Tuesday, April 24, 2012

Creativity and competition



April 23, 2012

The Creative Monopoly

As a young man, Peter Thiel competed to get into Stanford. Then he competed to get into Stanford Law School. Then he competed to become a clerk for a federal judge. Thiel won all those competitions. But then he competed to get a Supreme Court clerkship.
Thiel lost that one. So instead of being a clerk, he went out and founded PayPal. Then he became an early investor in Facebook and many other celebrated technology firms. Somebody later asked him. “So, aren’t you glad you didn’t get that Supreme Court clerkship?”
The question got Thiel thinking. His thoughts are now incorporated into a course he is teaching in the Stanford Computer Science Department. (A student named Blake Masters posted outstanding notes online, and Thiel has confirmed their accuracy.)
One of his core points is that we tend to confuse capitalism with competition. We tend to think that whoever competes best comes out ahead. In the race to be more competitive, we sometimes confuse what is hard with what is valuable. The intensity of competition becomes a proxy for value.
In fact, Thiel argues, we often shouldn’t seek to be really good competitors. We should seek to be really good monopolists. Instead of being slightly better than everybody else in a crowded and established field, it’s often more valuable to create a new market and totally dominate it. The profit margins are much bigger, and the value to society is often bigger, too.
Now to be clear: When Thiel is talking about a “monopoly,” he isn’t talking about the illegal eliminate-your-rivals kind. He’s talking about doing something so creative that you establish a distinct market, niche and identity. You’ve established a creative monopoly and everybody has to come to you if they want that service, at least for a time.
His lecture points to a provocative possibility: that the competitive spirit capitalism engenders can sometimes inhibit the creativity it requires.
Think about the traits that creative people possess. Creative people don’t follow the crowds; they seek out the blank spots on the map. Creative people wander through faraway and forgotten traditions and then integrate marginal perspectives back to the mainstream. Instead of being fastest around the tracks everybody knows, creative people move adaptively through wildernesses nobody knows.
Now think about the competitive environment that confronts the most fortunate people today and how it undermines those mind-sets.
First, students have to jump through ever-more demanding, preassigned academic hoops. Instead of developing a passion for one subject, they’re rewarded for becoming professional students, getting great grades across all subjects, regardless of their intrinsic interests. Instead of wandering across strange domains, they have to prudentially apportion their time, making productive use of each hour.
Then they move into a ranking system in which the most competitive college, program and employment opportunity is deemed to be the best. There is a status funnel pointing to the most competitive colleges and banks and companies, regardless of their appropriateness.
Then they move into businesses in which the main point is to beat the competition, in which the competitive juices take control and gradually obliterate other goals. I see this in politics all the time. Candidates enter politics wanting to be authentic and change things. But once the candidates enter the campaign, they stop focusing on how to be change-agents. They and their staff spend all their time focusing on beating the other guy. They hone the skills of one-upsmanship. They get engulfed in a tit-for-tat competition to win the news cycle. Instead of being new and authentic, they become artificial mirror opposites of their opponents. Instead of providing the value voters want — change — they become canned tacticians, hoping to eke out a slight win over the other side.
Competition has trumped value-creation. In this and other ways, the competitive arena undermines innovation.
You know somebody has been sucked into the competitive myopia when they start using sports or war metaphors. Sports and war are competitive enterprises. If somebody hits three home runs against you in the top of the inning, your job is to go hit four home runs in the bottom of the inning.
But business, politics, intellectual life and most other realms are not like that. In most realms, if somebody hits three home runs against you in one inning, you have the option of picking up your equipment and inventing a different game. You don’t have to compete; you can invent.
We live in a culture that nurtures competitive skills. And they are necessary: discipline, rigor and reliability. But it’s probably a good idea to try to supplement them with the skills of the creative monopolist: alertness, independence and the ability to reclaim forgotten traditions.
Everybody worries about American competitiveness. That may be the wrong problem. The future of the country will probably be determined by how well Americans can succeed at being monopolists.



