Somebody Asked Oxfam Questions

And Oxfam (which sounds like what millennial gym-friends might call each other) answered. They did not disappoint. That is to say, came off sounding one-toned and ignorant of their obvious disconnect from reality.

If it turned out that Oxfam was a strawman propped up by multinational firms just to make their detractors look incompetent, it wouldn’t be a surprise.

4. Oxfam talks about inequality but you pay your bosses’ fat-cat salaries – isn’t that hypocritical?

Oxfam is a confederation of 19 member organizations. The salary that each Oxfam pays to its own Executive Director differs – reflecting the size of the organisation as well as national market realities. In each case, the salary paid is entirely consistent with the individuals’ responsibility for running an organisation that is part of a major international humanitarian and development campaigning NGO.

As Tyler Cowen would say, market-based compensation for me but not for thee.

Next up, Oxfam conflates giving to charity and tax-dodging.

Giving the People What They Want

When it comes to stock markets, big firms like Goldman know better than anybody to give the people what they want to see. Witness, this slide:

It’s not crazy, it’s a path the market could conceivably follow, but a closer look is instructional.

  • Note how it isn’t simply a line up and to the right, there’s no obvious profitable action to take on a forecast like that. Something like this, well certainly.
  • It has an ‘up’ component built on “hope”, so if it doesn’t materialize, we can chalk it up to the markets being surprisingly rational, not our forecast being wrong.
  • The numbers and timelines are conveniently round, simple to interpret for ever the layest of laymen.
  • If the market goes up (most likely), goes down 5% at some point in the next 12 months (also most likely), and resumes the climb, success can more or less be claimed.

This chart is beautiful, if only for its ability to inspire the average day-trading dentist or pension fund trustees.

Before we leave, let’s take a look at a couple of other ads on the page and appreciate them for what they are, a dazzling ode to confirmation bias:

Like an eclipse, I recommend not viewing these kinds of things directly, they will blind you. However, if you must take a closer look, bring #14 welder’s glass or a pinhole camera.

You Have a Higher Net Worth Than the Bottom 37%

The very interesting-sounding statistic that launched a thousand retweets is once again making the rounds because oxfam is milking it yet again has updated their annual report.

That’s right, it’s time to find out about wealth inequality. Statistic wording of choice this time, “Eight richest men are worth the same as HALF the rest of the world.

Now, this statistic sounds interesting, but is actually very stupid highly misleading. The actual interesting statistic, courtesy of Jacob Falkovic, is that the total net worth of the bottom 37% is a tiny smidge above zero. I imagine this will need updating with the latest report, but I doubt it changed much.

That’s right, if you have a positive net worth, you are wealthier than the bottom 37% combined. I suspect this is related to the fact that China and India have about 36% of the world population and not a huge amount of its wealth, and when you add in a few dozen million of the people who have the largest negative net worths (new doctors, lawyers, etc.), you get to a negative figure.

Try not to be too hard on anyone who shares the stupid fact, they are smart enough to know there is something interesting there.

We Already Have UBI

Edit: This podcast from Econtalk on the same subject came out a day after this post (coincidence? I think not) and was a worthy listen.

Universal Basic Income (UBI) is a concept that has gained significant momentum over the past few years, and is ubiquitous enough that most people are now at least passingly familiar with the concept.

I’m here to break the news that we already have it. Social Security is effectively a UBI that is limited to the elderly (perhaps that means the “U” in UBI needs an asterisk).

According to the SSA, nine out of ten individuals over 65 receive benefits, and I’d wager a few more tenths are waiting to claim either at their FRA or at age 70. Most of the others who don’t qualify probably receive another pension.

Most UBIs have a flat payout, not a formulaic one, but if I were a gambling man, and I am, I’d bet we see flattening payouts as part of the solution to the demographic problems the Social Security system is on track to have. Benefits for high earners are already significantly lower relative to amounts paid into the system thanks to the “bend points“. It would be a natural extension to have earners over a certain amount pay in but not increase their benefit, or to change the current bend points, or both.

This would exacerbate the “problem” of social security alone not covering pre-retirement cost of living, but would allow using social security as a ‘floor’ for the standard of living that we want to allow people to live at.

