Quotulatiousness

August 28, 2013

Megan McArdle on why Wal-Mart can’t pay like Costco

Filed under: Business, Economics, USA — Tags: , , , — Nicholas @ 08:14

TL;DR – it’s not because they’re Dickensian monsters.

I wrote about this last spring in regard to Wal-Mart and Costco. Upper-middle-class people who live in urban areas — which is to say, the sort of people who tend to write about the wage differential between the two stores — tend to think of them as close substitutes, because they’re both giant stores where you occasionally go to buy something more cheaply than you can in a neighborhood grocery or hardware store. However, for most of Wal-Mart’s customer base, that’s where the resemblance ends. Costco really is a store where affluent, high-socioeconomic status households occasionally buy huge quantities of goods on the cheap: That’s Costco’s business strategy (which is why its stores are pretty much found in affluent near-in suburbs). Wal-Mart, however, is mostly a store where low-income people do their everyday shopping.

[…]

In other words, Trader Joe’s and Costco are the specialty grocer and warehouse club for an affluent, educated college demographic. They woo this crowd with a stripped-down array of high quality stock-keeping units, and high-quality customer service. The high wages produce the high levels of customer service, and the small number of products are what allow them to pay the high wages. Fewer products to handle (and restock) lowers the labor intensity of your operation. In the case of Trader Joe’s, it also dramatically decreases the amount of space you need for your supermarket … which in turn is why their revenue per square foot is so high. (Costco solves this problem by leaving the stuff on pallets, so that you can be your own stockboy).

Both these strategies work in part because very few people expect to do all their shopping at Trader Joe’s, and no one expects to do all their shopping at Costco. They don’t need to be comprehensive. Supermarkets, and Wal-Mart, have to devote a lot of shelf space, and labor, to products that don’t turn over that often.

[…]

That’s not the only reason that the Trader Joe’s/Costco model wouldn’t work for Wal-Mart. For one thing, it’s no accident that the high-wage favorites cited by activists tend to serve the affluent; lower income households can’t afford to pay extra for top-notch service. If it really matters to you whether you pay 50 cents a loaf less for generic bread, you’re not going to go to the specialty store where the organic produce is super-cheap and the clerk gave a cookie to your kid. Every time I write about Wal-Mart (or McDonald’s, or [insert store here]), several people will e-mail, or tweet, or come into the comments to say they’d be happy to pay 25 percent more for their Big Mac or their Wal-Mart goods if it means that the workers are well paid. I have taken to asking them how often they go to Wal-Mart or McDonald’s. So far, no one has reported going as often as once a week; the modal answer is a sudden disappearance from the conversation. If I had to guess, I’d estimate that most of the people making such statements go to Wal-Mart or McDonald’s only on road trips.

August 26, 2013

A small note from the hand tool trade

Filed under: Business, Tools, USA — Tags: , , — Nicholas @ 08:02

In a discussion of the plight of Sears in the major appliance market, Coyote Blog mentions an earlier Sears mis-step in a different market:

Oddly, I witnessed a similar Sears private label fracas when I worked for Emerson Electric over a decade ago. For years and years, Emerson (not the folks who make the cheap radios and TVs) manufactured many of the Sears Craftsman hand tools and power tools. Sears got tough one year, and negotiated a better deal of some sort with someone else, and an entire division of Emerson saw its sales basically going to zero. So Emerson bought a bunch of orange paint and plastic, went to Home Depot, and cut a deal for a private label tool line at Home Depot (Emerson separately owns the Rigid tool company, so a lot of the items were branded Rigid). Emerson ended up in potentially better shape (I did not stay long enough to see how it turned out), partnered with a growing rather than a declining franchise.

August 22, 2013

QotD: Politicians and the world of real jobs

Filed under: Business, Humour, Politics, Quotations — Tags: , — Nicholas @ 00:01

Whenever I hear a politician or pundit talk about a modern economy like they understand it well enough to run it, I want to burst out laughing, or cry, or both. If you can’t even keep pictures of your dick off the Intertunnel during an election cycle, I imagine being Emperor of the Economic and Social Universe is probably well above your abilities. Politicians have to take tours of factories because to them, everything and everybody in a factory might as well be alchemy performed by men from Jupiter.

