… the push-model of book sales. Long before there was an Amazon, chain bookstores had cozy deals with publishers that sent most indie bookstores (now beloved in effigy by the left) out of business.
And then the left dominated publishing establishment had a brilliant idea. For decades they’d been trying to forecast failure and success, and failings. Books they pushed out the wazzoo (A river in Sundon’tshine) died on the vine when bookstores refused to stock them because the owners had read them. The books they had designated as to be ignored caught someone’s fancy, and suddenly were all over.
This was inefficient. It caused way too much printing that never got distributed, and much last minute rushed reprinting. (Even leaving aside how often people chose to read the WRONG things, something that started to matter more and more in the last two decades.)
So they came up with the push model. It was, from a certain perspective, brilliant.
That perspective is the one where the real world doesn’t really exist, so you don’t need to hear from it.
Because the managers of the big corporate bookstores ALSO didn’t read, they took instruction beautifully. So the publishers could say “you’ll take 100 of x and 2 of y” and they DID.
For a little while it worked beautifully, in the sense that there were no surprise bestsellers, (and publishing houses hated those. I know someone who unexpectedly sold out her print run in a week. The publishing house took the book out of print. No, seriously.) and the books that got seen and talked about were picked by the publisher. (BTW this wasn’t even always or primarily political. Sure, that existed too sometimes, but mostly it was the crazy fads that publishing convinced itself of. For instance, sometime in the mid two thousands they convinced themselves no one wanted historical mysteries — they weren’t selling, true, probably because they were on NO shelves — but everyone wanted “chick-lit mysteries” that had covers with lots of shoes and dresses and whose plots were “Sex in the City with murder.” I remember trying to find something to read, giving up and going to the used bookstore (then a hundred miles away in Denver) for my mystery fix.)
Of course, they sold less. In fact, as time went on and people got out of the habit of going to the bookstore, because there was never anything they could find to read. I mean, I remember being chased from Science Fiction to Mystery to finally History, to at last the sort of “utility” book you find in the discount bins you know “a chart of history” type of thing just to find something to buy on our bookstore night.
Then we gave up.
Eventually the broken feedback mechanism gave us the demise of Borders — and B & N is not feeling so good itself — and a yawning, desperate chasm in customers’ need for books that meant the way was wide open for Indie and Amazon. Even the early badly proofed indie books were like a breath of fresh air because for the first time I could read outside the trends being pushed.
Sarah Hoyt, “Breaking the Gears”, According to Hoyt, 2018-01-03.
March 25, 2020
QotD: The broken feedback mechanism that brought down the chain bookstores
March 15, 2020
QotD: The latest breakthrough in psychological therapy
All psychotherapy books bring up the Dodo Bird Verdict – the observation, confirmed in study after study, that all psychotherapies are about equally good, and the only things that matters are “nonspecific factors” like how much patients like their therapist. Some people might think this suggests our form of therapy will only be about as good as other forms. This, all therapy books agree, would be a foolish and perverse interpretation of these findings. The correct interpretation is that all previous forms of therapy must be equally wrong. The only reason they ever produce good results at all is because sometimes therapists accidentally stumble into using our form of therapy, without even knowing it. Since every form of therapy is about equally likely to stumble into using our form of therapy, every other form is equally good. But now that our form of therapy has been formalized and written up, there is no longer any need to stumble blindly! Everyone can just use our form of therapy all the time, for everything! Nobody has ever done a study of our form of therapy. But when they do, it’s going to be amazing! Nobody has even invented numbers high enough to express how big the effect size of our form of therapy is going to be!
Consider the case of Bob. Bob had some standard-issue psychological problem. He had been in and out of therapy for years, tried dozens of different medications, none of them had helped at all. Then he decided to try our form of therapy. In his first session, the therapist asked him “Have you ever considered that your problems might be because of [the kind of thing our form of therapy says all problems are because of]?” Bob started laughing and crying simultaneously, eventually breaking into a convulsive fit. After three minutes, he recovered and proceeded to tell a story of how [everything in his life was exactly in accordance with our form of therapy’s predictions] and he had always reacted by [doing exactly the kind of thing our form of therapy predicts that he would]. Now that all of this was out in consciousness, he no longer felt any desire to have psychological problems. In a followup session two weeks later, the therapist confirmed that he no longer had any psychological problems, and had become the CEO of a Fortune 500 company and a renowned pentathlete.
