Saturday, January 20, 2018

Frank Pasquale: "Entrepreneurship Can Be Unproductive or Destructive"

We linked to a similarly titled post last August which someone (ahem) mistook for this piece.
See after the jump if interested.

From Professor Pasquale via Law & Political Economy,
In contemporary American law, few figures are as lionized as the “entrepreneur.” Lobbyists evoke entrepreneurship as a cornucopia of better goods and services at lower prices. Even ostensibly academic business law courses tend to offer a narrative of wise incremental development of legal doctrine toward enabling disruption, easy entry into markets, and ultra-flexible corporate forms. The lawyer is ideally, in this view, a fixer capable of profit-maximizing distributions of responsibility and liability. Some even dream of automating this role via smart contracts, to ensure even more rapid entrepreneurial activity.
Professional Responsibility courses also tend to adopt a similarly reverential attitude toward the business client, instilling an ethic of “zealous advocacy” in generations of students. Few question whether the near-evacuation of ethical self-reflection from advocacy roles systematically advantages dubious (or worse) business propositions.

This emphasis on the disruptive and new is jarring in law, because legal systems’ internal values so often prize stability, regularity, precedent, and tradition. Pressed to justify it, partisans of disruptive innovation often turn to economics—a discipline all too happy to oblige with just-so stories of creative destruction. As William Baumol has observed, where economic growth has slowed, it is often “implied that a decline in entrepreneurship was partly to blame (perhaps because the culture’s ‘need for achievement’ has atrophied). At another time and place, it is said, the flowering of entrepreneurship accounts for unprecedented expansion.” Both policymakers and mainstream legal scholars tiptoe through the tulips of entrepreneurship, wary of disrupting the business plans of the disruptive innovators they admire.

However, as Baumol went on to wisely observe, there is no obvious connection between entrepreneurship and genuine productivity. Productivity, defined from a properly politico-economic perspective, reflects society’s ability to meet real needs, create capabilities, and to promote human flourishing. Some entrepreneurs contribute to it, but others do not. As Baumol observes, there are unproductive entrepreneurial activities, and at “times the entrepreneur may even lead a parasitical existence that is actually damaging to the economy.”  Baumol also argues that the relative balance of productive, unproductive, and destructive entrepreneurs is not dictated by technology or culture. “Changes in the rules and other attendant circumstances can, of course, modify the composition of the class of entrepreneurs,” he reminds us, insisting on the intertwining of political and economic reality.


Frank Pasquale is a Professor of Law at University of Maryland Francis King Carey School of Law.
Note: Some of this post was based on my recent testimony before the U.S. Senate Committee on Banking, Housing, and Urban Affairs Committee, available here.




"The Dangerous Rise Of Unproductive Entrepreneurship"


from the this-is-bad-news dept
For many years now, we've talked about Andy Kessler's concept of political entrepreneurs vs. market entrepreneurs. In Kessler's telling, market entrepreneurs are the kind of entrepreneurs that people usually think about -- the ones creating startups and high growth companies and the like. While not everyone appreciates it, those entrepreneurs tend to provide a lot more to the world than they take away. They may get filthy rich in the process, but they tend to make the world a better place by creating lots of value. The "political entrepreneurs," on the other hand, are those who basically look to abuse the system to create monopoly rents and to limit competition. Those entrepreneurs may also get filthy rich, but they tend to do it by limiting value and locking it up so that only they can get it.

Obviously, one of those is a lot better for society than the other.

Of course, this idea certainly didn't originate with Kessler, either. Just recently, we had James Allworth on our podcast where we talked about this issue in response to an excellent article he'd recently written about how prioritizing profit over democracy was actually damaging American entrepreneurship. In that article, he referred back to the work of William Baumol, who wrote a paper back in 1990, entitled: Entrepreneurship: Productive, Unproductive, and Destructive. As you can see, that one divides entrepreneurship into three categories. Productive loosely maps to "market entrepreneurs" in Kessler's world, while "Unproductive" loosely translates to "political entrepreneurs" as well. Baumol also includes destructive entrepreneurs, who are actively making the world worse -- and getting rich off of people's misery (think drug dealers, and such).

But part of the point of Allworth's article is that it feels like too many people are just focusing on "profit" as the end goal, and thus either unwilling or unconcerned with determining if the entrepreneurship that drives the profit is "productive" or "unproductive." And, now the Economist has weighed in on this issue as well, noting that we're seeing more and more unproductive entrepreneurship in America, and that's a problem. The article focuses on the work of two economists, Robert Litan and Ian Hathaway, who are building on Baumol's concepts and are concerned about where things are heading. One interesting thing: they find that the issue can't be neatly put into the category of "too much regulation" or "too little regulation," but rather find that both of those situations can create the same rise in unproductive entrepreneurship:...
...MORE 



Some Stories About William Baumol

"Turkey's Erdogan says ground offensive on Syria's Afrin has begun"

A threefer-one deal, starting off with DeutscheWelle:
President Recep Tayyip Erdogan says Turkish forces have begun a new air and ground operation to oust Kurdish militants from Afrin. Turkey accuses the Kurdish militia YPG of being a terror group.
Turkish President Recep Tayyip Erdogan said on Saturday that a military operation against the northwestern Syrian town of Afrin, held by US-backed Kurdish militias, "has de-facto been started on the ground."

"This will be followed by Manbij," he added, referring to another Kurdish-controlled Syrian town to the east.

Turkish Prime Minister Binali Yildirim later said Turkish jets had also launched airstrikes against Afrin. The Turkish army said the new operation, dubbed "Olive Branch," aimed to hit positions held by the People's Protection Units (YPG) and "Islamic State" (IS) militants....MORE
From Reuters, Jan. 20:
Russia to demand in UN that Turkey halts Syria operation - RIA citing lawmaker
And from IndraStra, Jan. 19:

The Afrin Gamble: Turkey Starts Offensive on the U.S. backed Kurds
Turkey has started the cross-border bombardment after the threats issued a week ago by Turkish President Tayyip Erdogan to crush Kurdish People’s Protection Units (YPG) militia in Syria's Afrin canton in response to growing Kurdish strength across a wide stretch of north Syria.

Reuters crew filmed Turkish artillery at the border village of Sugedigi firing on Friday morning into Afrin region, and the YPG militia said Turkish forces fired 70 shells at Kurdish villages between midnight and Friday morning. Shelling continued in the late afternoon, said Rojhat Roj, a YPG spokesman in Afrin. Turkish bombardments are the heaviest since Ankara stepped up threats to take military action against the Kurdish region.

Earlier, Turkish media reported that military planning for the offensive was complete and two brigades and 5,000 Free Syrian Army (FSA) fighters were expected to participate. Media reports also stated that General Ismail Metin Temel, a hero of Turkey’s "Euphrates Shield" military incursion into northern Syria in 2016, was handed charge of the Afrin offensive. "Euphrates Shield" was launched on August 24, 2016, and cleared a roughly 2,000 square km area from Islamic State (IS) and YPG control. Officially, the operation was ended in March 2017.

