Curt Doolittle

Theme: Productivity

  • CONFIGURING PRODUCTION “Entrepreneurs, through a process of trial and error, fig

    CONFIGURING PRODUCTION

    “Entrepreneurs, through a process of trial and error, figure out how best to configure production. In this process of ongoing discovery, there can be periods in which workers are unemployed, while the market mechanism tries to figure out how to utilize them.” — Arnold Kling.

    I’ve been a supporter of Kling’s argument since he first started talking about it. But in our intellectual climate, an explanation must be reduced to some sort of model so that we are sure that the various causal axis are related in the way that we assume and intuit that they are.

    As yet I haven’t seen such a model, or comparison with that model against data. This deconstruction, which involves painfully detailed research, was one of the many ideas that convinced greenspan of the virtue of the entrepreneurial coordination of production amidst fragmentary knowledge by studying the cotton trade.

    I feel, that in my work, I am trying to express his argument for PSST in operational language of incentives using propertarian terminology.

    (And I’m using PSST in a post that should come out later today.)

    https://www.facebook.com/arnold.kling?

    Source date (UTC): 2013-10-21 05:18:00 UTC

  • Capitalism: How Much Is Wasted In Finding Market-based Solutions?

    I WILL TRY TO DO YOUR QUESTION JUSTICE:

    RE: “That represents a huge expenditure of human and physical resources that is not typically looked at when evaluating the efficiency of the winner.”

    Actually, it is obvious, common sense, and assumed in economics and politics, but we come to the opposite conclusion.  (a) we are constantly researching and developing new products and services, and variations of them through constant refinements of products, services, and prices called ‘entrepreneurial research and development”. It is not a process of PRODUCTION. The market is a process of RESEARCH AND DEVELOPMENT.

    Furthermore, as the world consists of millions of resources, all of which have multiple demands on them, we must constantly look for what we refer to as ‘substitutions’ in the form of different resources, different suppliers, different technology, to adapt to constant changes in the demand for and availability of resources from the most simplistic primary resources to the most complex combination of sophisticated production techniques. 

    So. NONE OF IT IS WASTE.   The market is not a machine following a production program. It is a vast network of individuals working in networks some of us call ‘patterns of sustainable specialization and trade”, dynamically changing our efforts in response to other similar networks, in real time on a momentary basis in some cases (oil prices) and on a long term basis in others (commercial construction) and on a very, very long term basis for others (pharmaceutical research.)

    A COMMON ERROR
    It is very common for people who lack knowledge of economics to apply very simplistic concepts of production to an economy. It is very common for people who lack knowledge of economics and to fail to understand prices as an information system by which we coordinate ALL HUMAN ACTIVITY to serve each other’s needs, in a vast division of knowledge and labor, that is incomprehensible to any individual or group of individuals.  It is very common for people who lack knowledge of economics to confuse the difficulty in producing goods and services, as one of applying labor, when labor is, in fact, the cheapest most ready commodity available, and worth very little. On the other hand, it is extremely difficult to ORGANIZE VOLUNTARY participation in production that is not a constant process of producing what is know, but a perpetually dynamic process of organizing the process of research and development, which produces an infinite variety of goods, wherein the competition between multiple producers forces all production to the lowest price, so that an increasing number of people can afford to consume goods. 

    Each of us produces very little. None of us, individually, matters to production. However, by voluntarily coordinating our efforts through self interest, by using the information system we call prices to guide us, we can cooperate by in a vast division of incomprehensible knowledge and labor.

    For this reason, people who ORGANIZE production are compensated highly for it, but those who CONSUME that production.  Largely, those of us who consume or labor, gain the benefit of our efforts, each of which is very small, in the form of affordable consumer goods and services.  Not necessarily as compensation. Because it is our labor that is of little value, and the organization of labor for the purpose of production as highly valuable. Because risk taking, forecasting, and guessing the future against competitors, so that we make the best use of the world’s resources at any given time, is what determines success or failure of the coordination of many people’s interwoven efforts as successful. And that success is told to us by the information system in the form of ‘profit’.  Profit which is quite hard to obtain it turns out.  That is because, except at the extremes, organizations, whether private or public consume the maximum amount of profit that investors will tolerate. 

    I HOPE THIS ANSWERS YOUR QUESTION.

