All entries for May 2005

May 28, 2005

Ditch Traditional Graduate Jobs

Paul Graham is a programmer/author who has become well known for his work on Bayesian spam filters and his lucid writing. His latest essay, entitled Hiring Is Obsolete, asks why people leaving university tend to go straight into paid work, joining traditional graduate schemes, without giving thought to business opportunities of their own. Graham states that firms undervalue the talents of the best graduates due to large variation in ability and the lack of a proven track record.

It's hard to judge the young because (a) they change rapidly, (b) there is great variation between them, and (c) they're individually inconsistent. That last one is a big problem. When you're young, you occasionally say and do stupid things even when you're smart. So if the algorithm is to filter out people who say stupid things, as many investors and employers unconsciously do, you're going to get a lot of false positives.

Most organizations who hire people right out of college are only aware of the average value of 22 year olds, which is not that high. And so the idea for most of the twentieth century was that everyone had to begin as a trainee in some entry-level job. Organizations realized there was a lot of variation in the incoming stream, but instead of pursuing this thought they tended to suppress it, in the belief that it was good for even the most promising kids to start at the bottom, so they didn't get swelled heads.

The most productive young people will always be undervalued by large organizations, because the young have no performance to measure yet, and any error in guessing their ability will tend toward the mean.

As talent isn’t valued correctly, Graham suggests that new graduates should be actively looking for potential business ventures; opportunities which will yield rewards far greater than any starting salary in the long run as well as signalling one’s industriousness and ability to work hard to any future employers. Being a programmer, Graham cites negligible start-up costs as a reason why the task is easier than it would have been 10 years ago. The plethora of web based businesses is evidence of this. For such a business, time is the main sacrifice. For anyone else, business premises, inventory and staff make the task much more difficult and more expensive (though far from impossible). The article is thus best suited to CompSci students, or those with a penchant for coding.

Still, it made me think. I’ve always wanted to run a business eventually but have never thought twice about going straight from university into the arms of a firm which sees me as merely one of 500–1000 grad students who may or may not prove profitable. The vast majority of people who say they’ll simply spend a few years gaining experience, building up capital before setting up on their own eventually succumb to the comfort of security, the certainty of a guaranteed income. With capital available from banks, credit cards and family, knowledge available from books and the internet, perhaps it’s better to take business risks much earlier on in life as Graham suggests – even if I can't program a television.

Read Hiring Is Obsolete in full here.
See Paul’s archive of essays here.

May 25, 2005

Reading festival update – Carling Stage lineup

The lineup for the Carling Stage at the Reading & Leeds festivals has been announced

According to

Appearing On Friday In Reading (August 26) And Saturday In Leeds (27) Will Be Ladytron, Charlotte Hatherley, Saul Williams, The National, Mando Diao, The Paddingtons, We Are Scientists, The Blood Arm, Cherubs, Two Gallants, The Rogers Sisters And Fell City Girl.

Saturday In Reading (27) And Sunday In Leeds (28) Will See Performances On The Carling Stage From The Go! Team, The Raveonettes, Sleater Kinney, Caesars, Yeti, Dogs, Arctic Monkeys, Mystery Jets, 747’s, Clor And Neon.

Echo & The Bunnymen, Adam Green, The Dresden Dolls, Engineers, Amusement Parks On Fire, Komakino, Towers Of London, The Rifles, Battle, Every Move A Picture, Young Offenders Institute, Boy Kill Boy And Forward Russia Will Take To The Carling Stage On Sunday In Reading (28) And Friday In Leeds (26).

I’m unfamiliar with most of the above groups, but stand out names are:

The National – Check out the album Alligator for some morose ballads; a la Joy Division.
The Go! Team – Sadly, they're on at the same time as the Foo Fighters.
Sleater-Kinney – Energetic girl power. Yet to hear their 2005 release.

May 23, 2005

Shareholders – Evil people apparently

A few people have been riled by Chris Martin’s (Coldplay frontman) recent outburst on the topic of shareholders.


