Power & Market

Business Insights on Tourism, Time, Services, and Subjectivity

The Austrian school and perspectives on economic theory apply very well to businesses in general, as seen in the thoughts of Clay Miller and articles by Hunter Hastings and Peter Klein, especially when it comes to developing advantages for responsive businesses in a dynamic environment. To expand on this, it would be good to look at how such perspectives can concretely be applied in certain industries, and for this article, we shall look at some specific applications of Austrian perspectives to tourism and hospitality.

The Value of Time

When on vacation, time is of the essence! Anyone who has been on an enjoyable holiday knows the importance of spending limited leisure time wisely. It is normal to expect that a tourist would want to maximize the time they have by any means necessary. Likewise, on the side of the businesses catering to the desires of tourists, coordinating the schedules of their clients can lead to better practices and more efficient methods of generating profit.

Concretely, knowing the expected times when guests arrive at, stay in, and leave a hotel, for instance, allows one to make highly effective decisions. A simple example would be that if a hotelier knows —because they asked— that a guest will be out of their room at 3:00 P.M. and won’t be back until late in the evening, then that is an opportune time window to have the room cleaned. This shows how knowledge of the way a particular client spends their time would lead to a better allocation of services.

The technical term for doing this on a grand scale in the hospitality industry is called “revenue management”. A more complex example of revenue management would be in anticipating how many guests will arrive in the hotel. Once the hotelier knows how many bookings are made, as well as the personal preferences of each booking, the rooms can be allocated to them according to their needs, ideally also in such a way that the rooms are filled so as to minimize the time and effort made to prepare these rooms according to specific preferences. After these rooms have been assigned, the remaining rooms can be sold to maximize the inventory. In doing so, profit is generated while loss is minimized, all through coordinating the times when these assets are used.

Running a hotel is a complex mechanism, not unlike the gears of a clock. If everything runs perfectly well against the hands of time, coordinated so that as guests arrive, rooms are cleaned and filled, technical issues are resolved, quality services are provided, and so on, the coming together of the system can generate maximum efficiency and profit. The opposite is a nightmare: if time preferences of the guests are unknown, the desired rooms are not available in a coordinated manner, technical issues don’t get resolved promptly, and services don’t know when and how to cater to clients, then time is effectively lost, and value is lost in the process.

The Value of Subjectivity

On the other hand, customer feedback in the world of hospitality is of vital importance. How else can one provide the best possible custom service to clients if we don’t ask them about their specific preferences? Of course, ultimately, each client is different, and has different reasons for, say, booking at a hotel: attending a business conference, having a romantic getaway, visiting friends and family, merely passing through as a stopover, and so on. That said, regardless of whether said hotel is in Vienna’s Altstadt or in Manila’s Intramuros, the principle remains the same, and understanding what each guest values allows for both customization and optimization.

Knowing the specific wishes of guests can also make things easier on the level of decisions made and in strategically allocating resources. Suppose that our theoretical guest mentioned earlier —the one whom the hotelier knows will be out of their hotel room at 3:00 P.M. and won’t be back until late in the evening— doesn’t want their room cleaned at all. Knowing this, a judicious hotelier would do well to ensure that housekeeping doesn’t clean the room, for not only is it against the desires of the guest, it is also a rather pointless opportunity cost: the resources and time of the housekeeping staff could be used to clean another room of another guest who wants it instead.

Being aware of customer preferences goes hand-in-hand with understanding how they value their own time. It allows the hotelier more opportunity to sell them services they would appreciate, as well as plan around specific requests, such as having a late check-out, which would affect how that room is prepared for the next guest. It is the burden of businesses to be able to provide and cater to these requests, but that doesn’t have to mean that the granting of these specific wants would be mutually exclusive of equally bespoke considerations towards other guests as well.

Lastly, the subjective experiences of guests are the ultimate standards by which their idea of a great vacation or excellent service was given or not. It is, as Hunter Hastings writes, about continuous value perception on the end of the customer, and as Mark Packard’s model shows us, empathy is a necessary skill to predict value on the end of the service provider.

Because everyone has a different notion of what a fantastic experience is, and what a worthwhile way to spend time entails, a hotelier must be willing to provide, to the best of their ability, a wide variety of potential services and a great degree of flexibility. This is so that every individual served in the tourism industry would feel that their own personal desires are being fulfilled for them, developing loyalty and patronage, which is the hallmark of any great service provider, regardless of the nature of their business.