Thursday, April 19, 2012

The Fear Index by Robert Harris

"The familiar creek of the stairs [going up to the therapist's office] was enough to unleash a flood of old sensations.  Sometimes he had found it almost impossible to drag himself to the top; on the worst days he had felt like a man without oxygen trying to climb Everest.  Depression wasn't the word for it; burial was more accurate--entombment in a thick, concrete, cold chamber, beyond the reach of light or sound." 203

...she [Gabrielle, Hoffman's wife] noticed an old computer in a glass case.  When she went closer, she read that it was the NeXT processor [a server] that had started the World Wide Web at CERN in 1991...."Pandora's Box," said a voice behind her...Or the Law of Unintended Consequences.  You start off trying to create the origins of the universe and you end up creating eBay." 211

"Learn from me, if not by my precepts, at least by my example, how dangerous is the acquirement of knowledge, and how much happier that man is who believes his native town to be the world, than he who aspires to become greater than his nature will allow."  Mary Shelley, Frankenstein

"And like all the best lies, it has the merit of being almost true" (Quarry)

Tuesday, April 17, 2012

Revelations by Elain Pagels

Rain and Zen

Zazen was difficult today.   I was generating thoughts and feeling from a beehive of bad memories.  But I did it. Stayed focused...at least for seconds at a time :).  This week (week two) will be more difficult....and I have a good, new book to read that almost compelled me to abstain from sitting.  Elaine Pagels' "Revelations"...I wish I could be a scholar like her; respected in academia but with a talent for bringing scholarship into the town square.  "The Dharma Rain Center."  What a great name.  Rain and Zen go together like brother and sister, bride and groom.

Yesterday I saw Dr. John. I played with him, startled him at times, so I'll have to check in with him next time to get his feedback--I'll play psychologist.  He suggested I was "rigid", and I found it humorous to some degree.  I really think i just love banter--it make me feel good--...the philosopher and the psychologist trying to find a way to "get along" and avoid jail time. Where did he come up with that diagnosis?  A stereo-type (of a philosopher)? I suppose that diagnosis was predictable.  Yes, I agree.  I am "rigid" in some ways; flexible in others.  I'm probably more bamboo than he knows, and more rigid than I would like to confide.  After all, the ego is a rigid construct, and a philosophical ego especially so, like two minds, one compassionate and understanding, the other carnivorous and brutal.  Why does life nurture one more than the other in some people?  Much of that answer is pure coincidence, I suppose. Family, friends, lovers, work, life experiences, all contribute to the building.

Thursday, April 12, 2012

American Nietzsche

"Emerson bathed Nietzsche in images of the intellectual life as life on the open sea, as circles of waves emanating outward from the active intellect: 'Struggling and undulating of the most diverse currents, ebbing and flowing, all to the eternal ocean." And then, suddenly, that monster-wave appears, the blood runs hot with fear, a gift from a dead sister, "The Collected Writings of Nietzsche." The self drowns, slowly at first, with every poetic utterance, to fall off the edge of the world, to be reborn again in the sunrise of a new world. http://www.powells.com/biblio/62-9780226705811-0