Coldplay lead singer Chris Martin today launched an attack on his record label EMI and the company's shareholders. It came after EMI, the world's third-largest music company, warned that profits would be lower because the band took longer than expected to finish their first studio album in three years.

But as Coldplay prepared for a concert in New York to promote their new album, called X&Y, Martin said: "I don't really care about EMI. I'm not really concerned about that.

"I think shareholders are the great evil of this modern world."

Martin told reporters at Manhattan's Beacon Theatre that the band was uncomfortable that they sell so many albums they can affect a major corporation's stock price.

Full article here.

I’d like to think it was just a spur of the moment statement; one of those things you wish you could take back once viewed in the cold light of day. Sadly, given previous statements made as part of the Make Poverty History campaign, I fear he truly believes it. Not only that, but despite his wealth and fame, he experiences no dissonance in reconciling such views with his actions.

Alice Cooper wisely said the following on rock stars and their political views:

If you're listening to a rock star in order to get your information on who to vote for, you're a bigger moron than they are. Why are we rock stars? Because we're morons. We sleep all day, we play music at night and very rarely do we sit around reading the Washington Journal.

No doubt Chris would have something to say if I chose to download his forthcoming album instead of making a trip down to HMV; in the name of socialism of course.

Coldplay Live Performance

Anyone keeping up with The O.C. might have heard a clip of Coldplay’s ‘Fix You’ (a track on their forthcoming album X&Y) two episodes ago during a scene featuring Seth Cohen coming to the rescue of Summer.

Coldplay recently performed the tracks ‘Fix You’ and ‘Speed of Sound’ on NBC’s Saturday Night Live in the States. Recordings of the live performance have been linked to by Brooklynvegan at the bottom of this post.

Anyone curious about the album should take a look. It’s promising to be another solid release.

May 20, 2005

More comments on Star Wars

Well I went down to see Return of the Sith yesterday and it was a great experience, even for someone who until 2 weeks ago hadn’t seen any of the Star Wars films before. I particularly liked this telling comment from Padme in response to a speech from Chancellor Palpatine – "So this is how liberty dies, to thunderous applause."

Following on from some geeky analysis of the republic from highlighted by The Liberalist, Marginal revolution makes some additional points on the seemingly altruistic and moral Jedi.

Some examples –

The Jedi and Jedi-in-training sell out like crazy. Even the evil Count Dooku was once a Jedi knight.
What do the Jedi Council want anyway? The Anakin critique of the Jedi Council rings somewhat true (this is from the new movie, alas I cannot say more, but the argument could be strengthened by citing the relevant detail). Aren't they a kind of out-of-control Supreme Court, not even requiring Senate approval (with or without filibuster), and heavily armed at that? As I understand it, they vote each other into the office, have license to kill, and seek to control galactic affairs. Talk about unaccountable power used toward secret and mysterious ends.
The core message is that power corrupts, but also that good guys have power too. Our possible safety lies in our humanity, not in our desires to transcend it or wield strange forces to our advantage.

If you're yet to get your fill of Star Wars, see the full (spoiler free) post here.

May 17, 2005

China, Trade & the Fashion Industry

Staying on the topic of the EU and American fear of Chinese textile imports, Reason magazine has published an article on “How cheap Chinese textiles could transform high fashion”.

It appears imitation goods aren’t necessarily the bane of very fashion designer’s life.

For as long as snobbery exists, cheap Chinese imitations will be a boon to haute couture and its American equivalent. Clothes are a both a way to signal status and to exhibit a certain mastery over a system of rules, and their value is dependent on their scarcity. Now that the H&Ms and Wet Seals of the world are packed with the season's bullfighter jackets and flounced skirts, the truly fashionable have moved on—to the benefit of the same circle of designers who trotted out those styles in the first place.

And once again, the consequences of legislation are not thought through fully.