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Big Tech and the Sovereign Consumer

12/14/2020James Talocka

Listen to the Audio Mises Wire version of this article.

Both the Senate hearings on “Big Tech” companies and the Department of Justice (DOJ) lawsuit against Google amplify popular misunderstandings of what drives competition in the market for information. In any market, competition is a means to consumer satisfaction, the ultimate governor of which firms prevail, and which firms fail.

Tech giants such as Google, Facebook, Amazon, and Twitter have found themselves under the microscope of the federal government and the media for supposed “anticompetitive practices.” The Senate and the DOJ have leveled accusations ranging from monopoly to censorship, alleging these firms’ practices are detrimental to consumers. However, the dominance of these firms is almost entirely driven by consumers, making them exemplary competitors in a largely unrestricted market.

The profits of the Big Tech firms are primarily generated by advertisers, who pay tech platforms for access to their users. Like any other firm in the market, these firms would not make profits or gain market share if willing customers did not derive value from their products. In the case of Big Tech, more users create more traffic for advertisers, which translates into increased revenue.

The size of a firm is determined by how effectively they satisfy consumers relative to available alternatives. The Big Tech firms are worth a combined $5 trillion and have expanded products and services significantly over the last several years. The pandemic has also facilitated strong growth in tech due to consumers’ transition to online platforms.

These practices are out of sync with the rhetoric of regulators, who have been flirting with the idea of breaking up large tech firms. For instance, the DOJ’s lawsuit accuses Google of stifling competition and harming consumers by acting as “gatekeepers of the internet.” They are particularly focused on Google’s exclusive agreement with Apple, which requires Google to be installed as the default search engine on Apple devices. According to the DOJ, this (among other practices) reduces “the ability of innovative new companies to develop, compete, and discipline Google’s behavior.”

Regulators fail to realize that Google’s practices are competitive since they are disciplined by consumer preference. Contrary to the DOJ’s claims, Google’s search market dominance is indicative of their ability to innovate. Google has used their profits to compete with other tech companies in a multitude of markets, especially through widely used products such as Android, Gmail, and YouTube.  

Google’s exclusivity agreement with Apple also does not live up to allegations of consumer harm. While the deal requires the preinstallation of Google on Apple devices, it is a great deal for iPhone users. The contract essentially subsidizes Apple in exchange for default browser rights, which lowers Apple’s costs of production and, presumably, their prices. Another important benefit for iPhone users is that they can still use an alternative search engine by downloading another browser free of charge.

Those who charge the Big Tech firms with monopoly claim to be concerned about maintaining a competitive market. But what good is competition if the best firms cannot distance themselves from the pack? Tech giants such as Google and Facebook have gained leads over their competitors by developing new products at little to no cost for consumers. The telltale sign of a monopolist is just the opposite: restricting output and raising prices.

This is not to say that all the consequences of market dominance are desirable. The effort by Big Tech firms to mitigate “misinformation” through censorship threatens to suppress dissenting opinion on the highest-traffic platforms. However, the availability of alternatives encourages competition by providing unsatisfied users the opportunity to act on their preferences.

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Big Business versus Monopoly

CNN Business reports that Exxon, which was the world’s largest company in 2013, is today being kicked out of the Dow. As CNN Business puts it, “Exxon is now a shell of its former self.” The company is losing money and its “market value has crumbled by a staggering $267 billion from the peak.”

What? That’s not possible! Haven’t we always been taught that big corporations just keep getting bigger and bigger? Don’t Keynesian economics professors all across America teach that oil companies are “oligopolies,” which enables them to raise their prices whenever they want and to make as much money as they want? Haven’t statists told us for years that it’s necessary for the federal government to break up these “big companies” because they have so much power over American consumers?

Well, if all that is true, then what’s the deal with Exxon? It was a big company. Why didn’t it keep growing?

What is happening to Exxon is just one more demonstration, among many, that no matter how big a company is, it can begin losing market share to competitors and even be driven out of business.

In a genuine free market, the consumer is sovereign. Through his buying decisions, the consumer decides which businesses are going to stay in existence and which ones are going to go out business. Those businesses that succeed in pleasing consumers with goods and services that consumers find attractive are the ones that are going to do well.