    It cannot be waste if it is experiment.  The problem with your question is that you assume we know what we do not and cannot know. It may help to remember that the socialists thought like you do and 100 million people are dead because of it. And the entire world has abandoned socialism (central planning of production) for this reason.  Prices and Incentives are inseparable. without prices we literally cannot think, or plan, or coordinate out efforts. Without incentives we cannot voluntarily get people to continue to conduct research and development.  Without research and development we cannot sustain production at low prices, with increasing advancement in technology, goods and services. Without advancement we would eventually become incrementally poorer as all differences between us were equilibrated, and the incentive to cooperate voluntarily declined. 

    EASY ENTRY LEVEL READINGS
    “I Pencil” (Essay)
    “The Use Of Knowledge In Society” (Essay / Hayek)
    “Parable Of The Bees” (Essay)
    “Economics In One Lesson” (Book / Haslitt)

    That’s about it. You get that. You get economics.  We call it The Economic Way of Thinking. 

    Curt Doolittle
    The Propertarian Institute.
    Kiev

    https://www.quora.com/Capitalism-How-much-is-wasted-in-finding-market-based-solutions

  • Capitalism: How Much Is Wasted In Finding Market-based Solutions?

    I WILL TRY TO DO YOUR QUESTION JUSTICE:

    RE: “That represents a huge expenditure of human and physical resources that is not typically looked at when evaluating the efficiency of the winner.”

    Actually, it is obvious, common sense, and assumed in economics and politics, but we come to the opposite conclusion.  (a) we are constantly researching and developing new products and services, and variations of them through constant refinements of products, services, and prices called ‘entrepreneurial research and development”. It is not a process of PRODUCTION. The market is a process of RESEARCH AND DEVELOPMENT.

    Furthermore, as the world consists of millions of resources, all of which have multiple demands on them, we must constantly look for what we refer to as ‘substitutions’ in the form of different resources, different suppliers, different technology, to adapt to constant changes in the demand for and availability of resources from the most simplistic primary resources to the most complex combination of sophisticated production techniques. 

    So. NONE OF IT IS WASTE.   The market is not a machine following a production program. It is a vast network of individuals working in networks some of us call ‘patterns of sustainable specialization and trade”, dynamically changing our efforts in response to other similar networks, in real time on a momentary basis in some cases (oil prices) and on a long term basis in others (commercial construction) and on a very, very long term basis for others (pharmaceutical research.)

    A COMMON ERROR
    It is very common for people who lack knowledge of economics to apply very simplistic concepts of production to an economy. It is very common for people who lack knowledge of economics and to fail to understand prices as an information system by which we coordinate ALL HUMAN ACTIVITY to serve each other’s needs, in a vast division of knowledge and labor, that is incomprehensible to any individual or group of individuals.  It is very common for people who lack knowledge of economics to confuse the difficulty in producing goods and services, as one of applying labor, when labor is, in fact, the cheapest most ready commodity available, and worth very little. On the other hand, it is extremely difficult to ORGANIZE VOLUNTARY participation in production that is not a constant process of producing what is know, but a perpetually dynamic process of organizing the process of research and development, which produces an infinite variety of goods, wherein the competition between multiple producers forces all production to the lowest price, so that an increasing number of people can afford to consume goods. 

    Each of us produces very little. None of us, individually, matters to production. However, by voluntarily coordinating our efforts through self interest, by using the information system we call prices to guide us, we can cooperate by in a vast division of incomprehensible knowledge and labor.

    For this reason, people who ORGANIZE production are compensated highly for it, but those who CONSUME that production.  Largely, those of us who consume or labor, gain the benefit of our efforts, each of which is very small, in the form of affordable consumer goods and services.  Not necessarily as compensation. Because it is our labor that is of little value, and the organization of labor for the purpose of production as highly valuable. Because risk taking, forecasting, and guessing the future against competitors, so that we make the best use of the world’s resources at any given time, is what determines success or failure of the coordination of many people’s interwoven efforts as successful. And that success is told to us by the information system in the form of ‘profit’.  Profit which is quite hard to obtain it turns out.  That is because, except at the extremes, organizations, whether private or public consume the maximum amount of profit that investors will tolerate. 

    I HOPE THIS ANSWERS YOUR QUESTION.

