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Month: July 2016

The ‘Downs’ of Pregnancy

The ‘Downs’ of Pregnancy

“What goes up, must come down.” That saying certainly applies to my mood, especially during pregnancy when a woman’s hormones are going crazy!

My last post on how pregnancy is going so far was a mostly positive one, and I think I had written it on an ‘Up’ day. Today was a bit of a ‘Down’ day, continued from a couple of days ago. On Friday, I had noticed a considerable shift in mood. The day started out well, I walked our dog before it got too hot out, I went to breakfast with a good friend, and then I met my MIL to do some furniture shopping. All in all, a good morning. But as the day wore on, and as the sun grew more intense, I started feeling more and more overwhelmed by everything. I had chores and errands to do that weren’t laborious, and I had the rest of the afternoon to do them, but for some reason, it was difficult for me to get the motivation up to complete them. One chore that really held me up that day was meal planning; my project was to come up with a dinner plan for the evening and meal plans for the weekend and then go shop for groceries, but lately I’ve been feeling uninspired by my cooking, making the task of meal planning extremely draining, frustrating, and disappointing. Eventually though, I settled on a few meal ideas and finished my errands, but not without some tears.

I don’t remember much of what yesterday was like, but in the evening, the Lion and I drove up to LA to have dinner with a couple of friends. It was a really good time, but we ate a lot of rich and heavy foods* (friend entrees, bread and crackers, ice cream, and presumably inordinate amounts of sugar), and we didn’t get to bed until almost midnight. This morning, we slept in until 9AM, and I woke up with the makings of a headache already in place. My headache today has waxed and waned, but it has been noticeable enough for me to consider today to be a ‘Down’ day 🙁

I consider myself very fortunate to not have had constant morning sickness or heartburn during pregnancy (though I’ve heard heartburn can begin in third trimester…), but these headaches are certainly a contender for causing discomfort, annoyance, and generally being day-ruiners!! Since I don’t want to take any medicine during pregnancy, I try to combat these headaches with quiet time, massaging my temples, Chinese medicinal oil (/eucalyptus oil), and short naps. These methods help me get through the day, but they don’t cure the headache. Oh, another method is early bedtime. Speaking of which…

*During this pregnancy, I’ve noticed that when I overload on sugar (eg, a bottle of soda at our July 4th dinner) or gluten (eg, a bowl of leftover udon noodles for lunch), a headache will develop almost instantly. And this constant heat does NOT help.

Review – Napoleon: A Life (#history, #dictators, #books, #review)

Review – Napoleon: A Life (#history, #dictators, #books, #review)

Napoleon: A Life

by Andrew Roberts, published 2015

I’ve long been fascinated by political revolutions, where they come from, how the unfold, whether they’re effective in actually changing the social organization of the society which experiences them. But I have not spent as much time studying reactions to political revolutions. Having read several books about the French Revolution, I decided it was time to study the life and times of Napoleon Bonaparte. Going into my reading, the primary questions I had in mind were:

  • What social conditions existed in revolutionary France that permitted Napoleon’s rise?
  • Was he actually a reformer and, to the extent he was, were his laws innovative or “useful”?
  • Was he truly a great leader and military commander and, if so, what personal characteristics did he possess which might have contributed to his success?
  • Do “Great Men” exist and if so, was he one of them?

As I read Roberts’s lengthy and overall balanced biography of Napoleon — it’s clear he believes in the Great Man theory of history and would put Napoleon in that category, but he rarely engaged in hagiography and was ready to admit his foibles, though also quick to wave them away as typical of the time or typical of humanity in general — I also developed a few more questions:

  • Why wasn’t Napoleon’s regime stable?
  • Why did Napoleon promote so many family members to positions of power (especially outside France)?
  • Could he have enjoyed a durable peace with neighboring countries, particularly Great Britain?

Setting aside Napoleon’s personal energy, intelligence and social talents, a large part of his rise appears to be attributable to timing and luck.

Rarely in military history has there been so high a turnover of generals as in France in the 1790s. It meant that capable young men could advance through the ranks at unprecedented speed… having been on leave for fifty-eight of his ninety-nine months of service — with and without permission — and after spending less than four years on active duty, Napoleon was made, at twenty-four, a general.

Surely it takes exceptional talent to even be considered for such a promotion at such a young age. But just as surely, Napoleon would not have been in a position to see and do the things he saw and did, when he saw them and when he did them, had this condition not existed by which he could achieve such a promotion at such a young age. The text doesn’t state whether any other generals were appointed at such an age around the time Napoleon was but it doesn’t matter– it is not to say that a “Napoleon” was bound to arise in such conditions, but only that it’s hard to imagine the Napoleon arising without such conditions.

And this luck or timing factor is a double-edged sword which can also help to explain his rapid political decline:

Many of the phenomena of Napoleonic warfare that had been characteristic of his earlier campaigns — elderly opponents lacking energy, a nationally and linguistically diverse enemy against the homogenous French, a vulnerable spot onto which Napoleon could latch and not let go, a capacity for significantly faster movement than the enemy, and to concentrate forces to achieve numerical advantage for just long enough to be decisive — were not present or were simply impossible in the vast reaches of European Russia. The Russian generals tended to be much younger than the general Napoleon had faced in Italy — averaging forty-six years old against the French generals’ forty-three — and the Russian army was more homogenous than Napoleon’s. This was to be a campaign utterly unlike any he had fought before, indeed unlike any in history.

Whereas in his early political and military career all of Napoleon’s strengths proved to be an uncannily perfect fit for the weaknesses of his opponents, the environmental factors shifted such that Napoleon faced a political-evolutionary dead end. Having mistook his earlier luck for fate, he mismeasured (or was simply unaware of) the enormous risks he was taking in this new, hostile environment and committed himself in such a way that he was doomed to be defeated.

Napoleon’s record as a social reformer is similarly mixed and confused. Although he rose to power supported by the burgeoning middle classes of France by vowing to defend the redistribution of Church and aristocratic property confiscated during the Revolution, Napoleon put in place a confusing and economically regressive system of managed trade (internal and external) known as his “Continental System” which was an intellectual continuation of the mercantilist Colbertism of the French monarchy, which was aimed at disrupting the trade economy of Great Britain and thus its willingness and ability to fight but which ended up proving more aggravating and ruinous to those same middle classes, as well as the economies of various French political allies.

France had reached only the level of industrialization that Britain had enjoyed in 1780, an indictment of revolutionary, Directory and Napoleonic economic policy and the Colbertism they all followed. ‘I never saw him reject a proposition that was aimed at encouraging or supporting industry,’ recalled Chaptal.