There is another factor involved here—the possibility of mismanagement or the making of bad or erroneous management decisions. That is one of the reasons for Exxon’s fall, given its heavy investment in natural gas more than ten years ago just before the price of natural gas collapsed.

Exxon’s fall goes to show that antitrust laws are ridiculous and destructive. They have no place in a free society. Bigness in a free-market system simply means that a company has pleased customers and made good management decisions. If a big company fails to please customers or makes one bad management or investment decision, it goes down.

Compare Exxon with a genuine monopoly, one that most leftists and Keynesian economics professors love—the Postal Service. It holds a privileged position in American society, because federal law protects it from competition in the delivery of first-class mail. If a private company tries to compete, a federal judge immediately orders it to shut down.

Imagine if Exxon had asked the federal government for a grant of monopoly. Why, statists would be screaming to the rafters—and rightly so. That is the type of “bigness” that is bad—because it is bigness based on government-granted monopoly privilege rather than on satisfying consumers and making sound management and investment decisions.

America should rid itself of monopolies, starting with the Postal Service, and restore a free market system to our land, one where company bigness reflects success in satisfying consumers and running a sound business.

Originally published by the Future of Freedom Foundation.

Image source:
Mike Mozart via Flickr
When commenting, please post a concise, civil, and informative comment. Full comment policy here

Beware a Government of Fear

“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.” — Benjamin Franklin (1706–90)

One of my Fox colleagues recently sent me an email attachment of a painting of the framers signing the Constitution of the United States. Except in this version, George Washington—who presided at the Constitutional Convention—looks at James Madison—who was the scrivener at the Convention—and says, “None of this counts if people get sick, right?”

In these days of state governors issuing daily decrees purporting to criminalize the exercise of our personal freedoms, the words put into Washington’s mouth are only mildly amusing. Had Washington actually asked such a question, Madison, of all people, would likely have responded: “No. This document protects our natural rights at all times and under all circumstances.”

It is easy, 233 years later, to offer that hypothetical response, particularly since the Supreme Court has done so already when, as readers of this column will recall, Abraham Lincoln suspended the constitutionally guaranteed writ of habeas corpus—the right to be brought before a judge upon arrest—only to be rebuked by the Supreme Court.  

The famous line by Benjamin Franklin above, though uttered in a 1755 dispute between the Pennsylvania legislature and the state’s governor over taxes, nevertheless provokes a truism.

Namely that since our rights come from our humanity, not from the government, foolish people can only sacrifice their own freedoms, not the freedoms of others.

Thus, freedom can only be taken away when the government proves fault at a jury trial. This protection is called procedural due process, and it, too, is guaranteed in the Constitution.

Of what value is a constitutional guarantee if it can be violated when people get sick? If it can, it is not a guarantee; it is a fraud. Stated differently, a constitutional guarantee is only as valuable and reliable as is the fidelity to the Constitution of those in whose hands we have reposed it for safekeeping.

Because the folks in government, with very few exceptions, suffer from what St. Augustine called libido dominandi—the lust to dominate—when they are confronted with the age-old clash of personal liberty versus government force, they will nearly always come down on the side of force.

How do they get away with this? By scaring the daylights out of us. I never thought I’d see this in my lifetime, though our ancestors saw this in every generation. In America today, we have a government of fear. Machiavelli offered that men obey better when they fear you than when they love you. Sadly, he was right, and the government of America knows this.

But Madison knew this as well when he wrote the Constitution. And he knew it four years later when he wrote the Bill of Rights. He intentionally employed language to warn those who lust to dominate that, however they employ governmental powers, the Constitution is “the Supreme Law of the Land” and all government behavior in America is subject to it.

Even if the legislature of the state of New York ordered, as my friend Governor Andrew Cuomo—who as the governor, cannot write laws that incur criminal punishment—has ordered, it would be invalid as prohibited by the Constitution.

This is not a novel or an arcane argument. This is fundamental American law. Yet it is being violated right before our eyes by the very human beings we have elected to uphold it. And each of them—every governor interfering with the freedom to make one’s own choices—has taken an express oath to comply with the Constitution.

You want to bring the family to visit grandma? You want to engage in a mutually beneficial, totally voluntary commercial transaction? You want to go to work? You want to celebrate Mass? These are all now prohibited in one-third of the United States.

I tried and failed to find Mass last Sunday. When did the Catholic Church become an agent of the state? How about an outdoor Mass?