On January 13, the threat was issued after reports that the U.S. plans to create a 30,000-strong Border Security Force (BSF) predominantly made up of Kurdish militias. According to Col. Thomas Veale, the public affairs officer of Operation Inherent Resolve, the U.S.-led coalition is training the Syrian Democratic Forces (SDF) to maintain security along Syria’s borders. SDF is an umbrella group of fighters dominated by the YPG. U.S. State Department spokeswoman Heather Nauert on Thursday urged Turkey not to take any action in northern Syria.

“The operation has actually de facto started with cross-border shelling,” - Nurettin Canikli, Turkish Defence Minister

Turkey sees the YPG as an extension of the separatist Kurdistan Workers’ Party (PKK), which is considered a terrorist group by the U.S. and has fought a bloody insurgency since 1984 that has killed at least 35,000 people. With around one-fifth of Turkey’s population identifying as Kurdish, Turkey views the PKK and moves toward Kurdish independence regionally as an existential threat.

On the other hand, the Syrian Kurds have their own fight with Russia-backed Bashar al-Assad's regime where latter is setting its sights on territory held by Kurdish-led forces including eastern oil fields. Till now, SDF has used the power vacuum caused by the civil war to occupy and seize territories in Syria along the Turkish border. But, the question is how much they are open to the concept of greater autonomy within the framework of the borders of the state as proposed by Walid Muallem, Syria's foreign minister in September 2017.

The American Signal
U.S. President Donald Trump decided to arm YPG fighters despite Turkey's objections and a direct appeal from Erdogan at a White House meeting in May 2017. Tensions between the U.S.and Turkey remain high, despite Trump saying last November that Washington would no longer supply weapons to the YPG. Since then, Ankara has been reinforcing its southern border by sending armored vehicles, tanks, and heavy machine guns, according to local media.

Up until now, the U.S. has been able to deter Russian strikes on SDF forces by launching fighter jet intercepts against Russian jets that cross east and north of the Euphrates river valley. Besides that, there are currently about 2,000 U.S. troops in Syria working with Syrian Kurds. It was unclear how large a contingent of U.S. military might be required for a long-term commitment.

In a speech at Stanford University's Hoover Institution, the U.S. Secretary of State spelled out a U.S. plan to advance a political transition in Syria to oust Bashar al-Assad. A central pillar of Tillerson’s speech is a UN-supervised election that Tillerson predicted would result in new leadership. Key questions that Tillerson left unaddressed, he continued, included how long Assad should remain in power and whether he would play a role in any political transition.

The Russian Influence
In the current situation, it is Moscow, not Washington, that appears to be dictating the terms of engagement over Syria. Russia has based military observers in Afrin since 2015, and the subject of their removal was part of negotiations held between Turkish Army Chief Hulusi Akar and his Russian counterpart Valery Gerasimov and other military and intelligence officials in Moscow on Thursday.

Approximately 180 Russian observers were pulling back from their positions on the Afrin/Turkish border, hours after Turkish artillery began what Ankara said was the "de facto" start of operations against members of the Kurdish YPG militia, which it considers part of the PKK terrorist group. In short, Ankara was waiting for a green light from Moscow....MORE

Apple's Tim Cook Joins the Chorus: "'I don't want my nephew on a social network'"

It's becoming a movement!

"Il faut bien que je les suive, puisque je suis leur chef"
-Ledru-Rollin, 1848*
From The Guardian:

Apple chief talks about tax affairs and overuse of tech at launch of school coding initiative
The head of Apple, Tim Cook, believes there should be limits to the use of technology in schools and says he does not want his nephew to use a social network.

Cook was talking at Harlow college in Essex, one of 70 institutions across Europe that will use Apple’s Everyone Can Code curriculum, it was announced on Friday.

“I don’t believe in overuse [of technology]. I’m not a person that says we’ve achieved success if you’re using it all the time,” he said. “I don’t subscribe to that at all.”

Even in computer-aided courses, such as graphic design, technology should not dominate, he said.
“There are are still concepts that you want to talk about and understand. In a course on literature, do I think you should use technology a lot? Probably not.”

The 57-year old chief executive, who took the reins at Apple after the death of Steve Jobs in 2011, said the company cared deeply about children outside the classroom.

“I don’t have a kid, but I have a nephew that I put some boundaries on. There are some things that I won’t allow; I don’t want them on a social network.”...MORE
*Schoolboy French translation: "I must follow them for I am their leader." 

Previously:

"CalSTRS Releases Statement on Letter to Apple"
I'm starting to think everyone involved is trying to get in front of a train that had been gathering momentum....
UPDATED—"Investors Push Apple to Develop Tools to Respond to Smartphone Addiction in Youth" (AAPL)
Counterpoint: "No, Apple Is Not Responsible For Your Kids' Smartphone Addiction"
Apple's Response To iPhone Addiction Concerns (AAPL)  

Turing: "Strong meat with strawberries"

By Sir John Dermot Turing, DPhil, 12th Baronet Turing at ETH Zürich's Turing Center blog, January 2018:
To the outsider, some of Alan Turing’s work can be difficult to grasp—unless you are an academic specialist it can be challenging. To use Alan Turing’s own words, when he was himself wading through John von Neumann’s book on Quantum Mechanics (in German) in the 1930s, it can be ‘rather strong meat’. As an outsider, I do not even know how to begin with, say, Alan’s paper 'Computability and λ-Definability' [1] with its profusion of Greek and Gothic letters. Lambda-calculus is not for the faint-hearted. It’s possibly for this reason that some people said Alan Turing was completely impossible to understand.

But Alan himself knew that new ideas needed to be described and explained in homely ways. His most enduring work—the discipline of computability, created in his 1936 paper 'On Computable Numbers, with an Application to the Entscheidungsproblem' [2]—was described in terms of an imaginary machine, an idea that non-specialists can easily grasp. The practical, hands-on approach to his work was always evident—for example in his designs for the British cryptological Bombe and for his phone-call encryption machine Delilah, as well as for an analogue machine that would find solutions to Riemann’s zeta-function.

As his career moved on, so Alan Turing’s writings and speeches moved away from lambda-calculus as a form of expression. Having had to explain himself at Bletchley Park to non-specialists, military folk, newcomers, and people from many non-mathematical disciplines, he became more adept at an everyday way of writing. His 1950 paper 'Computing Machinery and Intelligence' [3] includes a famous passage on the subject of his Imitation Game, now also known as the Turing Test. He wrote:

Let us listen in to a part of such a viva voce:
Interrogator: In the first line of your sonnet which reads "Shall I compare thee to a summer’s day", would not "a spring day" do as well or better?
Witness: It wouldn’t scan.
Interrogator: How about "a winter’s day". That would scan all right.
Witness: Yes, but nobody wants to be compared to a winter’s day.

Perhaps this next passage from 'Computing Machinery and Intelligence' is less well-known. Alan is debunking arguments that machines can’t think because it will never be possible to build a machine that can do such-and-such a thing, for example learn from experience, use words properly, or enjoy strawberries and cream:

A man has seen thousands of machines in his lifetime. From what he sees of them he draws a number of general conclusions. They are ugly, each is designed for a very limited purpose, when required for a minutely different purpose they are useless, the variety of behaviour of any one of them is very small, etc., etc. Naturally he concludes that these are necessary properties of machines in general … The inability to enjoy strawberries and cream may have struck the reader as frivolous. Possibly a machine might be made to enjoy this delicious dish, but any attempt to make one do so would be idiotic....
...MORE

"Bitcoin and Ethereum Have a Hidden Power Structure, and It’s Just Been Revealed"

From MIT's Technology Review:

Close examination reveals how power is being consolidated across their networks.
In cryptocurrency circles, calling something “centralized” is an insult. The epithet stems from Bitcoin creator Satoshi Nakamoto’s revelation: a monetary system doesn’t need a central authority, like a government, to work. That’s such a potent idea that it’s morphed into a battle among crypto-enthusiasts between good—that is, “decentralized”— currencies and evil ones, or anything with a whiff of “centralization,” that are assumed to threaten the utopian view of cryptocurrencies as the vehicle for a new financial world order.

