Category: Uncategorized

I am impressed by this talk by Sacha Baron Cohen about online hate on YouTube (and this link for the full transcript). And he is pretty blunt about today’s issues: “All this hate and violence is being facilitated by a handful of internet companies that amount to the greatest propaganda machine in history.”

He observes that “Today around the world, demagogues appeal to our worst instincts. Conspiracy theories once confined to the fringe are going mainstream. It’s as if the Age of Reason—the era of evidential argument—is ending, and now knowledge is delegitimized and scientific consensus is dismissed. Democracy, which depends on shared truths, is in retreat, and autocracy, which depends on shared lies, is on the march. Hate crimes are surging, as are murderous attacks on religious and ethnic minorities.“

“Freedom of speech is not freedom of reach.” Freedom of speech, Sacha Baron Cohen argues, should not and cannot be taken as an excuse by the Marc Zuckerbergs of this world. He observes however that the GAFA are reluctant to act beyond some lip service because their entire business model is at stake. Fact-checking content before it gets posted should be the way. But it will obviously cost more than pay a few hundred people in developing countries try to administer the site content.

I am deeply admirative of this speech, which is really worth reading, and the way someone like Sacha Baron Cohen provides an insightful view into some of the Fourth Revolution’s issues. Kudos.

As a great conclusion, “Voltaire was right, “those who can make you believe absurdities, can make you commit atrocities.”” Let’s do something about it!

Still following up from our previous post ‘How the Current Asset Over-valuation Changes Economic Behavior‘, and referring to the research paper ‘Bubble or nothing‘, the increase in the relative value of assets is also a good explanation for the increase in social inequality: those who have assets see their wealth increase substantially (doing nothing) compared to those who don’t. And it becomes harder for those who don’t have assets to acquire them.

This however comes with a pinch: if most of the increase in wealth of the the richer is based more on asset value than on actual direct income, any economic shock that would decrease substantially asset values would also reduce a large part of this apparent inequality.

On the other hand if the relative increase in asset value is a deeper, longer term trend linked with the Fourth Revolution (see our post ‘How the Increase of Asset Values Could be Linked to the Fourth Revolution Transformation‘), then we should expect this effect to be permanent and even increase in the foreseeable future. Access to ownership of assets will then become a major issue to address inequality (including property, as the family house is the prime asset for most people).

There are deep, multi-decade trends pervading our economy and traditional economic studies may not sufficiently understand them. It seems like the Collaborative Age will require quite a different approach to the economy, and probably to taxation and redistribution.

Following on the previous post ‘How Digital Rights Management Broke Its Promise‘ where we started to mention feudalism, this Quartz piece is quite interesting: ‘We’re living in an era of digital feudalism. Here’s how to take your data and identity back‘.

“Instead of farm produce, today the new asset class is data—created by us, but captured by digital landlords such as social-media companies, search engines, online retailers, governments, and banks. “Surfing the internet” has become “serfing the internet,” with users giving up intimate details of their lives for the internet lordships to aggregate, expropriate, and monetize. We, as the serfs, only get left with a few lousy cabbages.“

The issue is then, data ownership and managing the way it gets shared with others. The post goes on to propose a solution around blockchain to avoid any institution as an intermediary (even government is not deemed safe in the post), so that we really own our data.

The post also calls for “the cultivation of a new core competence: the ability to work with huge anonymized datasets rented from large numbers of people, all handled in a distributed and trust-minimized manner“

I am not as pessimistic as the paper regarding our serfdom. In general I find that although it is true that we have given our data for free to internet giants, the benefits of the Fourth Revolution so far have been positive for many in terms of better access to services and knowledge. Therefore the bargain is not so dire. Contrary to middle-age serfs we can also choose to change our provider.

That some corporations benefit excessively from the situation is also true, but they do reap only a small percentage of the value they have created for all of us. The issue is rather how to regulate and share this new added value from data aggregation. There are many ways to achieve this, including old-fashioned taxes on a basis to be renovated.

All in all, the concept of digital feudalism appears to me a bit exaggerated. I truly believe that our freedom and options have increased with the Fourth Revolution.

I recommend this piece by Cory Doctorow ‘DRM Broke Its Promise‘. Although fighting against Digital Rights Management (the small programs that impeded content to be shared) has been a battle for Cory Doctorow for a long time, it is an enlightening piece about how what we have thought we had bought may disappear overnight when a service provider decides so.

The most important observation is that in a number of instances, we don’t own things anymore. We buy them from providers but in reality we pay to borrow them for a limited time. As real life examples, “Walmart announced that it was shutting off its DRM ebooks in 2008 (but stopped after a threat from the FTC). It’s not even the first time Microsoft has done this: in 2004, Microsoft created a line of music players tied to its music store that it called (I’m not making this up) “Plays for Sure.” In 2008, it shut the DRM serv­ers down, and the Plays for Sure titles its customers had bought became Never Plays Ever Again titles.”

