1. San Francisco might ban delivery robots from its sidewalks.
2. Are pop lyrics becoming more repetitive?
3. Can China afford its Belt and Road?
5. How a chief executive with dyslexia and ADHD runs his company (WSJ, recommended).
Wednesday assorted links
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4. I want to use an old bicycle computer that I have in the garage. I”d have to dig out the manual to reprogram it. That’s been buried in my file cabinet for 30 years. So, the complacent solution is to order a new one from Amazon. I’m leaning that way.
A good peek inside Amazon strategies, and I agree with the closing paragraph.
2. This 3 day old metafilter discussion has some interesting perspectives on that article, particularly in terms of EDM – http://www.metafilter.com/166960/From-King-Elvis-to-Queen-Beyonc-repetitive-lyrics-in-popular-music
Pop lyrics only have artistic merit when they are repetitive. The words are just another instrument. Bob Dylan and Leonard Cohen have confused and misled everybody.
No, they haven’t.
Are you referring to Claim 1 or 2?
Btw I like Cohen
Claim two – they have not misled anyone. I like Cohen’s music and, even if he did not deserve the Nobel, Dylan is adequate.
#3 No, it can not. Beijing is doomed by the laws of History.
#1…How long until the police have faux delivery robots with cameras and microphones and smelling sensors?
I think #3 is supposed to be
https://www.bloomberg.com/view/articles/2017-05-17/can-china-afford-its-belt-and-road
4. People continue to open retail businesses. Why? Of course, historically it’s been the path to self-employment (and for recruiting new members of the local Chamber of Commerce). And it still is. And the path to bankruptcy. Speaking of services, service businesses are growing faster than retail. The one advantage is there’s no need to carry inventory. The one disadvantage is it requires a skill. I’ve observed that many of the retail stores in strip centers have been replaced by service businesses (fitness centers, massage, manicures, etc.). That usually coincides with a decline in both the appearance and good fortune for the center. As Amazon rises, retail declines. The good news is that people continue to open restaurants in record numbers. I often visit Charleston. I believe at least one new restaurant opens there every day, including Sunday. Sure, some are basic with little in the way of furnishings or equipment, but others, good grief! With all those restaurants serving all that food, we need those fitness centers.
Amazon gross global revenue was $135 billion in 2016 which is clearly like 50% of US gdp: $18 trillion.
Perhaps the problem is Amazon’s zero profit policies eliminate the opportunity for high rents by rent seekers trying to turn $1 in labor cost into $5 in wealth. Ie, build a mall and charge rents that require high profit margins which get taxed by the mall owner to inflate the price of the mall far above the cost of constructing the mall. After all, the capitalist is entitled to profit from every dollar in wages paid from the point of paying the worker to make a widget, the cost of transporting the widget, to selling the widget, to the worker who paid for it with his wages.
After all, if the capitalist controlling the mall did not exist, absolutely nothing would exists nor would any wages be paid anywhere. Further, money has nothing to do with labor, work, but only to do with the price capitalists set for merely existing and doing anything.
But Bezos is a radical leftist who believes everything is about workers paying workers, not rent seeking and profits.
>But Bezos is a radical leftist who believes everything is about workers paying workers, not rent seeking and profits.
Are you joking?
You should study the difference between accounting profits, profits in expectation, and how they are reflected in equity.
3. It seems China borrowed a page from Trump’s playbook for One Belt, One Road: OPM. https://www.nytimes.com/2017/05/13/business/china-railway-one-belt-one-road-1-trillion-plan.html? The Chinese are nobody’s fool.
Yet, they will fail, Man’s spirit will prevail over Red Fascism.
OPM is not short for opium; it’s short for Other People’s Money.
Trump got rich by putting OPM in his own pockets for doing nothing productive.
China is paying OPM to other people who work and then pay money to create the OPM that China directs to other people for working.
Money is always a proxy for labor. Either labor in the present, labor in the future, or labor in the past.
The free lunch economists spend lots of time trying to create money from nothing, and money for nothing.
Simple exercise. Replace all workers with robots, thus zero labor costs are paid. Where will the OPM come from to pay for gdp, the price of all the production by all the robots.
Economies are zero sum.
China is building the road for the same reason Lincoln signed the law to build the transcontinental railroad. What followed was a tripling of the miles of rail that State (primarily northern industrial) governments had acted to get built before 1860.