The Continental System was truly byzantine, an irony given that the multitude of taxes and trade regulations put in place by the French crown prior to the Revolution bred a nation of smugglers and tax evaders which sowed social instability and a lack of respect for the crown’s authority:

Different types of licenses costing different amounts authorized different companies from different departments to trade in different prescribed commodities with different foreign ports. The rules were constantly changing, seemingly capriciously, with endless clauses and sub-clauses covering every likely combination and permutation.

How could Napoleon’s regime achieve stability under such economic conditions induced by this policy? In fact, Napoleon specifically “rejected the idea of competition and free exchange as positive phenomena”, a formula almost guaranteed to produce conflict at home and war abroad. A zero-sum world is inhabited by predators and prey alone. Combined with Napoleon’s reckless and nearly constant warfighting, the French economy was very nearly wrecked, as evidenced by the fact that “at his best, he was forced to borrow at higher rates than Britain at its worst.” The upkeep of the military and the logistics of fighting far from home had a devastating effect on the finances of Napoleon’s state.

Napoleon put in place a system of mulcting conquered territories via “contributions” which were to help offset the costs of the wars. He also forced occupied territories to pay for the provisioning and billeting of troops. Despite these policies, Napoleon had to raise taxes and customs duties at home and engage in egregious borrowings. Rather than being a profit center, the wars were a weight around the neck of French society:

The war did not pay for the war, but only for 60 per cent of it, with the remaining 40 per cent being picked up by the French people in various other ways.

This problem was exacerbated still further by deploying this capital to fight wars of conquest in economically backward locales, such as Egypt:

the country had no watermills and only one windmill… [Napoleon and his savants spent time pondering questions such as] could Nile water be made drinkable; were watermills or windmills better for Cairo; [could they] teach Egyptians the benefits of wheelbarrows and handsaws?

And despite this incredible expense, nearly every one of his campaigns finds Napoleon writing letters to his quartermaster demanding basic provisions for his troops such as shoes (and terrible necessity given the thousands of kilometers his troops would travel on foot), adequate food and medicine. If the Napoleonic state couldn’t adequately provision its soldiery, the political backbone of the regime, how could it ever hope to innovate and reform its domestic economy?

Clearly, Great Britain got the better of the bargain in pursuing a policy of subsidizing proxy combatants:

In 1794 payments to allies amounted to 14 per cent of British government revenues… Although the grand total of GBP65,830,228 paid to France’s enemies between 1793 and 1815 was astronomical, it was markedly less than the cost of maintaining, and then fielding, a huge standing army… In 1815 alone, Britain subsidized no fewer than thirty European Powers.

The cost of war on French society, on any society, is not just financial. It is primarily physical, and it is truly horrible to behold as the nuances of warfighting are catalogued throughout the book in excruciating detail:

‘Everyone was scratching [due to the scabies mite],’ recalled a veteran, and one report to the Committee of Public Health stated that there were no fewer than 400,000 scabetics in the army. Napoleon later set up special hospitals for them during his campaigns [which he himself contracted earlier in his career].

Meanwhile, the battles and sieges, far from being conducted with a gentlemanly honor, routinely inflicted mass casualties on civilian populations caught up in the mix:

Genoa surrendered on June 4, by which time around 30,000 of its 160,000 inhabitants [almost 25%!] had died of starvation and of diseases associated with malnutrition, as had 4,000 French soldiers…”If one thinks always of humanity — only of humanity — one should give up going to war. I don’t know how war is to be conducted on the rosewater plan” [Napoleon later said].

The failed march on Russia in 1812 is later described as an “equinocide” in which literally tens of thousands of horses, almost the entire stock of France and the German States at that point in time, die of exposure, starvation, disease and battle. The waste of capital and life even before the dawn of mass warfare is staggering to behold for a person who loves civilization and peaceful trade.

While his early campaigns seem driven by ambition and his middle campaigns seem driven by a strategic belief in attacking as defense, his latter campaigns seem defensive and desperate. At a certain point, Napoleon realized his chance of a long reign was diminished the more he exhorted his state to fight. Unfortunately, his political status as an usurper and an upstart meant he had little realistic chance of a durable peace– his neighbors were committed politically to removing him from power and reinstating a monarchy. He antagonized them still further by placing his relatives on the thrones of various satellite states, but this was a further blunder in that many proved to be unreliable allies whose own search for power and permanence led them to follow policies contrary to Napoleon’s own desires. It’s hard to imagine a strategic environment where he would’ve been allowed to reign until his peaceful passing, at least so long as he pursued a disruptive domestic economic policy combined with an aggressive international trade paradigm that severely restricted the free flow of goods and services.

Far from a Great Man, then, we see Napoleon for what he mostly was– extremely intelligent and talented, yes, but subject to the same flaws and cognitive biases of all of us which led to numerous “unforced errors” which accumulated to the point of his downfall. Irrational loyalty to his spendthrift, cuckolding wife; doctoring public records to allow political prestige that was illegal; making up the results of democratic elections; being motivated deep down by a desire from childhood to be thought of as a historical figure. All the personal charm and the biggest library of wisdom and human experience in the world (Napoleon was a notorious bibliophile) couldn’t stop a person so hell bent at times on being their own worst enemy.

This “Life” was interesting to read in many ways and I found myself highlighting and underlining all manner of passages. It did get me to think more deeply about some of the questions I came to it with, as well as others that were raised along the way, but it didn’t succeed at getting me to fundamentally rethink any of my existing principles. And ultimately, although it demonstrated a great amount of research and personal expertise on behalf of the author and was pleasurable as a narrative at times, I found myself less inspired and moulded by this study of Napoleon than I had hoped to be and I doubt I’ll refer back to this title again in the future.

3/5

Review – Dressing The Man (#sartorialism, #style, #masculinity, @ArticlesOfStyle, #review, #books)

Review – Dressing The Man (#sartorialism, #style, #masculinity, @ArticlesOfStyle, #review, #books)

Dressing The Man: Mastering The Art Of Permanent Fashion

by Alan Flusser, published 2002

Why do some men look debonair while others look disheveled or worse? What role do clothes play in making a handsome man look plain, and a plain man handsome? According to Alan Flusser, the secret lies in the man’s face itself– do his clothes direct the eye confidently and purposefully to the face, or do they beg the viewer to stare anywhere but there?

Dressing well rests on two pillars– color and proportion… Fashion should be accountable to a specific set of physical trademarks.

