Links: How to put more money in people’s pockets, on reading, beauty in books, and more!

* Reforming Land Use Regulations. This is one way to put more money in your pocket.

* “Evidence increases for reading on paper instead of screens.” This is not the final word, but it may sway those of you who are debating whether you should ban screens from class, or whether you should hold class in person or online.

* Can small-scale nuclear fusion reactors work?

* Megan McArdle on the absurdities of “affirmative consent.”

* “Survey: Americans have more confidence in Amazon than government or press.” Observation: delivering packages and web services is difficult but also conceptually simpler than epistemology, and arguably the press is delivering epistemology, even though no one says as much. As for government, expectations seem unreasonably high, but, also, we need to work much harder at figuring out why infrastructure is so damn expensive. If most cities could reliably build subways at Nordic costs we’d all love “the government,” or at least local government.

* Re: the above, see also Tyler Cowen’s Big Business: A Love Letter to an American Anti-Hero.

* How ‘safety first’ ethos is destabilizing US society.

* O Oberlin, My Oberlin. On the recent scandal. See also Big Business and that article about trust in Amazon from a few links above.

* The population bust.

* “The battle cry of the politically homeless: Anyone moderate with a brain and anything to lose has largely gone silent.”

* “Are Health Administrators To Blame?“, for either high health care costs or high education costs? Doesn’t look like it, though that’s a popular narrative, for obvious reasons. And there are lots of unsourced, attractive-looking graphs on the Internet that blame administrators.

* “In praise of pretty books.” Agreed, and the Thor Power Tools decision is why we have so few pretty books today. As I understand the situation, prior to Thor, publishers could print up a bunch of books and take some kind of depreciation deduction as they sat around in warehouses. Now, publishers apparently can’t do that, so publishers are strongly incented to sell everything they can in a given year. Consequently, cheap books become more attractive.

* Is line editing a lost art? No.

The Alliance: Managing Talent in the Networked Age — Hoffman, Casnocha, and Yeh

It is especially odd to read The Alliance next to “A longtime proponent of marriage wants to reassess the institution’s future,” since the book and the article describe the same suite of ideas but apply them to different arenas: business and love/marriage/sex, respectively. One could do a find and replace for key words and phrases in The Alliance and have an entirely different book. The structure of dating markets and economic markets are more similar than is commonly supposed (though that may be changing).

The_AllianceThe Alliance is excellent and should be read; the authors note that the “family” model many corporations deploy when describing employees is at best dishonest and at worst fraudulent in a way likely to engender tremendous, justified ill-will. Individuals can’t rely on companies to look out for them (“Both parties act in ways that blatantly contradict their official positions”). Despite this, however, a world of strict, consultant-like free agents is not a happy one either, per the Coase Theorem—though Coase is not cited directly. The solution proposed is an “alliance” that doesn’t promise lifetime employment but does attempt to set explicit expectations for employer-employee interactions.

The book is not as heavily researched as I might have hoped but there are numerous useful bits, like this:

The Towers Watson 2012 Global Workforce Study found that even though about half of employees wanted to stay with their current employer, most of them felt that they would have to take a job at a different company in order to advance their careers.

And those workers are probably right. Still, “A business without loyalty is a business without long-term thinking.” Stock options do a little to ameliorate short-term thinking, but not enough; one reason for startups may be to enforce long-term thinking by putting companies in the control of founders. Large companies, however, are here to stay, and The Alliance offers a way to navigate through them.

As the quotes above show, the book is not gorgeously written, but it is competently written and held my attention throughout. It begs to be given.

In business there are very few true partnerships

When founders are starting out, partnership inquiries sound really exciting. In theory, a successful partnership with a larger company could help your company get more customers. What you realize, though, is that partnerships are rarely a real thing. When you work with another company, either they are your customer or you are their customer. Anything other than that usually just eats up time and energy.

—From Brad Flora’s “I Sold My Startup for $25.5 Million: Here’s how I did it,” which is interesting throughout despite the sensationalist title.

At Seliger + Associates we’ve learned that anyone who talks about partnerships is wasting our time (and theirs). People who need a good or service and can pay for the good or service are usually prepared to move quickly. They don’t need much if any convincing from third parties. And they don’t need an intermediary between them and the good or service provider.