“There is no necessary and direct connection between the value of a good and whether, or in what quantities, labor and other goods of higher order were applied to its production. A non-economic good (a quantity of timber in a virgin forest, for example) does not attain value for men since large quantities of labor or other economic goods were not applied to its production. Whether a diamond was found accidentally or was obtained from a diamond pit with the employment of a thousand days of labor is completely irrelevant for its value. In general, no one in practical life asks for the history of the origin of a good in estimating its value, but considers solely the services that the good will render him and which he would have to forgo if he did not have it at his command…The quantities of labor or of other means of production applied to its production cannot, therefore, be the determining factor in the value of a good. Comparison of the value of a good with the value of the means of production employed in its production does, of course, show whether and to what extent its production, an act of past human activity, was appropriate or economic. But the quantities of goods employed in the production of a good have neither a necessary nor a directly determining influence on its value.”
-Carl Menger
The diamond has to be found or obtained in the first place. Discovery or acquisition of the diamond is completely relevant to its value, and both of them require labor. The services that the diamond will render, and having the diamond at one’s command, both require labor. Labor is the determining factor in whatever value the diamond has.
A diamond is a rock, an inanimate physical object. It doesn’t fly out of the earth and plop into one’s lap miraculously. It’ doesn’t morph itself into jewelry and market itself.
They say economists have “physics envy”, but they’re really in physics denial. You can’t subjectively value away physical reality.
So if you found a hunk of gold in your back yard it would be valueless because it required no real labor to find? Or if you devised a process to extract gold from sea water that cost 1 billion dollars for an ounce of gold, that ounce would be worth a billion dollars because of the labor cost involved?
If you really believe that, i have a hunk of dog shit id like to sell you for a million dollars. Trust me, it cost that much in labor to produce, and so because labor is the determining factor in value, you should have no problem parting with a million for it, right?
Finding gold requires labor, and any value derived from gold depends on the labor involved holding onto it, protecting it, bringing it to market, etc.
If you expended labor and discovered or invented some method that turns dog shit into something very useful, like say fuel for table top fusion or a cure for cancer, then yes, dog shit would be very valuable and its value would derive from the labor you employed discovering or inventing that method.
Finding gold does require labor, but its value is independent of it. If that werent the case, then gold’s value would vary based on the labor effort required to obtain it. Some gold is relatively easy to obtain, some is substantially harder, and yet gold’s price is the same regardless.
You give away the game with the dog shit example:
“If you expended labor and discovered or invented some method that turns dog shit into something very useful, like say fuel for table top fusion or a cure for cancer, then yes, dog shit would be very valuable”
Dog shit is valueless irrespective of the labor expended to produce it. It only becomes valuable if it can be turned into something useful, fusion fuel, cancer cure, etc. Its value is therefore not determined by the labor needed to produce it, but by its utility or desirability. Same as gold and everything else.
Labor is usually needed to create valuable objects and services, however the determining factor of value is the consumers needs and desire not the amount of labor. If a surgeon cuts out my appendix when it is infected then the surgeon and associated medical workers created value. If they do the same when my appendix is fine and I have a sore side for few days afterwards then they have not created value.
The value of gold, and everything else, is dependent on labor. Gold is a metal, an inanimate physical object. It doesn’t fly out of the earth and plop into one’s lap miraculously. It doesn’t morph itself into jewelry or money or fillings and market itself.
The value of dog shit, like everything else, is dependent on labor. The labor involved making some discovery about or invention using dog shit gives it its value. As of yet, there has been no such labor.
Bob, I recommend econ 101 so you can be at a freshman level instead of your current Mulp/caveman/Marx level.
BTW, this comment took me 1 minute to type and I value my labor at 60m/hr. Pay up or it’s the Gulag.
I’m not a Marxist, and I don’t agree with Marx’s labor theory of value nor anything else that he wrote.
I recommend you read the other Classical economists like Smith, Mill, and Henry George, and study some of the physical sciences.
Oh ok, ill bite, what is it you think we will learn from the physical sciences that we dont already know? What earth shattering revelation will we find that upends all of econ as we know it?
I think Balding has this one correct, China will be talking on the risks if their partners default.
http://www.baldingsworld.com/2017/05/17/brief-follow-up-on-barf-funding/
Bob, are you saying diamonds are polyps and hydroids dream of electric fish? What’s the crystal lattice structure mean? Celery might be involved as it’s good for the blood. Ergo, blood diamonds. The conversion factors are always trippy.
Physicists hand their problems to chemists hand their problems to biologists hand their problems to economists always take the bait.
I’m surprised to have seen no MR mention of the prototype Amazon Go store.
https://www.amazon.com/b?node=16008589011
I wonder how they will avoid fraud, such as using a fake account and a maxed out credit card.
“3. Can China afford its Belt and Road?”
Can the US afford the transcontinental extensive railroad mesh created in the 18th century?
Clearly, the massive debt incurred to build the 250,000 miles of rail by 1900 plus pay the more than a million railway workers impoverished the US over the century, with the US being immensely poorer in 1900 than in 1800.