Do these arguments hold any water? Emin Gün Sirer, a cryptocurrency expert at Cornell University, says in many cases the jury’s still out—mainly because no one’s bothered to take a hard look at how decentralized these networks actually are.

“We don’t have any real metrics yet.” he says. His group aims to help change that with newly published results from a two-year-long study focused on Bitcoin and Ethereum, the world’s most popular cryptocurrency networks.

Perhaps the most striking finding is that the process of verifying transactions and securing a blockchain ledger against attack, called mining, is not actually that decentralized in either system. Bitcoin and Ethereum are open blockchain systems, meaning that in principle anyone can be a miner (see “What Bitcoin Is, and Why It Matters”). But organizations have formed to pool mining resources. The researchers found that the top four Bitcoin-mining operations had more than 53 percent of the system’s average mining capacity, measured on a weekly basis. Mining for Ethereum was even more consolidated: three miners accounted for 61 percent of the system’s average weekly capacity....MORE

The Bit Bomb: The True Nature of Information

The subject of this article, Claude Shannon has a couple interesting connections to finance/investing/trading beyond 'just' creating information theory (along with MIT's Norbert Wiener who was coming in on a different angle of attack), more after the jump.
Both Aeon and Climateer are reposting, "The Bit Bomb" first appeared at Aeon on August 30, 2017 and graced our pages over the Labor Day weekend, September 3, 2017.

From Aeon:

It took a polymath to pin down the true nature of ‘information’. His answer was both a revelation and a return
Just what is information? For such an intuitive idea, its precise nature proved remarkably hard to pin down. For centuries, it seemed to hover somewhere in a half-world between the visible and the unseen, the physical and the evanescent, the enduring medium and its fleeting message. It haunted the ancients as much as it did Claude Shannon and his Bell Labs colleagues in New York and New Jersey, who were trying to engirdle the world with wires and telecoms cables in the mid-20th century.
Shannon – mathematician, American, jazz fanatic, juggling enthusiast – is the founder of information theory, and the architect of our digital world. It was Shannon’s paper ‘A Mathematical Theory of Communication’ (1948) that introduced the bit, an objective measure of how much information a message contains. It was Shannon who explained that every communications system – from telegraphs to television, and ultimately DNA to the internet – has the same basic structure. And it was Shannon who showed that any message could be compressed and transmitted via a binary code of 0s and 1s, with near-perfect accuracy, a notion that was previously pegged as hopelessly utopian. As one of Shannon’s colleagues marvelled: ‘How he got that insight, how he even came to believe such a thing, I don’t know.’

These discoveries were scientific triumphs. But in another way, they brought the thinking about information full-circle. Before it was the province of natural scientists, ‘information’ was a concept explored by poets, orators and philosophers. And while Shannon was a mathematician and engineer by training, he shared with these early investigators a fascination with language.

In the Aeneid, for example, the Roman poet Virgil describes the vast cave inhabited by the god Vulcan and his worker-drones the Cyclopes, in which the lightning bolt of Jupiter is informatum – forged or given shape beneath their hammers. To in-form meant to give a shape to matter, to fit it to an ideal type; informatio was the shape given. It’s in this sense that Cicero spoke of the arts by which young people are ‘informed in their humanity’, and in which the Church Father Tertullian calls Moses populi informator, the shaper of the people.

From the Middle Ages onwards, this form-giving aspect of information slowly gave way, and it acquired a different, more earthy complexion. For the medieval scholastics, it became a quintessentially human act; information was about the manipulation of matter already on Earth, as distinct from the singular creativity of the Creator Himself. Thomas Aquinas said that the intellect and the virtues – but also the senses – needed to be informed, enriched, stimulated. The scientific revolution went on to cement these perceptible and grounded features of information, in preference to its more divine and form-giving aspects. When we read Francis Bacon on ‘the informations of the senses’, or hear John Locke claim that ‘our senses inform us’, we feel like we’re on familiar ground. As the scholar John Durham Peters wrote in 1988: ‘Under the tutelage of empiricism, information gradually moved from structure to stuff, from form to substance, from intellectual order to sensory impulses.’

It was as the study of the senses that a dedicated science of information finally began to stir. While Lord Kelvin was timing the speed of telegraph signals in the 1850s – using mechanisms rigged with magnets, mirrors, metal coils and cocoon silk – Hermann von Helmholtz was electrifying frog muscles to test the firing of animal nerves. And as information became electric, the object of study became the boundary between the hard world of physics and the elusive nature of the messages carried in wires.

In the first half of the 20th century, the torch passed to Bell Labs in the United States, the pioneering communications company that traced its origins to Alexander Graham Bell. Shannon joined in 1941, to work on fire control and cryptography during the Second World War. Outside of wartime, most of the Labs’ engineers and scientists were tasked with taking care of the US’ transcontinental telephone and telegraph network. But the lines were coming under strain as the human appetite for interaction pushed the Bell system to go further and faster, and to transmit messages of ever-higher quality. A fundamental challenge for communication-at-a-distance was ‘noise’, unintended fluctuations that could distort the quality of the signal at some point between the sender and receiver. Conventional wisdom held that transmitting information was like transmitting power, and so the best solution was essentially to shout more loudly – accepting noise as a fact of life, and expensively and precariously pumping out a more powerful signal.
The information value of a message depends on the range of alternatives killed off in its choosing
But some people at the Labs thought the solution lay elsewhere. Thanks to its government-guaranteed monopoly, the Labs had the leeway to invest in basic theoretical research, even if the impact on communications technology many years in the future. As the engineer Henry Pollak told us in an interview: ‘When I first came, there was the philosophy: look, what you’re doing might not be important for 10 years or 20 years, but that’s fine, we’ll be there then.’ As a member of the Labs’ free-floating mathematics group, after the war Shannon found that he could follow his curiosity wherever it led: ‘I had freedom to do anything I wanted from almost the day I started. They never told me what to work on.’...MUCH MORE
Last year we linked to Nautil.us in "Claude Shannon, the Las Vegas Shark" which highlighted some of his dealings with one of the 'quantfathers', Ed Thorp:

The father of information theory built a machine to game roulette, then abandoned it.
Many of Claude Shannon’s off-the-clock creations were whimsical—a machine that made sarcastic remarks, for instance, or the Roman numeral calculator. Others created by the Massachusetts Institute of Technology professor and father of information theory showed a flair for the dramatic and dazzling: the trumpet that spit flames or the machine that solved Rubik’s cubes. Still other devices he built anticipated real technological innovations by more than a generation. One in particular stands out, not just because it was so far ahead of its time, but because of just how close it came to landing Shannon in trouble with the law—and the mob.