What is the nature of freedom? It is an unassailable natural claim against all others, including the government. Stated differently, it is your unconditional right to think as you wish, to say what you think, to publish what you say, to associate with whomever wishes to be with you no matter their number, to worship or not, to defend yourself, to own and use property as you see fit, to travel where you wish, to purchase from a willing seller, to be left alone. And to do all this without a government permission slip.  

What is the nature of government? It is the negation of freedom. It is a monopoly of force in a designated geographic area. When elected officials fear that their base is slipping, they will feel the need to do something—anything—that will let them claim to be enhancing safety. Trampling liberty works for that odious purpose. Hence a decree commanding obedience, promising safety, and threatening punishment.

These decrees—issued by those who have no legal authority to issue them, enforced by cops who hate what they are being made to do, destructive of the freedoms that our forbears shed oceans of blood to preserve, and crushing economic prosperity by violating the laws of supply and demand—should all be rejected by an outraged populace, and challenged in court.

These challenges are best filed in federal courts, where those who have trampled our liberties will get no special quarter. I can tell you from my prior life as a judge that most state governors fear nothing more than an intellectually honest, personally courageous, constitutionally faithful federal judge.

Fight fear with fear.

Reprinted from LewRockwell.com

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Back to Work: America Has No Choice if It Is to Avoid Total Disaster

03/30/2020Robert L. Luddy

China and Russia are open for business and working at close to capacity as America shutters most all business and industry in states such as Pennsylvania, New York, California, New Jersey, and Connecticut. In many cases only select manufacturing companies are allowed to operate, which means that most manufacturers will be short of parts and services necessary to produce goods.

Our leaders are creating an economic crisis and a major national security risk with limited data. The cure is far worse than any perceived impact from COVID-19. Our economy is both fragile and interdependent, an economic reality not understood by our leaders as they order mass closings of many states’ business and industry.

Thomas Sowell wrote, “There are no solutions. There are only tradeoffs.” Sowell was informing us that wise and sound judgments are imperative during any crisis.

An opinion piece by John P.A. Ioannidis, professor of medicine, epidemiology, and population health at Stanford University, is headlined, “A Fiasco In the Making? As the Coronavirus Pandemic Takes Hold, We Are Making Decisions Without Reliable Data.”

This season the flu has killed 22,000 Americans versus 388 dead from COVID-19. This the hard data available. There has been no national discussion about the flu but complete panic on the coronavirus.

The restaurant industry, which is the largest employer in America, is closed in most states. Now we will begin to witness the industries that support restaurants and hotels begin to shutter.

Marriott Corporate in Bethesda, Maryland, has furloughed 66 percent of its employees and cut the pay of the remaining employees by 20 percent. Such actions by major employers will have a devastating impact on the US economy.

The Big Three automakers and their suppliers are closed, which means hundreds of thousands of workers are laid off and at home. This will quickly lead to more layoffs and many small business failures. There is no amount of government money that can make up for an economy closed and workers staying home.

We all know that food and supplies are critical to families. Most individuals assume these products and services will be available. But as we have witnessed, when demand exceeds supply and businesses are shuttered, supply runs out.

Supply of goods and services is quickly becoming a more important national issue than the COVID-19 panic. The virus will not adversely impact most Americans, but they will sustain substantial financial losses, and at some point supplies will run out.

Schools can shut down, and sick people should stay home, along with older or at-risk individuals, until the panic subsides, but the healthy must be allowed to work.

Every family, state, city, and business can make the best decisions during this crisis, but we cannot have simplistic top-down mandates.

We are quickly moving toward a supply problem. Just-in-time inventory means we make products as needed. If the producers are closed, we run out of goods quickly.

Wiring $3,000 to most Americans may seem like a solution, but unless we have a supply of the goods families need, the money will not help. The best way for families to have income is for America to be open for business and not risk shortages and civil unrest. It is noteworthy that liquor, ammo, and guns sales are robust.

The federal government has no money and is $23 trillion in debt. Now Congress contemplates a $2 trillion economic bailout, which is pushing the limits of how much Congress can borrow and will eventually create a major financial meltdown. The solution is a robust economy producing goods, services, and financial stability.

All healthy Americans who want to work must be allowed to return to work no later than March 30. This commonsense approach will allow new production and for the healthy to support those in need.