Think of it this way: if your friend knows you love Thai food and tells you that there’s a great Thai restaurant nearby, you’re not going to wait for your friend to take you there. You’re just going to go. By the same token, when existing clients make referrals, they often don’t even tell us. They just do it. The referral isn’t hard and it isn’t complex and it usually involves very little negotiation.

Being in business taught me that there are two factors that matter more than anything else: who is paying me money and who I am paying money to. “Partnerships” or “alliances” that don’t involve contracts and money and services or goods don’t mean anything.

How I learned about assertiveness and reality from being a consultant

Like many people with such businesses, some friends with a design consulting business say they’re getting jerked around by potential clients. While they’re worried about offending potential clients and don’t want to lose the business, they also don’t like being plied for free samples and they don’t like long conversations that aren’t likely to go anywhere. In the course of talking to them, I realized that they’re discovering that the lessons they’ve taken from school and every day life are wrong or at least not optimal. So I described my own experiences as a consultant and how that taught me about reality and money.

A lot of us—including me—are told from an early age to be polite, take turns, be considerate of other people’s feelings, etc. This is good advice in many but not all circumstances. Among friends you do  want to take turns and reciprocate interests and be warm to other people who are warm. That’s how you build lasting friendship networks. In the business / consultant worlds, however, being overly polite and considerate often leads other people to take advantage of you. Consultants need one very important skill: they need to figure out who is going to give them money and who isn’t. They need to do so relatively quickly. Clients often press to get as much free stuff—often in the form of time and opinions that should cost hundreds of dollars an hour—as they can. They lose nothing by dallying and often gain stuff. Consultants need to learn the killer instinct necessary to know when to stop and say “send me a contract and check or don’t call me until you want to.” Almost all successful consultant learn how to do this and learn when to say no.

(c) Victor WeFoto.com

(c) Victor WeFoto.com

“Talk is cheap” is a cliché for a reason: it doesn’t mean anything. Any talk that’s not a billable hour should be leading, rapidly, to a billable hour. At some point—a point sooner than most novices realize—it’s time to pay or go away. Money talks and isn’t cheap: I’ve been on numerous calls about “collaborations” and what not, when the real thing happens is through subcontracts. I learned to end vapid conversations about “collaboration” that don’t go anyway. Show me the money, or it doesn’t exist.

Someone who wants to hire you knows relatively quickly whether they want to hire you. Anything other than “yes” means “no.” “Maybe” means no. “Later” means no. That’s a hard thing for many of us to accept. My parents founded Seliger + Associates 20 years ago and they learned, the hard way, about how potential clients dangle work that never arrives and waste a lot of valuable time and energy. That means consultants have to get to “no.”

Getting to “no” is actually quite useful and a big improvement over a nebulous maybe. Attention is often your most valuable resource. Don’t let it dissipate over weak leads.

Drawing a clear line can actually turn some “maybes” in “yeses.” Clients will respect you more if you eventually stop negotiating, talking, or communicating unless they pay.

Because of the issues described in the paragraphs above, anyone experienced learns when to stop talking and say “money or nothing.” That means continuing to flirt without cash in hand is also a signal of being inexperienced. The line between being brusque and being direct is thin but when it doubt err on the side of directness rather than meekness.

Directness can actually be a kind of politeness. “Professional courtesy” has an adjective before “courtesy” because it’s different from regular courtesy. Professional courtesy indicates that there’s a different way of being courteous than the conventional way, and one aspect of professional courtesy is there to avoid time wasting people.

That being said, it can be worth exploring new ventures even when those new ventures aren’t immediately remunerative. But money and contracts separate exploration from reality.

These lessons aren’t only applicable to consultant. They apply to almost any form of business and for that matter in dating: if she says “I like you but not in that way,” she means no. I think men tend to learn this faster then women do, in part  because men usually conduct the initial approach to women for dating and sex. There are of course exceptions to this, but as a general principle it holds.[1]

(c) looking4poetry

(c) looking4poetry

My friends are women, and from what I’ve observed guys in their teens have to learn to approach women and risk rejection if they’re going to get anywhere, and a lot of women wait for guys to approach them.

Consequently, guys who want to get anywhere have to get used to rejection in a way a lot of women don’t, and that socialization is probably part of the reason why women like Sheryl Sandberg write books like Lean In. Men figure out relatively early that they have to lean in—or suffer. Like a lot of guys I spent time suffering. I also learned, however, that with women too anything other than “yes” means “no” and that I should move on quickly. Sticking around to beg and plead only worsens the situation.

