Follies of Infrastructure: Why the Worst Projects Get Built, and How to Avoid It – Bent Flyvbjerg
16 Feb 2015 Leave a comment
in managerial economics, organisational economics, theory of the firm, transport economics Tags: Bent Flyvbjerg, cost overruns, mega-events, mega-projects
The Law of Crappy Managers
14 Feb 2015 Leave a comment
in economics of bureaucracy, industrial organisation, managerial economics, occupational choice, organisational economics, personnel economics, survivor principle Tags: Peter Principle
The Evolution Of The Employee
09 Feb 2015 Leave a comment
in health and safety, human capital, labour economics, labour supply, managerial economics, market efficiency, occupational choice, organisational economics, personnel economics Tags: modern human resource management
Why do economic consulting firms exist?
02 Feb 2015 1 Comment
in applied price theory, economics of bureaucracy, economics of information, financial economics, law and economics, managerial economics, organisational economics, survivor principle Tags: advice giving industries, corporate law, Deirdre McCloskey, directors duties, economic consultants
Directors’ duties are the reason why the companies hire economic consultants. What consultants say isn’t important; the fact that simply the directors of a company sought advice is what matters. Same goes for the public sector: you must know what you’re doing, you took advice from outside experts.
Central to avoiding being sued if the company goes broke, or otherwise gets into a spot of bother, is the directors show that they acted responsibly.
Central to this is they can show they took advice from esteemed advisers: an accountant, a lawyer and an economist. If they did so, they must be responsible prudent directors because they took advice.
Deirdre McCloskey argued that the advising industry lives off 19th century case law on directors’ and trustees’ duties.
If you take advice – from an accountant, a lawyer or an economist – and the business or investment still fails, it can’t be your fault that you lost the widow’s and orphans’s inheritance.
You took advice. That is what that 19th-century court held with regard to what directors do and do not have to do given the fact that are not involved in the business on a day to day basis.
James Burk, a sociologist and former stockbroker… found that the advice giving industry sprang from legal decisions in the early 19th century.
The courts began to decide that the trustee of the pension fund or a child’s inheritance could be held liable for bad investing if they did not take advice. The effect would have been the same had the court decided that prudent man should consult a Ouija boards or the flight of birds…
America decided through its courts than an industry giving advice on the stock market should come into existence, whether or not it was worthless.
Therefore, it doesn’t matter what you say as a consultant economist to a company, the fact you’ve said something to them is more important to them than what you are saying. Seeking and receiving your advice excused them from being sued for breach of their directors duties for a couple of days.
Robert D. Tollison on the main positive contribution of economists to public policy
30 Jan 2015 Leave a comment
A cheat sheet of 19 different business models
28 Jan 2015 Leave a comment
in entrepreneurship, industrial organisation, managerial economics, organisational economics, survivor principle, theory of the firm Tags: entrepreneurial alertness, The meaning of competition
The spirit of Alfred P. Sloan: 10 Ways to Get People to Disagree
27 Jan 2015 Leave a comment
in entrepreneurship, managerial economics, market efficiency, organisational economics, personnel economics Tags: Alfred P. Sloan, group think
1. Assign someone on your team to the role of “Devil’s Advocate” to ensure a critical eye.
2. Ask part of your group to think like the firm’s competitors (or customers or employees) in order to surface and expose flaws in a set of core assumptions.
3. Establish “ground rules” that will stimulate task-oriented disagreement — but minimize interpersonal conflict.
4. Keep the proceedings “transparent” by making decisions based on what goes on in the meeting and not behind-the-scenes maneuvering.
5. Make sure your team members represent a diversity of thinking styles, skill levels, and backgrounds. And if they don’t, invite people with various points of view to offer their perspectives.
6. Start out with a question and don’t voice an opinion. Once you’ve said, “Here’s what I’m thinking . . .” you have already influenced your team.
7. If you want honest feedback, then be the first person to admit mistakes.
8. Listen (really listen) to everyone’s ideas. Let people know that you value their input and are taking into consideration what they have to say.
9. Pay attention. It’s not enough to listen — you can do that while viewing text messages or pouring a cup of coffee. You also have to be perceived to be paying attention. That means you need to make sure your body language (eye contact, head nods, torso orientation, etc.) sends signals of inclusion.
10. Clearly state the behaviors you want during the discussion (constructive conflict) and as a result of the discussion (shared commitment to the outcome).
via http://www.forbes.com/sites/carolkinseygoman/2012/08/23/10-ways-to-get-people-to-disagree/
A five minute cartoon about the privatisation of the NHS, from the Green Party
26 Jan 2015 Leave a comment
in health economics, managerial economics, organisational economics Tags: green party, Leftover Left, National Health Service, socialised medicine, UK politics
This cartoon video by the Green Party UK claims of their National Health Service is is Britain’s greatest invention. It can be improved by taxes on the rich and companies to increase funding and by everybody getting on a bike or walking to work
- NHS doctors routinely conceal from patients information about innovative new therapies that the NHS doesn’t pay for, so as to not “distress, upset or confuse” them.
- Terminally ill patients are incorrectly classified as “close to death” so as to allow the withdrawal of expensive life support.
- NHS expert guidelines on the management of high cholesterol are intentionally out of date, putting patients at serious risk, in order to save money.
- When the government approved an innovative new treatment for elderly blindness, the NHS initially decided to reimburse for the treatment only after patients were already blind in one eye — using the logic that a person blind in one eye can still see, and is therefore not that badly off.
- While most NHS patients expect to wait five months for a hip operation or knee surgery, leaving them immobile and disabled in the meantime, the actual waiting times are even worse: 11 months for hips and 12 months for knees. (This compares to a wait of 3 to 4 weeks for such procedures in the United States.)
- One in four Britons with cancer is denied treatment with the latest drugs proven to extend life.
- Those who seek to pay for such drugs on their own are expelled from the NHS system, for making the government look bad, and are forced to pay for the entirety of their own care for the rest of their lives.
- Britons diagnosed with cancer or heart attacks are more likely to die, and more quickly, than those of most other developed nations. Britain’s survival rates for these diseases are “little better than [those] of former Communist countries.”
HT: avik-roy
Utopia, you are standing in it! 
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