Rivoli, author of The Travels of a T-shirt in the Global Economy, says the quotas have actually proven disastrous to the industry by accelerating the race to the bottom. Quotas imposed on China led the production to shift to Hong Kong; when Hong Kong was hit with similar restrictions, factories popped up in the Philippines and Sri Lanka. Writes Rivoli, "Each time a hole in the import dyke was plugged by quotas—on cotton socks from China, say, or silk ties from Thailand—the effect was not to preserve US jobs but instead to increase the force of imports gushing in from other countries and categories."

Read the full article entitled “Couture Revolution”, here.

Found via Dynamist Blog

(I promise this post wasn't an excuse to post a picture of a pretty lady.)

May 13, 2005

A comprehensive 5 minute defence of the invisible hand

Writing about web page

OK, I'm not capable of doing what the title implies, but I’ll briefly comment on the ongoing discussion about the EU and proposed 48 hour working weeks. I’ll offer some piecemeal commentary on a post by Leftspace ’s Peter Wolfendale entitled “The invisible hand makes everything better…” They’re just general comments on the ideas raised rather than the mechanics of this specific EU proposal.

His post beings…

It appears that the history of social policy has gone all wrong, and that if we just leave the market alone everything will work out just great! What have we been thinking all these years, trying to protect the poor from people who are willing to exploit them by using the economic power they already to possess to maximise their potential gain?

History has proved many ideas to be incorrect and/or lacking in efficacy. A tendency towards managerialism and paternalistic attitudes towards citizens certainly isn’t a result of free market failure. Rather, overconfidence in our human faculties and ability to engineer more desirable social states (partly bourne of our success in scientific arenas).

When a contract is created between citizens of the state it is most often the caset hat one party benefits more than another party, and in some cases this can be to the detriment of the other. If we accept that the state has no part in the welfare of its citizens and is just a body for the creation and maintainence of rules for the conduct of said citizens, then we must also accept that there is no limit upon how much any given contract can harm either of its parties. This is absurd. To allow that humans make mistakes, that they can be mislead, manipulated, and subject to pressures that can not always be forseen, is to require intervention the intervention of the state.

I’m confused as to the source of this implicit social contract spoken of and its specific terms. What am I obliged to do beyond paying my taxes and abiding by the law? What has the state promised to do beyond protecting my property and defending the country? Are the terms of such a contract unchanging over time? Something tells me I wasn’t the only one not informed of all these things. Due to this ambiguity, I have no qualms in saying the state isn’t and shouldn’t exist to protect us from mistakes; to hold our hands though life, guiding us on a course deemed safe; shielding us from any form of risk, regardless of our preferences.

I fail to see how our capacity for making mistakes as regards our lifestyle, career, purchases etc. renders a free market system useless. Quite apart from punishing such mistakes, flexibility and wealth of opportunity reduces the importance of initial levels of wealth, education and social status.
Being born into society doesn’t render you a slave to any particular person. As an individual, you have skills and knowledge which can be utilised to gain whatever ends you see fit. In an environment which encourages enterprise, no given firm has the power to dictate how you should life your life. A stupid employer can be changed fairly easily. Escaping arbitrary intervention however is far more difficult.

Secondly, market forces do not magically make everything better. Market forces do not work towards any kind of optimum health and happiness of workers. If this was so then there wouldn't be any work-related health problems, which as several other people pointed out are rife within our society. Could it be that the state's emphasis on welfare law creates a climate in which workers suffer from overwork and/or bad working conditions? I rather think not.

It’s quite true that markets are amoral. The agents driving the system however are working to further their own ends. I purchase goods for solely my own benefit, and the person on the other end of the transaction does likewise. The firm employs me to further its ends and the wage I receive can be used for whatever I please. In a world full of voluntary transactions there’s a sense in which the resulting order reflects the preferences of everybody, subject to the preferences of everybody else. I think you’d agree nothing but a market system can allocate resources between people such as to match demand to supply and to utilise individual-specific information about needs, desires and life aims.