I urge President Trump to speak to Americans from a Midwest manufacturing plant, away from the Swamp, and appeal to all governors and Americans to overcome their fears and take reasonable precautions, but allow America to open for business by March 30.

Originally published by American Spectator.

Image source:
When commenting, please post a concise, civil, and informative comment. Full comment policy here

Butler Shaffer, RIP

12/30/2019David Gordon

Yesterday afternoon, Butler Shaffer, one of the great pioneers of the libertarian movement, passed away, two weeks before his eighty-fifth birthday. In a column written in December 2014, he tells us, "My interest in what is now called 'libertarian' thinking was kindled in college in the late 1950s. There was no coherent philosophy by that name in those years, but I found myself attracted to such thinkers as John Locke, John Stuart Mill, the Stoics, and very much annoyed by the likes of Thomas Hobbes, Karl Marx, and my undergrad study of 'economics' taught by a prominent Keynesian. While in law school, I began my study of genuine economics with Prof. Aaron Director, and began my focused and energized inquiry into the kinds of ideas later to be described as 'libertarianism.'"

Butler’s brand of libertarianism was exceptionally pure and consistent. As he explains in his superb monograph A Libertarian Critque of Intellectual Property (free here), he believed that rights stem from "the informal processes by which men and women accord to each other a respect for the inviolability of their lives — along with claims to external resources (e.g., land, food, water, etc.) necessary to sustain their lives." (p. 18) The "informal processes" that Shaffer mentions proceed without coercion. In particular, law and rights do not depend on the dictates of the state, an organization that claims a monopoly over the legitimate use of force in a territory.

In adopting this stance, Shaffer puts himself at odds with much that passes in our day for wisdom among professors of law. "In a world grounded in institutional structuring, it is often difficult to find people willing to consider the possibility that property interests could derive from any source other than an acknowledged legal authority. There is an apparent acceptance of Jeremy Bentham’s dictum that 'property is entirely the creature of law.'" (pp. 18–19) Butler explained his approach in great detail in his Boundaries of Order, a major contribution to libertarian political philosophy.

Butler taught at Southwestern Law School from 1977 to 2014 and influenced generations of students. He was a master of the Socratic method. He would sometimes read to his class a list of "progressive"-sounding measures that would usually command approval. He would then tell the students, "You just voted for Hitler!" His list had been taken from the Nazi Party platform. Butler always looked at things from an original angle, and in my many conversations with him, his ability to subject his own ideas to constant criticism and rethinking impressed me.

Butler continued to share his wisdom with us nearly to the end of his life, and his mordant criticism of the state brings to mind H. L. Mencken, a writer he greatly admired. In a column on LewRockwell.com published last August 13, he said,

Those who seek to control our lives must first gain control of our minds. If one of your neighbors went through the neighborhood with a gun, informing you that he was the sovereign authority therein, and that you were required to obey his orders, how would you respond? When, as a child, I visited my aunt and uncle on their farm, there was a retarded man in the neighborhood who informed us that he was the local sheriff and we had to do as he directed. Since he was completely harmless and pleasant, the neighbors tended to humor him and treat him with respect. But when you listen to the gaggle of Democratic Party presidential candidates with essentially the same baseless claim to run your life with policies that would be far more disruptive of your interests, you become aware that you are not hearing the voices of good-natured chuckleheads; but of men and women who fully intend to make their delusions enforceable through the coercive powers of the state.

Butler was my dear friend for many years, and now that he is gone what comes most to my mind is his sense of humor. He loved words and was a master of puns. Few things in my life brought me as much joy as a conversation with Butler, and now that is gone forever.

Butler is survived by his wonderful wife, Jane, to whom he was married for 63 years, their three daughters, and a number of grandchildren.

As I get older and people close to me pass away, the melancholy words of Ovid come to mind: Omnia perdidimus: tantummodo vita relicta est / praebat ut sensum materiamque mali — I have lost all; life alone remains / to give me the consciousness and the substance of sorrow.

 

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Bad Capitalism and Good Socialism

12/17/2019Walter Block

Is socialism the enemy of the civilized order? It depends on what kind of socialism we are discussing. There are several varieties, not only one. If it is the version calling for government ownership and control of all the means of production, the complete nationalization of all industries, then yes, socialism is the work of the devil. All we need do to demonstrate this is mention economic basket cases like Venezuela, East Germany, Maoist China and the USSR. They produced dire poverty and the deaths of millions of innocent people.