For Flusser, successful sartorial pursuits play within known boundaries of taste, structure and purpose, but within those broad confines the greatest spoils go to the most individual:

The best dressed men consistently demonstrate the greatest degree of self-knowledge… a superior understanding of their physical manner and appearance.

This self-aware approach to menswear starts and ends with a man’s face.

The face is the destination to which one’s attire should escort the beholder’s attention… the colors of any given ensemble should exhibit the same degree of contrast as that manifested by one’s skin and hair tones, a person’s two primary color signposts… highlighting each face by repeating one or more of its natural pigments in the colors worn below.

While there is infinite variance to men’s faces, all men happily fit into one of two primary categories of complexion:

If your hair is dark and your skin light, you have a contrast complexion. If your hair and skin tone are similar, your complexion would be considered muted, or tonal.

For example, Southern Europeans and Slavs, as well as Africans and Asians, are clear contrast-type complexions. Northern Europeans, Scandinavians, the Irish and other “norse” blooded peoples are classic muted/tonal complexions. Of special note is the “light, bright and blond”, for whom “at least one item in each ensemble reflects his gold toned complexion.”

For contrast complexions, contrasting colors help to brighten the face and draw attention to it. Conversely, tonal complexions are best shown against complementary, typically warm, colors as their complexion can be easily over-powered by a surfeit of dark tones. The idea is to find combinations that help the face to “pop”, almost as if one is walking around with a low-powered spotlight directing attention to one’s face.

If the man can master this one element of permanent style, he has accomplished at least 80% of the job. The rest of the book involves classic style recommendations on how to wear and match the different elements of mens’ formal clothing such as the suit, jacket, slacks, dress shirt (including collars and cuffs), ties, hosiery, shoes and accessories, as well as how to think about patterns and colors. As I found these sections immensely helpful, I am recreating the most essential advice in list form below:

Navigating the body

While style must be matched to the individual characteristics of each man to succeed, Flusser cautions against simply making up the rules.

Genuine innovation has always taken place with an awareness, rather than an ignorance, of restraints.

The primary restraints beyond complexion are the “five major intersections” of menswear: the neck, shoulder, waist, wrist and ankle. Each provides an opportunity to choose complementary lines, angles and colors which can either greatly enhance or greatly diminish the effect of drawing the viewer’s eye toward the man’s face.

The suit jacket

  • Since the jacket’s shoulders frame the head, if they are too narrow, the head will appear larger than actual size; conversely, if cut too wide, the head will appear disproportionately small
  • Length: long enough to cover the curvature of the buttocks while giving the leg as long a line as possible (relative to torso, divide in half the distance from the collar’s seam to the floor)
  • Bottom line: should line up with the thumb knuckle
  • Waist button: when fastened, should divide the body so that the torso and legs appear at maximum length; should be placed 1/2 inch below the natural waist (place your hands around the smallest part of your torso and then press down at the sides into the hollow above the hipbone)
  • Lapels: width should harmonize with the necktie; single-breasted should cover between 2/5 and 3/5 of the distance between the chest and shoulder line
  • Sleeve: full at the top and tapering down to the wrist bone; the converging lines should conform to the broad shoulder and narrowing waist of the jacket; the band of linen between the jacket sleeve and hand is yet another stylistic gesture associated with the well-turned out man
  • The sine qua non of tailoring sophisticiation is a suit that brackets the wearer’s head with gently sloped, natural-looking but defined shoulders
  • Side vents lead the observer’s eye up either side of the coat’s back, subliminally imbuing the wearer with an illusion of greater height
  • Four buttons (working!) on a suit jacket’s sleeve convery superior satorial breeding
  • The waistcoast adds gravitas to the single-breasted suit; it is a rememberance of things past and accessible only to those able to afford one custom-made

The suit trouser

  • Suit trousers should extend the line of the jacket; fuller-chested jackets require fuller-cut trousers, just as more fitted jackets mandate slimmer-fitting trousers
  • Trousers should be worn on the waist, not on the hip

The dress shirt

  • The choice of the dress shirt should be guided first and foremost by the appropriateness of its collar shape to that of the wearer’s face
  • If its collar is too small, the head will appear large; if the collar sits too low on the neck, it will make the neck look longer than it is; broadly spaced points of a spread collar will counterbalance a long and narrow face; long-pointed collars that are either pinned or buttoned down will help to countermand faces with angular features and strong lines
  • With top button closed, two fingers should be able to slide comfortably between the neck and collar of a new shirt; if it fits perfectly on first wear it may strangle after repeated washings
  • It should be cut full enough to allow the wearer to sit without concern for whether its front will gape open; lengthwise, it should be such that you can raise your arms without it pulling out of the trouser top; the collar’s points ought to be able to remain in touch with the shirt’s body
  • The shirt must fit snugly around the wrist so that the additional length required to keep the cuff from pulling back when the arm is extended does not force it down the hand; if the hand can slide through the cuff opening without first unfastening it, the cuff’s circumference is too large
  • A shirt’s formality begins at the collar, its most prominent and defining feature; stiffer collars are more formal; more open points are more dressy; the cuff also contributes to the overall effect; fabric is the next indicator of formality, smoother or more lustruous materials are dressier; finally, the amount of white in the design’s ground add to dressiness
  • While pure white has been the traditional color of choice, medium-blue flatters more men’s faces; at least half a dozen or so dress shirts in one’s wardrobe should ideally be in some shade of solid blue or in a predominantly blue pattern; the trick is to find the deepest shade of blue that highlights the face without distraction
  • A mane with strong contrast in his complexion can enjoy a larger range of colors; fair-haired men with muted complexions can balance their lighter tones with soft-hued blues such as end-on-ends, oxfords and mini-checks whose weaves use white to reduce the blue’s intensity
  • Gold is frequently used as an accent color in many patterned neckties, so if a man has flecks of blond hair, echoing it under the chin is an opportune way to illuminate the face
  • While the matching french cuff is always acceptable, a button cuff has no place at the end of a sleeve attached to a shirt with a contrasting white collar
  • To fully exploit the french cuff link’s decorative potential, each side shouldbear a design and connect with a chain or link
  • Sooner or later, every well-dressed man should acquire an antique set of studs

