Things happening in the world of business

Starting with this angry post by Bill Waddell, I agree that gathering a bunch of politicians and lobbyists into a room and expecting something useful to come out the other end is a fruitless endeavor. Yes, the National Association of Manufacturers (NAM) are merely protecting factory owners, not consumers (in the process, they probably side with their unionized workers a lot more than against). Bill's anger is mostly justified, except that I don't believe that "we" as a country necessarily need manufacturing so much as we need the freedom and ability to trade. Remember that Jefferson thought we should aspire to be a nation of farmers; manufacturing is just the next level of development above agriculture; I'm not sure what will come next, but I'd hate to put too much emphasis on manufacture and find that commitment to it condemns us to life as a second-rate nation.

Fortunately, most of the grim stories about modern manufacturing and modern business in general can be examined with data. Russell Roberts passes along this Sebastion Mallaby column in which he lays out the evidence that jobs are not filled with more insecurity than they were a generation ago. Malalby writes,

In a paper to be released today, a trio at the London School of Economics -- Nick Bloom, Tobias Kretschmer and John Van Reenen -- sort through a hard drive's worth of data on 732 manufacturing firms in the United States and Europe, assessing their policies on work hours, vacation, assistance for child care and so on. Then they test whether the most fiercely productive companies in their sample treat workers badly. They find no such correlation.

Pretty cool, and yes, Russ, I am surprised. Not for the assumed reason, but for the reason that we have been reading so much about workers' lack of loyalty to a single employer. Has somebody tested that? If not, I'd suggest that they use a dummy variable to control for whether the firm has Lean tendencies or not.

Finally, Russell's co-blogger at Cafe Hayek, Don Boudreaux, points out the need to think about the whole real world in relation to labor law: the people yet to come, the effects on employers, etc. It's the incentives, stupid.

(It's not quite the same whole I pointed out in a comment on this post at Catallarchy, but the whole matters in many contexts)

Keeping an Island of Communism

It used to be joked that when the Soviets finally took over the entire planet, they would have to keep an island of capitalism just so they would know what prices to charge in the state stores.

Castro and Kim Jong Il are going to depart from this world in the next few years. When they do, we face a true moral problem. Should we keep one communist country as a warning and an example? Nobody even remembers today the fact that Stalin, Mao, and Pol Pot made Hitler look like an amateur, and in another generation, even Hitler is going to be a long-distant memory. On the other hand, the South Americans are headed for yet another round of populist kill me/kidnap you, so maybe we won't have to keep one around.

However, even if it were necessary, should we force a small portion of humanity to remain in a Communist country just so tomorrow's Deep Thinkers aren't tempted to foist yet another centrally planned fiasco on the rest of us?

Kaizen for everything

From Gemba and today's NYT:

Gemba links to Helmuth Sole's article about visiting Toyota's Formula 1 racing facility, and finding that their pit crew is consistently the fastest thanks to engineers brought in to kaizen the process. Pit times run about 12 seconds for a complete fuel fill-up and tire change. Nice.

The kaizen activity in this article in the NYT is not nearly as pleasant. Breaking bad news to patients used to be thought of as a talent you either had or didn't have. Some oncologists are trying to challenge that assumption and show that it is a skill that can be taught. They employ actors to serve as the patients, and then through a "grueling" 20 hour seminar teach the doctors to find out what kind of doctor the patient wants them to be before bombarding them with a flood of jargon and inappropriate facial expressions.

John Dillon, another actor, said, "No matter what level the doc is at, we see them go up a notch."

For a more formal validation, Dr. Back and his colleagues have accumulated a load of pre- and post-training questionnaires and videotaped interviews, which are still being analyzed.

I hope I never have to find out how good the program students are, but I certainly respect that aspect of the profession.

Projection and selfishness

The common definition of "selflessness" is something like, "I am willing sacrifice myself to the needs of others." Its opposite is selfishness, commonly thought of as, "I am the only thing that matters." Despite their claim to the "true" nature of the word, Objectivists' definition of "selfish" is at odds with common understanding. The Objectivist definition is something akin to "I neither require others to sacrifice to me, nor will I sacrifice myself to others."

I had a college acquaintance who believed in three kinds of people: those who were out for themselves at the expense of others, those who were fools and allowed themselves to be taken, and himself. He, of course, was not out to take from anyone, but if he did come out ahead at someone else's expense, well, then they were foolish. He comes close to the Objectivist definition of selfishness, but not quite. He always made sure he didn't get the short end of the stick, and if he erred towards giving someone else the short end, he accepted that outcome. In other words, he had a probabilistic tendency toward the common understanding of selfishness.

Ayn Rand had a lesson that always stuck with me about this: it concerned the aphorism, "you can't cheat an honest man." The point was that con games frequently require convincing someone that they are going to get something for nothing. An honest man realizes the wrongness of the proposition and makes a poor mark. No reasonable person believes that by sending a checking account number by e-mail, that he is going to be the beneficiary of the treasury of some poorly managed African nation.

Kathleen's version of the same lesson is that you can usually trust business people who are rude to you, or at least more so than people who are nice. People who are nice may be trying to figure out an angle by which to exploit you. Rude people are signalling that they can barely stand the inconvenience of talking to you.

Anyhow, I believe that the ultimate irony of this is that this particular friend of mine believed the worst of people, yet he was one of the most self-absorbed people I have ever met. That was my first observation of projection, where you get a look into a person's soul by seeing how they regard the rest of humanity. Someone who always assumes that people have the lowest motives for their actions, especially when other explanations are both available and more likely, probably have low motivations for their own actions. Someone who always trusts other people is probably trustworthy themselves [1]. I try to pursue a trusting but learning position: I think people are basically good and trustworthy, and I'll even give someone a second chance if there is some possible legitimate explanation for a betrayal of confidence, but when someone proves themselves to be unworthy, I don't unconvince easily. This is easily summarized:

Fool me once, shame on you,
Fool me twice, shame on me.

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[1] I'll caveat that by saying that such Pollyannas are morally trustworthy, but frequently fail in the execution. They your trust through blunder rather than intent (what does that say about me?).