Wednesday, May 24, 2006


Direct Deposit Considered Harmful Part 2

For just a moment, I want to return to the curiosity mentioned last time: a manager goes out of his way to hand-deliver paycheck envelopes to the employees. Because the money has already been direct deposited, there are no paychecks in the envelopes. Hierarchy seems absent while the employee accepts the gift of the hardcopy receipt of the direct deposit.

Managers and employees are not the only ones who participate in this kind of suspension of hierarchy. Chimpanzees do this when they share a feast. Food sharing encourages reciprocal exchanges with unrelated junior chimps and the action testifies to the moral character of the sharer. Status is not achieved by a position on an org chart. A direct deposit removes an opportunity for this exercise. It seems to squander an opportunity to acknowledge a reciprocal relationship between a boss and an employee.

Think of a person who gave you a gift when you were growing up. Do you still have an unusually strong fondness for that person? In elementary school, my friends and I mailed letters to Gale Sayers, Brooks Robinson, Johnny Bench and Magic Johnson. There was nothing more exciting than getting an autographed photo back in the mail. I'll never forget how we thought the players who were charging money for autographs were the biggest jerks. All these years later, those who sent us autographs will always be my favorite.

Here's a few observations:
  1. Sharing, with one type of exception, does not exist down a hierarchy

    For instance, an employee generally does not think to ask his boss for a ride to the airport. However, unused perishable items are shared: tickets to a sporting event, obsolete computer equipment, the deli tray left over from the managers' meeting. In a similar way, airlines allow customers to make use of unused seats by earning frequent flyer miles. All of these acts are perks that tend to build goodwill and loyalty and it costs the sharer nothing. It seems odd that, after all these years, my cell phone company has never offered to reward me with more minutes. They must squander billions of unused minutes. The Creative Commons initiative seems to address this blindspot in copyright laws which assume that every work is like Mickey Mouse and has an infinite commercial life. If managers played like the phone companies and copyright lobbyists, employees would never get to snack off the deli tray.

  2. Payments to subordinates in a hierarchy are opaque and for undefined work

    When payments are made outside of a hierarchy, they are often transparent. For instance, businesses advertise their prices on the market, anyone can find out how much a house sold for, etc. However, when it comes to salaries, this information is generally hidden. Furthermore, outside of a hierarchy, it is clear to the supplier or seller what he is providing. Within a hierarchy, an employee has a job description but that can change at any time.
If hierarchies are not conducive to sharing, where does sharing happen?

Gift exchanges happen within a community. Communities exist when there are gift exchanges. The Creative Commons is a community. So is the scientific community, the open source community and even bloggers. As Bernard Lietaer notes in The Future of Money, communities are destroyed when their gift exchanges are replaced by nonreciprocal currencies, like national currencies. An interesting example is that Japan continues a special tradition of gift exchange. Lietaer:
Gifts are constantly exchanged not only within the extended family, but between co-workers, esteemed individuals, social and work superiors and elders. It takes often the form of sharing one's talents in art, calligraphy, culture or other social graces...
A quick look at the Statistical Abstract shows that Japan stands alone among industrialized countries in measures like percentage of children raised by two parents, etc.

Turn back the clock 30,000 years ago. When woolly mammoths were hunted with dart throwers, there was too much meat for the hunter(s) to eat, so the mammoth was shared. This was a risky business and it makes sense to wait it out and let somebody else do the work. However, the status acquired due to the success of the kill and the sharing with others seems to be the incentive. An interesting idea is that in a high risk venture such as this, acquiring status is a good hedge when your hunting party doesn't get anything.

Matt Ridley briefly notes in The Origins of Virtue: Human Instincts and the Evolution of Cooperation that Glynn Isaac proposed that food sharing occupied a central place in human evolution.

It's getting late, so I'll have to finish up later. This is leading somewhere!

Sunday, May 21, 2006


Direct Deposit Considered Harmful Part 1: Microcosm

My first full-time job out of school was at a large company. A really large company. At such a large company, you show up for your first day orientation on a Monday morning with 30 or 40 other new hires and everyone learns how to set up direct deposit.