There is a second, just as historically accurate definition of socialism as the first. It is predicated on the Marxian nostrum “From each according to his ability, to each according to his need.” If this goal is attained on a coercive basis, then, yet again, this compulsory egalitarianism is surely uncivilized. It amounts to stealing from the innocent rich. But suppose people agree to live under this principle? Ayn Rand might not like this too much, but, if it is truly voluntary, then instead of being incompatible with civilized principles, it is a paradigmatic case of them. That is, the rich agree to be “expropriated” in favor of the poor.

Are there any such institutions that actually flourish? Here are a few: the convent, monastery, kibbutz, commune, syndicalist association, cooperative. I teach at a Jesuit school, and all members of this order subscribe to the “from each, to each” philosophy. True, kibbutzim were initially subsidized by the state of Israel and are now shadows of their former selves, and Robert Owen’s commune in New Harmony, Ind., is no longer in operation. But neither does every business last forever. Then there is the average American family. It, too, lives according to this Marxian doctrine. The three-year-old girl eats, gets toys, and is clothed not in accordance with her ability to earn income, but based on her needs.

Capitalism is likewise divided into several varieties. If it is free market capitalism we are contemplating, or as near to that system as we can approach in this vale of tears, then this—along with voluntary socialism—is the very foundation of the civilized order. All boats rise on a tide of profit maximization and untrammeled entrepreneurship, as long as personal and property rights are respected. The experiences of places with expansive economic freedom, such as the US, Switzerland, Hong Kong, Singapore—and yes, Bernie, Scandinavia too—give ample testimony to this claim.

Yet under the veneer of economic freedom, markets have their dark side, too: crony capitalism. Uber is brutalized by the taxi industry in the name of protecting the public; young women who braid hair are hassled by licensed beauticians; domestic manufacturers lust after protective tariffs; farm states tried to outlaw dyeing margarine yellow; labor unions champion minimum wage laws to price their unskilled competitors out of the market. As Adam Smith wisely said, under this type of capitalism, “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

No, not all versions of socialism are the enemy of humanity and decency, nor are all types of capitalism their friend. It all depends on which variety of each we are discussing.

Published with permission of the author. Originally published on December 15 in the Wall Street Journal.

Image source:
PxHere | https://pxhere.com/en/photo/1172203
When commenting, please post a concise, civil, and informative comment. Full comment policy here

Bitcoin's Past Accomplishments and Future Challenges

Oct. 31 marks the 11th anniversary of the release of the famous bitcoin whitepaper. It is worthwhile to take stock of the first crypto-currency’s impressive achievements to date, while also warning of the future perils it faces.

Bitcoin has defied the critics repeatedly, being declared “dead” many times over. (In this respect it’s appropriate that it was born on Halloween.) Although its price has been volatile, it’s currently trading at a market cap of $170 billion — more than McDonald’s, and comparable to CitiGroup.

Along the way, internecine battles led to a “hard fork” and the creation of “Bitcoin cash” (in August 2017), but the cryptocurrency community emerged wiser. As for the future, ironically a piece of otherwise good news — faster computing power — may pose serious problems if the promise of “quantum supremacy” should be fulfilled.

An estimated 5 percent of Americans hold bitcoin, and the global number of users is probably around 25 million. More impressive (and precise) details concern the financials: as of this writing, some 18 million bitcoins have been “mined” — the metaphorical term describing the procedure by which a new bitcoin becomes recognized as belonging to someone’s address on the blockchain — and a single bitcoin currently fetches a market price of about $9,450. For something that critics derided as a tech fad that would soon evaporate, that’s a rather impressive accomplishment.

Read more at The Hill

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Bernie Sanders's Hypocrisy on the F-35

09/30/2019Conna Craig

Things are about to get noisy in Burlington, Vermont. No, it’s not a rally for the state’s Brooklyn-born junior senator. After some pomp including a “mini air-show,” the first two of 20 F-35s have begun settling into their new home at Vermont’s Air National Guard base, located at the Burlington Airport.

The F-35s will replace a fleet of F-16s, which the Vermont Air National Guard flew for 33 years. In an interview with WCAX, a CBS-affiliated local news station, Colonel David A. Smith , Commander, 158th Fighter Wing, Vermont Air National Guard, said, “Bringing the F-35 to Vermont secures our future for decades.” According to WCAX, the Vermont Guard began lobbying for the F-35 in the mid-2000s. “When you consider significant milestones in our storied history, this one certainly rises to the top,” Smith said.