And, a natural extension of not wanting Grandma living under a bridge eating mustard sandwiches is that we don’t want anyone under a bridge eating mustard sandwiches. There are a lot of subtleties in moving from Grandma to everyone — e.g., if Grandma is eating mustard sandwiches she might not have any viable way to earn an income, while someone younger might, and maybe there are a few 20 year olds who would not work if you guaranteed they did not have to live under a bridge. This is the danger of making UBI equal to the cost of rent + food + netflix. This is called retirement, and most people find it perfectly acceptable from age 65+.

So the question, then, is: Do we wish to allow everybody, if they wanted to, to retire and watch netflix all day? It would certainly make some people better off, but the costs would have to be absorbed by others.

If the answer is yes, we have a fairly easy framework to implement with, simply allowing earlier and earlier (perhaps at more and more reduced amounts) filing for social security.

Jack’s Links

  • Brazil’s Austerity Experiment: Scott Sumner walks us through some of the problems with ascribing any of the future economic success/failure of Brazil to the coming austerity. Very useful to learn how to think about economics. Also, Vox still sucks.

Might austerity hurt the supply-side of Brazil’s economy?  I suppose anything is possible, but it’s hard to see how.  Unlike China, Brazil’s high government spending goes to things like public pensions, not infrastructure.

Jelinek interrupted, according to people who were briefed by Chenault about the call, and told him that as far as he was concerned, Amex was another vendor, just like the one that sold Costco ketchup. “If I can get cheaper ketchup somewhere else, I will,” he said.

  • Health Care Reform: With a h/t to David Henderson for the link to this Bryan Caplan piece from 2012. More relevant than ever.

Gruber mentions people who “think they don’t need insurance because they are healthy” – then condescendingly adds, “They don’t realize that if they do get sick, they won’t be able to afford the care they need.”  Yes, or maybe they’ve weighed the risks and reasonably decided to take their chances.


F#$% the Home-mortgage Interest Deduction

H/t to David Henderson for his link to this WSJ post from Hugh Hewitt on why, though he admits it is bad in theory, he thinks in practice eliminating the HID as the GOP seems to be posturing to do is a bad idea.

I’m here to put my stake in the ground in the “F!@# the HID”-camp.

Hewitt’s point is a little bit subtle, but to my reading basically boils down to two points:

  1. An immediate elimination of all or most of the HID would be unfair to recent homebuyers, or at least perceived that way.
  2. Eliminating the HID in such a way would harm the GOP.

I think its far more unfair to everybody in the country to continue a policy of economic distortion that tends to favor the wealthiest (and most creditworthy) than it would be to reverse such a policy. In fact, I would make the argument that the risk of HID elimination is priced into the market, and we would see even further distortions with a long range phase out like the kind Hewitt mentions.

There are far better ways to subsidize home purchasing than through a deduction that helps those with access to credit, which has increasingly been the very wealthiest.

In economic policy, it seems to me that ripping off the bandaid is almost always preferable to setting up a slow future change if only for the reason that most things that should happen in politics never do, and getting something done, even if the optimal solution was to do it over 10 years instead of 1, is better than the probability weighted chance that you get the optimal outcome versus, for instance, the next administration repealing your plan within 10 years.

Kevin Erdmann has a good post that touches on the HID as he discusses the arbitrary advantages that exist today for owning a home.

If eliminating the HID forces some people into homes they can afford with smaller mortgages, that will push prices down, which will be a benefit to renters, either through lower costs to buy a home or lower rents.

I do not find the argument persuasive that we should continue a policy that creates distortion simply because people have taken advantage of that distortion and would now be harmed if it were undone.

Stock Markets in a Clinton vs. Trump World

Tyler Cowen has a very stimulating piece on doomsayers missing an opportunity to sell short the markets. I think his (perhaps strawman) argument is correct for those whose views he portrays accurately.

However, I think most people are thinking about Clinton vs. Trump more like this:

Meaning: a Trump victory heralds a wider range of stock market outcomes. Tyler might argue that someone who believes that has an opportunity to trade volatility through VIX, but VIX measures a very specific kind of volatility which is far from a necessary condition for a decline in markets.

Another possible answer to Cowen’s question about why people aren’t putting their money where their mouths are is that most of the people merely expect worse outcomes for the stock market, but not negative returns. If we knew for a fact that for 4 years under Clinton the market would go up 10%/year and for 4 years under Trump the market would go up 8%/year, what would the appropriate strategy change after a surprise Trump election be? Probably not much.

Now clearly this doesn’t affect Cowen’s main claim and question:

When Donald Trump was elected president, some prominent economists predicted disaster for the stock market.

are Trump doomsayers obliged either to stick with that prediction and short the market or to tone down their rhetoric?