The necktie and neckwear

  • The necktie’s correct width has always been determined by the jacket’s lapel (not what is fashionable at the time!)
  • The knot should be compressed so that it dovetails high up into the inverted “V” of the collar’s converging sides; a dimple or inverted pleat should emerge from the middle of the knot
  • Because of the move toward business casual in the professional world, the appearance of a necktie will more than ever signify the wearer’s desire to embrace a dressier, more authoritative image
  • A necktie should be agreeable to the touch, silk is undeniably the fabric of choice
  • Some standard woven types: Macclesfield, Spitalsfield, regimental stripes (proper direction is high left to low right; these ties have a slimming effect), plaid, solid (a more sophisticated look), wool (best for cool-weather); should a man want to acquire a necktie with a reasonable probability of aesthetic longevity, the woven design tie would generally be the safer bet
  • Polka-dot ties enliven all kinds of menswear ensembles but they are on particularly friendly terms with stripes
  • Bow ties can be worn on both formal and informal occassions, day or evening, and are correct with either single- or double-breasted jackets; its width should not extend beyond the outer edge of a man’s face and definitely not beyond the breadth of his collar; the hand-tied bow’s moody loops and unpredictable swirls give you that subtle insouciance; bow ties work best for the over-fifty set
  • The manner in which a tie is knotted offers the only true means of imposing one’s individual stamp on it; over time this male rite should evolve into another manifestation of one’s personal style
  • The widest point just above the tip of the tie should coincide with the belt’s upper edge
  • The tie should arch out from the collar, the dimple extending downward, projecting a subliminal authority

The pocket handkerchief/square

  • No man can consider himself an elegante without knowing how to rig out the simple white pocket square; angle the hank outward toward the shoulder, with its point irregularly arranged
  • Without some form of pocket rigging, an outside breast pocket appears superfluous and the outfit incomplete; it is the quickest and least expensive way to lend a mediocre suit a more expensive look
  • Its deportment should appear unstudied, effortlessly contributing to the overall aplomb
  • Overtly coordinating, or worse, matching a tie and handkerchief is not only a sign of an unsure dresser but also a sure way to lead the eye across the body and away from the face; solid handkerchief with patterned necktie, and should not be of the same color as the ground shade of the necktie
  • A tie’s silken luster calls for a matte pocket square like linen or cotton; wool or linen neckties with a dulled surface requires the upbeat luster of a silk foulard
  • A solid pocket hank should echo a color in the necktie, shirt or jacket

The dress belt

  • The choice should be dictated first by the shoe’s color and then by the hue of the jacket and trouser
  • Should be an equal or darker shade than the suit; darker imparts a dressier look, the more contrast between the belt and trouser, the sportier the look
  • Long enough to finish through the trouser’s first belt loop without running past the second
  • Buckles should be simple in design, in either silver or gold, depending on the color of accompanying jewelry

The tailored ankle

  • The trouser bottom should cover about two-thirds of the shoe
  • The round or slightly-square-toed oxford, or blucher lace-up with a welt-constructed sole, ranks as the ideally proportioned shoe for suit-driven attire

Hosiery

  • By reiteraing at floor level a color or pattern found near the face, the silhouette’s upper and lower zones begin to network with each other
  • Should match the trouser rather than the shoe; when shoe and hosiery are perceived as a unit, they separate themselves from the trouser which is not desirable
  • Black hose should be avoided any time one is not engaged in formal wear or swathed head to toe in black
  • The more formal the ensemble, the finer or more sheer the hose
  • The bulkier the outfit, the more one must step up the sock’s thickness
  • After the necktie, the hose’s most frequent stage partner is none other than the dress shirt

Footwear

  • A well-made and properly looked after pair of leather dress shoes can provide several decades of fine service; uppers should be made from skins no more than twelve weeks old and have a fine grain that takes a high polish; the sole can be removed and repaired repeatedly with minimal damage to the shoe’s upper; it’s impossible to spend too much on a finely crafted, perfectly fitting pair of shoes which will improve with age
  • Top quality brown leather shoes invest all fabrices with an intangible richness
  • The plain cap-toe oxford lace-up is the basic shoe style for smart, though not strictly formal, town wear
  • The wing tip takes its name from its toe cap shaped like the spread wings of a bird, pointed in the center and eztending toward the rear with heavily perforated side seams
  • The blucher is a step down in dressiness from the oxford
  • The monk-strp shoe has intermediate formality, registering somewhere between that of a slip-on and a lace-up shoe
  • The brown suede shoe happens to be suitable for all seasons
  • Crocodile leather in a dark honey tone affords versatility
  • The Weejun-style slip-on became the year-round workhorse of many men’s casual shoe wardrobe

Suit colors and patterns

  • When it comes to starter suits, the dark grey, two-piece charcoal gets the professional’s nod; it has the highest color and function versatility
  • More enriching than stark black, more ceremonial than charcoal, whether in twill or plain weave, 12 ounces or 8, a navy suit shows off the average man to best advantage
  • Of all men’s suitings, none has ever matched the glamour and popularity of the striped suit; it’s innate appeal derives from the vertical lines which lengthen the wearer
  • The window-pane is the anti-prole
  • The classic gray flannel suit remains a paragon of cool-weather stylishness
  • The brown suit provides special charisma to the chocolate-, blond-, red-, or sandy-haired man who are continually encouraged to consider brown as one of their staple wardrobe themes; the dark brown worsted jacket and the medium-blue dress shirt attract considerable acclaim
  • In medium blue, brown or gray and white oxford stripe, single- or double-breasted, worn with a necktie or polo shirt, the seersucker suit offers a heat-beater stylishness transcending both low and high fashion
  • For business casual, the easiest way to pull together unmatched separates is through the medium of color; when harmonizing three different seperates keep two pieces in the same color family
  • Accessorizing a suit in a monotone palette imbues it with instant sleekness and modernity
  • Psychologists consider black and white the most authoritarian of all color combinations
  • Darker trousers will make sport jackets appear dressier
  • For business casual, the buttons of most sport jackets often come in a complementary contrast shade, so it’s a fair guess that trousers chosen in the same tonality will match the jacket pretty well; if the jacket and trouser are in a similar hue, the shirt can be in a contrast or tonal relationship to both, dictated by complexion and personal taste; if the shirt is multi-colored, one of its colors should echo that of the jacket and trouser

Pattern matching

  • When combining two patterns of the same design, the size of each should be as different from the other as possible
  • When matching two checks, specifically, there should be a healthy dose of contrast between the scale of each player
  • When coordinating two different patterns, such as a striped suit and a check dress shirt, or a plaid jacket and a figured necktie, the patterns should be kept close in size; when in doubt, choose a larger rather than a smaller design; placing two smaller patterns near each other, whether similar or not, will wreak havoc on the eye of the beholder
  • When mixing three patterns where two are the same, separating the two like designs in size while selecting an unlike pattern that is visually compatible with both is the trick; the odd one out should take its cue from the more prominent of the similar partners; for neckties, the open-ground, large-spaced motif affords the greatest possibilities for textural harmony
  • When mixing three patterns of the same design, graduating in size from small out to large, beginning closest to the body and going up as clothing layers outward (ie, shirt smallest, jacket medium, tie or pocket square largest)
  • When mixing four patterns, the more imagination and taste one puts into his appearance, the more subtle the results should be

Conclusion

This book is an incredible resource and fun to read, to boot. It feels like having a conversation with a thoughtful but playful personal clotheshorse. The number of synonyms for different pieces of menswear and style are unbelievable and luckily there is a thorough glossary at the back of the book. There’s so much more here than what I chose to make notes about.