    It cannot be waste if it is experiment.  The problem with your question is that you assume we know what we do not and cannot know. It may help to remember that the socialists thought like you do and 100 million people are dead because of it. And the entire world has abandoned socialism (central planning of production) for this reason.  Prices and Incentives are inseparable. without prices we literally cannot think, or plan, or coordinate out efforts. Without incentives we cannot voluntarily get people to continue to conduct research and development.  Without research and development we cannot sustain production at low prices, with increasing advancement in technology, goods and services. Without advancement we would eventually become incrementally poorer as all differences between us were equilibrated, and the incentive to cooperate voluntarily declined. 

    EASY ENTRY LEVEL READINGS
    “I Pencil” (Essay)
    “The Use Of Knowledge In Society” (Essay / Hayek)
    “Parable Of The Bees” (Essay)
    “Economics In One Lesson” (Book / Haslitt)

    That’s about it. You get that. You get economics.  We call it The Economic Way of Thinking. 

    Curt Doolittle
    The Propertarian Institute.
    Kiev

    https://www.quora.com/Capitalism-How-much-is-wasted-in-finding-market-based-solutions

  • (Feeling guilty about not writing more) My company’s product has really needed m

    (Feeling guilty about not writing more)

    My company’s product has really needed my attention for the past six months – and it’s paid off. We have made more progress on the software since July than we had in the previous six months. It’s exceeded my expectations considerably. Although I’ve doubled my expected investment too, because I understand we have a category killer on our hands.

    But my writing suffered. And while in the few months of 2013 I’d made incredible progress, and while I’ve managed to solve a few core theoretical problems over the summer, I haven’t put the additional chapters to paper.

    But, you know, I’ve been thinking about the PFS Interim Meeting in London and the talk I want to give, and not surprisingly, I realized once again, that every six months that go by, I can distill the arguments further, into increasingly clear and compact statements.

    So maybe that isn’t such a bad thing. 🙂

    Good. My guilt is assuaged for the evening. Now, do I have permission to do something mindless now? lol

    Source date (UTC): 2013-10-19 15:43:00 UTC

  • THE INSIDIOUS LOGIC OF PAUL KRUGMAN It is perfectly fine to overpay a corrupt go

    THE INSIDIOUS LOGIC OF PAUL KRUGMAN

    It is perfectly fine to overpay a corrupt government because it creates high paying salaries and consumption, despite not producing a good. But it is not perfectly fine to overpay healthcare workers for providing the best healthcare in the world in order to create consumption.

    Ostensibly we assume that its because he is a lying political hack.

    But the truth is, he is a racist who just hates white folk. And everything else is just a vehicle for his hatred.

    Source date (UTC): 2013-10-14 23:41:00 UTC

  • I don’t know what the difference is between you controlling your body and me con

    I don’t know what the difference is between you controlling your body and me controlling my money. Why is it ok for you to have control over my productivity if I can’t have control over your productivity? I mean, isn’t my productivity the equivalent of your reproductivity?

    Source date (UTC): 2013-10-14 16:29:00 UTC

  • THOUGHTS ESTIMATING CREATIVE AND SOFTWARE PROJECTS : POKER You know the whole ca

    THOUGHTS ESTIMATING CREATIVE AND SOFTWARE PROJECTS : POKER

    You know the whole card game thing actually works pretty well. But it’s harder to do in some settings than others. In house dev is pretty easy. But international groups, with different skill sets, it’s pretty hard.

    If you read everything out there (I have) most of it’s pretty obvious behavioral psychology. In my view I want to encourage people to invest very little time up front estimating, but to get estimates from a lot of people on the team, and narrow those estimates as we come closer to execution. The reason is that the statistical analysis of each individual’s estimate of any given work item, over time, is pretty accurate. In other words, if you estimate 100 things over three months, and the end work actuals are captured as hard data, over time, we can do a better job of predicting estimates on first blush than we can with deep analysis. Just how it is. Intuition being what it is across a group of people.

    What bothers me is that in house people are pretty comfortable sitting around pondering this stuff. But in my experience, high speed high production service businesses, have an extremely hard time doing this kind of thing, partly because they have less direct influence over team members who have much more autonomy, and more varied and irregular demands.

    So, the way I’ve looked at the feature in oversing, after looking at a zillion alternatives, is to set up a mixture of triangulation and card game that can be done real-time or not. The PM/DM/SM or whatever picks a range of stories / features to estimate. We handle both narrative and functional approaches. (In-house I use functional not narrative because of the workflow engine’s ability to modify all experiences.) Then launches the game at a particular time, and can do it interactively, or iteratively. Personally I absolutely love the iterative approach because I freaking hate sitting there working at the rate of the slowest bandwidth at the table.