“Sippican Cottage”, “Mene, Mene, Tekel, Upharsin” Sippican Cottage, 2013-08-21.

August 21, 2013

Ottawa deploys drone to … chase away geese

Filed under: Business, Cancon, Technology — Tags: , — Nicholas @ 08:48

Not every drone carries missiles:

Fed up with geese fouling the grass and water at its Petrie Island beaches, the city government is calling in drone strikes.

It’s proving amazingly effective, said Orléans Coun. Bob Monette. The place used to be haunted by as many as 140 geese, which can eat several pounds of grass in a day and poop out nearly as much in waste.

“Now we’re down to anywhere from 15 to 20 on a daily basis,” Monette said. The weapon the city’s deployed is a “hexcopter,” a remote-controlled chopper with rotors that can hover, soar, circle and — most importantly — scoot along just above the ground, scaring the bejesus out of dozing geese. It’s operated by contractor Steve Wambolt, a former IT worker who launched his own business after one too many layoffs.

“When he takes it out, they put their backs up straight and they’re watching,” Monette said. “When he starts it and it goes up off the ground, they sort of walk into a formation, and as soon as it starts moving, they all take off and they don’t come back until the next day.”

Wambolt starts buzzing the geese at about 4 a.m. The drone also works on seagulls, though they’re a bit braver and have to be harassed almost constantly to keep them away. Both sorts of birds can be territorial and nasty to beachgoers. Their droppings also feed bacteria in the water, which can make swimming dangerous.

Update: Reason.tv attended a recent gathering of civilian drone manufacturers and users:

When you hear the word drone you may immediately think of bombs being dropped in the Middle East or the surveillance of citizens here in the United States, but engineers and aviation geeks have wondered for decades if unmanned flight might solve a few of our world’s problems or just make our lives a little easier.

Over 30 years ago, science magazines wondered if drones would “sniff out pollution,” or, “make pilots obsolete,” and engineers are saying that those ideas may be possible now.

“The technology has reached a point where it can be very inexpensive to buy [unmanned aerial system technology],” says John Villasenor, an engineer at UCLA and a senior fellow at the Brookings Institution. Villasenor says that advances in GPS, airframe design, and flight control methods have made unmanned flight available to pretty much anyone.

As a part of the FAA’s re-authorization of funds in February 2012, Congress passed a bill that included the integration of unmanned aircraft into U.S. airspace. First for public entities like law enforcement or fire fighters and second for civilians like farmers or filmmakers with full integration by 2015. In July, the FAA approved two drones for commercial use which could fly as early as 2013.

August 20, 2013

Another reason to stick with printed books – “undownloading”

Filed under: Books, Business, Law, Media, Technology — Tags: , , — Nicholas @ 10:22

At Techdirt, Glyn Moody has another word you need to know about those convenient ebooks you’ve been adding to your reader:

So, it seems that ebook users need to add a new word to their vocabulary: “undownloading” — what happens when you leave the authorized zone in which you may read the ebooks you paid for, and cross into the digital badlands where they are taken away like illicit items at customs. If you are lucky, you will get them back when you return to your home patch — by un-undownloading them.

What makes this tale particularly noteworthy is the way it brings together a host of really bad ideas that the publishing and distribution industries insist on deploying. There’s DRM that means you can’t make backups; there’s the country-specific usage that tries to impose physical geography on your digital ebooks; and there’s the update that spies on you and your system before deciding unilaterally to take away functionality by “undownloading” your ebooks. And copyright maximalists wonder why people turn to unauthorized downloads….

I have dozens of books stashed away on my iPhone … but they’re all public domain works. I doubt I’ll be adding any DRM-afflicted items to my library any time soon.

Everything Is A Remix

Filed under: Business, Law, Liberty, Media, Technology — Tags: , , , — Nicholas @ 10:09

Remixing is a folk art but the techniques are the same ones used at any level of creation: copy, transform, and combine. You could even say that everything is a remix.