Not every case goes this smoothly. Consider the case of Sarah. Sarah also has some standard-issue psychological problem. She had also been in and out of therapy for years, tried dozens of different medications, none of them had helped at all. Then she decided to try our form of therapy. In her first session, the therapist asked her “Have you ever considered that your problems might be because of [the kind of thing our form of therapy says all problems are because of]?” Sarah said “No, I don’t think they are.” The therapist asked “Are you sure you’re not just repressing the fact that they totally definitely are, for sure?” As soon as Sarah heard this, she gasped, and her eyes seemed to light up with an inner fire. Then she proceeded to tell a story of how [everything in her life was exactly in accordance with our form of therapy’s predictions] and she had always reacted by [doing exactly the kind of thing our form of therapy predicts that she would], only she was repressing this because she was scared of how powerful she would be if she recovered. Now that all of this was out in consciousness, she no longer felt any desire to have psychological problems. In a followup session two weeks later, the therapist confirmed that she no longer had any psychological problems, and had become the hand-picked successor to the Dalai Lama and the mother of five healthy children.
Previous forms of therapy have failed because they were ungrounded. They were ridiculous mental castles built in the clouds by armchair speculators. But our form of therapy is based on hard science! For example, it probably acts on synapses or the hippocampus or something. Here are three neuroscience papers which vaguely remind us of our form of therapy. One day, neuroscience will catch up to us and realize that the principles of our form of therapy are the principles that govern the organization of the entire brain – if not all of multicellular life.
Scott Alexander, “Book Review: All Therapy Books”, Slate Star Codex, 2019-11-21.
March 11, 2020
QotD: Orthorexia
Our culture accepts as a scientific fact that organic food is healthier than non-organic food. You can watch TV, read popular magazines, or listen to healthy-living gurus, and overwhelmingly you will be told that organic food is healthier than non-organic food. Recipes tend to call for organic produce and ingredients. And it goes beyond organic foods. Genetically-modified foods are slandered as “frankenfoods” concocted by mad scientists in a laboratory. Further, we are admonished to avoid anything that is not “natural.”
OK then. Vaccines are genetically modified, lab-made, and certainly not natural. Being anti-vax seems a logical extension of the natural, organic lifestyle.
I know several people — including family members — who have so completely bought into the natural-organic hype that they genuinely believe GMO and non-organic foods are poisonous. They would rather starve themselves and their children to death than ingest a gram of non-organic food. They look at the shelves of a regular grocery store and see rows and rows of poison. There is a medical term for this fear of safe healthy food — it’s called “orthorexia.” I am not shocked that some of these individuals are anti-vaxxers. Instead, I am shocked (and relieved) that some of the orthorexics I know actually do vaccinate themselves and their children.
Buck Throckmorton, “Organic Food & Anti-Vaxxers – Does The Fear of Safe Food Lead to Fear of Safe Vaccines”, Ace of Spades H.Q., 2019-12-08.
November 23, 2019
What? No minister for socks? How will Justin decide what to wear?
Chris Selley on the quirky decision to appoint a “Minister of Middle Class Prosperity” to Justin Trudeau’s new cabinet:
Typical image search results for “Justin Trudeau socks”
Wednesday’s Cabinet shuffle featured the usual head-scratching reorganization of portfolios and outright invention of others, “bigger” being for some reason a stated goal. Joyce Murray, for example, becomes Minister of Digital Government. It has a very pre-Y2K ring to it, but then again the government in question accepts payment for access-to-information requests by cheque, and sometimes fulfills them (if at all) via CD-ROM, and it can’t manage a simple payroll system. So maybe it’s not such a bad thing to have someone on that job specifically.
Then there’s Ottawa-Vanier MP Mona Fortier’s new job. I literally assumed people were joking about the Liberals’ obsessive branding, but it’s true: No word of a lie, she is an Associate Minister of Finance and, specifically, the Minister of Middle Class Prosperity.
Should a government need a minister whose job is to ensure Canadians are prospering? One might reasonably hope that’s the goal of pretty much any minister when she rolls out of bed in the morning. But they sure don’t always act that way, so maybe a Minister for Making People Richer isn’t such a bad thing.
But the “middle class” flourish is so ridiculously on-brand that it turns the very idea into a joke. Recalling Trudeau’s 2015 catchphrase, many wags asked: “Shouldn’t it be the Minister of the Middle Class and Those Working Hard to Join It?” And they have a point. After four years in government, the Liberals have a good story to tell on social mobility: Poverty rates are at an all-time low. And yet they remain officially obsessed with a middle class that was never as imperilled as they claimed.
