Thursday, May 27, 2021

Are monopolies good? Peter Thiel's hypothesis

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CEO Picks - The most popular editorials that have stood the test of time!

Are monopolies good? Peter Thiel's hypothesis
Are monopolies good? Peter Thiel (of Paypal founding and Facebook

Peter Thiel (of Paypal founding and Facebook investment fame) has argued in his book, 'From Zero to One' that only monopolies like Google can afford the long-term focus and cash drain required to really invest in innovation. He adds that competition causes companies to rush towards mediocrity, as they try to outprice each other or only incrementally improve offerings. In this article, the New York Times makes a similar case. It's interesting that a democratic platform like the internet is creating 'winner-takes-all' companies like Google, Facebook and Amazon. Many of these companies have managed to create network effects (more people joining Facebook makes it more valuable to existing users, so they don't move elsewhere) to become monopolies. Now, the good thing is that they are very aware that the pace of new technology is such that they could get wiped out unless they invest their excess cash in tomorrow's technologies and do it faster and better than the next startup that could upend them (case studies include Nokia and Blackberry). So, in effect, unlike the monopolies of the past which were created through control of licenses and natural resources, tech monopolies are monopolies due to consumer choice and consumers will choose whatever's best for them.

However, the above theory is not without its critics. Here is a list of problems with the theory that monopolies are good and that competition is for losers.


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A new model for democracy?
A new model for democracy?

So, you have an idea to fix a problem in your city? Maybe, it's potholes, or a cleanliness drive, or a project that reduces pollution. What if, you could put this up on a site and attract funding for it and solve it on your own. That's precisely what a bunch of social designers in Finland did with Brickstarter a few years ago. Imagine if this idea could be further extended, where instead of your local government allocating tax money, ordinary citizens could identify problems, suggest solutions and then allocate their tax dollars towards the projects they identify with the most! True democracy in action? The government knows exactly what the people want, at all times, and plays more of an enabler role. Such a radical new way of looking at democracy is what author Steven Johnson suggests in his book - Future Perfect. Today's technology does provide us the opportunity to experiment with new forms of community development. This is especially critical in large developing nations, where top-down planning often runs into vested interests.



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Highlighted Story

Discount retailers TJX, Ross stage a comeback as shoppers crave 'treasure hunting' for clothes again

Discount retailers TJX, Ross stage a comeback as shoppers crave 'treasure hunting' for clothes again Any doubts about whether shoppers would return to discount retail stores to rummage through racks in the hunt for bargains were crushed this week when TJX Companies and Ross Stores reported their first-quarter earnings.

Both companies' sales surged past analyst estimates, as consumers started packing back into their stores to look for new outfits, shoes, luggage and home goods as pandemic-induced lockdowns eased.

TJX and Ross cited a pent-up demand from shoppers, many of whom have been armed with extra stimulus dollars in recent months, but also a desire among many people to still look for good deals. So-called treasure hunting in stores could be something that many consumers end up craving more than they did before the Covid health crisis.

"We believe the appeal of our entertaining, treasure-hunt shopping experience gives consumers a compelling reason to shop us," TJX CEO Ernie Herrman said in an earnings conference call. "In-store shopping is not going away."















CEO Picks - continued!

Here's Why Office Layout Was So Important To Steve Jobs
Steve Jobs wanted 'serendipitous personal encounters' to occur

Steve Jobs wanted 'serendipitous personal encounters' to occur between his employees, so his office bathrooms were placed accordingly. Freshbooks in Canada sets its employees up on 'blind dates' (no, not the romantic kind), so they can get to know each other better, make friends at work and yes, possibly come up with out of the box ideas. Is your organization more than a few dozen people? What are you doing to encourage serendipity, especially in the current challenging WFH environment?



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Norway wants to lead on climate change. But first it must face its legacy of oil and gas.
2015 was a record year for investment in clean energy

An expert explains Norway's climate change paradox.

Norway's ambition to be an international leader on climate change is at odds with its status as one of the world's largest oil and gas exporters.

In 2019, the country was 15th on the list of the world's top oil-producing countries, according to provisional data from the International Energy Agency, and ranked eighth in the world for natural gas production, behind Australia but ahead of Saudi Arabia.

The bulk of revenue from Norway's oil and gas production is kept in a sovereign wealth fund, which was created to keep the money for the Norwegian people and future generations. The fund, which has amassed $1 trillion since its inception in the 1990s, is a source of stability for the nation in times of economic instability, like the coronavirus pandemic.

In December, Norway's Supreme Court ruled against environmental activists who sued the government because they felt oil-licensing permits granted in the Arctic threatened their right to a clean environment under the country's constitution. The decision will now pave the way for more drilling in the Arctic.

Experts refer to this as Norway's "paradox": Norway wants to be at the forefront of international efforts to address climate change, yet it continues to rely on heavily polluting fossil fuel extraction for continued economic prosperity.



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The Inequality Virus: Global Report 2021
It's not a good time for those who believe in

It's not a good time for those who believe in the trickle-down theory of wealth. Here's a wild statistic: The 26 richest people on earth in 2018 had the same net worth as the poorest half of the world's population, some 3.8 billion people. The pandemic has made it worse. Rising inequality means it could take at least 14 times longer for the number of people living in poverty to return to pre-pandemic levels than it took for the fortunes of the top 1,000, mostly White male, billionaires to bounce back. About $7.6 trillion of individuals' wealth sits in offshore tax havens, and if tax were paid on the income that this wealth generates, an extra $190 billion would be available to governments every year



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