H/T to American Digest for the link.

August 13, 2013

Apple – dead fruit walking, says Larry Ellison

Filed under: Business, Technology — Tags: , , — Nicholas @ 10:27

At The Register, Jasper Hamill reports on the latest oracular pronunciamento from Larry Ellison:

Oracle supremo Larry Ellison has told Apple that it doesn’t stand a chance of success without Steve Jobs at the helm.

In an interview with CBS, the multibillionaire performed a bizarre dance routine meant to illustrate what chance Apple has in the post-Jobs era. Just like the oracles of old, Ellison’s predictions take a bit of interpretation.

The Oracle was asked what he thought of Jobs, to which he replied: “He was brilliant, he was our Edison, he was our Picasso. He was an incredible inventor.”

But then came a question about how the fruity firm is likely to fare without their godhead on the throne.

“Well, we already know,” Ellison said, before embarking upon a simple piece of interpretive dance to illustrate his thoughts.

Blacksoft or Microberry … will Microsoft scoop up Blackberry?

Filed under: Business, Cancon, Technology — Tags: , , , , — Nicholas @ 10:21

In Maclean’s, Peter Nowak wonders why Microsoft hasn’t already purchased Blackberry:

The logic is pretty solid. Android and Apple have run away with the smartphone market, with the Canadian company clutching at a distant and declining third-place slice. The latest numbers say the company has indeed lost that spot to Microsoft and its Windows Phone.

That’s not cause for any excitement — these are low, single-digit scraps we’re talking about. Android and Apple have about 80 and 13 per cent of the market, respectively. (As an aside, it’s funny how those numbers are starting to look like the historical division between Windows and Mac computers, huh?)

So what’s the fastest and easiest way for a company to make its anemic market share bigger? It doesn’t take a mathematician to figure out the answer: combine it with somebody else’s equally anemic share into something with a little more meat on its bones. Putting BlackBerry and Microsoft’s Windows phones together would amount to almost seven-per-cent share. That’s still small, but it’s almost within striking distance of Apple.

More importantly, Microsoft — through an acquisition — would eliminate its biggest obstacle. In some countries, especially Canada. BlackBerry still enjoys decent success as the de facto third brand that buyers gravitate to because they’re loyal and/or hate Android and Apple. By most accounts, Windows Phone sales are extra anemic to non-existent in these markets as a result.

August 12, 2013

Schneier to internet company executives – it’s time to fight back

Filed under: Business, Government, Liberty, USA — Tags: , , , , — Nicholas @ 11:02

In The Atlantic, Bruce Schneier has some advice for the executives of major internet companies:

It turns out that the NSA’s domestic and world-wide surveillance apparatus is even more extensive than we thought. Bluntly: The government has commandeered the Internet. Most of the largest Internet companies provide information to the NSA, betraying their users. Some, as we’ve learned, fight and lose. Others cooperate, either out of patriotism or because they believe it’s easier that way.

I have one message to the executives of those companies: fight.

Do you remember those old spy movies, when the higher ups in government decide that the mission is more important than the spy’s life? It’s going to be the same way with you. You might think that your friendly relationship with the government means that they’re going to protect you, but they won’t. The NSA doesn’t care about you or your customers, and will burn you the moment it’s convenient to do so.

We’re already starting to see that. Google, Yahoo, Microsoft and others are pleading with the government to allow them to explain details of what information they provided in response to National Security Letters and other government demands. They’ve lost the trust of their customers, and explaining what they do — and don’t do — is how to get it back. The government has refused; they don’t care.

It will be the same with you. There are lots more high-tech companies who have cooperated with the government. Most of those company names are somewhere in the thousands of documents that Edward Snowden took with him, and sooner or later they’ll be released to the public. The NSA probably told you that your cooperation would forever remain secret, but they’re sloppy. They’ll put your company name on presentations delivered to thousands of people: government employees, contractors, probably even foreign nationals. If Snowden doesn’t have a copy, the next whistleblower will.