4/5

Notes – Stanford Graduate School of Business Search Fund Primer (#searchfund, #business, #investing)

Notes – Stanford Graduate School of Business Search Fund Primer (#searchfund, #business, #investing)

Notes on “A Primer On Search Funds” produced by the Stanford Graduate School of Business

“The Search Fund”

  • Greater than 20% of search funds have not acquired a company
  • Stages of the Search Fund model:
  • Raise initial capital (2-6mos)
  • Search for acquisition (1-30mos)
  • Raise acquisition capital and close transaction (6mos)
  • Operation and value creation (4-7+ years)
  • Exit (6mos)
  • SFs target industries not subject to rapid tech change, easy to understand, fragmented geographic or product markets, growing
  • Highest quality deals are found outside broker network/open market due to lack of auction dynamics
  • Research shows that partnerships are more likely to complete an acquisition and have a successful outcome than solo searchers (71% yielded positive return, 15 of top 20 performing funds were partnerships)
  • Principals budget a salary of $80,000-120,000 per year w/ median amount raised per principal $300,000~
  • Majority of the economic benefit of SF comes through principal’s earned equity; entrepreneur/partners receive 15-30% equity stake in acquired company in three tranches
  • Investors typically receive preference over the SFer, ensuring investment is repaid, with return attached, before SFer receives equity value
  • Individual IRR from 2003-2011 median was not meaningful, heavily skewed toward 75th percentile where median was 26% in 2011; 57% of individual IRRs were not meaningful in 2011; the median fund destroyed capital in 2009 (0.5x) and 2011 (0.8x); 58% in 2011 broke even or lost money
  • Half of the funds that represent a total or partial loss were funds that did not acquire a company; biggest risk is in not acquiring a company at all
  • Median acquisition multiples: 1.1x revenues; 5.1x EBITDA
  • Median deal size, $8.5M

“Raising a Fund”

  • Search fund capital should come from investors with the ability and willingness to participate in the acquisition round of capital raising

“Search Fund Economics”

  • Search fund investors often participate at a stepped up rate of 150% of original investment in acquired company securities

“Setting Criteria and Evaluating Industries”

  • Desirable characteristics for a target industry: fragmented, growing, sizable in terms of revenues and number of companies, straightforward operations, early in industry lifecycle, high number of companies in target size range
  • Desirable characteristics for a target company: healthy and sustainable profit margins (>15% EBIT), competitive advantage, recurring revenue model, history of cash flow generation, motivated seller for non-business reasons, fits financial criteria ($10-30M in revs, >$1.5M EBITDA), multiple avenues for growth, solid middle management, available financing, reasonable valuation, realistic liquidity options in 3-6 years
  • Key challenge is “know when to take the train” lest a SF never leaves the station waiting for the perfect opportunity
  • Ideally, seller is ready to transition out of the business for retirement or personal circumstances or has something else they’d like to do professionally
  • Experience shows it is better to pay full price for a good company than a “bargain” for a bad one
  • Idea generation: SIC and NAICS codes, Yahoo! Finance, Thomson Financial industry listings, Inc. 5000 companies, public stock OTC and NASDAQ lists and even the Yellow Pages; generate a list of 75 potential industries to start
  • Target industries buoyed by a mega-trend
  • Can also target an industry in which the SFer has worked and possesses an established knowledge base and network
  • Some focus on 2-3 “super priority” industry criteria (eg, recurring revenues, ability to scale, min # of potential targets, etc.)
  • Objective is to pare down the industry target list to 5-10 most promising
  • Basic industry analysis (Porter’s five forces, etc.) is then used to narrow from 10 to 3; SFers use public equity research and annual reports for market size, growth, margin benchmarks; also Capital IQ, Hoover’s, Dun & Bradstreet and One Source
  • Industry insiders (business owners, trade association members, sales or business development professionals) and industry trade associations or affiliated ibanks and advisory firms are primary methods of research and often have general industry research or white papers available
  • Next step is to create a thesis to codify accumulated knowledge and compare opportunities across common metric set in order to make go/no-go decision
  • In order to become an industry insider, SFers typically attend tradeshows, meet with business owners, interview customers and suppliers and develop “River Guides”

“The Search”

  • Median # of months spent searching, 19
  • 54% spend less than 20 months searching, 25% spend 21-30 months, 21% spend 30+ months
  • Track acquisition targets with CRM software such as Salesforce, Zoho, Sugar CRM
  • Bring up financial criteria and valuation ranges as early as possible when speaking to potential acquisition targets to save everyone time
  • A company that is too large or too small as an acquisition target may still be worth talking to for information
  • You must immediately sound useful, credible or relevant to the owner; deep industry analysis should already have been performed at this stage
  • Tradeshows can be a critical source of dealflow
  • If a particular owner is not willing to sell, ask if he knows others who are
  • “River Guides” are typically compensated with a deal success fee, usually .5-1% of total deal size
  • Boutique investment banks, accounting firms and legal practices specializing in the industry in question are also a good source of deals
  • The business broker community itself is extremely large and fragmented; could be a good rollup target?
  • Often, brokered deals are only shown if a private equity investor with committed capital has already passed on the deal, presenting an adverse selection problem
  • Involve your financing sources (such as lenders and investors) early in the deal process to ensure their commitment and familiarity

“Evaluating Target Businesses”

  • Principles of time management: clarify goals of each stage of evaluation and structure work to meet those goals; recognize that perfect information is an unrealistic goal; keep a list of prioritized items impacting the go/no-go decision
  • Stages: first pass, valuation/LOI, comprehensive due diligence
  • It is in the best interest of the SFer to tackle core business issues personally during due diligence as it is the best way to learn the details of the business being taken over
  • Adding back the expenses of a failed product launch rewards the seller for a bad business decision; adding back growth expenses gives the seller the double benefit of capturing the growth without reflecting its true cost
  • Due diligence may also uncover deductions to EBITDA or unrealized expenses that reduce the “normalized” level of earnings (undermarket rents, inadequate insurance coverage, costs to upgrade existing systems, etc.)

