Category: Books

Beautiful Downtown Burbank, Runs Amok

Cultural history background for the young:  at the beginning of every installment of the "Rowan and Martin Laugh-In" TV comedy review (circa 1968-1973), someone would sarcastically intone that the show was being broadcast from "beautiful downtown Burbank." 

Excerpted below is Daniel Pink’s incredible conversation with a Burbank city clerk:

 

(p. 199)  What led me to this 100,000-person city in California’s San Fernando Valley—past the fish fountains, to the steps of City Hall—was a rumor I’d heard that Burbank puts free agents in jail.

. . .

(p. 200)  After fifteen minutes of probing, here’s the gist of what he tells me:  If I want to write from a home office in Burbank, I first must apply for a home occupation license.  The city would examine my application, and then come to my house to inspect the office from which I intended to work.  Once the inspector deemed my home office safe for writing and unthreatening to my neighbors, I could begin earning a living, my workplace now officially blessed by the city.

But that was only the beginning.  I’d have to pay a special tax.  And I’d have to abide by the strictures of Burbank Municipal Code Section 31-672—which, among other things, said:  My office couldn’t be larger than four hundred square feet or 20 percent of my home’s square footage.  I couldn’t put my home office in a "garage, carport, or any other area required or designated for the parking of vehicles."  The only "materials, equipment, and/or tools" I could use to do my work were things used by "a normal household."  I couldn’t use my home office to repair cars, sell guns, or operate a kennel.  And the only folks who could ever work with me in the office were people who lived with me.

That last provision alarmed me.

Pointing to Section 31-672(c), I ask, "Does this mean I can’t have a meeting at my house?"

"Yep," says the clerk.  "You’d have to somewhere else."

"Let me get this straight," I say.  "Let’s say I’m a writer collaborating on a screenplay.  If my collaborator comes over and we work on the screenplay together, that’s against the law?  It’s a misdemeanor to have a meeting at your house?"

"Yep," says the clerk.

"Isn’t California a ‘three strikes and you’re out’ state?"

"Yep."

Burbank, we we have a problem.  I hope it’s unlikely that a free agent who has three meetings at her house, and gets caught, prosecuted, and convicted each time, goes to jail for the rest of her life.  But the mere possibility reflects a wider problem with America’s legal, policy, and tax regimes.  They were built for a (p. 201) work world that has largely disappeared, and are ill equipped for the new world that has arrived.

 

Source:

Pink, Daniel H.  Free Agent Nation: How America’s New Independent Workers Are Transforming the Way We Live.  New York: Warner Business Books, 2001.

(Note:  italics in original; ellipsis added.)

 

“A Triumph of Engaged Amateurism”

 

Steven Johnson has a great passage on the contribution of the amateur in The Ghost Map story (see below).

This is a theme that resonates.  In The Long Tail, Chris Anderson makes the case for amateurs in astronomy.  (Is it he, who points out that the root of the word "amateur" is to love?)

Stigler had an important early paper in which he discusses the professionalization of the economics profession.  He praises the results, but what he presents provides some grist for the mill of criticism too.  For example, the exit of the amateurs, reduced the applicability of the work, and turned research more toward internal puzzle-solving, and model-building.

The web is a leveler in science, as suggested in an NBER paper.  Maybe the result will be a resurgence of amateurism, and maybe that won’t be all bad.

 

(p. 202)  But Broad Street should be understood not just as the triumph of rogue science, but also, and just as important, as the triumph of a certain mode of engaged amateurism.  Snow himself was a kind of amateur.  He had no institutional role where cholera was concerned; his interest in the disease was closer to a hobby than a true vocation.  But Whitehead was an amateur par excellence.  He had no medical training, no background in public health.  His only credentials for solving the mystery behind London’s most devastating outbreak of disease were his open and probing mind and his intimate knowledge of the community. 

 

Source:

Johnson, Steven. The Ghost Map: The Story of London’s Most Terrifying Epidemic – and How It Changed Science, Cities, and the Modern World. New York: Riverhead Books, 2006.