I don’t actually know who any of these people are (are we talking about Krugman?), which is probably some combination of my ignorance and Tyler thinking of people as prominent that I don’t follow closely. (And I’d confidently put myself in the 95th+ percentile of people who follow prominent economists.)

I do know of plenty of people who claimed a Trump victory would be a human rights disaster, and while obviously less measurable than the stock market, I think a ‘correction’ for human rights would be just as damaging to society as a correction in the markets.

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Book Highlights: Capitalism, Socialism, and Democracy, Schumpeter, (Part 1: The Marxian Doctrine)

  • Yes, I do believe that most of the current talk about monopoly, like all the current talk about the dire effects of saving, is nothing but radical ideology and has no foundation in fact.
  • capitalism is being killed by its achievements.
  • A study of Marx begins most conveniently with the first volume of Das Kapital
  • In spite of a huge amount of more recent work, I still think that F. Mehring’s biography is the best, at least from the standpoint of the general reader.]
  • But it is perhaps superfluous to insist on the shortcomings of a theory which not even in the most favorable instances goes anywhere near the heart of the phenomenon it undertakes to explain, and which never should have been taken seriously.
  • A little reflection will convince the reader that this is not a necessary or natural thing to do. In fact it was a bold stroke of analytic strategy which linked the fate of the class phenomenon with the fate of capitalism in such a way that socialism, which in reality has nothing to do with the presence or absence of social classes, became, by definition, the only possible kind of classless society, excepting primitive groups.
  • The exaggeration of the definiteness and importance of the dividing line between the capitalist class in that sense and the proletariat was surpassed only by the exaggeration of the antagonism between them. To any mind not warped by the habit of fingering the Marxian rosary it should be obvious that their relation is, in normal times, primarily one of cooperation and that any theory to the contrary must draw largely on pathological cases for verification.
  • But nothing in Marx’s economics can be accounted for by any want of scholarship or training in the technique of theoretical analysis. He was a voracious reader and an indefatigable worker. He missed very few contributions of significance. And whatever he read he digested, wrestling with every fact or argument with a passion for detail most unusual in one whose glance habitually encompassed entire civilizations and secular developments.
  • To his powerful intellect, the interest in the problem as a problem was paramount in spite of himself; and however much he may have bent the import of his final results, while at work he was primarily concerned with sharpening the tools of analysis proffered by the science of his day, with straightening out logical difficulties and with building on the foundation thus acquired a theory that in nature and intent was truly scientific whatever its shortcomings may have been.
  • Both Ricardo and Marx say that the value of every commodity is (in perfect equilibrium and perfect competition) proportional to the quantity of labor contained in the commodity, provided this labor is in accordance with the existing standard of efficiency of production (the “socially necessary quantity of labor”). Both measure this quantity in hours of work and use the same method in order to reduce different qualities of work to a single standard.
  • Both answer critics by the same arguments. Marx’s arguments are merely less polite, more prolix and more “philosophical” in the worst sense of this word.
  • The labor theory of value, even if we could grant it to be valid for every other commodity, can never be applied to the commodity labor, for this would imply that workmen, like machines, are being produced according to rational cost calculations. Since they are not, there is no warrant for assuming that the value of labor power will be proportional to the man-hours that enter into its “production.”
  • To begin with, the doctrine of surplus value does not make it any easier to solve the problems, alluded to above, which are created by the discrepancy between the labor theory of value and the plain facts of economic reality.
  • Marx relies on the competition between capitalists for bringing about a redistribution of the total “mass” of surplus value such that each firm should earn profits proportional to its total capital, or that individual rates of profits should be equalized.
  • If we place ourselves on Marx’s standpoint, as it is our duty in a question of this kind, it is not absurd to look upon surplus value as a “mass” produced by the social process of production considered as a unit and to make the rest a matter of the distribution of that mass. And if that is not absurd, it is still possible to hold that the relative prices of commodities, as deduced in the third volume, follow from the labor-quantity theory in the first volume. Hence it is not correct to assert, as some writers from Lexis to Cole have done, that Marx’s theory of value is completely divorced from, and contributes nothing to, his theory of prices.
