Quotulatiousness

May 20, 2019

A “cutting-edge mediaeval Catholic” view of the modern economy

Filed under: Business, Economics, Liberty — Tags: , , , — Nicholas @ 03:00

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”

Filed under: Food, Health, Quotations, Science — Tags: , , — Nicholas @ 01:00

… 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

Filed under: Books, Quotations, Wine — Tags: , , — Nicholas @ 01:00

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

Filed under: Government, Media, Quotations — Tags: , , — Nicholas @ 01:00

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

Filed under: Business, Media, Technology, USA — Tags: , , , , — Nicholas @ 05:00

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

Filed under: Business, History, Media, Quotations, Technology — Tags: , , , — Nicholas @ 01:00

… 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.

January 11, 2018

Sell the sizzle works, for a while, but even names with “blockchain” still have to produce something

Filed under: Business, Technology — Tags: , — Nicholas @ 03:00

Remember the media splash — and stock price boost — that the Long Island Iced Tea Company got by rebranding themselves as Long Blockchain? The rest of the plan apparently isn’t playing out quite as the company may have hoped:

… today Long Blockchain announced it was scrapping the stock offering. The company says that it’s still planning to buy bitcoin-mining hardware. However, Long Blockchain says that it “can make no assurances that it will be able to finance the purchase of the mining equipment.”

Where the company might get the money to buy the mining equipment is unclear. Antminer S9 mining hardware lists for upwards of $5,000, so it would cost millions of dollars to get 1,000 units. Long Blockchain’s most recent financial disclosure shows the company with only $429,000 in cash on hand in September.

The company’s press release didn’t explain the sudden turnaround, but it seems the stock market wasn’t thrilled by the plan to sell new shares. Long Blockchain’s stock price fell on Friday, the day the plan was announced, then soared this morning when the plan was scrapped. The stock is still worth more than double its value before the blockchain pivot was announced last month.

The broader question is why it makes sense for a beverage company to get into the blockchain business in the first place. In principle, you could imagine the company looking for ways to use blockchains to improve its core business — by optimizing supply chain management, for example.

Maybe I should rethink my plan to rebrand as Quotulatiousness BLOCKCHAIN

January 7, 2018

Give your butt a wake-up call with the latest from “Gwyneth Paltrow’s life-threatening, wallet-flensing empire of woo”

Filed under: Business, Health, Media, USA — Tags: , , , , , — Nicholas @ 03:00

Cory Doctorow views with alarm yet another potentially dangerous product from Goop:

Goop is Gwyneth Paltrow’s life-threatening, wallet-flensing empire of woo, home to smoothie dust, vulva steaming, rocks you keep in your vagina, and a raft of rebadged products that are literally identical to the garbage Alex Jones sells to low-information preppers.

Both Goop and Alex Jones are big on “detoxing,” an imaginary remedy that poses a very real health-risk, especially when it involves filling your asshole with coffee.

Coffee enemas are, of course, bullshit, whose history and present are rife with hucksters whose smooth patter is only matched by their depraved indifference for human life.

But as stupid as coffee enemas are, they’re even stupider when accomplished by means of Goop’s, $135 “Implant O’Rama,” manufactured by Implant O’Rama LLC. It’s a $135 glass jar with a couple silicon hoses attached to it.

November 9, 2017

QotD: The reputation of Che Guevara proves “the triumph of marketing over truth and reality”

The Irish Post Office has issued a stamp to commemorate the fiftieth anniversary of the death of Ernesto Guevara. This is, presumably, because he was both very famous and had some distant Irish ancestry. It is, however, a rather sinister philosophy that the worth of a man’s work or ideas, or his influence on the world, is much affected, either for the better or the worse, by his distant ancestry.

Guevara’s reputation is, of course, the triumph of marketing over truth and reality. There is probably no resort of mass tourism in the world where Guevara kitsch is not on sale and, one must presume, bought; and in an odd way this is only appropriate, for mass tourism makes lemmings seem like unreconstructed individualists, and Guevara was nothing if not an ardent promoter of mass conformity and unthinking obedience. Like many an adolescent psychopath, as he remained all his life, he dreamed of making mankind anew — not in his own image, exactly, for he thought of himself as a leader rather than a follower, but according to his own far-from-profound ideas of what mankind should be. The triumph of marketing is to have made this apostle of the most complete servitude into an apostle of the most complete freedom.