Long before the Apple Watch or the Fitbit, what was arguably the world’s first wearable computer was conceived by Ed Thorp, then a little-known graduate student in physics at the University of California, Los Angeles. Thorp was the rare physicist who felt at home with both Vegas bookies and bookish professors. He loved math, gambling, and the stock market, roughly in that order. The tables and the market he loved for the challenge: Could you create predictability out of seeming randomness? What could give one person an edge in games of chance? Thorp wasn’t content just pondering these questions; like Shannon, he set out to find and build answers.

In 1960, Thorp was a junior professor at MIT. He had been working on a theory for playing blackjack, the results of which he hoped to publish in the Proceedings of the National Academy of Sciences. Shannon was the only academy member in MIT’s mathematics department, so Thorp sought him out. “The secretary warned me that Shannon was only going to be in for a few minutes, not to expect more, and that he didn’t spend time on subjects (or people) that didn’t interest him. Feeling awed and lucky, I arrived at Shannon’s office to find a thinnish, alert man of middle height and build, somewhat sharp featured,” Thorp recalled.

Thorp had piqued Shannon’s interest with the blackjack paper, to which Shannon recommended only a change of title, from “A Winning Strategy for Blackjack” to the more mundane “A Favorable Strategy for Twenty-One,” the better to win over the academy’s staid reviewers. The two shared a love of putting math in unfamiliar territory in search of chance insights. After Shannon “cross-examined” Thorp about his blackjack paper, he asked, “Are you working on anything else in the gambling area?”

Thorp confessed. “I decided to spill my other big secret and told him about roulette. Ideas about the project flew between us. Several exciting hours later, as the wintery sky turned dusky, we finally broke off with plans to meet again on roulette.” As one writer, William Poundstone, put it, “Thorp had inadvertently set one of the century’s great minds on yet another tangent.”

Thorp was immediately invited to Shannon’s house. The basement, Thorp remembered, was “a gadgeteer’s paradise. ... There were hundreds of mechanical and electrical categories, such as motors, transistors, switches, pulleys, gears, condensers, transformers, and on and on.” Thorp was in awe: “Now I had met the ultimate gadgeteer.”

It was in this tinkerer’s laboratory that they set out to understand how roulette could be gamed, ordering “a regulation roulette wheel from Reno for $1,500,” a strobe light, and a clock whose hand revolved once per second. Thorp was given inside access to Shannon in all his tinkering glory:...MUCH MORE
If interested see also 2012's "How did Ed Thorp Win in Blackjack and the Stock Market?" and a couple more from 2017
A Review of Garry Kasparov’s Deep Thinking: Where Machine Intelligence Ends and Human Creativity Begins
"How Information Got Re-Invented"

Friday, January 19, 2018

Mark Zuckerberg: "Continuing our focus for 2018 to make sure the time we all spend on Facebook is time well spent..."

From Mr. Z's Facebook account;
Continuing our focus for 2018 to make sure the time we all spend on Facebook is time well spent...

Last week I announced a major change to encourage meaningful social interactions with family and friends over passive consumption. As a result, you'll see less public content, including news, video, and posts from brands. After this change, we expect news to make up roughly 4% of News Feed -- down from roughly 5% today. This is a big change, but news will always be a critical way for people to start conversations on important topics.

Today I'm sharing our second major update this year: to make sure the news you see, while less overall, is high quality. I've asked our product teams to make sure we prioritize news that is trustworthy, informative, and local. And we're starting next week with trusted sources.

There's too much sensationalism, misinformation and polarization in the world today. Social media enables people to spread information faster than ever before, and if we don't specifically tackle these problems, then we end up amplifying them. That's why it's important that News Feed promotes high quality news that helps build a sense of common ground.

The hard question we've struggled with is how to decide what news sources are broadly trusted in a world with so much division. We could try to make that decision ourselves, but that's not something we're comfortable with. We considered asking outside experts, which would take the decision out of our hands but would likely not solve the objectivity problem. Or we could ask you -- the community -- and have your feedback determine the ranking.

We decided that having the community determine which sources are broadly trusted would be most objective.

Here's how this will work. As part of our ongoing quality surveys, we will now ask people whether they're familiar with a news source and, if so, whether they trust that source. The idea is that some news organizations are only trusted by their readers or watchers, and others are broadly trusted across society even by those who don't follow them directly. (We eliminate from the sample those who aren't familiar with a source, so the output is a ratio of those who trust the source to those who are familiar with it.)

This update will not change the amount of news you see on Facebook. It will only shift the balance of news you see towards sources that are determined to be trusted by the community.
My hope is that this update about trusted news and last week's update about meaningful interactions will help make time on Facebook time well spent: where we're strengthening our relationships, engaging in active conversations rather than passive consumption, and, when we read news, making sure it's from high quality and trusted sources.....
 https://www.facebook.com/zuck/posts/10104445245963251

Shipping: "Baltic index falls, capesizes post biggest weekly drop in 2 years"

Following up on Wednesday's "Shipping: Today's Word Is 'Overcapacity'".
From Reuters, Jan:
The Baltic Exchange’s main sea freight index fell on Friday and continued to linger around five month lows as the capesize segment recorded its biggest weekly percentage decline in two years.

* The overall index, which factors in rates for capesize, panamax, supramax and handysize shipping vessels that ferry dry bulk commodities, shed 14 points, or 1.23 percent, to 1,125 points, the lowest since Aug. 10, 2017.

* For the week, the index ended 12 percent lower.

* The capesize index fell 118 points, or 7.32 percent, to 1,493 points, its lowest since Aug. 2.

* It fell about 35 percent this week, its biggest weekly percentage decline since Jan. 15, 2016.

* Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, fell $741 to $11,571....
...MORE

PreviouslyJan. 4
Global Fleet Capacity to Bulge as More Containerships are Delivered in 2018; Baltic Dry Index Down 21%, Hyundi Heavy Up
I'm going to have to learn how to say "Boom-and-bust cycle" in Korean..... 

Dec. 4 
"Shipping Magnates Shock Industry With Huge Orders"

Bezos/SoftBank-Backed Indoor Farming Powerhouse Plenty Planning for 300 Farms in China

This is one of the two biggies. Some of our links after the jump.

From Global AgInvesting:
San Francisco-based indoor vertical farming startup Plenty is taking the initial steps toward its planned expansion into China and Japan.

The company is currently adding to its team on the ground in China, and is scouting out locations and distributors in Beijing, Shanghai, and Shenzhen for up to 300 of its vertical indoor farms across the country. The startup has also already established a team in Japan, and has secured farm sites in that country, company CEO Matt Barnard told Reuters.

Founded in 2014 by Matt Barnard and Nate Storey, Plenty is headquartered in a 52,000 square-foot facility in San Francisco. There it grows leafy greens including purple Siberian kale, red leaf lettuce, sorrel, and varieties of basil and chives using a highly-efficient vertical system that grows plants in rows of 20-foot tall columns rather than horizontally. This configuration is highly efficient as it allows water to trickle down the column, and enables nutrients to be gravity fed rather than pumped into the system. Plenty also uses cutting-edge LED lighting systems that emit less heat than traditional LEDs, along with microsensor technology and big data processing, that together can be used to produce high-quality produce at lower prices. And because of the configuration of this production system, (which can produce up to 350 times more produce compared to the same area of traditional farmland while using only 1 percent of the water), Plenty is able to work with the forces of physics, not against them, enabling the company to save significantly on cost of production.
This past year has been notable for Plenty; most markedly due to its securing of record setting funding from a range of high-profile investors, and a top-tier addition to its team.