 

(Note:  A probably relevant, much praised book, that I have never gotten around to reading, is Martin J.S. Rudwick’s The Great Devonian Controversy:  The Shaping of Scientific Knowledge among Gentlemanly Specialists.)

 

Why Starbucks Coffee is a Bargain

 

(p. 161)  These coffee places, most of which didn’t even exist ten years ago, had several virtues.  They were always in convenient locations.  They permitted, even welcomed, patrons to sit and talk for several hours.  And they had tables for spreading out my materials and electrical outlets for plugging in my equipment.  In short, they provided a four-hour office rental for the price of a three-dollar latte.

. . .  

(p. 162)  Starbucks and its caffeinated cousins are part of what I call the free agent infrastructure.  The components of this infrastructure, which I’ll review in a moment, include copy shops, office supply superstores, bookstore cafés, overnight delivery services, executive suites, and the Internet.  Like America’s system of federal highways, the free agent infrastructures form the physical foundation on which the economy operates.  But unlike the federal highway system, which was planned and paid for by the government, this infrastructure emerged more or less spontaneously.  Like so many other aspects of Free Agent Nation, it is self-organized.  Nobody is in charge of it.  That’s why it woks.  It  works so well, in fact, that few people realize that this collection of commercial Establishments even constitutes an infrastructure.

 

Source:

Pink, Daniel H. Free Agent Nation: How America’s New Independent Workers Are Transforming the Way We Live. New York: Warner Business Books, 2001.

 

Internet Transmits and Applies Libertarian Ideas

 

Source of book image:  http://ec1.images-amazon.com/images/P/1586483501.01._SS500_SCLZZZZZZZ_.jpg

 

Today the Internet has become, Mr. Doherty notes, an efficient way to transmit libertarian ideas and show their practical application. (With its decentralized, free-wheeling ethos, the Internet is itself libertarian without even trying to be.) Jimmy Wales, the man who started the interactive online encyclopedia Wikipedia, believes that "facts can help set the world free." The largest retail market in the world is eBay, which allows anyone to buy and sell without a government license.

Louis Rosetto, the "radical capitalist" who founded Wired magazine, notes that, even if libertarian ideas must now push against a statist status quo, "contrarians end up being the drivers of change." Among the most ornery contrarians, he says, are the libertarians "laboring in obscurity, if not in derision." They have managed "to keep a pretty pure idea going, adapting it to circumstances and watching it be validated by the march of history." Mr. Doherty has rescued libertarianism from its own obscurity, eloquently capturing the appeal of the "pure idea," its origins in great minds and the feistiness of its many current champions.

 

For the full review, see: 

JOHN H. FUND.  "BOOKSHELF; Free to Choose, and a Good Thing, Too."  The Wall Street Journal (Thurs., February 15, 2007):  D7.

 

Should Netscape Be Viewed as a Failed Company, or as a Successful Project?

 

(p. 53)  Recall the story of Netscape, once the darling of the New Economy.  Netscape was formed in 1994.  It went public in 1995.  And by 1999, it was gone, purchased by America Online and subsumed into AOL’s operation.  Life span:  four years.  Half-life:  two years.  Was Netscape a company—or was it really a project?  Does the distinction even matter?  What matters most is that this short-lived entity put several products on the market, prompted established companies (notably Microsoft) to shift strategies, and (p. 54) equipped a few thousand individuals with experience, wealth, and connections that they could bring to their next project.

And Netscape is not alone.  A University of Texas study found that between 1970 and 1992, the half-life of Texas businesses shrank by 50 percent.  Likewise, a Federal Reserve analysis of New York companies found that the type of firm that created the most new jobs (microbusineses with fewer than ten employees) often had the shortest life span.  The life cycle of companies has been that jobs, too, have diminishing half-lives.  Ten years ago, nobody ever heard of a Web developer.  Ten years from now, nobody may remember Web developers.

Most important, at the very moment the longevity of companies is shrinking, the longevity of individuals is expanding.  Unlike Americans in the twentieth century, most of us today can expect to outlive just about any organization for which we work.  It’s hard to imagine a lifelong job at an organization whose lifetime will be shorter–often much shorter–than your own.