Disengagement is underrated. In many endeavors one important ingredient in success is fire and motion.


[1] See Tucker Max and Geoffrey Miller’s book Mate for a long description of how and why men tend to initially approach women (giving men the choice of who to approach), women tend to accept or decline sex (giving women the choice of saying yes or no) and men tend to accept or reject long-term relationships (giving men the choice of say yes or no to becoming “official” or “married” or otherwise socially sanctioned).

You may think these principles are bogus or unfair, which is fine, and if you want to change society itself, I wish you luck, but you should at least know they exist. Even among my female friends who identify as hard-core feminists, very rarely will make the initial approach to men in a sex / dating context.

Just because I’ve been stupid doesn’t mean you should too: responses to the school and jobs post

In response to “Employment, attitude, and educational entitlement,” a couple friends noted my own experience in higher education and asked if I was being a hypocrite by telling people to do as I say not as I do. But I would phrase it differently by saying that going to grad school was a stupid thing to do, and an important component of intellectual honesty is admitting when we do something stupid.

When I make a mistake, I admit it and encourage others not to make the same one. What do you do?*

In addition, although it’s true that I’ve been in various pouches of academia, I’ve also been working continuously as a grant writer (If not for that, I doubt I would’ve majored in English in the first place: I like to read and write but am aware of the job situation). When I began English grad school, I thought I’d be able to conventionally publish a novel by the time I was done. This has turned out not to be true. For me, that’s annoying but not a crisis. For many of my peers, however, it is a crisis.

English grad school is also somewhat less pernicious than some professional grad schools. In English, they pay you (a small amount, to be sure), instead of you paying them, which means it’s relatively easy to walk away—much easier than law, business, or medicine. It’s becoming apparent to those of us who pay attention to higher education that higher education institutions have an increasingly predatory relationship with those they are educating. Or nominally educating.

There’s also a “follow-the-money” element to the higher education problem. School can go on pretty much forever when you are paying them. Not surprisingly, if you offer someone money, they will usually be inclined to accept it. Want to get into any but the very top PhD programs? Say you’ll pay your way and you can at least start. Finding someone who wants to give you money is harder than finding someone who wants yours.

Universities have realized this.

Finally, I’ll note that, in the absence of a better job, I will do whatever jobs I can get, and, in my life, some relatively low-status jobs have been better than relatively high status jobs; working as a lifeguard, for example, is more fun than being a lawyer, and it was a great job from a writing perspective: about 10% of my conscious mind would keep an eye on the pool while the other 90% came up with ideas. I wish I’d been smarter and started lifeguarding in high school.**

It’s true that lifeguards don’t get to fuck with other people’s lives in the way some lawyers do, so it may be a worse occupation for the power hungry, but it also doesn’t require tens or hundreds of thousands of dollars in loans to be a lifeguard.


* “When the Facts Change, I Change My Mind. What Do You Do, Sir?”

** Then again most people probably wish they’d made smarter choices.

Why corporations?

Arnold Kling asks: “Why Large Corporations?” I left a comment citing Peter Thiel’s answer:

Companies exist because they optimally address internal and external coordination costs. In general, as an entity grows, so do its internal coordination costs. But its external coordination costs fall. Totalitarian government is entity writ large; external coordination is easy, since those costs are zero. But internal coordination, as Hayek and the Austrians showed, is hard and costly; central planning doesn’t work.

The flipside is that internal coordination costs for independent contractors are zero, but external coordination costs (uniquely contracting with absolutely everybody one deals with) are very high, possibly paralyzingly so. Optimality—firm size—is a matter of finding the right combination.

This applies to corporations more generally, but large corporations presumably persist because they continue to solve this class of problem. Corporations also solve or ameliorate succession and other problems; one way of re-stating Thiel’s point is that corporations help align the interests of a lot of people in approximately the same direction. This mechanism obviously isn’t perfect, but it’s better than alternatives.

IMG_0298Skepticism of corporations is useful, but only when skeptics understand the problems corporations solve. I took a grad seminar on the Modernism / Postmodernism divide and was assigned the movie The Corporation, which is heavy on innuendo and rhetorical slight-of-hand and light on intellectual acuity. When the seminar discussed the movie, my classmates were happy to assume that corporations are evil—but they couldn’t identify why they exist, let alone offer coherent alternatives that don’t have obvious drawbacks. I’m not in love with the corporate legal form as some kind of ideal, but without a plausible alternative, feeling-based criticism isn’t terribly helpful. It’s like people who criticize coal power plants. . . and nuclear. . . and other viable, large-scale options.

