Ged Carroll

Category: economics | 經濟學 | 경제학 | 経済

Economics or the dismal science was something I felt that I needed to include as it provides the context for business and consumption.

Prior to the 20th century, economics was the pursuit of gentleman scholars. The foundation of it is considered to be Adam Smith when he published is work An Inquiry into the Nature and Causes of the Wealth of Nations. Smith outlined one of the core tenets of classical economics: each individual is driven by self-interest and can exert only a negligible influence on prices. And it was the start of assumptions that economists model around that don’t mirror real life all the time.

What really is a rational decision maker? Do consumers always make rational decisions? Do they make decisions that maximise their economic benefit?

The problem is that they might do actions that are rational to them:

  • Reducing choice when they are overwhelmed
  • Looking for a little luxury to comfort them over time. Which was the sales of Cadbury chocolate and Revlon lipstick were known to rise in a recession
  • Luxury goods in general make little sense from a ration decision point of view until you realise the value of what they signal
  • Having a smartphone yet buying watches. Japanese consumers were known to still buy watches to show that they care about the time to employers when they could easily check their smartphone screen

All of which makes the subject area of high interest to me as a marketer. It also explains the amount of focus now being done by economists on the behavioural aspect of things.

  • Bradley Horowitz + more news

    Bradley Horowitz

    On Leaving Yahoo… : Elatable | Bradley Horowitz – Bradley Horowitz leaving Yahoo!, on its own a bit of a sad day for the big Y! as Bradley is probably the smartest guy I have ever stuck in front of a journalist. Bradley Horowitz had come to Yahoo! as part of the surge on search under then CEO Terry Semel. He was one of a senior management team that reported into Jeff Weiner

    Design

    NASA Workmanship Technical Committee – handy hardware hacking reference guide

    The Manga Bible – Pages – Japanese artists have done the story of Buddha and text books in manga, so I guess this is the logical extension. Its not really drawn in a manga style but has a good pedigree with one of the artists having worked for 2000AD

    Economics

    The dark reality – interesting realistic economic analysis on India that could apply to China just as well

    How to

    Developing Intelligence : Caffeine: A User’s Guide to Getting Optimally Wired

    Innovation

    Popgadget Personal Technology for Women: Socket Sense: “Adjustable surge strip to fit your adapters – OMG this is such a duh why didnt I think of this idea

    Japan

    The Green Lantern – green and quality concerns kick in on Japanese restaurant offerings

    Marketing

    SMS Text News » Archives » Text a Mars Bar!  – UK agency copies Korean idea for Mars / Masterfoods. Nate.com has had this on a social network-wide level for a good while. It just goes to show you that there is no such thing as a new idea

    Media

    Half Of All Clicks On Display Ads Are Worthless  – A study put out yesterday by comScore, Starcom Media, and Tacoda suggests that half of all clicks on display ads (as opposed to clicks on paid search links) are generated by only 6 percent of Web surfers.

    Victrola Favorites book and CD – interesting mix of stuff, expect to hear some of it on an Orb album soon

    Online

    The Game – WSJ.com – For Facebook, GeoCities Offers a Cautionary Tale Can Rise and Fall of Once-Hot Site Sway Decisions on Funding, IPO?

    Xiaonei – chinese social network similar to Facebook

    Stats: Facebook and MySpace lose their draw

    Retailing

    Overkill Shop Berlin | Streetwear, Graffiti, Sneaker Shop – achingly cool shop in Germany

    Software

    Theme Garden | Drupal 5 Themes – handy themes and ideas for the open source CMS

    Yahoo’s socially integrated messaging service, oneConnect

  • The Strength of the Wolf

    I chose The Strength of the Wolf  by Douglas Valentine as I needed a good paperback to read as I travelled back to Liverpool. It seemed strangely appropriate that I read a book about narcotics travelling there; given that Liverpool’s recent history and cultural renaissance has been intertwined with its association as the UK’s narcotic equivalent of the Square Mile. Characters like Curtis Warren as it’s big swinging dicks as Liars Poker author Michael Lewis would have called them.

    The premise of The Strength of the Wolf by Douglas Valentine is that the US and other foreign governments have had their fingers in the drug trafficking pie for hundreds of years.

    Indeed Great Britain fought two wars over the opium trade. However, this is thought to be history.

    The US as the 20th century empire ‘ruler’ is alleged to have carried on the practice supporting Chinese nationalists running heroin through the golden triangle, right-wing military figures in South America, friendly factions in the Middle East to smuggle opium to the French Connection and allowing the mafia a degree of freedom in return for using their supply.

    Valentine also describes how drugs were used as a way of controlling minorities and how politically-motivated drugs laws fanned demand in the US rather than choking it off.

    These allegations are made as Valentine tells the story of the FBN (the federal bureau of narcotics), its successes, it’s failures and its politics. How officers trod the line between doing their job, whilst not upsetting the establishment players who most benefited from the drug trade that they combated.

    The book covers the inner real politik that tore the FBN apart and the global narcotics market as it evolved from the early 20th century.

    Valentine eventually decides to pursue so many leads from Jack Ruby’s involvement with drugs, the CIA and narcotics business associates link with the Kennedy assassination (which sounds only slightly more credible than the Warren Commission finding that Oswald did it on his own with an Italian carbine), DeGaulle’s link with Corsican criminals to fund French intelligence work and Mossad’s alleged involvement with money launderers and Lebanese narco power-brokers.

    At times these allegations and avenues come out like a stream of consciousness and the thread of the plot leaps around like an epileptic break dancer. Whilst Valentine has obviously done a very thorough and comprehensive job in researching the book, it seems that he had too much material to work with in too little time.

    The book becomes hard to follow because of the huge amount of information and cross-linkages that it tries to convey and not exactly ideal reading material for travelling.