 

Source:

Pink, Daniel H. Free Agent Nation: How America’s New Independent Workers Are Transforming the Way We Live. New York: Warner Business Books, 2001.

 

“Free Agent Nation” Still Rings True

 

   Source of book image:  http://g-ec2.images-amazon.com/images/G/01/ciu/10/ae/8ca3d250fca0f5b077de4010.L.jpg

 

Daniel Pink’s 2001 Free Agent Nation has been on my to-read list since it first came out.  It finally made it to the top—at least in the author-abridged two-cassette incarnation.

I always found the basic idea appealing:  the appeal of the freedom of working for yourself—Harry Browne’s How I Found Freedom in an Unfree World, but for real. 

But I also was a little anxious; fearful that the book would place too much emphasis on seeming flash-in-the-pan dot.com labor market phenomena and rhetoric.

To my relief, I can report that little in the book depends on the dot.com over-exuberance.  The internet appears, as an infrastructure enabler, but the free agents are mainly doing more standard stuff, but doing it from a home office, and doing it project-by-project.

Pink is not an academic, which has pros and cons.  One of the pros is that his prose is pleasant.  Another is that he has an ear for a good story and a telling example.  Perhaps a con is that he often hasn’t had the time, or the interest, (or maybe the data just don’t exist) to often follow-up with how widespread his examples are.

Still there’s some good stuff here.  Like suggesting that free agency is what you would expect more of us to pursue, as we work our way up Abraham Maslow’s hierarchy of human needs.  (In college I was enthused enough about Maslow that I was thinking of minoring in psychology, until they told me how many hours I would have to run rats through mazes before I’d be allowed to open a Maslow book.)

And there’s plausible discussion about how in some ways free agency is more secure than a regular job (multiple clients means diversification).  And there is more freedom to control your own time, and be your authentic self.

There’s also some good discussion of how the government makes free agency harder through health care and taxation policies.

All-in-all, this book helps make the case that labor can thrive in a Schumpeterian world of creative destruction.

 

Reference to the book:

Pink, Daniel H. Free Agent Nation: How America’s New Independent Workers Are Transforming the Way We Live. New York: Warner Business Books, 2001.

 

“Under the Spell of a Theory”

 

Johnson’s wonderful book is part mystery, part history, part philosophy of science, and part musing on political philosophy.  The passage below warms the heart (and stimulates the brain) of the libertarian.  Against great odds, Dr. Snow persisted in presenting ever-more convincing evidence for his correct water-borne theory of cholera.  Meanwhile Chadwick, the main advocate of government public health activities, continued to direct policy on the basis of the mistaken theory that cholera was spread by foul vapors in the air. 

 

(p. 120) Herein lies the dominant irony of the state of British public health in the late 1840s.  Just as Snow was concocting his theory of cholera as a waterborne agent that had to be ingested to do harm, Chadwick was building an elaborate scheme that would deliver the cholera bacteria directly to the mouths of Londoners.  (A modern bioterrorist couldn’t have come up with a more ingenious and far-reaching scheme.)  Sure enough, the cholera returned with a vengeance in 1848-1849, the rising death toll neatly following the Sewer Commission’s cheerful data on the growing supply of waste deposited in the river.  By the end of the outbreak, nearly 15,000 Londoners would be dead.  The first defining act of a modern, centralized public-health authority was to poison an entire urban population.  (There is some precedent to Chadwick’s folly, however.  During the plague years of 1665-1666, popular lore had it that the disease was being spread by dogs and cats.  The Lord Mayor promptly called for a mass extermination of the city’s entire population of pets and strays, which was dutifully carried out by his minions.  Of course, the plague turned out to be (p. 121) transmitted via the rats, whose numbers grew exponentially after the sudden, state-sponsored demise of their only predators.)