However, my boss Jerry had a habit that I didn't fully understand and appreciate until this week. Usually employees with direct deposit pick up their paycheck envelope in their office mailbox but, of course, it is just a receipt. That's the easy way. It's a lot more efficient to have an assistant do this than to waste a manager's time with delivering these apparently useless envelopes to employees. Jerry didn't see it that way. Each payday, he hand-delivered the envelopes to the team. This important ritual ignores for a moment that we work in this huge hierarchy and Jerry takes the time to openly acknowledge the work associated with the payment. It's like when a shopkeeper receives payment from a customer. In this case, the shopkeeper knows he's helping the customer and there is transparency in the exchange. The shopkeeper is not motivated by money and a boss but by the relationship with his customer.

In Hoover's Vision, Gary Hoover points out:
People need to know that their work matters. Kinko's founder Paul Orfalea continually pointed out to his copy-shop employees that they were helping people announce birthday parties, spread the word on neighborhood festivals, or find their lost dogs. Herb Kelleher reminds the people of Southwest that they are helping people get to graduations, to weddings, to be at the side of loved ones who are sick.
The problem with corporate management was explained by Peter Drucker. He said that salaries "obey the internal logic of the hierarchical structure." Unlike the money earned by the shopkeeper, salaries do not reflect the work that was actually done (merit) or the market. This may be an obvious point.

Next time, we'll deconstruct what's really going on and we'll see what's happening each time a mega-store displaces local businesses. An unholy web of opaque transactions will replace the transparency the community once enjoyed.

Thursday, May 18, 2006


Tony Blair's Big News & U.S. New Deal

An acknowledgement about oil by Tony Blair in his speech to the CBI:
If we don't take these long-term decisions now we will be committing a serious dereliction of our duty to the future of this country.
Meanwhile in the U.S., the latest Homeland Security Corporate Welfare project to divert public billions to private contractors is to build a wall. Gold is at $700/ounce. Media keeps a straight face.

The wall and all of the associated posturing is a farce. Heavy fines against companies who hire illegals and amnesty for illegals who turn in employers would actually do what the wall will not and would pay for itself.

Wednesday, May 10, 2006


Truthiness, even unto its innermost parts

The motto of Brandeis University has been "Truth, even unto its innermost parts." Truth is a scarce resource these days. The school pulled an art exhibit of drawings by Palestinian 12 year olds because they received complaints. Of course, this whole problem could have been avoided if they outlawed crayons.

Tuesday, May 09, 2006


Astrud Gilberto - The Girl From Ipanema [1964]

Wednesday, May 03, 2006


Email Spreading Resentment in America

History has shown over and over again, that when confronted in public with misdeeds, the most successful strategy a criminal can employ is to point a finger at someone else.

I've been sitting on this post for about 3 weeks. It was then when my jaw dropped at a few chain letter emails that were forwarded to me. Three weeks ago, many American citizens all the sudden found it necessary to voice their resentment of immigrants' influence on the economy. I'm still getting this electronic waste in my email, but strangely, I'm not getting any email about the looting of the U.S. treasury.

It's something you can count on. When a country's currency spirals downward, politicians can always count on scapegoating a minority. This is often a non-voting minority.

Congressman Ron Paul (R) of Texas remarks:
The rise in gold prices from $250 per ounce in 2001 to over $600 today has drawn investors and speculators into the precious metals market...Holding gold is protection or insurance against government's proclivity to debase its currency. The purchasing power of gold goes up not because it's a so-called good investment; it goes up in value only because the paper currency goes down in value. In our current situation, that means the dollar...The lack of earned interest on gold is not a problem once people realize the purchasing power of their currency is declining faster than the interest rates they might earn.
It seems that there is no end to this freefall in sight.

The world's been down this road many times. This time, it has email.

Monday, May 01, 2006


Anonymous Blogging Part 3

Today, anonymous blogger "Juan Non-Volokh" revealed his true identity. Last week, there was a contest to see if anyone could identify him. Note from the comments in the contest that (unlike a non-blogger like Deep Throat) he could be identifed by his writing style.

Also note the presumably tongue-in-cheek comment that acts as a sanity check:
And just how will we know that the person "unmasked" is the real Juan Non-Volokh?
I was asking the same question about Mark Felt. Why should we trust Felt and Woodward?

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