“Transitioning Ownership and Management”

  • Create a detailed “Transition Services Agreement” with the seller, a legal contract where specific roles, responsibilities, defined time commitments and compensation are agreed prior to the transaction close
  • The first 100 days should be dedicated to learning the business
  • Businesses consist of people, and people need communication; great leaders are always great communicators
  • “Don’t listen to complaints about your predecessor, this can lead to a swamp and you don’t want to be mired there.”
  • The goal is to learn, not to make immediate changes
  • Outwork everyone; be the first person in and the last to leave
  • Many SFers insert themselves into the cash management process during the transition period by reviewing daily sales, invoices and receipts and signing every check/payment made by the company
  • The company’s board should be a mix of deep operational experience, specific industry or business model experience and financial expertise
  • The seeds of destruction for new senior leaders are often sown in the first 100 days
Review – The Panic Of 1819 (#history, #economics, #banking)

Review – The Panic Of 1819 (#history, #economics, #banking)

The Panic of 1819: Reactions and Policies

by Murray Rothbard, published 1962, 2007

Please note, this book is also available as a free PDF on the Mises.org website, which is how I read it [PDF]

Introduction

Rothbard’s “The Panic of 1819” is a lot of things, but the thing it is most is yet another reminder of the old dictum “Plus ca change, plus c’est la meme chose”. Contained in this approximately 250-page reporting of the causes, consequences and social responses to the Panic of 1819 are the same behaviors and political programs that could be found in today’s headlines about corrupt Chinese banking practices, Chicago-school monetarism and Keynesian pump priming, including early recognition that attempts to kickstart “idle resources” logically implies a totalitarian command economy where the government manages all resources (and all people) at all times.

It’s all here, and more. There is nothing new under the sun.

How the business cycle gets started

Early on page 16 the reader is entreated to an excerpt from private correspondence between Pennsylvania politician Condy Raguet and European economist Richard Cantillon in which Raguet tries to clear Cantillon’s confusion as to how fractional reserve banking manages to operate to the point of a catastrophic bubble instead of wobbling and crashing under its own confusing weight:

You state in your letter that you find it difficult to comprehend, why person who had a right to demand coin from the Banks in payment of their notes, so long forebore to exercise it. This no doubt appears paradoxical to one who resides in a country where an act of parliament was necessary to protect a bank, but the difficulty is easily solved. The whole of our population are either stockholders of banks or in debt to them. It is not the interest of the first to press the banks and the rest are afraid. This is the whole secret. An independent man, who was neither a stockholder or debtor, who would have ventured to compel the banks to do justice, would have been persecuted as an enemy of society.

Today’s full reserve Austrian economists, caught between clueless and complacent bank executives, a massively indebted “ownership society” public, Keynesian and monetarist adherents and “free banking” friends who are anything but, simply has no place to turn for safety. He defaults to “enemy of society” status in the ensuing confusion though he seeks only to point out the folly of these fractional reserve systems which inevitably injure all in tying their fates by one string.

The Panic of 1819 followed the War of 1812. During the war, imports and exports came to a halt due to the sea being a battleground and many products which would’ve been imported were kept in their home (overseas) markets to furnish the war effort. As a result, the young States United of America saw the development and growth of domestic manufactures and exportable industries. However, when the war ended and international trade resumed, many domestic manufacturers found they weren’t actually competitive facing world markets (this makes sense because if they had been they probably would’ve developed before the war, not during it in a period of “isolationism”). This created a nascent strain of “protectionist” thinking and monied interests who saw a benefit to adding tariffs on imported products.

The end of the war and the resumption of trade saw a banking boom (fractional reserve) which finally ended in 1819 with the panic. From about 1819-1823 the country was in and out of what could be termed depressed economic conditions. In many ways the early country’s experience mirrored the present day experience from 2008-2009 onward, especially the contentious economic and political debates about how to respond.

Something I found fascinating was what happened to various “macro” economic metrics during the Panic (what we’d call a crash):

The credit contraction also caused public land sales to drop sharply, falling from $13.6 million in 1818 to $1.7 million in 1820, and to $1.3 million in 1821. Added to a quickened general desire for a cash position, it also led to high interest rates and common complaint about the scarcity of loanable funds.

That last bit is especially fascinating to me. I don’t know what the state of federal funded debt was in this time period as Rothbard doesn’t really go into the concept or existence of a “risk free rate” but it is interesting to see “deflation” leading to HIGHER rather than LOWER interest rates. In today’s topsy turvy world, low rates are supposed to be the result of the flight to safety during a depression while high rates are supposed to herald an economic recovery. However, it seems it was just the opposite in 1819.

I found myself charmed by the ability of so many in 1819 to see what was the cause of the bubble and the collapse, even politicians. For example, in an address supporting a “relief bill”, Illinois Senator Ninian Edwards observed:

The debtors, like the rest of the country, had been infatuated by the short-lived, “artificial and fictitious prosperity.” They thought that the prosperity would be permanent. Lured by the cheap money of the banks, people were tempted to engage in a “multitude of the wildest projects and most visionary speculations,” as in the case of the Mississippi and South Sea bubbles of previous centuries.

I enjoyed learning that even medical analogies to describe the cause and effect of monetary expansion and collapse were popular in 1819. One government committee, the Hopkinson Committee, arguing against “debt relief” legislation, noted:

palliatives which may suspend the pain for a season, but do not remove the disease, are not restoratives of health; it is worse than useless to lessen the present pressure by means which will finally plunge us deeper into distress.

I thought that pain pill and hangover analogies were something recent and peculiar to adherents of the Austrian school but critics knew of these rhetorical flourishes even two hundred years ago, at least!

On the topic of “flight to safety”, I did make note of one paragraph which seemed to suggest that while interest rates on bank debt and other commercial lending may have risen, interest rates fell dramatically on tax-backed (ie, “guaranteed”) government issues, for example:

“A Pennsylvanian” pointed to United States and City of Philadelphia 6 percent bonds being currently at 3 percent about par– indicating a great deal of idle capital waiting for return of public confidence before being applied to the relief of commerce and manufacturing. Thus, in the process of criticizing debtors’ relief legislation, the “Pennsylvanian” was led beyond a general reference to the importance “confidence” to an unusually extensive analysis of the problems of investment, idle capital, and the rate of interest.