Why would the authorities go to such lengths to destroy the Thames?  All the members of these various commissions were fully aware that the waste being flushed into the river was having disastrous effects on the quality of the water.  And they were equally aware that a significant percentage of the population was drinking the water.  Even without a waterborne theory of cholera’s origin, it seems like madness to celebrate the ever-increasing tonnage of human excrement being flushed into the water supply.  And, indeed, it was a kind of madness, the madness that comes from being under the spell of a Theory.  If all smell was disease, if London’s health crisis was entirely attributable to contaminated air, then any effort to rid the houses and streets of miasmatic vapors was worth the cost, even if it meant turning the Thames into a river of sewage.

 

Source: 

Johnson, Steven. The Ghost Map: The Story of London’s Most Terrifying Epidemic – and How It Changed Science, Cities, and the Modern World. New York: Riverhead Books, 2006.

 

Advice from Charles Koch: A Successful Business Schumpeterian

   Source of book image:  http://media.wiley.com/product_data/coverImage300/89/04701398/0470139889.jpg

 

When Charles Koch became the chief executive of Rock Island Oil & Refining after the death of his father in 1967, the company was a moderately successful enterprise based in Wichita, Kan. He renamed it Koch Industries in honor of his father — and over the next 40 years proceeded to transform Fred Koch’s legacy into the world’s largest private company. Koch Industries — now a commodity and financial conglomerate that includes brands such as Stainmaster, Lycra and Dixie cups — has 80,000 employees in 60 countries. Its revenue last year was $90 billion. In one generation, the book value of Koch Industries has increased 2,000-fold. That’s an 18% compounded annual return — comparable with the long-term track record of Warren Buffett’s Berkshire Hathaway.

. . .

At age 71, Mr. Koch clearly feels that the time has come to pass along the business formula that has served him so well. In "The Science of Success," he describes a technique, called Market-Based Management (MBM), that he says evolved from his reading, early in his career, in history, political science, economics and other disciplines. He arrived at an understanding of what allows a free society to prosper, Mr. Koch says, and decided to apply those principles to business.

. . .

. . .   He is especially fond of the "Austrian school" of economists, such as Ludwig von Mises and Joseph Schumpeter, who emphasized production processes, technology and the dynamic competitive models of "creative destruction." 

 

For the full review, see: 

MARK SKOUSEN.  "BOOKS; A Short Course in Long-Term Value."   The Wall Street Journal  (Weds., March 7, 2007):  D8. 

(Note:  ellipses added.)

 

More on Creative Destruction in Science Fiction

On April 11, 2007 I posted an entry noting a new science fiction book with the title Creative Destruction.  Not having read the book, I wondered aloud whether the book contained any reference to Schumpeter.

Yesterday (4/13/07), I was delighted to receive an email from the author of the book, answering my question.  With his permission, I reproduce his email below:

 

Dr. Diamond,

I noticed your blog entry about Creative Destruction, my computer-themed SF collection.  You asked:  Does Schumpeter get a mention?

Absolutely.  Here are the opening lines of the foreword:

     If the Internet bubble had a patron saint, he was an obscure economist named Joseph Schumpeter.

     Schumpeter owes his posthumous celebrity to two words: creative destruction.  In 1942, he wrote of the "… Process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.

     "Creative destruction," he said, "is the essential fact about capitalism."  Every dotcom, of course, claimed its new technology would sweep out the old in a frenzy of creative destruction. Occasionally — think Yahoo! and Amazon — they were even correct.

The stories in the collection are most definitely science fiction — I have degrees in physics and computer science — but I also have an MBA from the University of Chicago.

Best regards,

– Ed Lerner

 

(Note:  I have changed the format of the email, a little.  The ellipsis was in the original.)

 

Creative Destruction in Science Fiction

Source of book image: http://ec1.images-amazon.com/images/P/0809557487.01._SS500_SCLZZZZZZZ_V38973347_.jpg

 

There’s a new collection of science fiction stories entitled Creative Destruction (after one of the main stories in the collection that is also entitled "Creative Destruction").  I have not read the book, but used to enjoy reading science fiction, and hope to have a look before too long.

I welcome comments from anyone who has read the book.  Does Schumpeter get a mention? 

 

The reference to the book is:

Lerner, Edward M. Creative Destruction. Rockville, MD: Wildside Press, 2006.