outlandish behavior is worrisome.     

Friday, July 20, 2018

Branding - the dark side

Once a brand becomes well known, manufacturers can and often do raise prices. The brand equity represents the additional margin that can be added to the competitive market or oligopolistic commodity price ("CMOCP"). The danger, however, is that when the brand loses its luster, the company must either reduce prices back to the CMOCP or lose sales. But in reducing prices, it reveals to its installed base and to potential future customers what the brand equity premium was. Those who paid it may feel cheated, and that might tarnish the brand for potential future buyers.