Digest: 14 April 2013
New markets open up through direct “sharing” transactions between individuals that cut established companies out of the picture, but those companies are now buying in; Shareholders are taking more active voting roles in the running of companies and shifting the balance of powers in corporate decision-making; Switzerland votes to reign in corporate managers, but it remains to be seen how far new laws will go towards quelling public outrage at perceived conflicts of interest; Companies are embracing the idea that architectural environments can be designed to foster creativity and innovative thinking; New economies are developing around the provision of disaster relief products, but these must not take away from the incentive to mitigate against disaster in favor of merely developing ways to respond to disaster; Biomimetic structures used to treat cancer and bone and organ reparation are finding success; Scientists are progressing towards the ability to bring extinct species back to life, but much work remains to be done; Hawaii is quickly establishing itself as a leader in the implementation of solar technology, California is taking note; Justice Ginsberg, responsible for having litigated landmark decisions on women’s rights in the 1970s, is in her nineties and faced with the decision of whether to step down while Obama is still president; Assassination has replaced capture, torture, and complicated litigation as the US method of choice for dealing with terrorists; Margaret Thatcher would not have been successful in today’s US Republican Party, a party that is out of touch with the titans of the free-market capitalism that it purportedly supports; New laws to criminalise those who seek to expose practices in the animal processing industry are antithetical to US principles of free choice and morality.
In All Eyes on the Sharing Economy, The Economist discusses the rising market of the “sharing economy”, a peer-to-peer business model that has seen success in areas such as cars and apartments. Hurdles have included how a person can know whether to trust the person to whom he is renting his property. Self-policing models such as ratings and reciprocal reviews, and increasingly insurance have been employed to counter the risks. Legal hurdles have also arisen, particularly as regards compliance with regulatory requirements – as an example, NY law disallows the renting of apartments for a month or less. This initially disruptive model is now being bought into by major market players, and it can be expected that it will further develop and will take on a more significant role in the overall economy.
In Corporate Governance: Shareholders at the Gates, The Economist discusses the increasing role shareholders are playing in holding companies to account through their voting powers. The goals of these shareholders may differ, many have been accused of having only short-term financial gains in mind, others have acted to curb what they consider to be excessive pay packages for executives, and others still have acted to shore up company governance. This rising tide of shareholder activism is shifting the balance of decision-making powers in the business world.
In Executive Pay: Fixing Fat the Cats, The Economist discusses a recently enacted Swiss law that requires, among other provisions, that listed companies to offer shareholders a vote on managers’ pay and appointments at annual general meetings with criminal sanctions for those companies that do not comply. The business lobby decries the development as dangerous and must hope that the law releases enough of the pressure of outrage at corporate practices that favor executive interests over shareholder interests. If it does not quell that outrage, even tougher measures such as executive pay caps may be introduced.
In Gray Matter: Engineering Serendipity, Greg Lindsay (for The New York Times Sunday Review) discusses the increasing consideration of how environments can be designed to promote creative and innovative thinking. The article essentially discusses how some companies are learning to counteract the problems inherent in specialization, i.e. the decreased perspective that results from highly specialised focus. By designing spaces that promote interaction, companies are able to create the benefits of generalism within a community. Generalist knowledge, which not specifically discussed in the article, provides the opportunity for apparently unrelated ideas to intersect. Through this intersection, relationships and patterns between different ideas can be made more apparent. Companies such as Yahoo! and Google are crafting their business environments around these concepts. This should enormously increase their effectiveness in the achievement of their corporate goals.
In The Disaster Response Industry’s Salesmen of the Apocalypse, Matthew Power (for Bloomberg Businessweek) discusses the economy that is developing in the area of disaster response. This economy consists of products for dealing with catastrophic events, such as water purification systems, self-heating rations, radio equipment, solar panels, field toilets, etc. The article points out the large scope for development in this area – the [Hurricane] Sandy relief aid bill passed by Congress in late January set aside $48bn to repair physical damage from the storm, and $12bn for mitigation investment. Catastrophic risks are increasing all around the world, and such disaster response products can potentially be put to use in environments all around the world. The article also discusses the rather close “revolving door” relationship between government and private industry in this area. One question to keep in mind is to what extent policy should guard against the development of economy that might then undermine mitigation efforts as a result of the newly formed vested interests that will result in the maintenance of situations that require their products, e.g. defense industry spending. In the catastrophe arena, anything that might undermine efforts towards the development of effective mitigation should be handled very carefully – this must include preventing the mentality that the promise of relief diminishes the need for investment in mitigation.