August 8, 2019
An excellent illustration of market segmentation
The Wikipedia entry for “market segmentation” defines it this way:
“BEER”by Jonnee is licensed under CC BY-NC-SA 2.0
Market segmentation is the activity of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics. In dividing or segmenting markets, researchers typically look for common characteristics such as shared needs, common interests, similar lifestyles or even similar demographic profiles.
No single product is going to be universally popular, and it’s generally a bad idea to present it that way. The producers of a new product ideally try to identify the groups of potential customers who are more likely to want to buy the new product, and tailor their advertising to those groups. The more accurately they can identify and communicate with these customer groups, the greater the chances that the product will be a success in the market.
Beer isn’t universally popular (Gasp! Shock! Horror!), so brewers try to identify different kinds of beer drinkers and market their brews to those sub-groups:
The point about a market being that you can put your stuff out there and see who buys it. The buyers will – they are rational beings after all – select from the varied offerings and their selections will be the ones which best increase their utility by their own measurements of that utility. Thus the Shagmenowbigboypint might get a bit more business toward closing time, who knows? Not necessarily entirely female business either.
And even to stop being puerile about it. We’ve only this one system that does provide multiple choices – that’s what a market is. But in order for ever finer meeting of utility it’s necessary for ever finer slices of the market to be addressed. That is, we need to have free market entry so we can find out what it is that actually meets peoples’ desires.
Banning something that appeals to some slice of that market is thus defeating the point and object of that very market’s existence. Sure, lots of women won’t buy a sexist beer. Some will, as will some men. The aim and art of the whole exercise being to allow those who won’t not to, those who will to.
Or, as we can put it, every beer being Shagmenowbigboypint is as bad as no beer being Shagmenowbigboypint.
August 2, 2019
Doug Ford’s sudden onset “Winegate” scandal
Ontario premier Doug Ford is now taking flak for promoting an Ontario winery after his party accepted what some Toronto media reports characterized as a “generous” donation from the winery’s owner. How generous? Are we talking millions? Tens of millions? A thousand dollars. Toronto media considers $1,000 to be enough money to sway the provincial government and at least one local media outlet encouraged its readers to boycott the winery. But that turned out to be only the tip of the iceberg from a media investigation point of view: Ford’s ultra-cheesy “Ontario News Now” party propaganda channel had given Ford’s endorsement to at least four other mega-corporations whose political contributions may have gone as eye-wateringly high as $2,000! Torontonians may never have heard of these corporate puppet-masters who clearly now control Premier Ford’s every waking moment, but as Canadians have never seen corruption on this scale before — nearly ten thousand dollars in political contributions!! — they’re demanding all the usual things that media-ginned-up protests tend to demand.
“Pelee Island winery”by John Kannenberg is licensed under CC BY-NC-ND 2.0
At the National Post, Chris Selley wonders why the Ontario Progressive Conservatives are acting just as badly as the Liberals they replaced:
When it comes to Canadian politicians and money, it might be difficult to explain to a foreign visitor exactly what’s kosher and what’s not. Ontario Premier Doug Ford got some bad press this week for having promoted the Pelee Island Winery in one of his impossibly cheesy “Ontario News Now” propaganda videos, just weeks after the winery’s owner, Walter Schmoranz, donated $1,000 to Ford’s Progressive Conservatives. In isolation, it didn’t look great. If it’s a coincidence, as the premier claims, then it’s the sort of coincidence a government wishing to claim moral rectitude should endeavour to avoid.
Viewed in the broad landscape of Canadian politics, however, it all seems rather overblown. Politicians regularly stump for certain products and businesses, after all, implicitly at the expense of others. More to the point they routinely give businesses free money without asking us, and not out of the goodness of their hearts.
According to David Akin’s indispensable @ottawaspends Twitter feed, the federal government doled out $723,000 to wineries and winery associations this year and last. The Nova Scotia Winery Association hoovered up $522,000 of the total, plus another $175,000 back in 2012. Perhaps it would be cynical to observe that the riding of West Nova, home to the Annapolis Valley wineries, is notorious for changing hands between the Liberals and Conservatives. Whoops — too late.
Here in Ontario, meanwhile, between 2013 and 2018, the province and feds collectively gave away at least $1.1 million to wineries and $1.5 million to breweries, plus $140-odd million more to an endless queue of cap-in-hand distillers, mushroom farmers, meat processers, goat dairies, sugarmakers and bakeries. Pelee Island Winery isn’t on that list, incidentally, which might put the premier’s non-financial contribution — quid pro quo or not — in perspective.