In the seminar’s discussion, other students and the professor conflated publicly-traded corporations with privately traded ones and LLCs with C Corps, etc. (Incidentally, if you want to listen to something hilarious yet depressing, get a bunch of English grad students and professors together and tell them to talk about business). They also thought that all corporations exist solely to make money. That’s not true: Corporations do what their shareholders tell them to do. As far as I know, courts have decided that publicly traded companies need to maximize shareholder value, but single-owner corporations can do whatever the single owner or small group of owners wants them to.

Thiel says this about the advantages of starting a new corporation to accomplish some task:

The easiest answer to “why startups?” is negative: because you can’t develop new technology in existing entities. There’s something wrong with big companies, governments, and non-profits. Perhaps they can’t recognize financial needs; the federal government, hamstrung by its own bureaucracy, obviously overcompensates some while grossly undercompensating others in its employ. Or maybe these entities can’t handle personal needs; you can’t always get recognition, respect, or fame from a huge bureaucracy. Anyone on a mission tends to want to go from 0 to 1. You can only do that if you’re surrounded by others to want to go from 0 to 1. That happens in startups, not huge companies or government.

Usually, developing “new technology” dovetails with making money, but it doesn’t necessarily have to: you could in principle start a nonprofit technology company to conduct research or develop a product (in some businesses, competition between for- and non-profits is common: think of healthcare, or gyms). That no one or almost no one goes this route means that it could be an under-explored avenue for creative and technological success. Or it could be a deadend, and no one goes down it because doing so would be stupid.

The Generals — Tom Ricks

The Generals has one of the best qualities a general nonfiction book can have: it’s about a specific topic that it covers well, but its lessons and ideas also transcend its topic and apply to many others. Let me explain. Take this section, about General Patton:*

Even now, more than six decades after his death, Patton remains one of our most remarkable generals. ‘You have no balance at all,’ Marshall’s wife once scolded the young Patton, correctly, years before World War II. Maj. Gen. Ernest Harmon, one of his peers, wrote that he was ‘strange, brilliant, moody.’ The blustery Patton behaved in ways that would have gotten other officers relieved, but he was kept on because he was seen, accurately, as a man of unusual flaws and exceptional strengths. Marshall concluded that Patton was both a buffoon and a natural and skillful fighter.

Knowledge, skill, and expertise in one domain don’t necessarily transfer to other domains. A brilliant physicist may be a terrible marriage therapist, and vice-versa. Someone who is a “buffoon” might also have a compensating skill that makes up for their possible deficits. Paul Graham implicitly writes about this in Is It Worth Being Wise?:

‘wise’ means one has a high average outcome across all situations, and ‘smart’ means one does spectacularly well in a few. [. . .] The distinction is similar to the rule that one should judge talent at its best and character at its worst. Except you judge intelligence at its best, and wisdom by its average. That’s how the two are related: they’re the two different senses in which the same curve can be high.

A lot of people seem to have trade-offs between peaks and averages. Steve Jobs comes to mind: Walter Isaacson’s biography is rife with examples of Jobs being wrong, cruel, and occasionally outright stupid. His lows were low. But he got big, important stuff right—and not just right, but very, spectacularly right. He found (or made) the right environment for his skills. It’s almost impossible to imagine Jobs being a good employee at, say, Wal-Mart, or any large company that values homogeneity over creativity.

It’s obviously possible to have high averages and high peaks, but that doesn’t appear to be common. Really spectacular peaks often come in unusual packages. Those unusual packages are often easy to dismiss by someone not paying attention.

Unfortunately, as Ricks points out, America since the Korean War hasn’t judged its generals by their peaks or their averages: in fact, we haven’t judged generals on their competence much at all. That’s a tremendous, underappreciated problem. In Ricks’ description, the generals cut from the Marshall style were primarily “team players” who needed to work effectively with others and defer to the group. That’s not necessarily a bad thing; as Ricks says:

Perhaps those who rose highest in World War II were organization men. But for the most part they were members of a successful organization, with the failures among them weeded out instead of coddled and covered up. That would not be in the case in our subsequent wars, in which it would be more difficult to know what victory looked like or even whether it was achievable.