  • For Marx, saving or accumulating is identical with conversion of “surplus value into capital.” With that I do not propose to take issue, though individual attempts at saving do not necessarily and automatically increase real capital. Marx’s view seems to me to be so much nearer the truth than the opposite view sponsored by many of my contemporaries that I do not think it worth while to challenge it here.]
  • Now this tendency of the capitalist mechanism to equilibrate itself is surely not above question and any assertion of it would require, to say the least, careful qualification. But the interesting point is that we should call that statement most un-Marxian if we happened to come across it in the work of another economist and that, as far as it is tenable, it greatly weakens the main drift of Marx’s argument. In this point as in many others, Marx displays to an astonishing degree the shackles of the bourgeois economics of his time which he believed himself to have broken.]
  • Finally, the idea that capitalist evolution will burst—or outgrow—the institutions of capitalist society (Zusammenbruchstheorie, the theory of the inevitable catastrophe) affords a last example of the combination of a non sequitur with profound vision which helps to rescue the result.
  • Or capital in the Marxian system is capital only if in the hands of a distinct capitalist class. The same things, if in the hands of the workmen, are not capital.
  • Marxists claim that their system solves all the great problems that baffle non-Marxian economics; so it does but only by emasculating them.
  • Moreover, as every lawyer and every politician knows, energetic appeal to familiar facts will go a long way toward inducing a jury or a parliament to accept also the construction he desires to put upon them. Marxists have exploited this technique to the full. In this instance it is particularly successful, because the facts in question combine the virtues of being superficially known to everyone and of being thoroughly understood by very few.
  • If however we shake off the blinkers and cease to look upon colonization or imperialism as a mere incident in class warfare, little remains that is specifically Marxist about the matter. What Adam Smith has to say on it does just as well—better in fact.
  • For instance, the consistent support given by the American people to protectionist policy, whenever they had the opportunity to speak their minds, is accounted for not by any love for or domination by big business, but by a fervent wish to build and keep a world of their own and to be rid of all the vicissitudes of the rest of the world. Synthesis that overlooks such elements of the case is not an asset but a liability.
  • Big business has been able to take advantage of the popular sentiment and it has fostered it; but it is absurd to say that it has created it.
  • Matters become infinitely worse if, flying in the face of fact plus common sense, we exalt that theory of capital export and colonization into the fundamental explanation of international politics which thereupon resolves into a struggle, on the one hand, of monopolistic capitalist groups with each other and, on the other hand, of each of them with their own proletariat. This sort of thing may make useful party literature but otherwise it merely shows that nursery tales are no monopoly of bourgeois economics.
  • The attitudes of capitalist groups toward the policy of their nations are predominantly adaptive rather than causative, today more than ever. Also, they hinge to an astonishing degree on short-run considerations equally remote from any deeply laid plans and from any definite “objective” class interests. At this point Marxism degenerates into the formulation of popular superstitions.7
  • This superstition is exactly on a par with another that is harbored by many worthy and simple-minded people who explain modern history to themselves on the hypothesis that there is somewhere a committee of supremely wise and malevolent Jews who behind the scenes control international or perhaps all politics. Marxists are not victims of this particular superstition but theirs is on no higher plane.
  • The badge of Scientific Socialism which according to Marx is to distinguish it from Utopian Socialism consists in the proof that socialism is inevitable irrespective of human volition or of desirability. As has been stated before, all this means is that by virtue of its very logic capitalist evolution tends to destroy the capitalist and to produce the socialist order of things.8
  • The capitalist or any other order of things may evidently break down—or economic and social evolution may outgrow it—and yet the socialist phoenix may fail to rise from the ashes.
  • This should also solve the problem that has divided the disciples: revolution or evolution? If I have caught Marx’s meaning, the answer is not hard to give. Evolution was for him the parent of socialism. He was much too strongly imbued with a sense of the inherent logic of things social to believe that revolution can replace any part of the work of evolution.