All that taxpayer dough got handed out under a program called Growing Forward 2, which was an “initiative that encouraged innovation, competitiveness and market development, adaptability and industry sustainability in Canada’s agri-food and agri products sector.” That’s a fancy way of saying “corporate welfare,” which can be unpopular in Canada when it comes to bailing Bombardier out of its latest fiasco or buying the Weston clan new freezers, but which is entirely uncontroversial when it comes to smaller, less obviously villainous businesses — especially if they happen to be farms.
July 4, 2019
Assorted green scams
David Warren briefly returns to the current day (away from his normal 13th-century preferences) to look at a few of the many green scams being run by various government and industry scam artists:
Speaking with a gentleman who vends in a neighbourhood farmers’ market, I learnt something interesting, and probably true. Surviving family farms usually lack “organic” credentials. This is because getting them, from the bureaucracies that dispense them, is an immensely time-consuming process, and involves costs that would erase most of the little farmer’s profits. You have to be a big, faceless, industrial operation to afford the official “organic” labels that sucker big city consumers into paying double for essentially the same goods. That the whole system is massively corrupt, can almost go without saying. It was designed to be.
Organic scams are far from new, but perhaps more insidious because corporations love to add that “organic” label on stuff to jack up the prices on all sorts of things, like spices, wine, and many, many other items. Restaurants do the same trick on their menus, frequently assuming nobody will ever check up on them. That said, it’s mostly the well-off who get fooled because, well, they’re eager to be fooled on that score. The US government even admitted that organic certification is not about food safety or nutrition: it’s all marketing.
By coincidence, the same day my eye caught, by accident on the Internet, the announcement of a Green Award to a big car assembly “park.” They had changed all the light bulbs in their factory buildings, thus saving themselves a few thousand dollars on their multi-million electric bill, and seem to have installed new toilets, too. This sprawling high-tech carriage works remains three hundred acres of unspeakable aesthetic horror, in which human beings are enslaved to machines. But now it is “Green.”
The greenwashing of modern industrial and commercial buildings is a long-running scam, with the much-desired “LEED Platinum” certification usually, if not always, awarded to those who game the system most successfully. “What LEED designers deliver is what most LEED building owners want – namely, green publicity, not energy savings“
The environmental business — currently buoyed by unprovable, often fatuous claims of anthropogenic global warming — is perhaps the most cynical. It has spawned vested interests on a global scale, that will not be overturned by occasional exposure. At its heart is the manipulation of statistics, and scare-mongering through compliant mass media. The general public are hypnotized by repetition. I have noticed in desultory dips into the news that e.g. anomalous weather will invariably be attributed to “climate change,” when more plausible explanations are easily at hand.
This zombification extends to most other areas of reportage: invisible bogeys blamed for imaginary trends. Solutions to “environmental problems” are proposed that will not make the slightest dent in them.
Of course, the constant demands for “clean energy” almost always explicitly reject the use of nuclear power because reasons.
Darlington Nuclear Generating Station in Clarington, Ontario.
Photo by Óðinn via Wikimedia Commons.
But nuclear power, most easily in the form of molten salt reactors (on which research was killed fifty years ago), could replace most uses of coal, oil, and gas within a decade, through much smaller facilities eliminating huge transmission costs. It would be the cheaper because the fuels are readily available to start in the form of recycled nuclear waste, and the raw materials would be abundantly available thereafter.
On the question of safety, the death toll from mining, drilling, hydro dams, &c, is quite considerable — in the tens of thousands at least, post-War. Except for Chernobyl (one of many Soviet-era environmental disasters), the death toll from nuclear accidents remains about nil. No one died at Three Mile Island. Not one death was caused by the flooded Fukushima reactors (though well over twenty thousand were killed by the tsunami that caused the difficulty there).
In short, “clean energy” is not a problem. It had to be made into one by the fright campaigns of the environmentalcases, whose own power and income depends on sustaining the problem, and preventing the most obvious solutions.
July 3, 2019
QotD: Elon Musk as a modern-day Ferdinand DeLesseps
I used to love Elon like everyone else. I still think that having four or five billionaires in a space race against each other is finally the world I thought I was going to get growing up reading Heinlein. The Tesla Model S was probably one of the most revolutionary cars of the last 50 years. But he lost me when he committed outright fraud in the Solar City – Tesla deal and since then have only become more skeptical about he and Tesla.
Elon Musk at the 2015 Tesla Motors annual meeting.
