Random finds (2017, week 29) — On the rise and fall of globalisation, Ayn Rand’s extreme libertarianism, and ‘guff-talkers’

“I have gathered a posy of other men’s flowers, and nothing but the thread that binds them is mine own.” — Michel de Montaigne

Random finds is a weekly curation of my tweets, and reflection of my curiosity.

Globalisation: the rise and fall of an idea that swept the world

“It’s not just a populist backlash — many economists who once swore by free trade have changed their minds, too. How had they got it so wrong?,” Nikil Saval wonders in a long read in the Guardian. (Nikil Saval is a co-editor of n+1 magazine, and author of Cubed: A Secret History of the Workplace.)

“In the heyday of the globalisation consensus, few economists questioned its merits in public. But in 1997, the Harvard economist Dani Rodrik published a slim book that created a stir.” In Has Globalization Gone Too Far?, which appeared just as the US was about to enter a historic economic boom, he pointed to a series of dramatic events that challenged the idea that growing free trade would be peacefully accepted.

“Since the 1980s, and especially following the collapse of the Soviet Union, lowering barriers to international trade had become the axiom of countries everywhere. Tariffs had to be slashed and regulations spiked. Trade unions, which kept wages high and made it harder to fire people, had to be crushed. Governments vied with each other to make their country more hospitable — more ‘competitive’ — for businesses. That meant making labour cheaper and regulations looser, often in countries that had once tried their hand at socialism, or had spent years protecting ‘homegrown’ industries with tariffs,” Saval writes.

These moves were generally applauded by economists, but “the social cost, in Rodrik’s dissenting view, was high — and consistently underestimated by economists. He noted that since the 1970s, lower-skilled European and American workers had endured a major fall in the real value of their wages, which dropped by more than 20%. Workers were suffering more spells of unemployment, more volatility in the hours they were expected to work.”

Rodrik’ book was an unusual note of alarm among a widespread perception that globalisation was working as it was supposed to. But “in the wake of the financial crisis, the cracks began to show in the consensus on globalisation, to the point that, today, there may no longer be a consensus. Economists who were once ardent proponents of globalisation have become some of its most prominent critics. Erstwhile supporters now concede, at least in part, that it has produced inequality, unemployment and downward pressure on wages. Nuances and criticisms that economists only used to raise in private seminars are finally coming out in the open.”

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Illustrations (above and below) by Nathalie Lees for the Guardian.

“In his 2011 book The Globalization Paradox, Rodrik concluded that ‘we cannot simultaneously pursue democracy, national determination, and economic globalisation.’ The results of the 2016 elections and referendums provide ample testimony of the justness of the thesis, with millions voting to push back, for better or for worse, against the campaigns and institutions that promised more globalisation. ‘I’m not at all surprised by the backlash,’ Rodrik told me. ‘Really, nobody should have been surprised.’

But what, in any case, would ‘more globalisation’ look like? For the same economists and writers who have started to rethink their commitments to greater integration, it doesn’t mean quite what it did in the early 2000s. It’s not only the discourse that’s changed: globalisation itself has changed, developing into a more chaotic and unequal system than many economists predicted. The benefits of globalisation have been largely concentrated in a handful of Asian countries. And even in those countries, the good times may be running out.”

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Whether reduced or increased, globalisation is unlikely to produce the kind of economic effects it once did, Rodrik believes. “For him, this slowdown has something to do with what he calls ‘premature deindustrialisation.’ In the past, the simplest model of globalisation suggested that rich countries would gradually become ‘service economies.’ while emerging economies picked up the industrial burden. Yet recent statistics show the world as a whole is deindustrialising. Countries that one would have expected to have more industrial potential are going through the stages of automation more quickly than previously developed countries did, and thereby failing to develop the broad industrial workforce seen as a key to shared prosperity.

[…]

Rodrik pointed to a belated emphasis, both among political figures and economists, on the necessity of compensating those displaced by globalisation with retraining and more robust welfare states. But pro-free-traders had a history of cutting compensation: Bill Clinton passed Nafta, but failed to expand safety nets. ‘The issue is that the people are rightly not trusting the centrists who are now promising compensation,’ Rodrik said. ‘One reason that Hillary Clinton didn’t get any traction with those people is that she didn’t have any credibility.’