The amazing part of course is that in spite of digital, the price of stuff has not decreased much in particular when managed by publishers. In France Kindle versions go without discount compared to the digital version, and Cory Doctorow observes the same in the US for textbooks.

The conclusion from Cory Doctorow is a bit dire: “There’s a name for societies where a small elite own property and everyone else rents that prop­erty from them: it’s called feudalism. DRM never delivered a world of flexible consumer choice, but it was never supposed to. Instead, twenty years on, DRM is revealed to be exactly what we feared: an oligarchic gambit to end property ownership for the people, who become tenants in the fields of greedy, confiscatory tech and media companies, whose in­ventiveness is not devoted to marvelous new market propositions, but, rather, to new ways to coerce us into spending more for less.“

I am not as pessimistic, but then of course we need to be wary about those new devices and again, some regulation is surely needed to protect the consumers’ rights.

Following the previous post ‘How Neoliberal Economics Could Become Obsolete‘, it is interesting to put things back into perspective a la Piketty and his famous book ‘Capital in the twenty-first century‘.

Piketty shows that capital inequality has dramatically shrunk in the first half of the 20th century, mainly due to the world wars. The capital he mentions there however was mainly the Agricultural Age capital, previously inherited through generations. The Industrial Age capital represented by industrial millionaires such as famously John Rockefeller got less concentrated through taxation and anti-trust regulation that applied after a while; but also through the visionary intuition of capitalists like Henry Ford who did increase the wages of workers to reduce turn-over and make them able to buy his own products..

Are we not currently seeing the same evolution than in the early Industrial Age. Capital gets concentrated with a limited number of capitalists, monopolies develop in new activities. However regulations combined with the pressing need to provide society enough income to sustain consumption will progressively lead to another more stable situation with a stronger middle class?

Hopefully we won’t need a few world wars to accelerate that trend. The good thing is that we can see already some calls for increased regulation and breaking up of data monopolies, the only thing is to see this through.

I am not too pessimistic observing that whenever there is a new value source it seems to be a natural trend that a few innovators benefit from it first, concentrating wealth, but that on the longer term the need to find solvable clients will leads to more redistributive approaches. The speed of change and the resistance of the ones that currently benefit from the system are the unknown.

While the discussion about income inequality becomes mainstream I find those arguments by Nick Hanauer quite refreshing, like for example in his TED talk ‘the dirty secret of capitalism – and a new way forward‘ or also the excellent ‘Beware fellow plutocrats – the pitchforks are coming‘.

His perspective as a ‘plutocrat’ belonging to the 0.1% is that social stability depends on a strong middle class, therefore it is essential to maintain and develop the conditions for this middle class to emerge and strive. One of his initiatives has been to support an increase in minimum salary in Seattle (US federal minimum salary is very low), which did have a positive impact on consumption and social stability.

He promotes new economics, based on market economy but along 5 main rules:

• Successful economies should be like gardens (and not jungles), tended, and properly regulated
• Inclusion creates economic growth. Neoliberal approaches have shown their limits. Economy is people
• the purpose of the corporation should be reviewed. It is far more than enriching shareholders: it is to promote the welfare of all stakeholders
• Greed is not good. “Being rapacious doesn’t make you a capitalist, it makes you a sociopath“. Economy depends on cooperation
• Laws of economy are a choice (unlike laws of physics), it is a social construct. Therefore if we want so we can choose to apply a new economical approach.

Nick Hanauer is only a representative of an interesting new trend in economic thinking, calling for a change to the current neoliberal theories. Recently a number of CEOs of large companies have publicly adhered to a similar approach. It will be interesting to see how far those ideas will gain traction.

Prioritization is essential if we want to reach our goals, even more in current society where the number of daily sollicitations increased constantly. In this useful post ‘How to Prioritize When Everything Feels Important‘, a general synthesis of available prioritization methods is provided.

The methods described there are basic and effective, quite rational and can be used by anyone.

I just believe they do not address the major emotional hurdle to prioritization: accept that some things won’t get done. Limit what really needs to be performed. And that’s where most people fail even after the most rational approach to prioritization.

I repeat, prioritizing effectively means accepting not to do certain things. That hurts, and that hurt must be overcome. Are you read for real prioritization?

In the last weeks I have been struck by several conversations with people that wanted to implement some change in their lives but had only limited action capability due to the fact that they had to keep an income roughly equivalent, could not afford even a month without salary or were desperate to maintain a high level of living. All this because they did not have any savings.

More and more, I consider that one condition for freedom is to have savings available. I have always been careful to save, and strive to have at least a year’s income readily available.