    Each item is presented for triangulation against other previous estimates (if there are any) and you vote by dragging the card into the position with the appropriate points. When done, you commit that card. At some point, the PM/DM/SM calls the hand, flips the cards, and all the players are informed about the ‘hand’.

    This means I can run through thirty items at my speed, and someone else at theirs, and we don’t have to do it at the same time, and we can do it as a cognitive break from our other work.

    Now, I’ve set it up to ‘award the pot’ to people who are accurate estimators. So it’s a little bit of a game. The pot is just a score, and this score is part of your profile. The better your ‘winnings’ are the better you look at estimating. It’s pretty fun really.

    This kind of gamification matters because in large consulting companies people don’t know much about you and these sort of metrics build an empirical reputation for you tat’s visible on your FB-like profile.

    Alternatively, you can run the game interactively, with people right in the room, or over Skype etc. The point is that you can run it either way. Or even a combination of the two. (I don’t have to be there in person to play my hands – yes I know purists. But again. I dont get to tell people how to run their projects. I just get to find ways to help them run them the way that they want to. Advocacy is your job. Enablement is mine. )

    Now, when you move from the backlog to the sprint you estimate, (or at least most people do) in hours, and break the story or feature into discrete measurable tasks.

    Oversing records actuals in painful detail. You sort of plan your day or week on an normal calendar, and we just assume that whatever you plan is what you did unless you change it. It’s pretty easy to reconcile your billings this way, by handling exceptions to your agenda rather than trying to remember what you did. (I’m not doing it justice here.) You don’t really fill much out on your timecard. The system does all of that for you. (I know. Cool. It’s awesome. Thank Max Romanenko. It’s his doing.)

    So, we have SWAGS in points, Refined estimates from the triangulation-poker-game, hourly estimates for tasks, forecast time against them, actual time recorded. And our funnel statistics are pretty solid with that information.

    That said, any brilliant insights would be appreciated.

    Cheers.

    Source date (UTC): 2013-10-12 16:03:00 UTC

  • US adults are dumber than the average human Not quite honest. But the underlying

    US adults are dumber than the average human

    Not quite honest. But the underlying report suggests why our labor force cannot be carried by a shrinking minority.

    http://nypost.com/2013/10/08/us-adults-are-dumber-than-the-average-human/

    Source date (UTC): 2013-10-09 02:27:00 UTC

  • WHY ASIANS LAG : THE PROBLEM OF +106 VERBAL IQ : PARETO REVISITED While spatial

    WHY ASIANS LAG : THE PROBLEM OF +106 VERBAL IQ : PARETO REVISITED

    While spatial IQ is very good for workers, engineers, and scientists, we must remember that CONTRARY to Marxist and now dominant postmodern western economic intuitions that have been derived from the ERRONEOUS labor theory of value, that ORGANIZING production is what is difficult, not production itself. Organizing requires persuasion and negotiation and collaboration. We are generally compensated for ORGANIZING society into vast networks of production of goods and services, and REORGANIZING society as needed. This is the job of entrepreneurs. And it is somewhat surprising that our Austrian forbears only got it sort of half right. They corrected the Marxists, but they din’t quite solve the problem for us. It isn’t efficiency or prices that really matter, it is using price and efficiency information in order to organize production using people and capital and supplying them with incentives.

    THAT IS VERBAL WORK. THAT VERBAL WORK REQUIRES A PRECISE LANGUAGE as well as precise property definitions and precise laws for the resolution of conflicts.

    My argument is that this is the Pareto Principle in effect. In every nation 20% controls 80% of the capital. And there is a good reason for that. Because that capital is used to organize the production of consumer goods. It is not ‘consumed’ It is used to manage society’s dynamic and chaotic, and entirely schumpeterian means of production.

    In order for those people to succeed, both they and the rest of the administrative and operations people that flow from them must be able to negotiate by expressing ideas in increasingly articulated form.

    —EXCERPT FROM LE GRIFFE DU LION’s WHY ASIANS LAG—

    “In market economies, per capita GDP is directly proportional to the population fraction with verbal IQ equal to or greater than 106.