Rodrik felt that economics commentary failed to register the gravity of the situation: that there were increasingly few avenues for global growth, and that much of the damage done by globalisation — economic and political — is irreversible. ‘There is a sense that we’re at a turning point,’ he said. ‘There’s a lot more thinking about what can be done. There’s a renewed emphasis on compensation — which, you know, I think has come rather late.’”

The extreme libertarianism of Ayn Rand

“Few, if any, literary philosophers have had as much influence on American business and politics as Ayn Rand, especially now that Donald J. Trump occupies the White House,” writes James B. Stewart in As a Guru, Ayn Rand May Have Limits. Ask Travis Kalanick.

“My philosophy, in essence, is the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute.” — Ayn Rand

“In business, Rand’s influence has been especially pronounced in Silicon Valley, where her overarching philosophy that ‘man exists for his own sake, that the pursuit of his own happiness is his highest moral purpose, that he must not sacrifice himself to others, nor sacrifice others to himself,’ as she described it in a 1964 Playboy interview, has an obvious appeal for self-made entrepreneurs. Last year Vanity Fair anointed her the most influential figure in the technology industry, surpassing Steve Jobs.”

But lately, Rand devotees have been running into trouble. Most prominently, Travis Kalanick, Uber’s ousted CEO. “Though people close to Mr. Kalanick told me this week that he has distanced himself from many of Ayn Rand’s precepts while undergoing an intense period of personal reassessment, they all acknowledged that she’d had a profound influence on his development. Few companies have been as closely identified with Rand’s philosophy as Uber,” Stewart writes.

According to Lawrence E. Cahoone, professor of philosophy at the College of the Holy Cross, “Rand’s entrepreneur is the Promethean hero of capitalism. But she never really explores how a dynamic entrepreneur actually runs a business. She was a script and fiction writer, motivated by an intense hatred of communism, and she put those things together very effectively. She can be very inspirational, especially to entrepreneurs. But she was by no means an economist. I don’t think her work can be used as a business manual. She never really had to manage anything. She was surrounded by people who saw her as a cult figure. She didn’t have employees, she had worshipers.”

She has also little to say about making the transition from this kind of heroic entrepreneurial vision to a mature corporation with many stakeholders — a problem many company founders have confronted and struggled with, whether or not they’ve read or been influenced by her.

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Travis Kalanick, Uber’s former CEO, who once used the cover art for The Fountainhead as his Twitter avatar.

Many of Rand’s defenders insist that the problems for Mr. Kalanick and others influenced by Rand aren’t that they embraced her philosophy, but rather that they didn’t go far enough. Yaron Brook, executive chairman of the Ayn Rand Institute, who teaches seminars on business leadership and ethics from an Objectivist perspective, told Stewart, “Few business people have actually read her essays and philosophy and studied her in depth.”

When, in an interview for Quartz, Aimee Groth asked what Brook made of Rand’s name being affirming free-wheeling, sometimes-destructive cultures like Uber’s in the name of disruption, he told her that Silicon Valley for the most part has a completely confused understanding of what she even meant. “There are entrepreneurs who are inspired by Ayn Rand, who get emotional fuel, a certain amount of courage, audacity, and spunk because of Rand,” he added. “I don’t think Travis Kalanick ever claimed to be an Objectivist. He said The Fountainhead was his favorite book. Very few of them actually sit down and say, ‘Wow, that’s a life-changing philosophy here.’ In some sense I understand it: they’re too busy living their lives, too busy changing the world and they take what they can from it. They get it superficially: go act, be entrepreneurial, start a business.”

The reason why Silicon Valley gets Rand’s philosophy wrong, says Brook, a misinterpretation of what she meant by selfishness. “The classic way they get it wrong is simply believing that Ayn Rand says ‘do whatever you feel like doing, don’t care about other people, just do whatever is good for you.’ And there’s no delving into what she means by good for you. Being selfish is really hard work. It means really thinking about what are my values, what are the most important things to me, how do I rank them, and how do I actually pursue them in a rational, productive way?’ Ayn Rand’s philosophy is very challenging. […] The whole point of Objectivism is living by what Ayn Rand calls the trader principle: to create as many win-win relationships as possible. Trade is always win-win. It’s a spiritual transaction, not a financial transaction.”