    I stuck with the book, not because of the drugs and intelligence drama, but the more human tale of how the agents careers were created and trashed like failed drafts being thrown in the paper basket. The book on balance, deserves the plaudits that have been heaped upon it, but who will recognise the achievements of the reader who pushes through to the end? More book reviews can be found here.

  • Working class

    I was prompted to think about the working class thanks to an interesting opinion piece The Great Divide by James Delingpole in the Sunday Times Style magazine (February 5, 2006) about a division in the middle classes between the haves and the have-nots. The haves stay in Tuscany and go on ski-ing holidays.

    My own thoughts on this is that the working class haven’t gone away, they just slave away with a phone, the laptop and the Blackberry. The have-nots referred to in the article are the normal working class folk of yore. They are the infantry of the knowledge economy. In place of soot-covered waste coats or donkey-jackets it’s suits-and-ties or media casual.

    I have no problem calling myself working-class. I learned my trade as a PR person by working with great people in the same way that I served my time as an apprentice in the chemical industry in my early 20s.

    They have the same fears as the working class of past decades with the fear of their jobs being exported to India or China rather than seeing their factory closed down by foreign competition. Self-service online and IT-driven business process management in banks has replaced robots and automation on the factory floor.

    I found it particularly interesting that Delingpole assigned education and politeness with middle class society. The working class neighbourhood I grew up in was not full of cavemen: respect for yourself and others was something that was drilled into me. Indeed, I still occasionally have that uniquely Irish refrain from my mother asking me ‘not to disgrace the family-name’ ringing in my ears.I worked in many jobs from managing a tightly knit production team, to working on a factory line, being a cleaner, being part of a call-centre hive, banking and working in PR. It was in the middle-class environs of the PR agency life where I saw the most morally repugnant mistreatment of fellow colleagues and peers practiced.

    With regards education, there has been a long tradition of a well-read working class, indeed some of the ‘new’ universities sprang out of mechanics institutes and other places of working-class education. The things that stood me in good stead for working in the knowledge economy were:

    • The wide range of reading that I did whilst working shifts in the oil industry and have carried on since
    • The work ethic that my gaffer taught me as an apprentice
    • A practical approach to problem solving that I picked up working in the chemical industry
    • The typing tutor software on the mini-computers that we used in the oil refinery and other places that I worked at

    My university degree just got me in the door at my first ‘graduate’ roles. The under-class of today are the dispossessed bypassed by the knowledge economy, rather like the farm workers left by land reforms and the industrial age. The working-class education is now a combination of the state education system, public libraries and the worldwide web were institutions like MIT Open Courseware and Wikipedia which equate to the mechanics institute of today. It will be interesting to see if or how these new working-classes get organised. If you would like to read more consumer behaviour related content, you can find it here. 

  • Hallyu, Mociology & Microchunk

    Hallyu – The rise of Korea as a cultural hotbed (what’s called the Korean wave in some quarters) in Asia: from the sexiest mobile phones, or well written and produced cinema to K-pop (the Korean equivalent of J-pop: sugar-coated Japanese pop music that carries well in other Asian markets and performed by young performers so physically perfect, you wonder if Sony hasn’t a secret laboratory protected by ninjas inside of Mount Fuji to manufacture J-pop artists).
    Interestingly the Korean wave has not yet impacted on Japan in the same way as its neighbours, which was an interesting aside that came out of Richard Edelman’s keynote at the London presentation of his agency’s global trust barometer survey. Kudos to the New York Times Online (registration required).
    Expect to see more of hallyu: the mix of professional product perfection and the conservative nature of Korean culture produces a product that travels better around the world than much US culture.

    Mociology – The study of how mobile technology impacts with sociology from purchasing concert tickets to organising political rallies, raves and flash mobs. (Derived from mobile and sociology).

    Microchunk – A product or service sold traditionally as a package broken down into its constituent parts so buyers can purchase a la carte for consumer electronics to news feeds. Think sachet marketing for the digital world. People like 37signals have successfully built ‘microchunk’ applications and services (like Backpack) that do one thing extremely well and compete against other much larger software companies that take a bundled approach leveraging an effective desktop monopoly (mentioning no names). Kudos for mociology and microchunk to Wired Magazine. More related content here. 

  • Level3

    Totaltele.com had an interesting report from Dow Jones Newswire how Level3 the backbone network provider had been exhibiting Enronesque traits.

    Level 3’s capital-intensive business model is questioned (subscription required) by Helen Draper highlights how Level3 is having to invest huge amounts of money to make just a little money back, hurting its working capital. This was one of the factors that encouraged all the creative accounting at Enron.

    I have a bit of related history. Back in the day I was involved in launching Enron Broadband Services in Europe. The operation was a start-up with just three bright Americans who were sent over to kick things off. I got them sorted with their first UK mobile phones, which were prepaid devices on Orange.

    My team was responsible for introducing them to the European telecoms media, the telecoms analyst community and key contacts at the major peering networks in London. I thew the most awkward party ever. A whole pile of UNIX and Cisco experts ate nouveau cuisine in a minimalist restaurant that required a cloak room assistant to help you find the exit door in the bathroom. My job at that time wasn’t made any easier by Level3. In a classic case of the Emperor’s new clothes or dot com hubris, Enron had a complex PowerPoint deck and a story that  didn’t make much sense. At the time Level3 was both a supplier of capacity to Enron Broadband Services and a determined critic.

    It’s then CEO James Crowe was a vocal critic of the Enron Broadband Services business model according to journalists that I had spoken to. Which made my job so much harder.  Of course, some of Crowe’s criticism was justified and none of us really had an idea of how much of a mess Enron actually was. It is ironic to think that Level3 might be treading a similar path. More telecoms related content here.