August 11, 2013

Speculations on why Lavabit went dark

Filed under: Business, Law, Liberty, USA — Tags: , , , — Nicholas @ 11:40

In The New Yorker, Michael Phillips tries to outline the legal picture around the Lavabit shutdown:

In mid-July, Tanya Lokshina, the deputy director for Human Rights Watch’s Moscow office, wrote on her Facebook wall that she had received an e-mail from edsnowden@lavabit.com. It requested that she attend a press conference at Moscow’s Sheremetyevo International Airport to discuss the N.S.A. leaker’s “situation.” This was the wider public’s introduction to Lavabit, an e-mail service prized for its security. Lavabit promised, for instance, that messages stored on the service using asymmetric encryption, which encrypts incoming e-mails before they’re saved on Lavabit’s servers, could not even be read by Lavabit itself.

Yesterday, Lavabit went dark. In a cryptic statement posted on the Web site, the service’s owner and operator, Ladar Levison, wrote, “I cannot share my experiences over the last six weeks, even though I have twice made the appropriate requests.” Those experiences led him to shut down the service rather than, as he put it, “become complicit in crimes against the American people.” Lavabit users reacted with consumer vitriol on the company’s Facebook page (“What about our emails?”), but the tide quickly turned toward government critique. By the end of the night, a similar service, Silent Circle, also shut down its encrypted e-mail product, calling the Lavabit affair the “writing [on] the wall.”

Which secret surveillance scheme is involved in the Lavabit case? The company may have received a national-security letter, which is a demand issued by a federal agency (typically the F.B.I.) that the recipient turn over data about other individuals. These letters often forbid recipients from discussing it with anyone. Another possibility is that the Foreign Intelligence Surveillance Court may have issued a warrant ordering Lavabit to participate in ongoing e-mail surveillance. We can’t be completely sure: as Judge Reggie Walton, the presiding judge of the FISA court, explained to Senator Patrick Leahy in a letter dated July 29th, FISA proceedings, decisions, and legal rationales are typically secret. America’s surveillance programs are secret, as are the court proceedings that enable them and the legal rationales that justify them; informed dissents, like those by Levison or Senator Ron Wyden, must be kept secret. The reasons for all this secrecy are also secret. That some of the secrets are out has not deterred the Obama Administration from prosecuting leakers under the Espionage Act for disclosure of classified information. Call it meta-secrecy.

August 9, 2013

The cult of Apple

Filed under: Business, Media, Religion, Technology — Tags: , , — Nicholas @ 08:24

In Wired, Brett T. Robinson talks about the similarities of the “Apple cult” to religious beliefs:

Technology ads provide parables and proverbs for navigating the complexities of the new technological order. They instruct the consumer on how to live the “good life” in the technological age.

Like all advertising, Apple’s ads perform a vital educational function in consumer society. The advertisements are allegorical, rhetorical attempts to domesticate foreign and abstract concepts, making them accessible and attractive to everyday adherents.

In fact, they resemble medieval morality plays in their personification of good (Mac) and evil (PC). As such, the ads contain a moral — or, more explicitly, they propose a morality customized for the conditions of the age.

Media technology has acquired a moral status because it has become part of the natural order of things. Luddites, those who have sworn off new technologies, are the new heretics and illiterates. Technology is an absolute. There is no turning back or imagining a different social order. Challenge is acceptable as long as it remains within the confines of the technological order. Apple may challenge Microsoft. Samsung may challenge Apple. But the order must not be challenged.

The impact of digital culture, then, is epistemic; it insinuates a moral system based on its own internal logic.

[…]

In the Apple story, the brand cult began offline, with users meeting in real, physical locations to swap programs and ideas. Now, the Apple community is more diffuse, concentrated in online discussion groups and support forums. However, Apple product launches and conferences remain sacred pilgrimages where Apple fans can congregate, camp, and live together for days at a time to revel in the communal joy of witnessing the transcendent moment of the new product launch.

The reverence once reserved for holy relics and liturgy has reemerged in the technology subculture. The shared experience of living in a highly technological era provides a universal ground for a pluralistic society. There may be many different devices, but only one Internet.