In July of last year Plenty made headlines after raising a record-setting $200 million Series B led by SoftBank Vision Fund – the $93 billion all-stage tech fund headed by Japanese billionaire Masayoshi Son.  Other participants in the round which brought total funding for the startup to $226 milion, included affiliates of Louis M. Bacon, the founder of Moore Capital Management, and existing investors Eric Schmidt’s Innovation Endeavors, Finistere, DCM, Data Collective, and Bezos Expeditions.

“Indoor farming isn’t new, but Plenty has developed the next critical contribution to the global food supply evolution, creating a healthier crop economy with fresher, more nutrient-rich produce. As an early investor in Plenty, we saw the potential of indoor farming from the start,” Finistere told GAI News last year. “…not only to dramatically increase and improve food production, but also to accelerate AgTech innovation and R&D in adjacent areas like breeding, high-value ingredient production and genomics.”

A Fitting Landscape
Despite the fact that Chinese consumers don’t often opt to eat raw vegetables, China is a highly strategic market to move into for Plenty. It’s production system provides the perfect answer to two of China’s largest food challenges – safety and quality, and land degradation....MORE
Previously:
October 2017
Tesla's Former Battery Director Joins Farming Startup—UPDATED
December 2017
"This Is Why Jeff Bezos Is Spending Millions on an Indoor Farming Startup"

The competition:
December 2017
A Behind-the-Scenes Look at Europe’s Huge New Vertical Farm
December 2015
AeroFarms Raises $20 Million for High-Tech Urban Agriculture
   
Related:
The Other Musk: Overthrow Big Agriculture?

The Meaning of Life or Investing Insights From Hedgeye

From Hedgeye, Jan. 17:

FLASHBACK: Valuation Is Not a Catalyst (Buy The Dip)

https://d1yhils6iwh5l5.cloudfront.net/charts/resized/52816/large/zbtd.jpg

...MORE

Farm Economy: "Rural Mainstreet Index Sinks for January: Rising Farm Loan Defaults Identified as Greatest 2018 Challenge"

From Creighton University, January 18:
January Survey Results at a Glance:
*  The overall index sank from December’s weak reading and remained below growth neutral.
*  Approximately 40 percent of bank CEOs named rising loan defaults as the greatest economic challenge for 2018.
*  More than seven in 10 bankers expect that the abolition of NAFTA would have a negative impact on their economic area.
*  For the 50th straight month, the farmland price index sank below growth neutral.

OMAHA, Neb. (Jan. 18, 2018) – The Creighton University Rural Mainstreet Index declined slightly in January from December’s weak reading, remaining below growth neutral, according to the latest monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.  

Overall: The index, like all indices in the survey, ranges between 0 and 100 with 50.0 representing growth neutral, fell to 46.8 from 47.8 in December. Though the overall index remained below growth neutral, it is significantly higher than the reading for January 2017.

“While the overall Rural Mainstreet Index (RMI) for January declined and remained below growth neutral, year-over-year indices are trending higher. Clearly, based on our recent surveys, the negatives are getting less negative,” said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

When asked to name the greatest 2018 economic challenge for their banks, four in 10 bankers reported that loan defaults represented the biggest challenges for the year ahead. This is well ahead of the second ranked challenge of competition from Farm Credit coming in at 15.6 percent.

Farming and ranching: The farmland and ranchland-price index for January rose to 42.2 from 39.8 in December. This is the 50th straight month the index has fallen below growth neutral 50.0. ...
...MUCH MORE

The story at the Omaha World-Herald (a Berkshire Hathaway company):

Bankers see rocky road ahead for rural Midwest, and NAFTA worries aren't helping
The rural Midwest remains in an economic slump, and worries about the future of the North American Free Trade Agreement are adding pessimism to the outlook for 2018, a Creighton University survey of rural bankers showed.

The survey’s Rural Mainstreet Index dropped to 46.8 from 47.8 in December on a scale of 0 to 100, with 50 being growth-neutral and figures below that showing economic decline.

Creighton economist Ernie Goss said the survey’s confidence index, reflecting the six-month outlook of the 180 bankers responding to the survey, fell to a pessimistic 46.7 from an optimistic 51.2 in December....MORE

"If Quantitative Easing (QE) is inflationary in theory, but deflationary in practice, will Quantitative Tightening (QT) have the opposite effect?"

From 13D Research:

By raising the cost of capital, QT could tip the balance in favor of capital discipline.
The answer to this question will be revealed gradually over the next couple of years, as the Fed gears-up for a gradual reduction in the size of its balance sheet and the ECB lays the groundwork for a tapering of its QE program. Suffice to say, the lowest interest rates in 5,000 years have done little to promote a pick-up in real gross investment or labor productivity in advanced economies (AEs), as the red lines in the following BIS charts illustrate.

In WILTW June 23, 2016, we argued that much of the blame for this predicament belongs to the central banks: “If the Fed and other major central banks had not lowered interest rates to zero (or below), it would have been harder for corporations to justify financial engineering at the expense of capital investment. But, financial engineering goes hand-in-hand with management compensation practices that focus on short-term at the expense of long-term performance.”
QE did not drive U.S. price and wage inflation higher on a sustainable basis as central banks had expected. One of the frequent criticisms against QE is that the liquidity that was created remained largely within the banking system but did not filter down to the wider population who could spend it, which exacerbated income and wealth disparities. Hence, asset prices such as stocks, bonds and real estate rose, but broader measures of price and wage inflation lagged. Another criticism of QE is that it led to inefficient capital allocation and mal-investment in the commodity space, among other sectors, which was deflationary.

By raising the cost of capital, QT should result in more efficient capital allocation and less mal-investment across the commodity space, which previously caused a drag on the CPI. This should result in an inflationary impact in the energy sector, restraining supply growth in shale oil by curtailing the supply of cheap finance. Halliburton’s (HAL, $43.32) executive chairman, David Lesar, recently said that a “tapping of the brakes is happening all over North America” and earlier this week, Anadarko Petroleum (APC, $45.17) announced that it would cut $300 million from its capex budget for the remainder of this year.

Will others follow? Only time will tell, but the higher cost of capital triggered by QT could tip the balance in favor of capital discipline. Crude oil prices appear to have bottomed-out, and if Anadarko’s move is copied by others and capital discipline returns to the shale oil patch, oil could rise farther and faster than anyone currently expects.

Higher capital costs will also affect supply-growth in the agriculture space, and this could be compounded by adverse weather and tighter supply of migrant labor — all of which could push food prices higher. Global weather has been uncharacteristically benign in the past five years. That period may be ending — ushering in higher food prices — as we have seen in the nearly 35% rise off the lows in wheat prices and poor growing conditions in soybeans.

If QT results in a sustainable rise in the cost of capital, the U.S. federal and state budgets will get squeezed, which will lead to a vicious cycle of higher taxes and/or spending reductions, which could push interest rates up even further. We have made the following point often but it bears repeating: according to the latest baseline budget estimates by the Congressional Budget Office (CBO), federal net interest expense could double from $240 billion in FY2016 to $481 billion in FY 2021, even though the average interest rate on publicly-held debt is assumed to increase by less than 100 basis points.