Consumption vs. Investment (and IPO vs. Secondary Market)

Scott Sumner answers what I imagine is an extremely prevalent question about the difference between consuming and investing.

I have read your site for years, but this is the first time I felt compelled to ask a question: some friends and I were discussing the various benefits to society that would accrue from say, my purchasing a product, vs investing the same amount of money in the stock market. While I know, at a high level, that investment is necessary to grow the economy, I had a more difficult time explaining the specific mechanism by which the action of “I buy 100 bucks of index funds on Vanguard” translates to “investment” in the economy. We were easily able to understand that if I buy a 100 dollar widget from Widget Corp, that benefits that company (and the economy), which now has $100 more to spend on wages or machines, but I am having difficulty coming up with a similar concrete sequence of steps for the 100 dollar stock investment.

On a larger point, I think this reflects part of the skepticism and suspicion that people have towards the stock market, particularly from the crowd that throws around terms like “gambling” and “speculation.”

Scott responds by reframing the question and explaining what ‘saving’ really is.

This is a surprisingly confusing subject. Consider the sentence that begins “We were easily able to understand . . . “. In fact, I don’t think they do understand, as money spent on wages and machines is not a benefit to the economy, it’s a cost. The benefit comes from consuming the widget. In the examples that follow, I’ll assume the $100 widget is a meal at a restaurant for the Moore family.

Before considering Brian’s stock market question, suppose he were trying to decide between spending the $100 on a meal, or spending it on materials for a new front sidewalk. The meal is considered consumption, and the new sidewalk is investment, because it’s durable and yields a flow of services for many years, or even decades. The money spent on the sidewalk is called “saving”. In either case, output gets produced and the effect on GDP is roughly the same, in the short run. In the long run, GDP will be a bit higher with the sidewalk investment, as it will continue to produce a flow of services for many years.

One more thing to address is a distinction that Scott doesn’t touch on in the post. Scott goes on to discuss giving $100 to a company that installs sidewalks, and presumably will install more sidewalks because they have that $100. That is confusing to people in the “thanks for the tip”-zone, because most people think of the secondary market when they are thinking of buying and selling stock. In the secondary market, buying a share of XYZ Corp doesn’t put any money in their pocket to aid the building of sidewalks.

Actually, most people confuse these over and over and don’t have a coherent schema for thinking about how the flow of money in markets actually works — evidenced by many people who don’t want to “give money” to companies whose business practices they don’t like. The better reason not to buy shares of a company is that one wouldn’t want to be an owner of a company they don’t like and can’t change, which is fine, but suboptimal in my opinion. I digress.

The point that I wanted to add to Scott’s is that investments in the secondary market, even though XYZ Corp isn’t actually getting your money to build more sidewalks, also (as Scott says) ‘works on average’, because the cash you use to buy the shares go to somebody else who uses that cash to either consume or invest, which also works on average. Those dollars will eventually go either to someone consuming or investing in ‘sidewalks’ directly until equilibrium is reached.

As a brief example, if Scott owns 1 share worth $100 of NGDP Corp, and I can either spend $100 on lunch or buy $100 of NGDP Corp on the open market. I go to buy the stock and Scott is the lucky fellow with his ask price at $100. Scott was selling his share because he was hungry, so he goes to buy lunch. Nothing changed except the ownership of NGDP Corp, and $100 was still spent on lunch.


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Book Highlights: Zero to One: Notes on Startups, or How to Build the Future (Peter Thiel)