Photo by Steve Jurvetson via Wikimedia Commons.I sort of laugh when folks tell me that really smart successful rich people believe in Tesla. You mean like James Murdoch, on the board of Tesla and who also was lost his entire investment in Theranos? Or like Larry Ellison, an adviser and fan of Elizabeth Holmes who invested $1 billion in Tesla just 6 months ago and has already lost 40% of it? The window on this is probably closing, but over the last 10 years if you wanted to get Silicon Valley investors to throw a lot of money at you, find a traditional bricks and mortar business and devise a story in which you take that industry and convert its economics to that of the networked software world (see: Uber, WeWork, Tesla, and even Theranos in some of its strategic pivots).
Or how about true millennials and Elon Musk? Name a wealthy millennial supporter of Elon Musk and Tesla and I can bet you any amount of money they have not looked at Tesla’s balance sheet or cash flow or the details of its global demand trends. They have not thought about its dealership strategy or manufacturing strategy and the cash flow implications of these. They just like what Elon says. It sounds big and visionary. They buy into Elon’s formulation that he is saving the environment and everyone opposed to him is in a cabal with big oil (ignoring the fact that Elon routinely uses his Gulfstream VI to commute distances less than 60 miles). So saying that rich millenials adore Elon is effectively saying that they want to be associated with the same things Elon says he is for — the environment and space travel et al.
Elon Musk is Ferdinand DeLesseps. He is PT Barnum. He is Elizabeth Holmes. He is the pied piper. He is fabulous at spinning visions and making them sound science-y. But he is not Tony Stark. There is a phenomenon with Elon Musk that everyone thinks he is brilliant until they hear him speak about something about which they have domain knowledge, and then they realize he is full of sh*t. For example, no one who knows anything about transportation or physics or basic engineering has thought his Boring Company and Hyperloop make any sense at all. His ideas would have been great cover stories for Popular Mechanics in the 1970’s, wowing 13-year-old boys like me with pictures of mile-long cargo blimps and flying RV’s. He is like a Marvel movie that spouts science that is just believable-enough sounding that it moves the plot along but does not stand up to any scrutiny.
All of this would be harmless if he was not running a public company. I don’t really care about the rich folks who were duped by Elizabeth Holmes, but hundreds of thousands of small millenial investors who have totally bought into the Elon hype are literally putting their last dollar into Tesla, and sometimes borrowing more. Tesla shorts often laugh at these folks on Twitter, calling them “bagholders,” but it is a tragedy. Unless Tesla finds a sugar daddy sucker, and the odds of that are getting longer, I think it is going to end badly for many of these investors.
As a disclosure, I have been short Tesla via puts for a while now. It you really want to understand Elon, the best book I can recommend is The Path Between The Seas about the building of the Panama Canal. First, it is a great book you should read no matter what. And second, Ferdinand DeLesseps is the best analog I can find for Musk.
Warren Meyer, “People Who Express Opinions Outside of their Domain Seldom Have Really Looked into it Much”, Coyote Blog, 2019-05-28.
May 20, 2019
A “cutting-edge mediaeval Catholic” view of the modern economy
David Warren explains some of his disquietude about our modern world:
Gentle reader may object that none of these entities is a government department, except insofar as it is the subject of taxes and regulations, and as it grows larger, an ever more formidable force in lobbying for subsidies and legislation favourable to itself. Objection sustained. Verily, this is just my point.
Each entity made its way until the gobbling by means of mass consumer advertising, in which morally illegitimate methods of persuasion — principally hype, actual lies, irrelevant claims and endorsements — are instrumental to sales success. Honest advertising (e.g. catalogues with exact descriptions) is theoretically possible but practically extinct; campaigns are based on the tawdry manipulation of human “perceptions” — behaviourist psychology at the level of Ivan Petrovich Pavlov, but elaborately quantified, with financial and pricing arrangements factored in.
Indeed, one may link most disastrous marketing decisions to the decline of intuitive reasoning, as statistical reasoning takes its place. The manager who knows in his gut, from experience, what might work and what won’t, or can’t, is displaced by the young analyst with computer modelling skills and all the jargon of “science” to express the platitudes he was drip-fed in school.
But here, too, “private” and “public” enterprise are fully integrated. Both are adapted to the “planning” paradigm, and each is utterly dependent on the other, in what is misleadingly called “the mixed economy.” The critics of abstract Capitalism, on the one side, and abstract Socialism, on the other, draw a false contrast between two administrative orders, when they are both bureaucratic in nature, inhumanly oversized, and habitually dedicated to the pursuit of monopoly.