Likewise, the building of highways in the 20s and Ike’s Interstates were totally unaffordable and those doubled down on making the US even poorer.
The cost of paying workers to build and operate transportation systems kills jobs and every dollar paid to them subtracts from gdp.
These are the key holdings of free lunch economics which Reagan made the dominant theory, not just in the US, but for economists globally.
Every worker paid is a deadweight cost that sucks money out of the economy and subtracts from gdp.
So when Tyler says something is recommended, does that mean the other links aren’t recommended?
Or is it just extra recommended?
#3. It would not surprise me if this was thoroughly talked over with the Bank of China folks. And these loans would be denominated in RMB, and also run through China’s recently launched answer to the SWIFT system. I cannot remember it’s name, as it was unremarkable. But these are two of Beijing’s goals, internationalization of the RMB, but also control over it’s use, thus their own proprietary SWIFT system. I understand the coding is similar/same… but of course, the payment network is owned by Beijing. The timelines of OBOR and internationalization of the RMB are the same. Not this year, but these coming decades.
CIPS: “Cross-Border Inter-Bank Payments System” or “China Interbank Payment System”, take your pick.
https://en.wikipedia.org/wiki/Cross-Border_Inter-Bank_Payments_System
5. How a chief executive with dyslexia and ADHD runs his company
Toby Cosgrove, MD, CEO and president of Cleveland Clinic is also a high-functioning dyslexic. He struggled in school. Everyone told him not to go to not to become a heart surgeon. He went on to do 22,000 cardiac surgeries, and led Cleveland Clinic over the past 13 years to national and international renown. Cleveland Clinic today is ranked by U.S. News as America’s #2 “bet hospital”, second only to Mayo Clinic. Cosgrove finished last in his class in medical school. He holds 35 patents for medical innovations.
http://blog.cleveland.com/pdextra/2014/06/from_cs_and_ds_to_clinics_helm.html
“1. San Francisco might ban delivery robots from its sidewalks.”
Would it consider banning blacks or gays from its sidewalks? I’m sure I could find politicians in the South that would say such a ban would “keep our sidewalks safe for people”
I identify as a robot with a 16 digit number as a gender and according to President Clinton II, you can be sentenced to 5 years in federal prison for misgendering me.
Good to know, Frank. Very good, tut tut carry on you ole knockabouts.
Blacks (and Hispanics) can’t afford to live in SF, so such a law would simply accelerate current trends. Gays assault passers-by with haute couture fashion crimes.
Yes I saw that too
3. Link routes readers to the wrong article
I wonder how you get diagnosed with ADD as an adult. The docs I’ve seen don’t bother to diagnose. They just listen to your symptoms and jump to prescribing medication.
#2 Aristotle’s “Rhetoric” comes to mind. The explanatory power of the article at that link is a revelation. Thanks.
#1: skateboarding in sidewalks is illegal but delivery robots are fine. Also bicycles, roller-skates, segways and hoverboards can’t be used on sidewalks.
Path-dependence comes to my mind. The delivery robot companies should answer this question: why a delivery robot can use the sidewalk while a teenager in roller-skates can’t?
The scale of the on-line revolution continues to surprise us. For more than 30 years we have sold used, out-of-print children’s books. 20 years ago perhaps 10% of our sales were on-line; today that figure is more than 50%. We are an Amazon third-party seller via A.B.E., which is Amazon-owned. (We also sell from a mail-order print catalog). The result is that we go to one of a number of local post offices daily; 44065, 44026, and 44072. These are quite small, semi-rural or suburban post offices in the heartland. On Mondays in these post offices there is invariably a stack of 20-50 pre-paid Priority mail packages piled at one end of the counter. From a third to a half of these are eBay sales. On other days, there is often half that number. This Monday we mailed 4 packages and 1 or 2 each other day. Most of our packages go by Media Mail, only three were pre-paid Priority, one to New York, one to Australia, and another to Japan.
Who are all these people and what are they selling? The mind boggles.
2. Are pop lyrics becoming more repetitive?
Yes. And dumb as hell too. For a few years now, I only listen to songs in languages that I don’t understand, mostly Ukrainian, Thai, mandarin and Kazakh.
4. So Amazon solved the socialist economic calculation problem: large vertically integrated companies do not know the efficiency of their divisions since these divisions are closed to the market, therefore the value of their services/inputs are not priced by the market. Amazon learned how to expose the individual elements of their company to the market which incorporates market knowledge into the company and allows them to perform the economic calculus on all levels of the company’s structure and reap the full benefits of continuous accumulation of new knowledge by market actors.