The triumph of marketing over truth and reality is nothing new, however. To expect people who are trying to sell you something also to tell you the truth, the whole truth, and nothing but the truth is to expect what never did happen and what never will happen. The buyer will always have to beware, no matter what legal protections are put in place for the unwary; the necessity is inscribed, as it were, in human nature itself.

Theodore Dalrymple, “The Way of Che”, Taki’s Magazine, 2017-10-28.

November 3, 2017

Don’t fall for the biodynamic woo in wine propaganda

Filed under: Business, Europe, Italy, Wine — Tags: — Nicholas @ 05:00

I’m not a believer in the pseudo-mystical bullshit of biodynamic wine and I’m very strongly of the opinion that it’s 100% New Age marketing bafflegab to excuse jacking up the price of a mediocre-or-worse bottle of wine and to deflect criticism of faulty or inexpert winemaking. “Organic” wines are too often just adequate wines at a higher price point than their quality would otherwise justify. Michael Pinkus reports that he had to put up with a full-on biodynamic bullshit storm on a recent tasting in Italy:

While on a journalist junket […] I found myself at a beautiful modern winery where Daddy had obviously made a lot of euros and he wanted his offspring to have the best in their new endeavor … the winery was painfully modern and so were the levels of wines (earth, sky, air, etc) everything pointed to a winery that devotedly cared about the environment wherein it existed and did so with biodynamic winemaking techniques and practices – even the tour dripped of kale-eating and moccasin-wearing.

[…]

When it came time to taste the wines, we all sat at a long elaborate table, everything was set to impress. We started with a bottle of barely choke-downable sparkling wine … it was off-putting and oxidized, and that’s putting it mildly. I looked around the table but everybody seemed to be okay with what was in their glass. Next we tried both the whites and red from the various lines previously mentioned, with each wine seemingly worse than the next.

I turned to an older colleague and said, “Do you like any of these wines?” To which he went into an explanation about how the wines are not “typical” but laudable: “In competition these wines would not show well because they have something different about them – but once they are explained, to either the judges or eventually the consumer, these wines would show much better.”

My mind screamed “NO” while I nodded so as not to start a huge argument in front of the winemaker who had returned with yet another bottle … How in the world could this logic be true? In what world is this even right? Wine is good or it is bad and that decision is in the palate of the beholder (so to speak), but to make an argument that a wine needs a full dissertation before one can enjoy it is absurd to me and blatantly false. I’m not saying that some explanation doesn’t help in the understanding of a wine, but you should not need to fully explain a wine to make it palatable; and just because it’s bio-dynamic doesn’t automatically give the wine a pass or extra marks for trying to make the world a better place; bad wine is bad wine and no amount of explanation is going to make it better.

If you like fruit in your wine then something with lots of minerality or over the top acidity will not appeal to you, that’s a taste profile – but poorly made, off-putting, faulty or oxidized wines don’t get an A for effort just because somebody lets a white sit on skins longer, bury a poop-filled rams horn in the ground at low tide (or whatever your bio-dynamic practice may be), or because you have a fountain that swirls water in ornate patterns from a 2000 year old cistern. Ultimately taste is king.

October 23, 2017

It’s legal to sell 2×4 lumber that’s not actually 2″ by 4″

Filed under: Business, Law, Woodworking — Tags: , , , — Nicholas @ 03:00

Not only is it legal, that’s the way construction lumber has been marketed and sold for decades. A recent Illinois case against US DIY chain Menards was dismissed recently:

A federal judge has slammed the door on the Illinois lumber shoppers who sued Menards claiming it deceived them about the size of its 4x4s.

Saying no reasonable consumer would regard Menards’ descriptions of its lumber the way plaintiffs Michael Fuchs and Vladislav Krasilnikov said they did, the judge last week dismissed the would-be class action lawsuit against the Wisconsin-based home-improvement chain.