Several of the readers with whom I correspond are under the immovable impression that I am against making money, or improvements in technology, per se. In fact my outlook is cutting-edge mediaeval Catholic. The moral questions are instead such as, How is the money made? And, for what are the improvements to be used? As I must remind e.g. my Chief Texas Correspondent, I am not against electricity or indoor plumbing. But I am against worshipping such things, or making them the criteria for high civilization.
April 17, 2019
QotD: “[E]valuating food by its calorie count is like evaluating literature by the number of pages in a book”
… calorie-counting is an ineffective approach to eating. Calories are a crude metric that takes into account nothing about the properties of foods other than the total energy they contain. The value of activities can’t be reduced to a number, and nor can foods. Still calories are listed everywhere, enumerated in enormous fonts on food packaging and across menus and ads for packaged products with nothing to recommend them but a lack of calories.
A calorie is the amount of energy required to raise the temperature of a gram of water by one degree Celsius. The “calories” we talk about in food are the amount of energy released when that food is burned. Of course the first law of thermodynamics applies to humans, so if you take in less energy than you use, it’s impossible to store that energy (as body fat). But the factors that go into energy balance are many. The body burns and stores energy from different foods in different forms at different times in different people in different ways.
That crudity leads to mistakes, like the idea that 200 calories of Skittles are in any way equivalent to 200 calories of salad. In that way, calories have been weaponized by marketers to claim their ingestible products are innocuous. As Coca-Cola has advertised, for one, drinking soda is fine as long as you exercise enough to burn off those calories. That’s reasonable if it weren’t also true that constant exposure to high-sugar foods changes the way our bodies store energy. It’s like saying it’s fine to insult someone as long as you follow it with a compliment.
Worse still are the loudly advertised “100-calorie” packs of sugar-based edible products. They cause insulin levels to surge, affecting nutrient absorption and subsequent hunger in ways fundamentally different from eating 100 calories of almonds or spinach. That’s so much spinach. It would fill your stomach and please the microbes of your bowel.
James Hamblin, “It’s True, Hot Baths Burn Calories: Why calorie counting is almost useless and often misleading”, The Atlantic, 2017-04-13.
March 8, 2019
QotD: Wine books as hagiography
Disasters of this sort happen much more rarely in books of the second category. Or rather, the things that do go wrong are sent from outside to try the heroic château-owners: items such as the French Revolution, the German occupation, hail, drought, floods, phylloxera, mildew and oidium. Disasters are there to be triumphed over; owners (or, at any rate, recent owners) are always doing their best, even when the world is less than the best possible. Greed, corruption, exploitation of employees and sharp practice turn up as rarely in the literary genre that is the château profile as does premarital bonking in Barbara Cartland. (And just out of interest, were there no collaborators in the vineyards during the last war? I’ve yet to read of any.) Of course, these books tend to be commissioned when the château is rich and its label famous; even so, it would be a nice change to read some day of an estate where the vineyards were wrecked, the workforce pissed, the proprietors fraudulent and the wine disgusting. In the meantime we have Asa Briggs: ‘I would not have written this book, however, had I not been invited to do so by the Duc and Duchesse de Mouchy, and they, along with other members of the Dillon family (who now own the vineyard) on both sides of the Atlantic, have given me great encouragement – and offered me memorable hospitality – throughout the inevitably protracted period of my research.’ Well, yes. Briggs does his little nods and bows, and writes with the bonhomie of a trusted courtier. He imparts all the key information that official sources will disclose about Haut-Brion; he writes effectively about the wider history of the Bordeaux wine trade (which perhaps should have been his subject in the first place), and fascinatingly about the city under the Revolution, when the owner of Haut-Brion was sent to the guillotine. But it is not for nothing that the name Asa Briggs, as a New Statesman competition entrant pointed out, is an anagram of Sir Gasbag. He just can’t help the pompous and the self-referential: ‘The year 1938, when I went up to university, was only an ‘average year’, rather like 1939, the first year I visited Bordeaux before war reached it … I have never tasted the 1955, the year of my marriage’. He is also a generous quoter of the gasbaggery of others. Take this insight from that ‘great citizen and long-time Mayor of Bordeaux’, Jacques Chaban-Delmas: ‘The spirit of a city takes bodily shape, so to say, across time and across the history that defines, affims and perpetuates both its identity and its raison d’être.’ Not much will have gone missing in the translation.
