Monthly Archives: July 2017

Wages, Nash equilibrium, and the productivity paradox: a small theory of my own

Economists write a lot about the mystery of why productivity is not increasing, with pieces such as this. There’s even a section on it in Wikipedia.

My own theory is that limited wage increases is also limiting the benefits of productivity aids. How I think this works is so:

  1. Employers wont raise wages for employees.
  2. Employers deploy technology that should result in productivity gains.
  3. Employees take the technology deployed and use them to decrease their efforts.
  4. The employer sees some productivity gains and assumes that is the limit for the technology deployed.

Look at this chart:

In much of the world economy, all the job growth is in the services sector (green line), not the manufacturing sector (red line). Achieving productivity gains in the manufacturing sector is more straightforward: replace people with robots and you are done. It’s not as straightforward as that in the services sector. In some services sector jobs, it is not possible to decrease effort without it being visible. But in many services sector jobs, it is. If employees cannot improve their lives by making more money, they may decide to do so by working less and working right up to the point where they don’t lose their job.

If you look at employment as a game, then we currently have a Nash equilibrium where the employees know that they won’t get paid more working for the same company, because that is the best strategy for the company. Therefore the best strategy for the employee is to minimize their effort without getting fired and while showing little if any productivity gains.

That’s to me is key reason why I think we have the productivity paradox.

I would add that the reason this is a paradox is because no one wants to admit that this is happening. It seems like a failure on both the employers and the employees side. The employee wants to be seen as a good worker and the employer doesn’t want to admit it could be paying more. Instead technology is brought in to solve an organizational problem, which is something technology cannot do.

(Chart from Business Insider).

 

 

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Some somewhat objective thoughts on the new Trudeaumania

Lots of chatter on this recently, Justin Trudeau: Canadian Prime Minister, Free World’s Best Hope? – Rolling Stone.

It’s good that the world thinks highly of our leaders, whomever they are. Canada is a significant nation in the world with the ability to influence other nations, and having a leader that is looked up to makes a positive difference.

As a Canadian citizen, I’m more interested in the substance than the PR. And I’m more interested in what the government is doing, not just the Prime Minister. I try to look at the government’s policies, competency in executing on those policies (either through legislation or direction to federal agencies), and how the government supports democracy (through actions to make our country more democratic) or hinders it (by making the country less democratic or by being corrupt).

That means I spend less and less time reading pieces like this, which are along the lines of “if you people were as smart as me you’d realize how bad Trudeau is” . Instead, I look to sites like this which track the government’s progress. For example, this site, TrudeauMeter, has ongoing ratings of the government. Other commentators, like John Ibbitson, provide periodic ratings: Video: Opinion: John Ibbitson rates the Trudeau government as Ottawa wraps up for the summer – The Globe and Mail. Finding sources of information you find comprehensive and objective are always your best bet.

If you don’t support the Liberal government’s policies, then I can see why you would not want the government in place.  Likewise there will be times when you do support the government’s policies but you feel the level of corruption or incompetence is so high you want to turn to a different group. If you are going to rate the Prime Minister and his government, those are good criteria to evaluate them on, not PR like the Rolling Stone magazine, or any other specific good or bad focus pieces on them. The government works for you, and if you are a good boss, you evaluate them mainly on the entirety of their efforts, not just things here and there.

Some other thoughts on Trudeau:

From what I can see so far, his government is starting off unsurprisingly: being successful over things the government has control over (like spending) and having less success over things that requires working with other groups. I suspect they will make no progress on electoral reform unless there is a major push from Canadians. Likewise, there are so many issues and problems with regards to Aboriginal peoples that any progress there will be modest, at best. I wish neither of them were true, but I am not optimistic on those fronts.

I suspect that as long as the economy is doing fine, the government does not appear corrupt or incompetent, and people aren’t tired of his government, then Trudeau and his team will be in power for some time to come. The first one, the economy, will be the one that is most likely to hit him. Corruption takes time to seep in (although major scandals can occur at any time and make the government appear corrupt), and government fatigue takes longer still. Whatever you thought of Chretien or Harper, that was true for them and I suspect it will be true for Trudeau as well.

I will continue to ignore articles that underestimate Trudeau (like the one above). He’s flashy and sometimes appears smarmy, but he’s smart, he has a good team, and politics is in his DNA.  If you oppose Trudeau, underestimating him only works to his advantage and not yours. In addition,  he is as much his mom’s son as his Dad’s. The combination makes him much more effective than his Dad could ever be. His Dad may have had a higher IQ than him, but he has a higher EQ than his Dad ever had and that will make him more challenging to defeat than people who approach politics intellectually realize.

Likewise, I will continue to ignore articles that compare Trudeau to Trump. There is little if anything to be gained by them. Trump is an anomaly. Almost any leader looks good in comparison to the 45th President of the United States.

I like Trudeau for alot of reasons.  That said, it doesn’t matter if I like him or not, anymore than it matters that you dislike him or not. What matters is his ability to do the job. He’s not an entertainer: he’s an elected official. When the next election comes, it won’t matter how good or bad Trudeau’s PR is. What matters is that in comparison to other politicians looking to lead the country, is the government he proposes to lead the best one for the job based on the criteria I have.  That’s the only thing that matters.

 

 

 

 

Thoughts on the new Blade Runner 2049 trailer

Well, here it is!

Some initial thoughts:

  • There’s many echoes visually of the first Blade Runner. In this trailer, there is the close up of the eye and the fight that goes crashing through the wall. Then there’s the cars,  the cityscape and even the clothing that K (Ryan Gosling) wears resembles the first film.  (Also  the woman with K is wearing a transparent yellow raincoat similar to Zhora in the first Blade Runner. She seems to be a replicant.)
  • Other echoes are the scene where K is walking with someone past suspended bodies. It looks like Deckard entering the Tyrell Corporation in the first film.
  • Speaking of that scene, the suspended body that resembles Dave Bautista has a label of Nexus 08 prototype 01! So clearly the replicants have gotten better. The question is: how much better, and in which ways?
  • There seems to be a number of locations for the film besides Los Angeles. The one Bautista’s character is in looks like Russia. (Also, there is a date on the tree that is tied up: is it the incept date of the tree? Or some other significant date?)
  • Speaking of locations, where is Deckard living? It looks deserted, which makes me think it is on Earth. Also, there are Korean symbols on the building he is in.
  • The sequencing of that scene where K meets Deckard is interesting. It looks like K mets Deckard, who tries to escape to his car, which get blown up. In other scenes he is fleeing with his dog when K bursts through a wall and saves him. After which it seems like K asks him questions.
  • That K can burst through a marble wall makes me think he is a replicant.(Well that, and a number of other things)
  • There are two scenes with insects: there are slugs at Bautista’s place and a fly at Deckard’s that lands on K’s hand. Are they real, or replicants too? The fly could be a drone that would tell Deckard someone is coming.
  • There is a walled off city at the beginning of the clip. I wonder if that is breached somehow. It makes me think that that is what happens later when the water is flooding.

Lots to think about and get excited about too! Looking forward to more trailers soon! In the meantime, what follows is a collection of the previous trailers. Enjoy!

P.S. Oh, I missed this featurette before. Need to add it, too!