That said, isn’t there scope for at least some management? Not even small instances of intervention, such as the limiting of working hours? Perhaps. However, you shouldn’t harbor the illusion that such intervention works for the benefit of everyone or even the majority. Only the individual can make judgments about happiness. Its pursuit by policymakers is futile. It can’t be measured accurately. There’s no real ‘scale’ of happiness. In fact, the very definition of happiness is disputed by many.

How can policymakers be trusted to pursue a goal which is tricky to define and impossible to measure! Something tells me the figure of 48hours wasn’t found by solving some complex happiness optimisation problem.
As such, the next best solution is to allow people to interact freely and accept the resulting state of the world, stepping in only when clear injustice is apparent.

Additionally, you shouldn’t you think will prove effective over time given the dynamic nature of our world. Legislation seemingly beneficial in the short run may prove detrimental as things change, as shown by France’s lower working weeks and the resultant unemployment and downturn in foreign investment.

Businesses are for the most part driven by one thing: PROFIT. There are exceptions to this rule, co-operatives being a big one, and businesses that are run by people with ethical agendas. This means that if there is a situation in which business owners can make more profit by exploiting their workers in some way: cutting wages, forcing longer or shorter hours, banning unions, etc. Then there are only two things holding them back:-

By this logic, it’s hard to understand why we have investment bankers earning £70 000 in the financial services sector, private school teachers earning £30 000, or even temporary workers earning £6.50 per hour working for an agency. Looking at the country as a whole, it becomes clear that the vast majority of people earn more than the minimum wage. Why is that the case? Surely a profit oriented business would pay whatever the legal minimum is? Surely they’d force workers to slave away for 50 hours a week? Similarly, why would such a business offer private healthcare, or holidays/sick leave/compassionate leave over and above legal requirements

We don’t see such behaviour because businesses need workers just as badly as we need jobs. As the poster which spurred this response pointed out, it’s not in the interests of an employer to pay a pittance, forcing employees to work in sweatshops. People respond to incentives. Incentives to become a more productive employee are nice working conditions; holidays; better pay. Of course the extent of such generority depends on the sector in question, but to claim mass exploitation would exist in the absense of government is incorrect. That’s ignoring the issue of whether a voluntary contract between employer and employee can possibly involve exploitation provided the terms laid down initially are being violated.

To simplify this as well: the invisible hand doesn't sort everything out automagically, it just as often masturbates those with existing economic power.

Essentially, you can't both maintain that market forces produce both worker happiness and greatest efficiency (which in the private sector is greatest profit) in all cases.

As I’ve said before on this blog, we’re in a fairly privileged position. Compared to countries whose citizens are unable to afford the basic necessities of life, we’re wealthy enough to consider things such as holidays, sick leave, education and health care to be indisputable human rights. Focus on creating ‘happiness’ and limiting the evil capitalists during our course of development wouldn’t have created the environment of enterprise that has brought us to our current point.

Call it fanaticism, or whatever. I trust these free market forces more than I do the smiling faces of politicians who claim to have my best interests at heart. To see faith in their ability to create ‘efficiency’ and ‘happiness’ taken to an extreme, look no further than the history of socialist states till the present day.

May 11, 2005

The Millionaire Club

George Mason University economist Walter E. Williams has a new article at on the growing legion of millionaires in the United States.

While becoming a millionaire by age 17 is rare, eventually becoming a millionaire isn't. According to TNS Financial Services' 2004 Affluent Market Research survey, there are an estimated 8.2 million American households with assets, excluding primary residences, worth over $1 million. That's a 33 percent increase over the 6.2 million millionaire households in 2003.