It is, no doubt, the fault of the genre, but Haut-Brion avoids controversy like a corked bottle. Briggs praises Edmund Penning-Rowsell’s ‘thoughtful and wide-ranging’ The Wines of Bordeaux, but does not quote its author’s judgement that ‘vinously the château has had its ups and downs in this century’. Briggs is ‘deeply impressed’ by Robert Parker and his ‘outstanding personality’, but does not refer to Parker’s assertion that the château produced ‘simplistic’ claret in the years 1966-74: ‘Whether this was intentional,’ Parker writes in Bordeaux, ‘or just a period in which Haut-Brion was in a bit of a slump remains a mystery. The staff at Haut-Brion is quick-tempered and sensitive about such a charge.’ Briggs also manages to blandify the potentially interesting anecdote. There is a story about Malcolm Forbes (‘who died while I was carrying out research for this book’), who at one extreme famously bought a bottle of Jefferson claret for $156,000, and at the other several hundred bottles of 1965 Haut-Brion for $5 a throw. ‘Forbes described himself as an appreciator of wine rather than as a collector, and he was a shrewd appreciator at that, a man who liked a bargain,’ Briggs notes. He records Forbes’s opinion that the 1965 got ‘better and better’ each time he drank it, the owner of Haut-Brion’s view that Forbes had been ‘quite right’ to have bought the wine, and ends by nervelessly quoting the Haut-Brion brochure to the effect that the wine is ‘astonishing for the vintage’. Sir Gasbag concludes: ‘Six thousand cases of Haut-Brion were produced in 1965. The comparative figures for 1964 and 1966 were 17,500 and 19,500. Forbes obviously knew what rarity meant.’ Among the fawning and the back-slapping lies a moderately interesting story about the penny-pinching of the super-rich. Of course, the reason the 1965 is ‘rarer’ than those on either side of it was because of climactic conditions which made it one of the crappiest of all postwar vintages, in which Haut-Brion produced a marginally less crappy wine than some of the other first growths. And would any vineyard-owner ever willingly dump on his own wine in overt contradiction of a millionaire client? I once attended a vertical tasting of a second-growth claret in the presence of the owner and her business manager. Among several excellent vintages there was an obvious super-dud of a 1958, which should long since have been emptied straight into the vinegar mother. When the owner arrived for the tasting she asked her manager in some puzzlement why they were showing the 1958. Because we have several hundred cases of it left,’ he replied. Whereupon, a few minutes later, she rose to her feet and gave measured praise to the lesser-known but arguably undervalued 1958.
Julian Barnes, “Did You Get Black Truffles on the Nose?”, Literary Review, 1994-10.
March 3, 2019
QotD: Four ways to corporate monopoly
1. Proprietary technology. This one is straightforward. If you invent the best technology, and then you patent it, nobody else can compete with you. Thiel provocatively says that your technology must be 10x better than anyone else’s to have a chance of working. If you’re only twice as good, you’re still competing. You may have a slight competitive advantage, but you’re still competing and your life will be nasty and brutish and so on just like every other company’s. Nobody has any memory of whether Lycos’ search engine was a little better than AltaVista’s or vice versa; everybody remembers that Google’s search engine was orders of magnitude above either. Lycos and AltaVista competed; Google took over the space and became a monopoly.
2. Network effects. Immortalized by Facebook. It doesn’t matter if someone invents a social network with more features than Facebook. Facebook will be better than their just by having all your friends on it. Network effects are hard because no business will have them when it first starts. Thiel answers that businesses should aim to be monopolies from the very beginning – they should start by monopolizing a tiny market, then moving up. Facebook started by monopolizing the pool of Harvard students. Then it scaled up to the pool of all college students. Now it’s scaled up to the whole world, and everyone suspects Zuckerberg has somebody working on ansible technology so he can monopolize the Virgo Supercluster. Similarly, Amazon started out as a bookstore, gained a near-monopoly on books, and used all of the money and infrastructure and distribution it won from that effort to feed its effort to monopolize everything else. Thiel describes how his own company PayPal identified eBay power sellers as its first market, became indispensible in that tiny pool, and spread from there.
3. Economies of scale. Also pretty straightforward, and especially obvious for software companies. Since the marginal cost of a unit of software is near-zero, your cost per unit is the cost of building the software divided by the number of customers. If you have twice as many customers as your nearest competitor, you can charge half as much money (or make twice as much profit), and so keep gathering more customers in a virtuous cycle.
4. Branding. Apple is famous enough that it can charge more for its phones than Amalgamated Cell Phones Inc, even for comparable products. Partly this is because non-experts don’t know how to compare cell phones, and might not trust Consumer Reports style evaluations; Apple’s reputation is an unfakeable sign that their products are pretty good. And partly it’s just people paying extra for the right to say “I have an iPhone, so I’m cooler than you”. Another company that wants Apple’s reputation would need years of successful advertising and immense good luck, so Apple’s brand separates it from the competition and from the economic state of nature.