This theme of “idle capital” was remarked on more than once in the text and by various parties with differing viewpoints. This is a particular fetish of Keynesians and monetarists who cite the existence of “idle capital” as an excuse for government to raise public spending to “put it to work.” It is fascinating to see these early Americans predicted Keynesianism by almost 150 years!

Another thing I found remarkable was the prevalence of either state-owned banks (federal, with the Bank of the United States, or individual states) or strong political pushes to establish these banks in response to the ensuing depression and the stress this created on the banking system. In other words, nationalization of the banking industry as a political prop to collapsing FRB institutions is nothing new:

The Alabama experience highlights the two basic measures for monetary expansion advocated or effected in the states: (1) measures to bolster the acceptance of private bank notes, where the banks had suspended specie payment and where the notes were tending to depreciate; and (2) creation of state-owned banks to issue inconvertible paper notes on a large scale. Of course, the very fact of permitting non-specie paying banks to continue in operation, was a tremendous aid to the banks.

People refer to the United States economy and monetary system at various points in time being “free market”, and while it’s true that tax rates and business regulations were generally less cumbersome near the nation’s founding than today, it is also true that there has been a virulent strain(s) of interventionist thinking and policy-making from very early on. It wasn’t until 1971 with Richard Nixon’s closing of the gold window that the US currency finally went fully inconvertible, and yet already in 1820 (if not earlier), people were calling for inconvertible paper currencies issued by state-owned banks. Some free market!

The whole episode seems to beg a question that, sadly, Rothbard did not explicitly address or explore, namely, Why did banks need to be chartered by the government in the first place? Although there were calls during the response to the economic crisis for various forms of occupational licensing and business regulation (aimed at stemming the flood of superior imports damaging local industries), the reality is that any other business but banking, such as butchering, baking, sawmilling, leather tanning, import/export, etc., did not require special permission granted by a session of the local legislature, state or federal. Why was banking different, requiring an act of congress to get the enterprise going?

Besides the fact that many such banks seemed to be public-private partnerships which included state “capital” injected into them, the only answer I have managed to come up with so far that makes any sense is that the banks were all set up on a fractional reserve basis, and a blessing by the government served to either 1.) grant legitimacy to an illegitimate institution or 2.) create the pretense and wishful thinking of providing some kind of “legal oversight” to what everyone at the outset understood to be an essentially criminal organization operating with a special legal privilege or 3.) both.

Because every bank had to be chartered, when the FRB system inevitably hit a bump in the road as it did in 1819 and many banks wished to suspend redeemability of their bank notes to stem outflows of specie, their status as creatures of the public legal mechanism meant they could run to the legislature for permission to violate their own contracts– and they almost always got the permission granted. Now, for example, if angry pitchfork-wielding townsfolk show up to break into the vault, take their gold and lynch the bankers, the Sheriff might step in with his posse to make sure everyone remembered their role.

Keynesians and monetarists and Chinese bankers

Continuing the theme of “everything new is old”, I was struck by commentary from a Pennsylvanian congressman named Henry Jarrett suggesting that government relief money might serve to prime the pump of the economy:

An inconsiderable sum of money, for which the most ample security could be given, being loaned to a single individual in a neighborhood, by passing in quick succession, would pay perhaps a hundred debts.

Kind of sounds like George W. Bush urging Americans to go shopping after 9/11, in order to get confidence in the economy back. It’s a crass Keynesian tactic inspired by a confused understanding of the relationship between production, consumption and the role of money in the economy.

It was also interesting to see how many people back then could sense there was a problem with the way the banking system operated, but were confused into thinking banking in and of itself was illegitimate, rather than simply the practice of issuing a greater supply of banknotes than the amount of specie held in reserve. Consider a campaign circular for a candidate for Congress from mid-Tennessee, who said:

banking in all its forms, in every disguise is a rank fraud upon the laboring and industrious part of society; it is in truth a scheme, whereby in a silent and secret manner, to make idleness productive and filch from industry, the hard produce of its earnings

If you substitute “banking in all its forms” with “fractional reserve banking”, you’ve got a pretty accurate description of the nature of the problem.

It’s also worth quoting at length the argument of “An Anti-Bullionist”, who thought that the economic crisis of 1819 was caused by specie money specifically, rather than abuse of specie money via fractional reserves. In its place he sought to create a fully inconvertible paper currency issued by the government which would of course be “well regulated” and serve to protect the economy from the inevitable deflationary death spiral of the specie system he believed he was witnessing. Shades of later monetarist thinking abound:

His goal was stability in the value of money; he pointed out that specie currency was subject to fluctuation, just as was paper. Moreover, fluctuations in the value of specie could not be regulated; they were dependent on export, real wages, product of mines, and world demand. An inconvertible paper, however, could be efficiently regulated by the government to maintain its uniformity. “Anti-Bullionist” proceeded to argue that the value of money should be constant and provide a stable standard for contracts. It is questionable, however, how much he wished to avoid excessive issue, since he also specifically called a depreciating currency a stimulus to industry, while identifying an appreciating currency with scarcity of money and stagnation of industry. One of the particularly desired effects of an increased money supply was to lower the rate of interest, estimated by the writer as currently 10 percent. A lowering would greatly increase wealth and prosperity. If his plan were not adopted, the writer could only see a future of ever-greater contractions by the banking system and ever-deeper distress.

Even chartalists will be happy to see that early proponents of the “American System” of nationalist public-private industry were representing their views in the debates of the early 1820s, for example:

Law pointed to the great amount of internal improvements that could be effected with the new money. He decried the slow process of accumulating money for investment out of profits. After all, the benefit was derived simply from the money, so what difference would the origin of the money make? And it would be easy for the government to provide the money, because the government “gives internal exchangeable value to anything it prefers.”

Why even have a private industry? Or money, for that matter?

Luckily, advocates of laissez-faire existed in this time period, too, and they were not silent. Commenting on one proposal to deal with “idle capital” by Matthew Carey, the “Friends of Natural Rights” wrote:

The people of the United States being in a very unenlightened condition, very indolent and much disposed to waste their labor and their capital… the welfare of the community requires that all goods, wares, mechandise and estates… should be granted to the government in fee simple, forever… and should be placed under the management of the Board of Trustees, to be styled the Patrons of Industry. The said Board should thereupon guarantee to the people of the United States that thenceforth neither the capital nor labor of this nation should remain for a moment idle.