Further QT could trigger a weaker U.S. dollar, which would, counterintuitively, put upward pressure on consumer price inflation. A November 2, 2015, study by Harvard’s Gina Gopinath estimated that “a 10% depreciation of the dollar relative to its trading partners will raise cumulative CPI inflation two years out by 0.4–0.7 percentage points.”...MORE

Norway Wealth Fund Dumps Shipping Investments, Others on Ethics Grounds

This follows the recommendation to remove oil and gas investments from the benchmark.
Next up, the fund will begin shorting anything to do with cod or brown cheese and the transformation will be complete.

From Bloomberg via gCaptain:
Norway’s wealth fund dumped a series of companies involved in making nuclear weapons and excluded others based on human rights concerns as the $1.1 trillion investor steps up its scrutiny over how corporations behave.

AECOM, BAE Systems, Fluor Corp. and Huntington Ingalls Industries Inc. were excluded “because of their involvement in the production of nuclear weapons,” the central bank, which oversees the fund, said in a statement. An exclusion of Honeywell International Inc. was maintained on this criterion.

The world’s largest wealth fund takes into account ethical rules encompassing human rights, some weapons production, corruption, the environment, coal and tobacco when deciding on its investments. The fund sells its stakes before it announces an exclusion....MORE


"Dollar Crushed as Government Shutdown Looms"

From Marc to Market:
The US dollar is broadly lower as the momentum feeds on itself. Asia is leading the way. The Japanese yen, Taiwanese dollar, Malaysian Ringgit, and South Korean won are all around 0.45% higher. Asian shares also managed to shrug off the weakness seen in the US yesterday. The MSCI Asia Pacific Index advanced 0.7%. It is the sixth consecutive weekly gain. The dollar's drop comes as US yields reach levels now seen in year. The 10-year yield is at its highest level seen 2014, while yields from bills to three-year paper are at their highest level since 2008.

The risk of a US government shutdown beginning tomorrow may be providing the latest fodder for the dollar's sell-off. The Dollar Index is set to post its fifth consecutive weekly loss, the longest drop since April-May 2015. The House of Representatives voted to extend the spending authorization for a month (Feb 16), but the Senate is balking. The Democrats in the Senate, whose votes are needed, unlike tax cuts, Many Democrats in the Senate want a deal on the adults that were brought by their families illegally as children.

The dollar bears have not only pushed aside the rise in US interest rates but also economic data that suggests the US economy accelerated in Q4 17 (initial estimate will be reported next week). In addition, even disappointment, like the UK's retail sales report today, has failed to stem the greenback's slide. December retail sales fell a sharp 1.5%, the latest drop since mid-2016, and 1.6% excluding gasoline. The median expectation was for a 1.0% decline after a strong 1.1% and 1.2% rise respectively. Those November gains were revised lower by 0.1%. Household goods purchases fell 5.3%, while clothing was off 1%. The average monthly change in Q4 was zero, after 0.2% in Q3 and 0.4% in Q2.

Sterling softened on the news, but only after it made a new high since the UK referendum (~$1.3945) and it remained above $1.39. It has not had a losing session against the dollar since January 1. This is the third week it is rising on a trade-weighted basis as well.

The euro is knocking on $1.24 after having fallen to $1.2165 yesterday. The high from the middle of the week was nearly $1.2325. European assets markets are firm. The Dow Jones Stoxx 600 is up 0.45%, showing resilience in the face of yesterday's losses in North American. It is up in each of the three weeks of the new year. European bonds are mixed, but the peripheral yields are two-three basis points lower. Italy is lagging a bit, as the March election deters some investors....

...MORE

Here's the last year of the Dollar Index (DXY). A trend appears to be emerging. 

Thursday, January 18, 2018

"Microsoft wants to patent mind control" (MSFT)

From The Register, Jan. 15:

Battling Zuck for the brain-computer interface
Microsoft has applied to patent a brain control interface, so you'll be able to "think" your way around a computer device, hands free.

Last year, Facebook claimed to have 60 engineers engaged in BCI [brain computer interface] but Microsoft isn't going to take this sitting down. It's erm, sitting down and thinking really hard.

The application Changing an application state using neurological data was filed last year, and published last week. The inventors recently filed a related patent for a continuous motion controller powered by the brain. (US 2017/0329392: Continuous Motion Controls Operable Using Neurological Data).
Brain patent screengrab
The team responsible for both includes principal lead scientist at the Applied Science Group in the Windows division, Kazuhito Koishida as well as Professor Jaeyoun Kim, who has developed an artificial eye. Another member of the team, Cem Keski, has years of experience developing hand gesture controls. So maybe PreCrime chief John Anderton's theatrical hand gesture UI, as shown in the movie Minority Report, isn't so far away....MORE
El Reg has the story tagged: "Emergent Tech"

Turkey’s Army Chief and the Head of National Intelligence Flew to Moscow Today

From Al-Monitor:

Russian jury still out on Turkey's Afrin offensive
Turkey’s army chief Hulusi Akar and head of national intelligence Hakan Fidan flew to Moscow today to hold talks on Syria and, as many commentators speculated, to secure Russia’s blessing for a planned Turkish offensive against the Syrian Kurdish-controlled enclave of Afrin.

Following their meeting with Russian Defense Minister Sergei Shoigu, the Russian Ministry of Defense posted a brief statement on its website saying the talks had focused on the situation in the Middle East as well as on “current topics of mutual interest.” The meeting was “held in a constructive manner,” the statement concluded but provided no further details.

The English-language Daily Sabah, the mass-circulation outlet that serves as a mouthpiece for Turkish President Recep Tayyip Erdogan, wasted no time in spinning the story to fit Turkey’s desired narrative. In quoting the Russian statement, it substituted the word “constructive” with “productive,” implying that the general and the spymaster had been given the green light to proceed with the offensive.

Photographs of the Turkish and Russian delegations assembled around a large oval table released by the ministry suggested otherwise. The Russians were grinning; the Turks were glum.

Turkish Foreign Minister Mevlut Cavusoglu remained evasive when asked whether Russia was on board for a Turkish operation. In an interview with CNNTurk, he said, “The Russians should not be opposed.” Cavusoglu said that Turkey was holding discussions with Syria’s top ally, Iran, which also has troops deployed along the Syrian Turkish border. Cavusoglu argued, however, “It is our right under international law. … We are going to do this. We need to do this. We do not care what the countries of the world have said.”...
...MORE

Previously from Al-Monitor:
"Will Erdogan defy Russia and the US over Afrin?"
 

Bats, Blimps, and Giant Camera Chips: 2018’s Top Tech Quick Hits

From IEEE Spectrum:

A dozen intriguing tech projects to look for in the coming year
https://spectrum.ieee.org/image/Mjk5NzM2Nw.jpeg

  • Moonward Ho!

    imgIn December 1968, Apollo 8 became the first manned mission to orbit the moon. A half-century on, SpaceX, Elon Musk’s spaceflight company, is vying to do the same thing, offering to send two private customers on a lunar flyby aboard its Dragon 2 capsule. Meanwhile, German startup Part-Time Scientists aims to land the first 4G LTE base station on the moon this year. The base station will relay signals between the company’s yet-to-be-launched rovers and mission control back on Earth, but it could also be used by future lunar explorers. Further-out moon ventures include an inflatable orbiting habitat being developed by Bigelow Aerospace. If all goes according to plan—admittedly, a big “if”—2018 could mark the beginning of the return of humans to the moon. And this time it’ll be for a good long stay. [For more on lunar plans in 2018, see “China Promises the Moon.”]