Williams sees growth in the number of people in this ‘elite’ group as evidence of social mobility within the country. When financial progression is so prevalent, feelings of self pity and resentment are highly unproductive. He ends with a query

Here's my question for you: What are we to make of people who preach pessimism and doom to people — telling them that they're poor because others are rich or telling blacks that they'll never make it because of societal racism? What are we to make of politicians, media pundits and college professors who preach the politics of envy — telling people lies that the rich became rich off the backs of the poor? I grew up poor in a housing project in North Philadelphia, and those weren't the lessons prevalent a half-century ago. My mother used to preach that "We have a beer pocketbook but champagne tastes." And my stepfather used to admonish, "If you want to make it in this world, you have to come early and stay late." Those messages are far more beneficial to a poor person than those of victimhood and pity. Personally, I like evangelical minister Reverend Ike's response when asked what should we do about the poor. He said, "The best thing you can do for the poor is not become one.

Read the full article here.

As Nassim Taleb would day, random events much more influence on our lives than we’d like to admit. That said there’s a high likelihood that a perchant for risk taking and hard work (or rather working ‘smart’) will yield returns. As I said in this post, we should be creating an environment in which such things are encouraged; an environment in which poverty is merely temporary for those with enough desire.

May 08, 2005

The REAL Digital Divide

Marketing guru Seth Godin yesterday put forward an amusing post on the digital ‘haves’ and ‘have nots’. He compares those eager to embrace new web based technologies to those content to use not exploiting new opportunities.

Some snippets –

Does it surprise you that more than half of the hundreds of thousands of Boing Boing readers use Firefox? That's about five times the number you'd expect. It turns out that a lot of these tech-friendly behaviors come in bunches. Someone who has a few of these behaviors is likely to have most of them.

Don’t know what BoingBoing is? Never heard of Firefox? You’re on the wrong side of the fence according to Seth Godin.

The second thing to keep in mind is that the digerati are using the learning tools built into the Net to get smarter, faster. A new Net tool can propogate to millions in just a week or two. Unlike the old digital divide, this means that the divide between the digerati and the rest of the world is accelerating.
Try to imagine doing your work today without email. It's inconceivable. I think the tools of the digerati are going to be just as essential in just a moment or two. You can wait until Microsoft issues them all as a dumbed down package, but if you do, you'll not only miss the texture and understanding that comes from learning as you go, but you'll always be trying to catch up.

It seems a reasonable pont of view, albeit slightly elitist. That said, in the past, users of email/mobile phone (both now ubiquitous technologies) would have levelled the same criticisms at those wary of embracing them. I know which side I would have preferred to be on. Read the full post here.

May 06, 2005

Feckless EU trade policy

It looks as it Peter Mandelson is continuing his crusade to punish the Chinese for producing goods which Europeans are eagerly purchasing. In this post, I said Mandelson was acting against the interests that he is employed to pursue, choosing instead to court special interest groups. According to Global-Growth, the EU is to launch an investigation into Chinese imports to determine whether they’re currently ‘excessive’. You’d expect these investigations to be carried out by an impartial panel – apparently not.

The only parties invited to cooperate in the investigation are manufacturers, producer associations in the EU, suppliers, traders-importers, exporters and industry users.

These actions have been criticised by Pascal Lamy & Carlos Pérez del Castillo both candidates for taking the helm of the World Trade Organisation.

The FT reports

In separate interviews, Pascal Lamy of France and Carlos Pérez del Castillo of Uruguay said western nations could not complain that they were facing a crisis when they had been given 10 years to prepare for the worldwide lifting of quotas, which, since January, has allowed China to boost its clothing exports. The French government has been leading calls for Brussels to act to restrict Chinese imports, but Mr Lamy, a former EU trade commissioner, said: “It is not the law of the jungle and the WTO rules were clearly set.”

“Why are some politicians now not recognising that fact?” he asked. “I can see two explanations: either their memory is too short or they know that perfectly well and pretend to be surprised, which is frankly a sign of hypocrisy.

“This idea that everybody is now taken by surprise and this is the fault of Brussels is clearly not the right reflex.”Mr Pérez del Castillo also said he was against imposing export restrictions rather than adjusting to China's improved efficiency.
This is truly a regressive step on the part of the European Union.

Thanks to:
Global Growth
Exploit the Worker
The Financial Times

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