“Despite Rand’s pervasive influence and continuing popularity on college campuses,” Stewart writes in The New York Times, “relatively few people embrace her version of extreme libertarianism. Former President Barack Obama, in a 2012 Rolling Stone interview, criticized her narrow vision’ and described her work ‘as one of those things that a lot of us, when we were 17 or 18 and feeling misunderstood, we’d pick up.’” He added, “Then, as we get older, we realize that a world in which we’re only thinking about ourselves and not thinking about anybody else, in which we’re considering the entire project of developing ourselves as more important than our relationships to other people and making sure that everybody else has opportunity — that that’s a pretty narrow vision. It’s not one that, I think, describes what’s best in America. Unfortunately, it does seem as if sometimes that vision of a ‘you’re on your own’ society has consumed a big chunk of the Republican Party.”

And this …

For nearly a quarter of a century, Lucy Kellaway has been writing columns telling business people to stop talking rot. For the same amount of time they have been taking no notice.

“We’re a unique insights platform that uses open-ended questions with AI and crowdsourcing to quantify qualitative data and deliver actionable ideas.” —
Fashionable ‘startup claptrap’ straight from a pitch delivered to Tom Goodwin

In her latest column for the Financial Times, How I lost my 25-year battle against corporate claptrap, Kellaway names Starbucks CEO Howard Schultz as “a champion in the bullshit space.” Schultz has provided her with more material for columns than any other executive alive or dead. “Yet, he is still at it, and still out-doing himself. Earlier this year, he announced that the new Starbucks Roasteries were ‘delivering an immersive, ultra-premium, coffee-forward experience,’” Kellaway writes. “In this ultra-premium, jargon-forward twaddle, the only acceptable word is ‘an.’ Mr Schultz has brewed up a blend of old and new jargon, the fashionable and the workaday, adding a special topping of his own. ‘Delivering’ and ‘experience’ are grim but not new. ‘Ultra-premium’ is needless word inflation. ‘Immersive’ is fashionable, though ill-advised if you are talking about scalding liquids. The innovation is ‘coffee-forward.’ Sounds fantastic, but what is it?

[…]

Talking rot has not only done him no harm, I fear it may have helped him. The new ‘roasteries’ have an exceptionally vulgar Willy Wonka-style decor with beans whizzing around in see-through pipes. When the style is all hype, the language needs to match.”

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Starbucks CEO Howard Schultz, “a champion in the bullshit space.”

Kellaway reveals the top eight rules for mastering corporate claptrap, along with some splendid examples of how to follow them, such as ...

Rule #5: If you produce something simple, rebrand it so no one will know what it is.

“Over the years, Toyota has renamed the car a ‘sustainable mobility solution’; Amazon has called the book a ‘reading container’; Speedo has rebranded the swimming cap a ‘hair management system’ and a Nestlé bottle of water has been described as an ‘affordable, portable lifestyle beverage.’ This rule is the most baffling of the lot as there is no reason for it.”

Rule #7: There is no such thing as too much metaphor and cliché in one sentence.

“Rick Hamada, CEO of Avnet, is a master at this: ‘Drilling down one more click on services, we actually think of multiple swim lanes of opportunity around business.’ However, he is not quite as good as the following management consultant: ‘You have to appreciate that the milestones we have set in these swim lanes provide a road map for this flow chart. When we get to toll gates, we will assess where you sit in the waterfall…’”

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And the winner is… former Cisco CEO John Chambers, who emailed his staff: “Weʼll wake the world up and move the planet a little closer to the future.” (Photograph: Adam Jeffery|CNBC)

According to Kellaway, the most gifted guff giants don’t use all the rules, but pick the ones that suit them best. Her eternal favourite is “John Chambers who, while CEO of Cisco, fired off an email to underlings beginning ‘Team,’ and ending: ‘We’ll wake the world up and move the planet a little closer to the future.’”

While using plain words and simple syntax, Chambers produced the most terrifying piece of bullshit ever, writes Kellaway. “In the four years since he said that the planet seems to have been reaching the future quite happily on its own, without the assistance of Mr Chambers or anyone else at Cisco.”

Things to Hang on Your Mental Mug Tree provides a glimps into how Rory Sutherland looks at the world. “I don’t think there’s any huge amount of intelligence required to look at the world through different lenses,” he says. “The difficulty lies in that you have to abandon four or five assumptions about the world simultaneously. That’s what probably makes it difficult.”

At the end of this 4o-minute conversation, Sutherland shares an interesting view — one of many — on recruitment and diversity.

“It seems obvious that people instinctively increase the variance of things as they buy more of them. When people do small weekly shops, they go to a greater variety of shops than they do when they do one enormous £150 shop every ten days.