Technology has become the new taken-for-granted order that requires our fidelity. Obedience to the new order is expressed in the communication rituals that take place every day in the use of computers, music players, and smartphones — devices that bind individuals together. From the farthest satellite to the nearest cellphone, the mystical body of electricity connects us all. Personal technology has become “the very atmosphere and medium” through which we mediate our daily lives.

August 4, 2013

Bruce Schneier talks about security and trust

Filed under: Business, Media, Technology — Tags: , , , — Nicholas @ 12:07

Published on 19 Jun 2013

Human society runs on trust. We all trust millions of people, organizations, and systems every day — and we do it so easily that we barely notice. But in any system of trust, there is an alternative, parasitic, strategy that involves abusing that trust. Making sure those defectors don’t destroy the cooperative systems they’re abusing is an age-old problem, one that we’ve solved through morals and ethics, laws, and all sort of security technologies. Understanding how these all work — and fail — is essential to understanding the problems we face in today’s increasingly technological and interconnected world.

Bruce Schneier is an internationally renowned security technologist and author. Described by The Economist as a “security guru,” he is best known as a refreshingly candid and lucid security critic and commentator. When people want to know how security really works, they turn to Schneier.

H/T to AVC for the link.

Ben Klass responds to Bell Canada CEO’s open letter

Filed under: Business, Cancon, Government, History — Tags: , , — Nicholas @ 11:26

An excellent response:

You begin the “unusual step of writing to all Canadians” (Strange, isn’t it, that “Canada’s Top Communication Company” should find it unusual to communicate with its customers?) with a history lesson, ostensibly in the interest of helping us “understand a critical situation” now facing the wireless industry: the potential entrance of an American company into the Canadian market.

You inform us that, since Parliament granted Bell its charter in 1880, Bell has spent 133 years “investing in delivering world-class communications services to Canadians.” An impressive track record!

You must, however, be aware that Bell’s permission to operate in Canada was initially obtained by agents acting in the interest of the (American) National Bell Telephone Company and that, after securing a favourable charter, three top-level executives from National Bell were appointed to Bell Canada’s board of directors (Babe, 1990, pg 68-69). Or how about how American Bell initially owned 50% of your company, only fully divesting its interest 43 years ago, in 1970 (Winseck, 1998, pg 119)?

Bell began its life in Canada as a branch plant of an American company. (In a strange twist of fate, it’s now a descendant of National Bell Telephone — Verizon — which is contemplating (re)entering the Canadian market.) And they leveraged this relationship to get an early leg up on the competition — using patents owned by its American parent, Bell quickly monopolized the market for Canadian telephone services, a monopoly it used to funnel profits back to the States. (Smythe, 1981, pg 141)

You suggest that “US giants don’t need special help from the Canadian government,” but that’s exactly how Bell got to where it is today!

That’s all ancient history, however, and in the here and now, BCE is a Canadian company who “welcomes any competitor,” so long as they “compete on a level playing field.” Right?

You’re calling on the Federal government to close “loopholes” that are intended to promote competition in your industry — rules that your company has forced the government to create.

Read the whole thing.

August 2, 2013

The self-inflicted wounds of Britain’s post-war auto industry

Filed under: Britain, Business, Europe, Germany, History — Tags: , , , — Nicholas @ 09:09

Dominic Sandbrook contrasts the rise of the German auto industry from the literal rubble of the post-war world with the slow decline of Britain’s once-mighty car makers:

If you want to know why Angela Merkel calls the shots in Europe, Germany’s car factories are a pretty good place to start.

By contrast, Britain’s car industry is a shadow of its former self. We do still make almost one and a half million cars a year, which is good news for thousands of British engineers. But these days, we make them for other people.

The iconic Mini plant at Cowley, for example, is celebrating its centenary this year. It was founded in 1913 by the entrepreneur William Morris as the home for his legendary Morris Oxford.

Today it still makes thousands of cars — but it makes them for BMW.