The decision by U.S. District Judge Edmond Chang throws out a case in which Menards was accused of deception because it marketed and labeled its 4x4s without specifying that the boards measure 3½ by 3 ½ inches.

So-called dimensional lumber — 2x4s, 4x4s, 2x6s and such — is commonly sold by names that do not specify the measurements of the pieces. The longstanding industry convention is recognized by the U.S. Department of Commerce, which distinguishes between the “nominal” designations for pieces of lumber and their actual size. The department says a 2×4, for example, can measure 1½ inches thick by 3½ inches wide.

The distinction between the name and the actual dimensions stems from the fact that lumber, when it is produced, typically is trimmed to smooth it after the initial rough cut, Chang said in his decision.

October 14, 2017

It’s not the actual dollar amount wasted, it’s what it reveals about the federal government

Filed under: Cancon, Government — Tags: , , — Nicholas @ 05:00

Colby Cosh, giving full credit for the scoop to Tom Korski, on the minor-but-revealing way the federal government treats taxpayer money:

Even as I summarize this news, I can see the potential for various kinds of carping from ad men or illustrators who don’t want their oxen gored. “Sigh, this is just business as usual.” Like hell it is: under the Conservatives the finance department used plain covers or inexpensive stock photos for the budget. This is exclusively Liberal tomfoolery.

“Okay, but the cost is perfectly reasonable for what we got!” Two hundred thou for one document, huh? Try that one out on a newspaper art director. Try it out on anyone who ever worked for a magazine, particularly one with newsstand sales that actually depended on a fancy cover.

Maybe you’re thinking, “Even if it’s a bit ridiculous, it’s ONLY $200,000 against a background of billions.” But is it? To me this is the most intriguing part of all. Blacklock’s quotes an e-mail (“It’s fresh. I love where this is going”) from someone who has the title “senior marketing advisor for the finance department”.

Am I the only one left asking, “Why the hell does the federal finance department need a marketing advisor?” The “senior” part denotes a six-figure salary, none of which is included in the cheque that was written to the nice creatives at McCann. Is the finance department a business whose revenues depend on effective advertising? Does Canada’s federal government have several finance departments contending with each other for market share?

[…]

This is the sort of use of public funds for essentially partisan purposes that we can’t throw anybody in jail for, except in my daydreams. Blacklock’s uncovered e-mails make this positively explicit: in arguing over the 2016 budget cover someone observed that, “Justin Trudeau’s election mantra was all about positivity, change, and optimism for the future. We want this budget cover to illustrate that feeling.” I would say this utterance is not quite in the tradition of our public service, except for my fear that it is a perfect expression of the real tradition.

September 13, 2017

Tesla’s experiment in price discrimination

Filed under: Business, Economics, Technology — Tags: , , , , , — Nicholas @ 05:00

Alex Tabarrok links to a story about Tesla using an over-the-air software update to help Tesla owners in hurricane-threatened areas get more range from their lower-battery capacity cars … but he says this may eventually come back and bite the company:

Tesla knows that some of its customers are willing to pay more for a Tesla than others. But Tesla can’t just ask its customers their willingness to pay and price accordingly. High willing-to-pay customers would simply lie to get a lower price. Thus, Tesla must find some characteristic of buyers that is correlated with high willingness-to-pay and charge more to customers with that characteristic. Airlines, for example, price more for the same seat if you book at the last minute on the theory that last minute buyers are probably business-people with high willingness-to-pay as opposed to vacationers who have more options and a lower willingness-to-pay. Tesla uses a slightly different strategy; it offers two versions of the same good, the low and high mileage versions, and it prices the high-mileage version considerably higher on the theory that buyers willing to pay for more mileage are also more likely to be high willingness-to-pay buyers in general. Thus, the high-mileage group pay a higher price-to-cost margin than the low-mileage group. A familiar example is software companies that offer a discounted or “student” version of the product with fewer features. Since the software firm’s costs are mostly sunk R&D costs, the firm can make money selling a low-price version so long as doing so doesn’t cannibalize its high willingness-to-pay customers–and the firm can avoid cannibalization by carefully choosing to disable the features most valuable to high willingness-to-pay customers.