Sunday, April 8, 2012

American Indians

 http://www.economist.com/node/21552208

MEETING Ronnie Lupe, the chairman of the White Mountain Apache tribe, is rather like an audience with the chieftain he would once have been. At 82 he has a sage’s bearing, takes his time speaking and does not allow himself to be interrupted. He has ears as long as those on statues of the Buddha. He sits surrounded by Apache flags, insignia and the tribal seal, which he says he co-designed with a medicine man long ago. His office commands a view in one of the sacred directions of the Apache, across a reservation in remote Arizona that is roughly the size of Delaware but home to only about 12,000 tribal members.
Born in a wikiup, a traditional Apache brush wigwam, and brought up on stories of bloodshed between his forebears and the white man, Mr Lupe has been in tribal government, off and on, since 1964. His career thus spans several historic changes for Indian tribes, each of which affirmed and increased their sovereignty. “When I was first elected, I received no financial reports, no letters, they all went over there,” he recalls, pointing across the street to a branch of the Bureau of Indian Affairs (BIA), the federal agency that handles relations with tribes. “Over the years I took their power away.” Then he flips his middle finger in the BIA’s direction. “I’m not responsible to you, I’m a sovereign nation.”
That sovereignty is still a topic of discussion at all should be surprising. America’s constitution names three sovereigns: the federal government, states and tribes. The “treaties” America signed with tribes in the 18th and 19th centuries also implied sovereign parties. Tribes could not keep armies or devise a currency, but they could issue their own passports, as the Iroquois have famously done (which made their lacrosse team miss a tournament in 2010, after Britain refused to recognise the documents). The Iroquois, the Sioux and the Ojibwe (Chippewa), even separately declared war on Germany in 1941.
But sovereignty has at least three pieces, says Manley Begay at the Harvard Project on American Indian Economic Development, a research group. First, there is “inherent” sovereignty. Mr Begay’s Navajo, for example, consider their sovereignty a sacred gift from their Holy People. But there are also legal and de facto sovereignty, and the federal government, for most of American history, honoured neither. It considered treaties merely a tool to take land from the tribes. Its real policy towards Indians before 1851 was to remove them. After 1851, when the first modern Indian reservations were created, the policy was to contain them in what one Indian author has called “red ghettos” for their widespread poverty, unemployment, alcoholism and crime.
In theory, this changed in 1934 with an act of Congress nicknamed the Indian New Deal. It endorsed a degree of self-rule for Indian tribes, while urging them to form tribal constitutions similar to America’s own, with elections, courts and so forth. But in practice federal paternalism continued. Native American religions, for example, were persecuted until the American Indian Religious Freedom Act of 1978 at last put a stop to it. Above all, the BIA (originally part of the War Department but nowadays part of Interior) made all decisions of economic consequence.
Those memories still get a rise out of Mr Lupe. Ultimately, sovereignty is power over land, he says. To the white man, he thinks, land is just “real estate”. But in Apache the word for land is also the one for mind: “So I point to my mind, I also point to my land,” he says, as his index finger moves from his forehead to the ground. It so happens that his tribe’s land is exceptional: the Salt River Canyon is as beautiful as the Grand Canyon, but without the tourists, and above it stretch endless forests of ponderosa pines. The right to fish, hunt, log and do whatever else they please there is what Mr Lupe and his ancestors have fought for. The only difference, he says, is that “We now go to war with pens, not bows and arrows.”
A roll of the dice
The biggest step towards de facto sovereignty came in 1975, with the Indian Self-Determination Act. It began the transfer of administration from the BIA to the tribal governments. Mr Begay calls the act “up there with the Iron Curtain falling down, with apartheid falling apart” in its importance. It also made possible the biggest economic change of the past century, the entry of tribes into the gaming business.
This began with the Seminole tribe in Florida and the Cabazon Mission Band of Indians, a tiny tribe in southern California. The Seminole took their case for running a bingo parlour to a federal appeals court, and won it in 1981. Around the same time the Cabazon Band opened poker and bingo rooms on their reservation, illegal under state law. The police raided the reservation, and a legal case began that wound its way as far as the Supreme Court. In 1987 the court decided that tribes, being sovereign, could not be barred from running casinos. The next year Congress wrote a law that explicitly allowed Indian gambling, as long as the proceeds were used to promote “tribal economic development”.
Soon tribes all over the country built casinos. Mr Lupe’s Apache opened theirs in 1993. Called Hon-Dah (“Welcome” in Apache), it is, like most casinos in America, a somewhat depressing place, with people in track suits yanking on slot machines in clouds of cigarette smoke.
In 2010, estimates Alan Meister, an economist, Indian casinos took in $26.7 billion, about 44% of America’s total casino revenue. Almost half of the tribes—239 out of the 565—are now at it. A few, including the Cabazon Band, are rolling in money, whereas others make hardly anything. The key, not surprisingly, is location. Casinos on reservations near cities (the Cabazon are near Palm Springs) get many customers, whereas those in the middle of nowhere (the majority, like Hon-Dah) get few.
For the tribes with lucrative casinos, gambling has become the biggest thing since the fur trade of the 19th century, says David Wilkins, a Lumbee and professor of American-Indian studies at the University of Minnesota. When the proceeds are used wisely—to build schools, provide health care, and so forth—gambling can indeed help with tribal nation-building, he says.
But casinos also bring problems. Some tribes consider gambling a vice. This is why the Hopi, for instance, have rejected gambling, and why the Navajo repeatedly voted against it in referendums before grudgingly accepting it for the revenues it brought in. In other cases, gambling income perversely reinforces a culture of dependency, as some tribal members wait passively for their profit share.
Indirectly the casinos have also highlighted some bizarre, sometimes unsavoury, aspects of tribal sovereignty. One of the biggest problems has always been deciding who is or is not a member. Most tribes do this with blood-quantum laws. An individual must prove that, say, a quarter, an eighth, or a sixteenth of his “blood” is from a given tribe.
Casino money has brought out the perversity in these rules. In California alone more than 2,500 Indians have been “dis-enrolled”—ie, cast out—from their tribes because political enemies or greedy administrators have suddenly discovered doubts about distant bloodlines. The motive is to share gambling revenues among fewer members. For the outcasts, this can mean losing tribal housing, education, welfare and sometimes cash payments, not to mention identity and community.
Pain and progress
The bigger question is whether sovereignty in general and gambling in particular have, on balance, improved the lot of tribes. Unfortunately, any progress is patchy and slow. In the 2010 census 28% of American Indians were poor, compared with 15% of the whole American population. Their median household income was $35,062, compared with $50,046 for all Americans. They are, on average, less educated and less likely to have health insurance. Most of the 2.9m American Indians now live in cities, including many of those who are better off. So poverty on the 334 reservations (not all tribes have one) is worse than these numbers suggest.
Unemployment is astronomically high. Mr Lupe estimates that it is 80% for the White Mountain Apache (others estimate it at nearer 65% on that reservation). Alcohol and drug abuse are endemic, as are obesity and diabetes. Violent-crime rates on reservations are twice the national average, according to the Justice Department. American-Indian women are four times as likely to be raped and ten times as likely to be murdered as white American women.