[…]

It is a vulgar notion that the property which a citizen possesses, actually belongs to him; for he is a mere tenant, laborer or agent of the government, to whom all the property in the nation legitimately belongs. The government may therefore manage this property according to its own fancy, and shift capitalists and laborers from one employment to another.

Finally, I don’t seem to have made a good note of the specific passage that caught my attention in this regard but I chuckled when reading the description of the operations of the average bank before collapse. These bankers would set up a new bank and pay only a fraction of capital with specie, the rest would be constituted by additional promissory notes from other banking institutions (which were themselves fractional). The bankers would pay themselves dividends, in specie, while the bank operated, and issue themselves and their friends enormous loans with which they’d purchase real goods and services, all while the real specie capital of their bank depleted. When crisis hit and they could not redeem their depositors’ money, they’d get legal permission to suspend redemption, ask for infusions of new capital from state authorities and/or set up a brand new bank whose purpose was to steady the previous institution. Ultimately, the bank would collapse and this too would work in their interest because they’d already hauled off the specie via dividends to themselves, and many of them were debtors of the bank who now had loans due in a worthless currency that was easy to obtain.

It reminded me a lot of the present Chinese state capitalist model.

Conclusion

“The Panic of 1819” is not light reading and for some readers it may not even be interesting reading. It depends a lot on how fascinating you find in depth examinations of “minor” historical economic events.

But that doesn’t mean it isn’t surprising, well-written (for all the facts and data, Rothbard still manages to weave together a narrative that helps the reader appreciate the nuances of the various factions and viewpoints of the time) and at times, depressingly relevant. People who care about economic and financial history and unique, formative episodes in the early history of this country, will find a lot of insights and curiosities in this work. I strongly recommend it.

4/5

Review – Good To Great (#business, #investing, #review)

Review – Good To Great (#business, #investing, #review)

Good To Great: Why some companies make the leap and others don’t

by Jim Collins, published 2001

The G2G Model

“Good To Great” seeks to answer the question, “Why do some good companies become great companies in terms of their market-beating stock performance, while competitors stagnate or decline?” After a deep dive into varied data sources with a team of tens of university researchers, Collins and his team arrived at an answer:

  1. Level 5 Leadership
  2. First Who… Then What
  3. Confront The Brutal Facts (Yet Never Lose Faith)
  4. The Hedgehog Concept (Simplicity Within The Three Circles)
  5. A Culture Of Discipline
  6. Technology Accelerators

The first two items capture the importance of “disciplined people”, the second two items refer to “disciplined thought” and the final pair embodies “disciplined action”. The concepts are further categorized, with the first three components representing the “build up”, the ducks that must be gotten into a row before the second category holding the last three components, “breakthrough”, can take place. The entire package is wrapped up in the physical metaphor of the “flywheel”, something an organization pushes on and pushes on until suddenly it rolls forward and gains momentum on its own.

This book found its way onto my radar several times so I finally decided to read it. I’d heard it mentioned as a good business book in many places but first took the idea of reading it seriously when I saw Geoff Gannon mention it as part of an essential “Value Investing 101” reading list. I didn’t actually follow through on the initial impulse until I took a “leadership science” course recently in which this book was emphasized as worth covering.

I found G2G to be almost exactly what I expected– a rather breathless, New Age-y, pseudo-philosophical and kinda-scientific handbook to basic principles of organizational management and business success.  The recommendations contained within range from the seemingly reasonable to the somewhat suspect and the author and his research team take great pains to make the case that they have built their findings on an empirical foundation but I found the “We had no theories or preconceived notions, we just looked at what the numbers said” reasoning scary. This is actually the opposite of science, you’re supposed to have some theories and then look at whether the data confirms or denies them. Data by itself can’t tell you anything and deriving theory from data patterns is the essence of fallacious pattern-fitting.

Those caveats out of the way, the book is still hard to argue with. Why would an egotistical maniac for a leader be a good thing in anything but a tyrannical political regime, for example? How would having “the wrong people on the bus” be a benefit to an organization? What would be the value in having an undisciplined culture of people who refuse to see reality for what it is?

What I found most interesting about the book is the way in which all the principles laid out essentially tend to work toward the common goal of creating a controlled decision-making structure for a business organization to protect it from the undue influence of big egos and wandering identities alike. In other words, the principles primarily address the psychological risks of business organizations connected to cult-like dependency on great leaders, tendency toward self-delusional thinking and the urge to try everything or take the easy way out rather than focus on obvious strengths. This approach has many corollaries to the value investing framework of Benjamin Graham who ultimately saw investor psychology as the biggest obstacle to investor performance.

I don’t have the time or interest to confirm this hypothesis but I did wonder how many of the market-beating performances cataloged were due primarily to financial leverage used by the organization in question, above and beyond the positive effects of their organizational structure.

A science is possible in all realms of human inquiry into the state of nature. Man and his business organizations are a part of nature and thus they fall under the rubric of potential scientific inquiry. I don’t think we’re there yet with most of what passes for business “research” and management or organizational science, but here and there the truth peeks out. “Good To Great” probably offers some clues but it’s hard to know precisely what is the wheat and what is the chaff here. Clearly if you inverted all of the recommendations of the book and tried to operate a business that way you’d meet your demise rather quickly, but that is not the same thing as saying that the recommendations as stated will lead in the other direction to greatness, or that they necessarily explain the above-average market return of these public companies.

I took a lot of notes in the margin and highlighted things that “sounded good” to me but on revisiting them I am not sure how many are as truly useful as they first seemed when I read them. I think the biggest takeaway I had from the book was the importance of questioning everything, not only as a philosophical notion but also as a practical business tool for identifying problems AND solutions.

3/5

Entrepreneurial Opportunity Cost (#socialism, #bureaucracy, #freemarket)

Entrepreneurial Opportunity Cost (#socialism, #bureaucracy, #freemarket)

I am wondering out loud here: when people attempt to do some kind of modeling of the various opportunity costs of having government provide X, versus having “the market” provide X, do they factor in the opportunity cost of lost entrepreneurial progress inherent in bureaucratic provisioning?

For example, if someone was arguing that the government should control automobile production, is there any calculus attempted that examines the present value of foregone future improvements in automobile production and design that will inherently be included in bureaucratic provisioning?

A further example– the roads and highways we drive on, which have been provisioned by government for decades, haven’t changed all that much. But cars have made huge technological leaps in terms of how they’re designed and built. Cars have entrepreneurs behind them, roads and highways have bureaucrats behind them.

I’m not sure I am articulating my inquiry as coherently as I might like to but there it is nonetheless!