In Biomedical Scaffolding: Under Construction, The Economist discusses advances in the development of hybrid structures (using a mixture of biological and synthetic elements) for use in cancer treatment and in the reparation of organs and bones. Purely synthetic structures are not always well-received by human bodies, but the hybrid structures promise greater success. The use of biomemtic structures (structures developed to mimic naturally occurring materials) are proving to provide “a welcoming environment” in which stem cells can be implanted. While the developments are not necessarily slavish to natural structures, they do add to the applications in which biomimicry shows its value.
In Bringing Them Back to Life, Carl Zimmer (for National Geographic) discusses efforts to bring extinct species back to life through samples of intact DNA. One recent project has sought the resurgence of the Pyrenean ibex, a wild goat native to Pyrenees. These animals became extinct around the year 2000, but cells were preserved in Spanish labs, and by inserting the nucleus of those cells into DNA-emptied goat eggs implanted into surrogate mothers. Of seven attempts, one pregnancy resulted in a birth, but the newborn did not live long. One benefit to the recovery of extinct species might be biological diversity, which is hugely important to sciences related to the development of medicine. There is still much work to be done and the recovery of some species remains far more distant than others. Some scientists argue that efforts and resources should be focused in protecting threatened species rather than in resurrecting extinct ones, but this is unlikely to stop the efforts to do so.
In Building a Solar Economy: 4 Lessons from Hawaii, Erin L. McCoy (for Nation of Change) discusses the state of solar technology. Hawaii derives a larger percentage of its energy from solar than any other state and has lessons to teach. With increasing transportation costs, the use of imported petroleum energy in Hawaii (86.1% in 2010) is incredibly expensive. In 2012, Hawaii managed to derive 13% of its power from solar, and plans to increase that to 40% by 2030 – through solar, Hawaii has the potential to bring the costs of homeowners’ electric bills to zero, and this has caught the attention of California. The article discusses four main obstacles to the development of solar and provides solutions to each.
In Heavyweight: How Ruth Bader Ginsberg has Moved the Supreme Court, Jeffrey Toobin (for The New Yorker) discusses the career of Justice Ginsberg. Ginsberg, now in her nineties, is one of four liberal justices on the Supreme Court. Her time on the Court has been marked by a tendency towards conservatism and her role has often proved to be one of bringing the liberal side together in dissent. Despite this position in the minority on a conservative Court, she can be said to be the most accomplished litigator among the current Justices, having argued during the 1970s several of the most important women’s rights cases brought before the Court. Now questions arise as to whether she will soon step down so that President Obama may be responsible for the appointment of her successor. If she does not, it opens up the possibility that the Court may swing even further towards the conservative.
In The Dark Ages: Terrorism, Counterterrorism, and the Law of Torment, Jill Lepore (for The New Yorker) discusses the state of the treatment of those accused of terrorist acts by the US government. In doing so, she provides an illuminating history of the use of torture and the gradual superseding of torture by the rule of law over the course of the last thousand years, and then its resurgence under the Bush Administration after 9/11. While the Obama Administration has apparently put an end to the most egregious practices of the Bush Administration, it has replaced them with a steady campaign of assassination by drones. The logic of such a move would be clear, assassination avoids the complications of imprisonment, interrogation, and the application of law to such imprisonment and interrogation. But assassination too bears costs, and while these costs have so far been largely externalized they cannot be avoided forever.
In The Moderation of Margaret Thatcher, Froma Harrop (for Nation of Change) discusses how Margaret Thatcher would have fared in contemporary US politics. She points out that while Thatcher is a role-model for many conservatives, she would not have been successful as a candidate in modern Republican party politics – she was too inclined to intelligently engage in “detail-oriented fights over what government should and shouldn’t do.” Harrop briefly considers the free-market titans that were influential for Thatcher – Adam Smith, Milton Friedman, and Friedrich Hayek – and points out several fundamental areas in which modern Republican approaches are severely out of touch with some of the principles espoused by those free-market gods, and Thatcher herself.
In Open the Slaughterhouses, Jedediah Purdy (for The New York Times) discusses new legislation designed to provide criminal sanctions (including inclusion on a registry of “animal and ecological terrorists”) for animal rights activists who take covert pictures and videos of conditions on industrial farms and slaughterhouses. In the absence of laws requiring transparency in the processes employed by those commercial enterprises, the new laws are essentially anti-whistleblower measures, preventing the opportunity for people to be informed about how animals are treated in the food processing industry. Such laws are antithetical to principles that the US generally upholds - compassion, free-choice, morality. Greater transparency in this area, rather than the opposite, should be established.