The F-35 has indeed risen to the top in terms of cost: at $1.5 trillion, it is the world’s most expensive weapons program. Earlier this year, Bloomberg reported that the F-35 jet “just got even costlier. The estimated total price for research and procurement has increased by $22 billion in current dollars adjusted for inflation, according to the Pentagon’s latest annual cost assessment of major projects.”

Despite the staggering costs, the super-stealth fighter plane is not living up to expectations. An April 2019 report by the Government Accountability Office (GAO) found that “F-35 aircraft performance is falling short of warfighter requirements – that is, aircraft cannot perform as many missions or fly as often as required.”

Initiated by the Department of Defense in 2001, the F-35 program was designed to provide “next-generation strike fighter aircraft” for the U.S. Air Force, Navy, and Marines. The GAO found that one of the most pressing issues with the program is spare parts: “DOD has spent billions of dollars on F-35 spare parts but does not have records for all the parts it has purchased, where they are, or how much they cost.” This situation, according to the GAO, risks the ability to support an expanding fleet. The U.S. plans to buy 2,500 jets total, with 700 to be purchased by foreign military.

The Vermont 20, however, are on schedule for arrival in Burlington. While some residents have expressed enthusiasm about the F-35s, not everyone is optimistic. Citizen coalitions have been fighting the basing for five years, citing noise concerns and the possibility of the F-35s carrying nuclear arms. The F-35 is as much as four times louder than the F-16. The latest sound map of the area that will be affected by noise levels of 65 decibels or higher includes 2,640 dwelling units and an elementary school. Rosanne Greco, a retired Air Force colonel, had initially supported the F-35 basing in Burlington, her hometown. Then she read the Air Force’s environmental impact statement. She told Time, “All I had to do was read what the Air Force said about the impact it would have. The evidence was overwhelming it would have a very negative effect on close to 7,000 people.”

Concerns about what will happen in Vermont with the arrival of the F-35s echo Sen. Bernie Sanders’ statements at his 2020 presidential campaign kickoff rally earlier this year:

“Today, we say to the military-industrial-complex that we will not continue to spend $700 billion a year on the military – more than the next ten nations combined. We’re going to invest in affordable housing, we’re going to invest in public education, we’re going to invest in rebuilding our crumbling infrastructure – not more nuclear weapons and never-ending wars.”

Why not call on Sen. Sanders for help?

Bernie Sanders supports the basing of the F-35s in Vermont. He said, in an interview with the Wall Street Journal, that it would be a “major blow” if the weapons program did not come to Vermont. Referring to the Vermont National Guard, Sen. Sanders stated, “If they don’t have planes to fly, there ain’t going to be too much for them to do.”

When commenting, please post a concise, civil, and informative comment. Full comment policy here

Bylund: Entrepreneurship Involves Uncertainty. Here's How to Deal With It Productively.

08/19/2019Per Bylund

Late South African economist Ludwig Lachmann once wrote, “The future is unknowable, though not unimaginable.”

What he meant is, it's beyond our ability to know what the future will bring. We cannot plan without errors, because we do not actually know anything about the future before it's already reality.

The future is not simply unknown, which suggests a lack of information, but unknowable -- what will be is uncertain. There is no information. We are, in this sense, slaves to destiny.

But while the future is unknowable, this does not mean it is hopeless. Our efforts always aim to create some specific, limited part of the future. Entrepreneurs do this more than others, as entrepreneurship scholar Saras Sarasvathy argues.

They can do this, as Lachmann notes, as the future is imaginable. Because we can imagine different futures, we can act to create the better version. We have the creative ability to draft scenarios and possible outcomes, so we can prepare for what is more likely to be. And attempt to bring it about.

We all differ in our ability to imagine the future that will be. Very often it might simply be luck. But luck is not all, and it certainly isn’t reliable. Some seem to have the ability and willingness to face the unknowable by imagining and attempting to shape it, and they're willing to bet that they’re right and put their money where their mouths are.

Entrepreneurs are in the business of creating big chunks of our future. They bear uncertainty.

Read the full article at Entrepreneur.

When commenting, please post a concise, civil, and informative comment. Full comment policy here
Shield icon power-market-v2