    “Smart Fraction Theory recognizes that smart people produce wealth. It asserts that a nation’s per capita GDP varies directly with the fraction of its population that is smart. SFT II changes the definition of “smart” by linking it to verbal IQ instead of general IQ. SFT II asserts:

    “***In market economies, per capita GDP is directly proportional to the population fraction with verbal IQ at or above some determinable threshold.***

    “Verbal IQ is a score derived from verbal subtests of an IQ test. The subtests measure abilities like abstract and common sense reasoning, language comprehension, short-term auditory memory, concentration, attention, word knowledge, verbal fluency and social judgment. It is the kind of intelligence that serves lawyers well. I actually prefer the term “verbal-analytical IQ.”

    “Their IQ is bifurcated. NE Asians have the highest IQ of all peoples other than Ashkenazim. They owe that superior IQ, however, to extraordinary visuospatial ability, which, despite verbal shortcomings, lifts their IQ above that of Europeans.

    “The bifurcation is evident in the workplace where, for example, fully-assimilated second and third generation NE Asian Americans are overrepresented in science, medicine and engineering, and underrepresented in law, social science and the humanities. According to the 1999 National Science Foundation survey of PhDs awarded to US citizens and permanent residents, Asian Americans earned 11% of the science and engineering PhDs but less than 5% of other PhDs.

    “Is it that NE Asians perform less well than Europeans on verbal subtests?

    “[Yes,] but there is other evidence of their verbal deficiency. Take the bar exam for example. In 1989, the Law School Admission Council commissioned a study of bar passage rates. Its report, The LSAC National Longitudinal Bar Passage Study was published in 1998, with results disaggregated by race and ethnicity. Linda F. Wightman, the project head, collected data from more than 27,000 students who entered ABA approved law schools in fall 1991. The study found that only 80.75% of Asians passed the bar on the first try compared with 91.93% of non-Hispanic whites. This corresponds to a white-Asian mean-score difference of 0.53 standard deviation or in IQ terms a verbal gap of 8 points!

    “Unfortunately, Wightman put NE Asians into one big Asian box along with Filipinos, Hmong and others whose IQs are more than a standard deviation lower than Chinese, Koreans and Japanese. It is true that relatively few from low-IQ groups make it to the bar exam, but some do. Consequently, 8 points must be regarded as an upper bound to the white-NE Asian verbal gap.

    “R. Lynn reviewed the literature on racial IQ in The Mankind Quarterly, 31:3, Spring 1991, 255-296. IQ averages for Caucasoids, Mongoloids, Negroids, Negroid-Caucasoid hybrids, Amerindians and South East Asians were reported. More than 100 studies were referenced, most from peer-reviewed journals and not a small number from Lynn himself. Of these, 12 reported both general and verbal IQ averages for NE Asians. Three of the 12 indicated a white-NE Asian verbal IQ gap of about 8 points in agreement with the bar exam result, but these are at the high end. The average verbal gap was a bit less than 4 points or about a quarter standard deviation.

    “Among the races, only NE Asians and Amerindians exhibit this particular kind of verbal-nonverbal cognitive split. For other races verbal and general IQ averages have similar values, making the distinction between the two transparent to smart fraction theory. In the 12 studies reporting both general and verbal IQ for NE Asians, the general-verbal gap averaged 6.5 IQ points.”

    Source date (UTC): 2013-10-08 09:36:00 UTC

  • CHINESE MONETARY THOUGHTS I HEARD FROM A MOUSE We all know that the Chinese have

    CHINESE MONETARY THOUGHTS I HEARD FROM A MOUSE

    We all know that the Chinese have been running around the world buying up all possible resources.

    But interestingly enough it turns out that they’re buying them in dollars and dollar denominated accounts, and securing them against their holding of US bonds.

    Now you can look at this a couple of ways.

    First, It could be that that buyers have greater faith in the dollar than the Renminbi. And so the price for assets is lower if paid in dollars.

    Second, it could be that the Chinese expect our dollar to explode and that if it does, they will leave the rest of the world holding the bag.

    Third, it could be that by spreading US debt around the world, it becomes possible to use the entire debt structure as an economic alliance against what the USA must do at some point, which is destroy the value of the dollar.

    Or. Of course. All of the above. Now, ‘nice folk’ don’t think in these kind of terms. But you know, I do, and I know that there are other people in the world who think like me. And it’s not ‘nice folk’ I’m worried about.

    It’s people like me.

    (Thank you Roman and Michael. )

    Source date (UTC): 2013-10-07 09:28:00 UTC