Nonetheless, some tribes have clearly made progress since 1975. The biggest factor, says Mr Begay, is the government institutions tribes have chosen to build since then. Is their administration efficient? Are the courts clean, fair and strong? He compares tribes to eastern European countries since the end of the cold war: some have prospered under good government, others have not. Generally speaking, the Winnebago of Nebraska, the Choctaw of Mississippi and the Navajo of the south-west are doing well; the Oglala Sioux of South Dakota are not.
When it comes to governance, American Indians are still all too likely to make news of the wrong sort. The Chukchansi of California, near Yosemite, spent the first part of this year brawling over control of their tribal council, with one side cracking the locks and smashing the windows of the government building to break in, while the other side cut the building’s electricity and fumigated it with bear spray. (As it happens, the tribe runs a successful casino, and the dispute had started over dis-enrolments of members.)
Even Mr Lupe has been involved in antics of this sort. Last December the tribe’s council (including two of Mr Lupe’s cousins and one nephew) voted to suspend Mr Lupe as chairman, alleging corruption and megalomania. Mr Lupe ignored the motion vote, suggesting that corruption is instead to be found among the council members, and that the Apache constitution has no concept of suspension. A judge was fired. The police chief who had been instructed to evict Mr Lupe thought better of it. Mr Lupe remains well ensconced. A tribal lawyer says that Apache government does not have distinct branches as America’s does, but values consensus.
So the record is far from clear. Mr Lupe’s Apache (there are other Apache tribes nearby) have their casino, some timber logging and a decent ski resort to boot. And they are surrounded by stunning natural beauty. But they are still quite poor.
They are also more sovereign now than they have been since Geronimo’s day. And yet, laments Mr Lupe, Apache culture is still under threat. Over half of the older members speak Apache, he says, but fewer than 10% of the young do. Indeed, of hundreds of American-Indian languages spoken when Europeans arrived, only about 150 survive, and only three (Dakota, Dene and Ojibwe) have viable communities of speakers. Dissolution into the American mainstream, of course, has always been a spectre, even if it is no longer federal policy. And yet, as David Treuer, an Ojibwe and the author of “Rez Life”, puts it with pride, “We stubbornly continue to exist.”