Different time periods reward different forms of industrial organization. If World War II rewarded “organization men,” many of today’s organizations reward people who figure out the weaknesses of large organizations, and then offer alternatives. But that can’t happen in the military, where the closest analogue to startups might be defense contractors and private, Blackwater-style armies. Those, however, have their own problems.

There’s also an analogy to teaching: almost no public school teacher is fired, ever, for bad teaching. Not being able to fire transparently terrible teachers is an impediment to getting better teachers, as almost anyone who’s ever been in a public school knows.

Organizations also need to focus on making sure that they’re focused on their major purpose, not on primarily serving the interests of the people inside them:

Trying to be fair to officers can be lethal to the soldiers they lead on the battlefield. The Army was using the Korean War to give the staff officers of the earlier war ‘their chance’ to command in combat—with disastrous results. Well before Chosin, the Army had recognized that it had a problem with inexperienced combat leadership in the war.

The problem is “inexperienced combat leadership,” but the solutions became worse in some respects than the problem itself. Fairness to one group can mean extreme unfairness to others, who often have much less of a voice. No one speaks for the enlisted men who are led by incompetent generals. (No one speaks for those led by an incompetent president, either, but that’s a separate issue related to larger American society.)

Misaligning incentives creates a deeper sense of rot; Ricks says that generals, by the post-Korean-War era,

were acting less like stewards of their profession, answerable to the public, and more like keepers of a closed guild, answerable mainly to each other. Becoming a general was now akin to winning a tenured professorship, liable to be removed not for professional failure but only for embarrassing one’s institution with moral lapses.

Notice what this says about Ricks’s view of the university: by comparing one system that advances mediocrity with tenure, he implies that tenure advances mediocrity. He doesn’t go on to explain why he uses the metaphor, because he assumes that his readers already believe as much. But tenured professors aren’t putting their students in life-or-death situations, and students can choose to pick a different department or university. Service members can’t. During World War II, as Ricks says, the road to victory and home led through Berlin and Tokyo. In recent wars, the road to victory has been murkier, the politico-military establishment mostly hasn’t selected generals adept at operating in the murk. The consequences are clear.

The Generals is too detailed for people who aren’t deeply interested in military affairs and history. It probably isn’t detailed enough for those who are immersed.

But it’s also the best intellectual explanation of why one should be wary of enlisting in today’s American military: you might get killed by someone incompetent but unaccountable on the basis of performance. Contemporary generals who lose wars and cost soldiers their lives are fêted. They “retire” to lucrative consulting gigs with defense contractors and lobbying firms. The soldiers are disabled or dead. To me that argues against becoming a soldier or junior officer. In most businesses, if you think your boss is an asshat, you can quit and start a rival firm. In the military, obeying is the only option, and no one is making sure that your boss is actually good at his job.

EDIT: B.J. Khalifah has an interesting letter in The Atlantic:

Thomas Ricks overlooked something important. Sadly, nobody becomes a general (or equivalent) in the military until they have served for many years. Most colonels are 50 by the time they get promoted. Many younger officers have experience and drive; as a group, they adapt well. Older officers are more cautious, members of the “cover your ass and do not make waves” category. They know how to manipulate the good-old-boy game. The service should be, but is not, a strict meritocracy. In effect, it follows union-style rules of seniority and time in grade. From second lieutenant to first lieutenant to captain is automatic. Some lousy officers have made it past captain to become major by being on court-martial or combat duty when they are promoted. The rules are not negotiable.

This contrasts hugely with startup and good corporate cultures, which judge people almost purely on merit. Successful startups have famously been founded by 18 year olds. Even law firm partners can be promoted within as little of five years of hiring, while associates frustrated by a firm’s practices can start their own. The military apparently doesn’t do that, and I haven’t seen any evidence that 50-year-old generals will necessarily be better than 26-year-old (hypothetical) generals. Certainly among startups this isn’t true.

The comparison isn’t perfect—markets reward innovators for making things people want, and the military doesn’t have a clear feedback loop. But at the moment almost no one is even discussing the issue, or making the comparison.


* The movie Patton is also remarkably good, especially the speech at the beginning. Patton doesn’t have the American character down correctly—Americans don’t love the sting of battle unless we’re provoked—but the speech demonstrates a lot about the man doing the speaking.

The bit about loving a winner and not tolerating a loser is also fascinating in light of The Generals: we’ve tolerated a lot of losers, like Donald Rumsfeld and Tommy Franks, and sacked winners like Eric Shinseki.

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