What kind of freedom does this bring me? Without jeopardizing my family’s quality of life, I can say no to an offer or a client, decide to start something new that would not provide me with the needed revenue level, invest in time or education, explore new ventures.

With just a little more savings I can invest in interesting start-ups, be part of some collective adventures bringing my competencies and knowledge at the service of entrepreneurs.

To be free, start by saving a substantial part of your income. Your mindset will change when you will have this mattress to protect you and when you’ll be able to consider more significant change in your lives.

Following up from our post “How Millennials Would Be Less Interested by Start-Ups“, one of the reasons may be that millennials have less money to start companies. There is an ongoing debate about the wealth of millennials compared to previous generations. Some argue that this generation is substantially poorer than previous ones, in particular in the US due to student debt (see for example ‘Millennials are killing countless industries — but the Fed says it’s mostly just because they’re poor‘), while other argue that they are in fact more educated and potentially more wealthy even if it does not show in numbers at a younger age (see ‘Actually, millennials may be the wealthiest generation‘).

The Fed states that “Millennials are less well off than members of earlier generations when they were young, with lower earnings, fewer assets, and less wealth,” the study said, adding, “Conditional on their age and other factors, millennials do not appear to have preferences for consumption that differ significantly from those of earlier generations.” It seems their average net worth is substantially lower than previous generations at the same age.

The counter argument is that the metrics used traditionally to measure wealth are not applicable. “Millennials are not only more educated, they are also more urbane. The changing structure of the economy rewards living in large, urban areas. In a knowledge economy, big cities are where they find well-paid jobs and valuable social networks. Better opportunities, coupled with falling crime rates, means millennials tend to live in cities more than previous generations. More time in school and city living requires different life choices than boomers and Gen Xers and it shows up in millennials’ asset portfolios.”

The debate is on. What seems clear is that millennials have less net-worth than prevous generations, at least in the US but also probably elsewhere, even if they can hope to earn more in the future. The feeling of becoming poorer may be the engine of social unrest and substantial changes in how our societies are run, in particular for those less educated and not living in cities.

Following up from our post “How Millennials Would Be Less Interested by Start-Ups“, this interesting post ‘Fewer, Bigger Entrepreneurs Explains Rising Inequality‘ refers to a published economical study that would show that the rise in inequality results from the fact that successful start-ups need to be well funded, and thus that start-up innovation basically favors the already (relatively) wealthy.

This idea is interesting and important. It makes two assumptions: that it is easier to start a new venture when one is already well-to-do (which is probably right, as poorer entrepreneurs will have part of their mind focused in getting enough revenue to live); and that overall, people that start entrepreneurial ventures increase their net-worth. This is probably less easy to prove and only works in average, as most start-ups rather end up losing money and diminishing entrepreneurs’ net-worth; however some are wildly successful, but the notion of average may not be relevant.

Would the rise in entrepreneurship explain the rise in inequality in our societies? It may certainly contribute (a large portion of the super-wealthy have been entrepreneurs), but is certainly not the entire explanation either. There are other factors at work, from tax policies to evolution in compensation policies. Still it is an interesting viewpoint and reminds us that to be able to start a new venture, one must have the peace of mind that comes with sufficient wealth.

Working in, or starting a start-up is very trendy. It has taken a significant pace in many countries as the occupation of choice. In France, it is now highly regarded. Nevertheless, it would seem that this is slowing down at least in the US, as mentioned in this interesting Atlantic article ‘Start-Ups Aren’t Cool Anymore‘.

According to the article, “A lack of personal savings, competition from abroad, and the threat of another economic downturn make it harder for Millennials to thrive as entrepreneurs“. In particular, “Research suggests entrepreneurial activity has declined among Millennials. The share of people under 30 who own a business has fallen to almost a quarter-century low“.

Reasons range from lack of funds to the fact that established corporations would become increasingly entrepreneurial and drive innovation (on the latter, I am still convinced that they are too slow compared to start-ups, but they have more means)

It will be interesting to watch if this trend confirms and spreads. It might be that some people get disillusioned about the gamble of a start-up. Still, it has proven to be a driving force of employment and innovation.

In an excellent piece about how develop a community and allow constructive debate, Pamela Slim states “It is important to be flexible in thinking and open to change, or as my friend Bob Sutton likes to phrase it “Strong opinions, weakly held.””

I love this statement. We definitely need to hold strong opinions on things; this is a proof of character and that we don’t take things for granted. At the same time, we need to be ready to put our beliefs in question and be open to contradictory evidence. The statement is then a beautiful call for open-mindedness and tolerance of other’s opinions.

As Pamela writes: “I do not like conflict. And I have learned to embrace it, since it is impossible to do anything meaningful without making mistakes, running into differing opinions or pissing someone off. It is important that we speak clearly, openly and honestly to each other when we don’t agree on something. It is important that we listen with an open heart, and curiosity.”