If you shop every three days, you’ll go to a lot of different shops, some upmarket, some downmarket. You might go to Walmart one day and Whole Foods the next. If you do one enormous shop, you’ll go very close to the middle. You’ll go somewhere that’s absolutely midmarket.

Similarly, when everybody had one car, most families had a saloon car at the time, a fairly standard car. People with two cars almost never have one saloon car, let alone two. In fact, they tend to have two cars that are wildly different — one very large one and a smaller one. Variety increases with frequency, as it were. That seems like a relatively obvious point.”

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Rory Sutherland, Vice-Chairman of Ogilvy London and columnist for The Spectator.

“Now, what seems interesting to me is that no one has applied this thinking to recruitment. If you want greater diversity of recruitment, hire people ten at a time. When you hire people for one job, one at a time, you’re very risk-averse, and you go for someone close to the expected norm. If you’re hiring ten graduate recruits, you’re looking for breadth. This happens without any quotas, without any conscious affirmative action. It seems to me a natural property of the human brain that the way we decide changes in variety simply by dint of choosing a lot simultaneously rather than choosing one person at a time. That seems to me an enormously important thing.

This is borne out by the fact that the partners in accounting firms show much less diversity than the graduate recruits do. You appoint partners one at a time, and you hire graduates en masse. The fact that our instinctive mode of choice changes depending on the way we choose, this seems to me just adding to the literature on choice architecture. When you make a choice, it’s always worth asking, ‘How would I make this choice if the choices were presented differently, if they were presented in a different order?’”

“By changing the rules of the economic game, the whole ‘economy’ could transform — not in the deterministic, business-as-usual way that neoclassical economics predicts, but in the creative, chaotic and dynamic way of complex systems,” writes George Zarkadakis, a science writer, novelist and artificial intelligence engineer, in The economy is more a messy, fractal living thing than a machine.

“Ever since the invention of the assembly line, corporations have been like medieval cities: building walls around themselves and then trading with other ‘cities’ and consumers. Companies exist because of the need to protect production from volatile market fluctuations, and because it’s generally more efficient to consolidate the costs of getting goods and services to market by putting them together under one roof. So said the British economist Ronald Coase in his paper The Nature of the Firm (1937).

But now, in an era of Ubers-for-everything, companies are changing into platforms that enable, rather than enact, core business processes. The cost of reaching customers has dropped dramatically thanks to the ubiquity of digital networks, and production is being pushed outside the company wall, on to freelancers and self-employed contractors. Market and price fluctuations have been defanged as machine learning and predictive analytics help companies manage such ructions, and on-demand services for labour, office space and infrastructure allow them to be more responsive to changing conditions. Coase’s theory is nearing its expiry date.”

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Airbnb, like eBay and Uber, succeeds in making money out of other people’s work and assets because they provide guarantees for good seller-buyer behaviour, while connecting to the ‘old world’ of banks, courts and government. But this hybrid model of doing digital business is about to change.

Today’s gig economy is the beginning of a profound economic, social and political transformation. For now, these new ways of working are still controlled by a hybrid model of doing digital business — platforms that sell ‘trust’ via reviews and verification, while plugging into existing financial and legal systems — but this is about to change, according to Zarkadakis.

Blockchain technologies promise to replace current trusted third parties, and these distributed systems might truly democratise work in a way that’s hard for us to imagine. Zarkadakis believes they could even challenge our current political institutions. “Over time, these collaborative networks might evolve into virtual city-states, and replace physical nations as the units of political organisation and citizen loyalty. Contrary to what current events suggest, the future of our planet could be bright: home to a self-organising ecosystem of democratic communities, cooperating to boost happiness, prosperity, longevity and creativity.”

In Why a Toaster Is a Design Triumph, Ian Bogost explains how good design finds the object’s ‘soul.’ “The designer’s job is not to please or comfort the user, but to make an object even more what it already is.”

According to Bogots, “Design is the stewardship of essence — not the pursuit of utility, or delight, or form. This is the orientation that produces solutions like the Breville ‘A Bit More’ button. The design opportunities that would otherwise go unnoticed emerge not from what people know about or desire for toasting, but from deeply pursuing the nature of toasting itself. […] It’s just the kind of solution that designers desperately hope to replicate, and users hope to discover in ordinary products. But agreeing on a method for accomplishing such achievements is harder.”

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Breville’s “A Bit More” button offers a lesson for design of all stripes — one that could make every designed object and experience better.