  • in the long run they could never create enough to save the average person from an extremely hard life.
  • Creating value is not enough—you also need to capture some of the value you create.
  • by “monopoly,” we mean the kind of company that’s so good at what it does that no other firm can offer a close substitute.
  • If you lose sight of competitive reality and focus on trivial differentiating factors—maybe you think your naan is superior because of your great-grandmother’s recipe—your business is unlikely to survive.
  • Non-monopolists exaggerate their distinction by defining their market as the intersection of various smaller markets:
  • Monopolists, by contrast, disguise their monopoly by framing their market as the union of several large markets:
  • Do outsized profits come at the expense of the rest of society? Actually, yes: profits come out of customers’ wallets, and monopolies deserve their bad reputation—but only in a world where nothing changes.
  • If your industry is in a competitive equilibrium, the death of your business won’t matter to the world;
  • All Rhodes Scholars had a great future in their past.
  • Sometimes you do have to fight. Where that’s true, you should fight and win. There is no middle ground: either don’t throw any punches, or strike hard and end it quickly.
  • However, disruption has recently transmogrified into a self-congratulatory buzzword for anything posing as trendy and new.
  • Grandmaster José Raúl Capablanca put it well: to succeed, “you must study the endgame before everything else.”
  • “half luck, half good timing, and the rest brains.”
  • Today the whole Eurozone is in slow-motion crisis, and nobody is in charge.
  • The indefinite pessimist can’t know whether the inevitable decline will be fast or slow, catastrophic or gradual. All he can do is wait for it to happen, so he might as well eat, drink, and be merry in the meantime: hence Europe’s famous vacation mania.
  • Whether you were born in 1945 or 1950 or 1955, things got better every year for the first 18 years of your life, and it had nothing to do with you.
  • a whole generation learned from childhood to overrate the power of chance and underrate the importance of planning.
  • Gladwell at first appears to be making a contrarian critique of the myth of the self-made businessman, but actually his own account encapsulates the conventional view of a generation.
  • Finance epitomizes indefinite thinking because it’s the only way to make money when you have no idea how to create wealth.
  • To Nozick, any voluntary exchange must be allowed, and no social pattern could be noble enough to justify maintenance by coercion.
  • It starts with the professors who often become part-time consultants instead of full-time employees—even for the biotech startups that begin from their own research.
  • Jobs saw that you can change the world through careful planning, not by listening to focus group feedback or copying others’ successes.
  • Actually, there’s no evidence that Einstein ever said any of those things—the quotations are all apocryphal.
  • The error lies in expecting that venture returns will be normally distributed: that is, bad companies will fail, mediocre ones will stay flat, and good ones will return 2x or even 4x. Assuming this bland pattern, investors assemble a diversified portfolio and hope that winners counterbalance losers.
  • First, only invest in companies that have the potential to return the value of the entire fund. This is a scary rule, because it eliminates the vast majority of possible investments. (Even quite successful companies usually succeed on a more humble scale.) This leads to rule number two: because rule number one is so restrictive, there can’t be any other rules.
  • VC investment accounts for less than 0.2% of GDP. But the results of those investments disproportionately propel the entire economy. Venture-backed companies create 11% of all private sector jobs. They generate annual revenues equivalent to an astounding 21% of GDP.
  • Less obvious but just as important, an individual cannot diversify his own life by keeping dozens of equally possible careers in ready reserve.
  • You should focus relentlessly on something you’re good at doing, but before that you must think hard about whether it will be valuable in the future.
  • Most people act as if there were no secrets left to find. An extreme representative of this view is Ted Kaczynski, infamously known as the Unabomber. Kaczynski was a child prodigy who enrolled at Harvard at 16. He went on to get a PhD in math and become a professor at UC Berkeley. But you’ve only ever heard of him because of the 17-year terror campaign he waged with pipe bombs against professors, technologists, and businesspeople.
  • Religious fundamentalism, for example, allows no middle ground for hard questions: there are easy truths that children are expected to rattle off, and then there are the mysteries of God, which can’t be explained.
  • Free marketeers worship a similar logic. The value of things is set by the market. Even a child can look up stock quotes. But whether those prices make sense is not to be second-guessed; the market knows far more than you ever could.
  • Physics, for example, is a real major at all major universities, and it’s set in its ways. The opposite of physics might be astrology, but astrology doesn’t matter. What about something like nutrition? Nutrition matters for everybody, but you can’t major in it at Harvard. Most top scientists go into other fields. Most of the big studies were done 30 or 40 years ago, and most are seriously flawed.
  • “Thiel’s law”: a startup messed up at its foundation cannot be fixed.
  • Actually, a huge board will exercise no effective oversight at all; it merely provides cover for whatever microdictator actually runs the organization. If you want that kind of free rein from your board, blow it up to giant size. If you want an effective board, keep it small.
  • However, anyone who doesn’t own stock options or draw a regular salary from your company is fundamentally misaligned.
  • START WITH A THOUGHT EXPERIMENT: what would the ideal company culture look like? Employees should love their work. They should enjoy going to the office so much that formal business hours become obsolete and nobody watches the clock.
  • Why would someone join your company as its 20th engineer when she could go work at Google for more money and more prestige?
  • But there are two general kinds of good answers: answers about your mission and answers about your team.
  • People at a successful startup are fanatically right about something those outside it have missed.
  • Whatever the career, sales ability distinguishes superstars from also-rans. On Wall Street, a new hire starts as an “analyst” wielding technical expertise, but his goal is to become a dealmaker. A lawyer prides himself on professional credentials, but law firms are led by the rainmakers who bring in big clients. Even university professors, who claim authority from scholarly achievement, are envious of the self-promoters who define their fields.
  • Americans fear technology in the near future because they see it as a replay of the globalization of the near past. But the situations are very different: people compete for jobs and for resources; computers compete for neither.
  • And that’s the point: computers are tools, not rivals.
  • Social entrepreneurs aim to combine the best of both worlds and “do well by doing good.” Usually they end up doing neither.
  • Elon describes his staff this way: “If you’re at Tesla, you’re choosing to be at the equivalent of Special Forces. There’s the regular army, and that’s fine, but if you are working at Tesla, you’re choosing to step up your game.”