Free trade lowers prices -- but not on things poor people need (and it pushes up housing prices)

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Part of the economic argument for free trade deals is that they benefit workers by producing cheaper goods -- even if you lose your manufacturing job, you can buy stuff a lot cheaper with the next job you get. Read the rest

Designing the future of work

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Over at Democracy Journal, my Institute for the Future colleagues Marina Gorbis and Devin Fidler explore the "digital coordination economy" (aka the on-demand economy) and how "it may take deliberate design choices in platform architecture, business models, new civic services, and public policy to prevent this increasingly seamless “coordination economy” from becoming highly inequitable as well." From Democracy Journal:

As software takes an increasing role on both sides of transactions—ordering and producing—it promises to bring vastly more efficient coordination to these kinds of basic economic functions. This emerging digital coordination economy, with its efficient matching and fulfillment of both human and nonhuman needs, has the potential to generate tremendous economic growth.

However, as software engineers essentially author a growing segment of our economic operating system, it may take deliberate design choices in platform architecture, business models, new civic services, and public policy to prevent this increasingly seamless “coordination economy” from becoming highly inequitable as well. Already the growth of on-demand work has allowed investors and owners in some industrialized regions to reap substantial financial returns while many of the people using platforms to generate income streams are struggling to maintain their standard of living. Uber drivers, for example, have seen a drop in earnings in the United States over the last couple of years, even as the company continues to grow at a dramatic pace.

It is clear that the fundamental technologies driving the coordination economy are neither “good” nor “bad,” but rather offer a heady combination of opportunities and challenges.

Read the rest

US religion is worth $1.2T/year, more than America's 10 biggest tech companies, combined

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The largely tax-free religion industry is one of the biggest in America, worth $1.2 trillion/year, a number that includes religious "healthcare facilities, schools, daycare and charities; media; businesses with faith backgrounds; the kosher and halal food markets; social and philanthropic programmes; and staff and overheads for congregations." Read the rest

Bloated U.S. management costs over $3 trillion annually

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"The cost of excess bureaucracy in the U.S. economy amounts to more than $3 trillion in lost economic output, or about 17% of GDP," write Gary Hamel and Michele Zanini in Harvard Business Review. Their recommendation? Cut management in half. The don't specify if that's crosswise or lengthwise. Read the rest

Bill Gates' net worth hits $90B, proving Thomas Piketty's point

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When Thomas Piketty published his 2013 book Capital in the 21st Century, he said that capitalism's primary beneficiaries aren't those who make amazing things that improve the world (as its proponents claim) -- rather, it favors those who have a lot of money to begin with. Read the rest

Las Vegas: high unionization rates mean smaller wage-gaps for women, especially older women

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Las Vegas is one of America's most unionized cities, and importantly, the unionization rates are especially high in trades dominated by women, such as cocktail servers and hotel cleaners, making Vegas one of the most equal places in America in terms of wage-parity between women and men, and also between young workers and older workers. Read the rest

Reputation systems work because people are mostly good

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Economist Tim Harford writes about holidaying in prosperous Bavaria, where hotels let you run up bills of €1000+ without a credit-card and all room-keys are stored in a cupboard where any guest can get at them, and asks how this can all work without being destroyed by dishonesty? Read the rest

John Oliver on subprime auto-lending and its killswitches

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We've been following the trade in remote kill-switches for cars sold to subprime borrowers since 2009, and watched in dismay as they got worse and worse: though John Oliver's report on the billions inflating the subprime auto-lending bubble touches on these, he focuses on the economic factors -- sleaze, corruption, moral hazard -- driving the tech. Read the rest

Scalpers drive Harry Potter play prices from £140 to £8,327

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What do you get when you combine fantastic wealth-inequality with winner-take-all entertainment economics and high-speed trading algorithms? The Viagogo marketplace, where botmasters who've harvested every available ticket for the new Harry Potter play, Harry Potter & the Cursed Child are auctioning them off to the war-criminals and financiers who've colonized London since the Blair years -- with Viagogo trousering a healthy £1,772.53 transaction fee on each ticket. Read the rest

Luna's prime real-estate and how to seize it

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Though 1967's Outer Space Treaty says no country can lay claim to the moon (and thus no person can get a deed to lunar territory), the treaty does allow for commercial and scientific installations on Luna, and there are some very small, very valuable bits of crater rim that could be squatted in this way, to the enormous benefit of whomever gets there first (and the detriment of all others). Read the rest

Cash grants to people with unexpected bills successfully prevents homelessness

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In The impact of homelessness prevention programs on homelessness (Scihub mirror), a group of academic and government economists show that giving an average of $1,000 to people in danger of losing their homes due to unexpected bills (for example, emergency medical bills) is a successful strategy for preventing homelessness, which costs society a lot more than $1,000 -- more importantly, these kinds of cash grants do not create a culture of "dependency" that leads to recklessness, nor does it have a merely temporary effect. Read the rest

Monopoly power and the decline of small business: big business vs democracy, growth & equality

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In the 15 years between 1997 and 2012: 72,000 small US manufacturers shut down; as did 108,000 local retailers and 13,000 community banks (fully half of America's complement of small banks!). The number of US startups has dropped by 50% since 1970. These statistics are not the result of the changing times: they're due to massive, monopolistic corporations stacking the deck against small competitors through unfair and corrupt practices, to the detriment of American growth, equality and democracy. Read the rest

How racist traffic stops criminalize black people, and what to do about it

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When Philando Castile was killed by a Minneapolis cop after a traffic stop, we learned that he had been stopped 46 times before and had been fined for driving without a license. Read the rest

Stiglitz quits Panama's official money-laundering panel over internal sabotage

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Nobel prize-winning economist Joseph Stiglitz has resigned from the Panamanian committee set up to probe the country's money-laundering industry in the wake of the Panama Papers leak, because the Panamanian government has reneged on its promise to publish the committee's findings and now says it will keep them secret. Read the rest

Dark Patterns: why do companies pursue strategies that make their customers regret doing business?

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In this 30 minute video, Harry Brignull rounds up his work on cataloging and unpicking "Dark Patterns," (previously) the super-optimized techniques used by online services to lure their customers into taking actions they would not make otherwise and will later regret. Read the rest

Highest-paid CEOs generate lowest shareholder returns

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In Are CEOs paid for performance? Evaluating the Effectiveness of Equity Incentives, a new study from MSCI, researchers compared the salaries of 800 US CEOs of large and medium-sized companies to the returns to their shareholders during their tenure. Read the rest

A catalog of weird-ass corners of game theory research

Game theory is the place where politics, economics, psychology and math meet, and it offers the seductive promise of being able to quantify empirically optimal outcomes from thorny problems ranging from whether to go to war to how to split the tab at a restaurant. Read the rest

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