The trend in contemporary design practice — and the one that claims to be particularly adept at producing outcomes like ‘A Bit More’ — is called user-experience, or UX, design, a discipline that strives to craft pleasurable and useful encounters between people and things.

“But UX practice talks out of both sides of its mouth,” Bogost argues. On the one hand, UX fancies itself an empirical discipline. It inherits mid-century form-follows-function design ideals, while at the same time embracing more recent trends, such as participatory design. On the other hand, UX design also privileges out-of-the-box genius to solve design problems. But neither of these polarities really help explain how one might best arrive at Breville’s ‘A Bit More’ button.

“The error comes from two assumptions. The first holds that human beings are the only arbiters of designed objects and experiences. […] But design-by-genius proves that this approach is often flawed. Steve Jobs was right: People don’t seem to know what they want, or need. Who could imagine verbalizing even the relatively simple challenge of toasting such that the ‘A Bit More’ button would emerge as a remedy? […]

“Designers are ambitious sorts of folk — arrogant, even — and none would want to be associated with stasis, or even with mere cyclicality. What a waste, just to mow lawns or brown bread every day! Let us instead reinvent lawn care! Let us reinvent breakfast!” Or slippers

“Breville’s toaster is not remarkable because it reinvents toasting, nor because it resolves an obvious user grievance, nor because it changes the world. What makes the device compelling is that it makes toasting what it always was, but even more so.” But many designers “are struggling so hard to meet requirements, please people, or exalt the arbitrary choices of their creators that they fail to pay respect to the thing in question — and thereby to see what it is, even, let alone to change it for the better.”

And finally, Ornament is Crime on Modernist architecture, by Matt Gibberd and Albert Hill (Phaidon). “Ever since Le Corbusier’s rallying cry in 1929, sleek slabs on stilts and levitating levels have proliferated. Here we celebrate 90 years of playful, efficient elegance,” says the Guardian’s architecture and design critic Oliver Wainwright, in Giants of modernist architecture.

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From “Ornament is Crime”: Marcel Breuer’s Starkey House, Duluth, Minnesota, 1955. (Photograph: Ezra Stoller/ Esto)

[above] “‘People will stop and stare,’ June Starkey told Time magazine in 1955. ‘But once inside, they say, Well, it is nice looking. They seem surprised. As a matter of fact, I think they are glad we did it. They wouldn’t themselves, but they get a kick out of seeing ours.’ This stark villa was a bold arrival to sleepy Duluth, but inside it combined a cosy living area with a soaring view over Lake Superior. Breuer suspended the living areas from two massive double beams above the roof to give an uncluttered expanse of ceiling.”

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From “Ornament is Crime”: Pierre Koenig’s Bailey House, Los Angeles, 1958. (Photograph: Darren Bradley)

[above] “The Bailey House was the 21st home in the Case Study House programme, an initiative by Arts & Architecture magazine to promote the best low-cost domestic design. Hailed by the magazine as embodying ‘some of the cleanest and most immaculate thinking in [its] development,’ Koenig’s design used an exposed steel frame, welded with precision. As the architect said: ‘Steel is only as good as its detailing. In order to make exposed steel acceptable in the living room it must be so well detailed that the joining connections are imperceptible.’”

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From “Ornament is Crime”: Silvestre Arquitectos’ Aluminium House, Madrid, Spain, 2016. (Photograph: Courtesy of Fran Silvestre Arquitectos)

[above] “A vast metal tray seemingly levitating above a glass box, the Aluminium House is a startling look-no-hands conjuring trick, a sleek container that contains the ultimate minimalist pool pad. It’s looks like what might happen if Apple’s Jony Ive turned his hand to domestic design. A central marble staircase links the multiple floors of the 1,000 square metre hideaway, off which marble-lined bedrooms and living areas are arranged, with appliances hidden behind folding white panels, the whole house wrought with an icy air of mortuary chic.”

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Brunello Cucinelli, a symbol of “humanistic capitalism.”

“Capitalism and Kant don’t always go well together, and pleasing the stockmarket isn’t Cucinelli’s priority. His ideal growth rate, he says, is 10%: ‘the hedge funds aren’t interested in that but the pension funds are. We want only a smooth growth level. It must be gracious. Everything in this business has to be gracious. Profit is the gift when creation is perfect.’” — Luke Leitch in The Philosopher King, an article about the ‘humanistic capitalism’ of Brunello Cucinelli (The Economist 1843)

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