  • EU Doubles Down on Data Privacy

    imgOn 25 May, the European Union’s General Data Protection Regulation (GDPR) will take effect, with tough rules aimed at protecting the privacy of people living in the EU. Europeans already have many more privacy protections than, say, U.S. citizens, including the “right to be forgotten.” But the GDPR goes much further: It protects virtually every kind of data pertaining to individuals, including medical records, online transactions, and social media posts. It also gives EU residents the right to opt out of automated decision making—via a machine-learning algorithm, for example—and to demand an explanation when an automated decision involves them in some significant way. The GDPR applies to companies doing business in Europe as well as companies that handle the data of Europeans. Unsurprisingly, firms far and wide are scrambling to comply.


  • Blimp Cell Towers Head Skyward

    imgThis year, Altaeros Energies plans to launch the first of its tethered-blimp cell SuperTowers. Each aerostat, floating up to 600 meters above the ground, will provide coverage equal to 30 traditional cell towers. The blimps are intended for remote locations where broadband service is too difficult or costly to supply by conventional means. Several other companies aim to do similar things, including Google, with its Project Loon balloons, and Facebook, with its solar-powered Internet drone, Aquila. Altaeros’s other big push is in high-altitude wind turbines. Who knew you could build a diversified business around lofting tech-laden tethered balloons?
...MUCH MORE

Related: Yesterday's "IEEE Spectrum Top Tech 2018"

Synthetic Booze

Not the powdered vodka I've mention a couple times but rather a compound to mimic the effects of alcohol.

From the un-bylined electron-stained wretches known only as FT Alphaville:

“It is not designed for binge drinking”
All those enduring enjoying a dry January should turn to the latest research offering from Jefferies. No more loss of judgement, the analysts promise, showcasing the potential for hangover free entertainment to disrupt the alcohol business.

They come direct from a good lunch with Alcarelle, “a company that has the goal of developing an alcohol-free adult beverage, which imitates the positive aspects of alcohol without the negative health aspects”.

From the gutter, all there is to see is blue sky:
Ideal product features of synthetic alcohol? The aspiration is to develop a product that is fast acting (15 mins for effects to take place), a one hour half-life (washes out in an hour), that is tasteless, odourless, with zero calories. We believe the finished product would likely be released as a bottled product that has already been diluted to a usable strength.
The company aspires to market approval by 2022, but how would synthetic alcohol work?...
...MORE

Previously, as part of our coverage of the ethanol biz: 
Powdered Booze Can Reduce Arterial Cholesterol Plaque By 40%
Partaay!
From our intro to 2013's "Can Powdered Water Cure Droughts?":
...Some years ago I was approached by a company seeking financing for their powdered vodka. 
When I was done laughing I had some research done on the principals and decided against doing anything with them.  
As it turned out the SEC eventually shut down another of their enterprises, thus besmirching the otherwise pristine reputation of the Boca Raton investment community. 
The powdered booze however turned out to be real, albeit with a patent owned by General Foods rather than the scamsters. 
Who knew?
From Popular Science:...
If interested see also 2015's:
"Everything You Want to Know About Palcohol, the Powdered Alcohol Approved by Feds"

Engineering Addiction Into Your Product: Lessons From the Professionals

The pros in this case being the gaming gurus at Gamasutra, November 13, 2017:

Compulsion Loops & Dopamine in Games and Gamification
The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.


This is a presentation I put up together for the Big Gamification Challenge 2018 organised by REACTOR in collaboration with the Anglia Ruskin university , UK To explain how to use Compulsion Loops to produce Dopamine in games and gamified apps I touch multiple subjects
  • Extrinsic vs Intrinsic Motivation and Rewards
  • Challenges and Skills
  • Anticipation, Churn and Retention
Most of the talk is based on my experience of some theories I found works best for game system design. Find the Presentation Slides Here .I also decided to write an article on that talk so here it is :

Compulsion Loops & Dopamine in Games and Gamification
What is Gamification really about?

When you talk about Gamification to people, one word that comes back a lot is "Rewards". Well that's not what Gamification (or Games for that matter) is about! Whaaaat? don't get me wrong here, Rewards ARE important, but that's not what it's about.  It's really all about Dopamine!
Dopamine is a drug produced by the brain. Simply put, it makes people do stuff seeking rewarding outcomes. Its responsible for addiction but also for things like seeking food or shelter.
Compulsion loops come from Behavioral Psychology and can be used to explain how games and Gamification makes the brain produce Dopamine. A compulsion loop is made of 3 steps:
  1. Anticipation
  2. Activity
  3. Reward
compulsionloop

Counter intuitively Dopamine is produced at the first step : Anticipation. If you look at BJ Fogg's Behavior Model anticipation would be the "Trigger" moment when you think about what you will do and its hopefully rewarding outcome.

But first to explain how to create anticipation that generates Dopamine we need to dig a bit deeper into the Rewards and Activities that are anticipated.

REWARDS 
There is a lot to say about rewards and a lot of ongoing research and it would take too much time to go through all of it here. If you want more on that you can find some reference at the bottom of this article. For the sake of simplicity I will divide Rewards into two categories :
  • Extrinsic
  • Intrinsic
When I do something for something else, that "something else" is an Extrinsic motivation to the activity (that's kind of important because a part of the "clusterfuck" surrounding the theoretical discussions on rewards and motivation is due to the confusion between "What" rewards are extrinsic to. Let's just agree that here we are talking about motivations that are extrinsic or intrinsic to the activity and we should be able to talk about what really matters : how does it work?

Intrinsic motivation is when I do something for itself. The thing I do is it's own reward.

Let's look at an example :
Say I am playing a video game because I love the story. Unraveling the story is it's own reward. This is an intrinsic reward. While playing I discover that the game mechanics are actually great and I like the challenge they offer me. Progressively I start playing more and more for the mechanics and less for the story. There is a shift in my motivation. I play the mechanics because I like them. This is still Intrinsic to the activity.
Now Let's imagine that for some reason the game designer tough it would be a good idea to add Achievements to the mechanics to reinforce the wanted behaviors. Every time I succeed at a challenge using the game mechanics I love I get rewarded with an achievement that tells me I'm doing it right. That's nice and I start seeking these achievements. As I keep playing I start doing it more and more for the achievements. I might even start grinding to get them, getting me through mechanics I don't like that much which makes the game designer quite happy.  What is happening is that my motivation is shifting from Intrinsic to Extrinsic. This shift is called the Over justification effect. Where I was doing something for it's own sake I am now doing it for an extrinsic reward. What's important to know is that this is a one way trip. It's easy to steal Intrinsic motivation and shift it to Extrinsic motivation but the other way is much harder. If at that point the game stopped to give me achievements I would probably stop playing... 
OverJustificationEffect
Over-Justification Effect
Intrinsic Motivation is the Unicorn of game design. If you have it in your game or app, protect it ferociously and harness it's power!! Ok... so how do we do that? Glad you asked! Well my friend we will use what's called "Scaffolding" with the Skills and Challenges that are intrinsically motivating in the activity....
...MUCH MORE

We'll be coming back to the topic and probably to Gamasutra over the next few weeks. Until the next installment here's an overview of where we're headed with this stuff:
"If you think your smartphone is addictive, you ain’t seen nothing yet."
"Mark Zuckerberg’s radical decision to reinvent the News Feed is a plea for mercy." (FB)
Related: Monday's ""Facebook Can’t Be Fixed" (FB)", last month's "Engineer a Little Addiction Into Your Product - Redux" or the just posted "Cory Doctorow: Persuasion, Adaptation, and the Arms Race for Your Attention ".