Scott Alexander, “Book Review: Zero to One”, Slate Star Codex, 2019-01-31.
March 2, 2019
QotD: Big Brother
Actually, it seems that Orwell was mistaken. Oppression does not have to mean dismal living conditions, horrible food, telescreen propaganda and rusty rationed razor blades. Big government can control people far more effectively by giving them a small slice of comfort and domesticity. Allow them a modest home. Encourage them to accumulate trinkets and toys and the occasional status symbol. Allow commercial marketing to develop the propaganda that shapes opinion and mood and sets people on the desired path.
Commercial marketing is far more effective than state propaganda — “Drivers Wanted” has recruited more people than any poster featuring a stern and serious Uncle Sam. Keep them somewhat comfortable, keep them acquisitive rather than inquisitive, keep them entertained rather than informed — and no-one will be seriously tempted to pursue an alternative.
Jonathan Piasecki, private e-mail, 1999-07-07. (Republished with permission)
January 27, 2019
Some reasons to be bearish on Tesla’s future
At Coyote Blog, Warren Meyer climbs back onto one of his favourite hobby horses:
Yes, I am like an addict on Tesla but I find the company absolutely fascinating. Books and HBS case studies will be written on this saga some day (a couple are being written right now but seem to be headed for Musk hagiography rather than a real accounting ala business classics like Barbarians at the Gate or Bad Blood).
I still stand by my past thoughts here, where I predicted in advance of results that 3Q2018 was probably going to be Tesla’s high water mark, and explained the reasons why. I won’t go into them all. There are more than one. But I do want to give an update on one of them, which is the growth and investment story.
First, I want to explain that I have nothing against electric vehicles. I actually have solar panels on my roof and a deposit down on an EV, though it is months away from being available. What Tesla bulls don’t really understand about the short position on Tesla is that most of us don’t hate on the concept — I respect them for really bootstrapping the mass EV market into existence. If they were valued in the market at five or even ten billion dollars, you would not hear a peep out of me. But they are valued (depending on the day, it is a volatile stock) between $55 to $65 billion.
The difference in valuation is entirely due to the charisma and relentless promotion by the 21st century’s PT Barnum — Elon Musk. I used to get super excited by Musk as well, until two things happened. One, he committed what I consider outright fraud in bailing out friends and family by getting Tesla to buy out SolarCity when SolarCity was days or weeks from falling apart. And two, he started talking about things I know about and I realized he was totally full of sh*t. That is a common reaction from people I read about Musk — “I found him totally spellbinding until he was discussing something I am an expert in, and I then realized he was a fraud.”
Elon Musk spins great technology visions. Like Popular Mechanics magazine covers from the sixties and seventies (e.g. a flying RV! a mile long blimp will change logging!) he spins exciting visions that geeky males in particular resonate with. Long time readers will know I identify as one of this tribe — my most lamented two lost products in the marketplace are Omni Magazine and the Firefly TV series. So I see his appeal, but I have also seen his BS — something I think a lot more people have caught on to after his embarrassing Boring Company tunnel reveal.
January 7, 2019
QotD: The lifecycle of the pop music industry
… the music industry, the people involved in the business end of things, is about half the size it was at its peak. A couple of years ago I did a post on the state of music. Per capita music sales have collapsed from their peak 15 years ago. That peak was largely a bubble created by the advent of the compact disc. Everyone went out and repurchased their music collection in the new digital format. A lot of old stuff was remastered for the new format and that boosted sales too.
We are now in a time when selling songs is no longer very profitable. Often, bands will put their new releases on YouTube free of charge. The song itself is a form of marketing for their live shows. In my youth, the opposite was the case. Bands went on tour to promote their latest album. The tickets to the show were often cheaper than the album. Now, anything you want is on-line so trying to monetize the songs has become a lost cause. As a result, the focus is on making money from the live shows.
In many respects, pop music is back to where it was before the great wars of the 20th century. In the 19th century, sheet music was the item of value in the music business. Many of our intellectual property laws, in fact, come from efforts to protect the owners of sheet music. The main source of income for musicians, however, was the live act. They went around performing for customers. It is where the expression “sing for your supper” started. Often musicians were paid, in part, with a meal.
The Z Man, “The Cycle of Life”, The Z Blog, 2017-03-01.
