Saving The World From The Economists: Ronald Coase & Paul Krugman

By Steve Denning – Economics, writes Nobel Prize winner Ronald Coase, as currently presented in textbooks and taught in the classroom does not have much to do with business management, and still less with entrepreneurship.

If the only problem of economists was one of irrelevance, then we could view the exchanging of econometric models of largely irrelevant issues by academics in ivory towers with the same nonchalance that we view medieval theologians arguing about how many angels can dance on the head of a pin.

The sad reality is that the people do pay attention to economists and their models. more> http://tinyurl.com/cfx3tbt

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Bitcoin: Seven reasons to be wary

The bitcoin logo
(Photo credit: Wikipedia)

By Maria Korolov – Of all the virtual currencies out there, BitCoin is the most interesting from a technical perspective – and the least interesting from the business point of view. BitCoin is a peer-to-peer virtual currency that uses cryptography to control the creation and transfer of money.

Many BitCoin enthusiasts are attracted by BitCoin’s independence, and the fact that its value comes directly from its network of users. But aside from its status as a technical marvel, it has little practical benefit for business users or consumers. Here are seven reasons why.

• Nobody has to accept it
• No critical mass
• No switching costs
• There’s nobody to police it
• There’s no real need for it
• It’s volatile
• BitCoin is unfair

BitCoins are created when users run complex algorithms on their computers, with fewer and fewer BitCoins generated as times goes on. more> http://tinyurl.com/czpj8wf

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In Praise Of Stretch Goals

BOOK REVIEW

Betterness: Economics for Humans (Kindle Single), Author: Umair Haque.

By Steve Denning – In an article  entitled The Folly of Stretch Goals, Daniel Markovitz writes, “Let’s dispense, once and for all, with the managerial absurdity known as ‘stretch goals.’”

Well, no! Instead, let’s celebrate stretch goals.

Markovitz’s article shies away from stretch goals for several reasons:

• “Stretch goals can be terribly demotivating, overwhelming and unattainable”
• “Stretch goals foster unethical behavior”
• “Stretch goals can also — tragically — lead to excessive risk taking.”

Stretch goals need to be about human excellence, not about financial targets. Financial goals bring out the selfish gene that lurks in all of us. Instead, stretch goals need to appeal to what is best in us. more> http://is.gd/lMczMu

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California’s population growth seen slowing

Reuters – The University of Southern California‘s Price School of Public Policy report’s population projections, based on 2010 Census data, differ markedly from state projections made in 2007 by California‘s Department of Finance.

“The population level previously expected for 2020 is not reached until 2028 (44.1 million). And the 50-million population mark previously anticipated for January 2032 is now expected in January 2046, fully 14 years later,” the report said.

At the same time, the most populous U.S. state will be growing markedly older, with population growth among its seniors ages 65 and older projected to quadruple in the coming 20 years, the report said.

A growing senior population could alter California’s finances and economy dramatically. more> http://is.gd/5UHgdO

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Catching Europe’s ills

economics (Photo credit: Sean MacEntee)

By Warwick McKibbin – As we now know from decades of government failure in Europe, much is at stake if Australian politicians get the economics wrong. The crisis in Europe (the region of choice for what not to do economically) was caused by a number of bad policy choices made over many decades. It has come to a head because of large-scale, macro-economic mismanagement, but this was a result of a wide series of policy errors over time which have merely been exposed by a sudden unexpected shock.

Some of these mistakes include: too much government focus on redistributing wealth rather than generating wealth; a focus on large-scale intervention to meet environmental goals set by the emergence of the green parties rather than serious assessment of the costs and benefits of policies; wasteful industry support through massive subsidies that badly distorted markets over many years; the idea that governments drive the economy and create jobs rather than the idea that governments provide the conditions through markets and transparent regulations that enable the private sector to create jobs; a reliance on Keynesian economics that led governments to create an enormous overhang of government debt generated by spending on activities that did not generate sufficient return to service that debt; and labour market rigidities preventing real wage flexibility when an economic shock occurs. more> http://tinyurl.com/847jxoe

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