The kind gesture to Tesla owners in Florida is probably deeply appreciated right now, but…

Unfortunately, I fear that Tesla may have made a marketing faux-pas. When it turns off the extra mileage boost are Tesla customers going to say “thanks for temporarily making my car better!” Or are they going to complain, “why are you making MY car worse than it has to be?”

Human nature being what it is, the smart money is betting on the “Thanks for the temporary upgrade, but what have you done for me lately?” attitude setting in quickly.

July 1, 2017

Happy 150, Canada … now get back to work

Filed under: Cancon, History — Tags: , , — Nicholas @ 03:00

Chris Selley on the artificial sesquicentennial celebrations beginning today:

On Wednesday evening, indigenous protesters marched on to Parliament Hill and, after some back and forth with the local constabulary, erected a large white tepee. The group’s leaders told reporters they intended to “reoccupy” “unceded Algonquin territory,” and remind Canadians that “reconciliation” with the people who were here before them lies far down a bumpy road.

If nothing else, it was a welcome moment of coherence: big white tepee, Parliament Hill, three days before Canada Day — no one is going to wonder what that’s about. By contrast, I’m not sure what “Canada 150,” the officially branded and hash-tagged celebration of this country’s existence, is supposed to be. It certainly isn’t a focused reflection on Canada’s history, much less on Confederation. Passport2017.ca, the Canada 150 online portal, reads like an in-flight magazine’s Canada Day edition.

You can check in with the “Canada 150 Ambassadors.” Singer-songwriter Rufus Wainwright appreciates Canada’s “civility, reasoning and compassion.” Sprinter Bruny Surin appreciates moving from Haiti to a country where, his mother told him, anyone can accomplish anything. Nobel laureate astrophysicist Art McDonald provides the obligatory shout-out to Lester Pearson’s role in the Suez Crisis.

[…]

Had Canada 150 been a thoughtful reflection of Canada’s history, it might have been worth defending against rhetorical excesses and disruptions. Instead we got a Molson commercial gone to seed — a facile, hackneyed celebration of our national superiority. Amidst all that, if Canadians and their big-talking government are forced to confront some of this country’s most notable failings, I would deem that a Canada 150 Essential.

Also in the National Post, Colby Cosh is not feeling the paroxysms of nationalistic fervour and joy he’s supposed to be feeling:

Could it be that going all-in on a 150th anniversary… was a mistake? One hundred and fifty is sort of an awkward number to be the occasion for a grand national celebration. That the word “sesquicentennial” exists, and that it is only ever used to describe contrived festivals of this sort, seems like a hint.

Me, I would probably be unenthusiastic over a rounder number anyway. My suspicion and resentment of any state-led hoo-rah or whoop-up is probably about half politics and half personality. No doubt in 1967 I would have been writing columns grumbling about Expo 67 being a showcase for high-modernist delusion, doomed hopes for national unity, and brutal industrialism.

But, of course, there is much to be said for the grouchy view. From our vantage, we look back mostly on the fashions and design coups of Expo 67 and ignore the larger details. Any ordinary cultured person of 2017 whisked back to Expo 67 in a time machine would step out of the pod and recoil instantly at the sexism of signs blaring “Man And His World.” We would look askance at the abusive landscaping of the Montreal riverside. We would sprain our eyebrows raising them at the glorification of European explorers and the endorsement of an unjust world order.

[…]

So maybe the grouches are usually right in the long run, and particularly about moral enterprises of the state, which are so often born and planned in a frenzy of self-congratulation and political calculation. Celebrating a 150th anniversary is inherently weird, but when I have pointed this out I have usually been offered the justification that Gen X-ers like me missed out on Expo 67 by accident of birth, and probably will not make it to see Hadrien Trudeau preside over CanadaFest 2067.

He also posted something on Twitter that might well be a response to Chris Selley’s article:

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