It’s a similar story at Crewe, the home of another great British icon, Bentley – which actually belongs to Volkswagen.

Half a century ago, let alone when Morris was at his peak, this would have seemed unimaginable. But the sad truth is that Britain’s car firms only have themselves to blame.

Seventy years ago, at the end of World War II, Germany was on its knees. After the fall of Hitler’s empire, its car industry lay in ruins.

In August 1945 the British Army sent a major called Ivan Hirst to take control of the giant Volkswagen plant in Wolfsburg, which had been built under the Nazis to produce ‘people’s cars’ for the German masses.

Ignoring his sceptical superiors, Hirst could see the potential amid the shattered debris of the Wolfsburg factory.

Rebuilding Volkswagen, he thought, would be a step towards rehabilitating Germany as a prosperous, peaceful European ally. And of course he was right.

In the next few years, Hirst restarted production of a car we know today as the Beetle. And from then on, VW was flying.

August 1, 2013

QotD: Banksy and the lumpenintelligentsia

Filed under: Britain, Business, Media, Quotations — Tags: , , , — Nicholas @ 08:08

Better still is Banksy’s satirical picture, this one on a wall in London’s Essex Road, of two small children pledging allegiance, with hand on heart, to a Tesco plastic bag on a flagpole — actually an electric cable — being run up like a flag by a third child. Tesco is Britain’s largest supermarket chain, and its plastic bags, white with blue stripes and red lettering, litter the countryside, often flapping from trees or disfiguring hedgerows.

Of course, Banksy, as a spoiled child of a consumer society in which real shortage is unthinkable, has all the unexamined anticapitalist prejudices of the lumpenintelligentsia to whom he appeals. But it would be wrong to dismiss the satire of this image out of hand. Tesco, after all, issues a “loyalty card” called a Clubcard; every customer is asked at the checkout, now sometimes by machine, whether he has such a card. The card’s name implies that shopping repeatedly in the stores of one giant corporation rather than in those of another, in the hope of a small price rebate, constitutes membership in a club. You don’t have to be anticapitalist to think that such an idea debases the concept of human clubbability. (In the same way, the word “solidarity” is degraded in France by its association with the payment of high taxes extracted from citizens by force of law.) It is no new thought — but not therefore a false one — that at the heart of consumer society is often a spiritual vacuum, at least for many people. They fill the vacuum with meaningless gestures, such as loyalty to brands almost indistinguishable from one another. I have known murder committed over brands of footwear. Banksy’s image captures, both succinctly and wittily, the vacuum and what fills it.

You also don’t have to be anticapitalist to acknowledge that the power of corporations like Tesco is not altogether benign. The small and beautiful town in which I live when I am in England illustrates this. When my next-door neighbor decided to restore and redecorate his house, which dated from 1709, the local council’s conservation department demanded that the new lead flashing on his roof, invisible from the street, be stamped with a design of bees, presumably because it had been so stamped at some time in history. Certainly conservation is important and cannot be left entirely to individuals. But why was my neighbor bullied in this fashion when Tesco was permitted to open a store not 100 yards away with a frontage completely out of keeping with the town — an eyesore that affects the town’s aesthetic fabric infinitely more than the absence of bees on my neighbor’s invisible lead does? The great majority of British towns have been ruined aesthetically in a similar way, their main streets becoming dispiritingly uniform and ugly, no doubt through some combination of corporate power, bribery, and administrative incompetence. Bullying people like my neighbor is perhaps the officials’ overcompensation for their cowardice or dishonesty in the face of corporations. Banksy’s image therefore has some satirical depth to it.

Banksy’s attitude toward authority and property rights is the standard hostility of the lumpenintelligentsia. Here he is particularly hypocritical because, while maintaining that pose of hostility, he employs lawyers, owns private companies, and is reputed to be highly authoritarian in his dealings with his associates. Inside every rebel, goes the saying, there’s a dictator trying to get out.

Theodore Dalrymple, “The Discriminating Philistine: Banksy’s wit and talent don’t excuse his vandalism and juvenility”, City Journal, 2013-06

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