Also:
Facebook's Statement on Social Media and Mental Health (FB)
"Hey, we've toned down the 'destroying society' shtick, Facebook insists" (FB)
"The Right to Attention in an Age of Distraction"
Climateer Line of the Day: Neurotransmitters and Facebook Edition
 "The short-term, dopamine-driven feedback loops we've created are destroying how society works.  No civil discourse, no cooperation; misinformation, mistruth. And it's not an American problem — this is not about Russians ads. This is a global problem."
—Former Facebook Vice President for Addicting Users, Chamath Palihapitiya
And many more, use the 'Search blog' box if interested.

Engineer a Little Addiction Into Your Product - Redux
My work here is done.
From Dilbert.com:

December 15
 Doctor And Dopamine - Dilbert by Scott Adams

December 21
 Dopamine - Dilbert by Scott Adams

There are three more in the series, very topical.

Previously in non-Dilbert commentary:
Dec. 11 
Climateer Line of the Day: Neurotransmitters and Facebook Edition
Dec 3 
"The Neurochemistry of Smartphone Addiction"
Sept. 25
Dopamine Labs: "Meet the tech company that wants to make you even more addicted to your phone"
Sept 24
"If You Want To Be Happy, Listen Up. Now! alternative title: The FT's Izabella Kaminska Is...".

And dozens and dozens more including  the namesake 2015 post "Want to Make Big Money? Engineer A Little Addiction Into Your Product

In 2018, Amazon will turn to private label goods (AMZN)

This article is going on three weeks old but combined with the Amazon post earlier today and especially yesterday's, helps give an outline of what's coming.

From Digiday, December 29:
Amazon has long honed the business of being the middleman — getting brands to sell on its site, letting shoppers pay for and receive those items fast and efficiently.

But 2017 was the year Amazon started taking steps to create its own brands. If done at the right price point, Amazon will be in a strong position next year to prove it not only can help other retailers grow, it can be a retailer itself. 

Amazon already has its AmazonBasics line of essentials like batteries and chargers. These items are largely commoditized, said Forrester analyst Sucharita Mulpuru-Kodali. It’s easy for Amazon to keep growing there: By bumping those products up in search results and pricing them right — which will be easy to do since Amazon owns the data — this line is poised to keep growing.

But the more interesting prospect is for private-label items that aren’t Amazon-branded. There are at least 19 brands Amazon owns and doesn’t operate under the Amazon brand name — from lingerie brand Arabella to furniture brand Strathwood. In October, Amazon rolled out private-label sportswear brands, including Goodsport (which competes with Champion), Rebel Canyon and Peak Velocity. Amazon may boasts fantastic brand recognition, but Amazon-branded panties are still a hard sell.

An October report by firm One Click Retail examined how Amazon’s private labels have performed. Amazon owns around 45 brands, and about 15 percent of its private-label sales come from those. The biggest one is women’s clothing line Lark & Ro, which had about $10 million in sales in 2017 to date when the report came out. Amazon’s Amazon Essentials clothing made about $3 million this year.
In apparel, Amazon’s most successful category with private label, L2 research found that the absence of major fashion brands that have traditionally abstained from selling on Amazon creates more room for private label to swoop in, a trend that would continue next year. 

“This is the uphill battle,” said Mulpuru-Kodali. “This is dependent on leveraging data and picking the right things to develop or manufacture.”...
...MORE

January 18
Platforms: Amazon Could Make Billions From the Ad Business (AMZN)

January 17 
Frank Pasquale—From Territorial to Functional Sovereignty: The Case of Amazon (AMZN)

Lithium: After Four Years of Negotiating, SQM and Regulator Reach Agreement On Increased Production (SQM; ALB)

We haven't had much on the investment side o'lithium because our focus was cobalt which ended up being the top performing tradable commodity in 2017, he said modestly.
From Psst, Wanna buy Some Cobalt:
...Anyway, in 2015-2016 we had a series of posts on a trade to capitalize on Tesla's battery ambitions that we hoped would go beyond the "common knowledge" lithium action (which we had covered here on the blog for the prior ten years):
From Reuters:
Chile's Corfo, SQM strike deal in lithium dispute
Chilean development agency Corfo said on Wednesday that it had struck a deal with lithium company SQM , ending a long dispute over royalties in Chile’s Salar de Atacama, home to one of the world’s richest lithium deposits.

The deal frees the miner to apply for an increase in its production quota amid a demand boom and surging prices for lithium, which is used in the batteries that power electric cars.
Corfo chief Eduardo Bitran said SQM had agreed to overhaul its corporate governance board to ensure adherence to global standards, a key condition put forward by Chilean authorities. The deal also hikes the royalties paid by SQM to equal those established in a similar contract between Chile and SQM competitor and lithium producer Albemarle.

SQM, like the U.S.-based Albemarle, would be required to supply Chile with lithium at a favorable price, a stipulation intended to incentivize value-added production in Chile.
The deal also includes an option that would permit SQM to work with state miner Codelco to begin developing the Maricunga lithium deposit. Codelco, one of the world’s largest copper producers, has lithium assets in Chile but is currently not producing the metal.

“Our intention is to make it available for Codelco so it can ... make viable the development of a new activity in this area,” Bitran told reporters...MORE 
SQM Sociedad Quimica y Minera de Chile S.A. daily Stock Chart

Related: 
Jan. 2 

August 2017 
Eighteen months ago we went with cobalt over lithium as the battery material that would be in shortest supply and think that is still a correct assessment. However, if long-suffering reader is interested the 'search blog' box has quite a few hits for 'lithium'.... 

YCombinator Is Going to Do More Biotech Deals

From Sam Altman at the YCombinator blog:

YC Bio
I’m excited to announce a new experiment we’re going to try: YC Bio. YC Bio is a new way for us to fund early-stage life science companies that are still in the lab phase.

Because biology is such a large field, we’re going to try concentrating on one sub-area at a time (we’ve found the companies working in similar areas get a lot of value from being around each other). The first area we’re going to focus on is healthspan and age-related disease—we think there’s an enormous opportunity to help people live healthier for longer, and that it could be one of the best ways to address our healthcare crisis.

We’ve been funding bio companies for a little while now, and we’ve learned a bit about what works and doesn’t. We will try to design the program in light of what we’ve learned, and almost certainly we’ll make a lot of changes as we go along.

This will be a special track like YC AI—the companies will go through the regular YC batch, but there will be a few differences....MORE