Monthly Archives: December 2004

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IBM sells to Chinese: emblematic of two shifts 

If you were looking for the perfect news story to illustrate the enormous shifts in our world, the purchase of IBM’s PC division by Chinese Lenovo is it.

I met the founder of Lenovo, Liu Chuanzhi, when it was a still-small Legend, created out of the computer science department at Beijing University. Now it has bought the PC business that infiltrated these machines into every corporation in the world. Of course the PC division of IBM has not been a major force for years, but the symbolism is there. The major Chinese companies are no longer content with their domestic or even regional markets. They intend to be global players.

At the same time, it’s a story of the complete commodification of the PC. IBM is absolutely right not to care a hoot about who makes, markets and distributes PCs. For most companies, it’s not a business in which to make money, or to create interesting new products.

Wolf on the US imbalance 

Hidden behind the FT subscription firewall, Martin Wolf has an excellent analysis of the problems being stored up for the world economy by the current US imbalances.

  The challenge to the world is to wean itself off ever-rising US indebtedness sooner rather than later. Yet this is clearly not what the significant policymakers intend. Europeans may well moan. But US policymakers are happy with their aid programme from abroad, while Asian policymakers seem content to subsidise their exports to the US. The result is what Laurence [sic] Summers, the former US treasury secretary, has called a “balance of financial terror”, with both sides preferring continuation of the status quo to the risks of change. But the behaviour that is creating this balance is unstable, because the predicament is worsening. The world needs a credible plan for escape from its reliance on the US debt trap.

Stay tuned for Martin’s plan next week. (Pedant’s point: Incidentally, you’d expect FT subs to know that Larry Summers is a Lawrence, not a Laurence. Does he look like a Laurence? No way.)

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The Wal-Mart model  

The most revelatory article I’ve read recently is Simon Head’s New York Review of Books essay on Wal-Mart. He looks at the scandal of Wal-Mart’s treatment of women and its low-paid workers in general, and the fascism (my word, not his) of its corporate culture. A taste of the beast:

  The corporation insists on an elaborate aptitude test for new employees that is intended to weed out troublemakers. When Barbara Ehrenreich took the test at the Minneapolis Wal-Mart, she was told that she had given a wrong answer when she agreed “strongly” with the proposition that “rules have to be followed to the letter at all times.” The only acceptable answer for Wal-Mart was “very strongly.” Similarly, the only correct answer to the proposition “there is room in every corporation for a non-conformist” was: “totally disagree.”

Whatever happened to the new-model, enlightened corporation? The reason Head’s essay is so important is that I pretty much agree with Tom Peters‘s recent assertion that the two most important factors in the business world today are the two Bs: Beijing and Bentonville (where Wal-Mart has its headquarters). There may be far greater similarities between the two Bs than anyone previously expected.

Where to look in China 

I met yesterday with a friend who has been consistently insightful over the years about a host of global issues. We talked a bit about China, where she’s been doing a lot of work.

“Look at places like Jiangsu province,” she advised. Apparently most of the boom in Shanghai is state-owned enterprises. Jiangsu is one of the few places where true private enterprise dominates. At the moment most of the businesses are still operating on day-to-day wits and decisions, but sophistication and capital is growing.

And since these private enterprises have fewer state obligations, they are looking hungrily at opportunities outside China. There’s apparently already some Chinese offshoring to Cambodia and Vietnam, and my friend is certain that the entrepreneurs have no intention of stuffing their hard-earned yuan in one of China’s insolvent banks.

Hillary ’08 

Thomas PM Barnett has a different take on Hillary Clinton as a presidential candidate in 2008:

  Every time I make even the slightest noise in the direction of Hillary, boy do I get emails from the right, and they’re all the same: “She’s got too many negatives and too many people hate her!”
  My reply is always the same: So does Bush, and he does just fine.

He goes further: “Frankly, she’s the closest thing to Margaret Thatcher we’ll ever see anytime soon. That’s why she’ll be formidable.”

I’m not so sure about his assessment of Hillary. I’ve seen her on a platform several times and although she certainly has star power, I don’t think she comes across that well to an audience. Unlike with her husband, there’s a certain detachment, a lack of connection, for me at least.

But I think Barnett is right that Democrats should seek out the best candidate, not the one likely to offend the fewest people.

Model city 

The Boston Globe reports on this extraordinary plan for Fallujah: “Under the plans, troops would funnel Fallujans to so-called citizen processing centers on the outskirts of the city to compile a database of their identities through DNA testing and retina scans. Residents would receive badges displaying their home addresses that they must wear at all times. Buses would ferry them into the city, where cars, the deadliest tool of suicide bombers, would be banned” (Via John Robb).

It’s hard to imagine a worse dystopia.

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Paintbox out Cupid’s willy 

Today’s Financial Times has an article that leaves me absolutely dumbstruck:

  US distributors of the film Merchant of Venice, which premiered in London this week, have asked the director to cut out a background fresco by a Venetian old master so it is fit for American television viewers…
  According to [director Michael] Radford, there was “a very curious request which said ‘Could you please paint-box out the wallpaper?’. I said wallpaper, what wallpaper? This is the 16th century, people didn’t have wall-paper.”
  When he examined the scenes, he realised the letter was referring to frescoes by Paolo Veronese, the acclaimed Venetian 16th-century artist, which, when examined closely, showed a naked cupid.
  “A billion dollars worth of Veronese great master’s frescoes they want paint-boxed out because of this cupid’s willy. It is absolutely absurd,” he said.

Garton Ash on Ukraine 

Tim Garton Ash has an excellent piece about Ukraine in today’s Guardian. He addresses the handful of people, sadly mostly on the left, who seem to be opposed to the agitation to overturn the rigged presidential election:

  For 25 years, I have heard these same old arguments against supporting the democratic oppositions in eastern Europe. Those oppositions, we are told, threaten European “stability”. Behind or beside them are nasty nationalists and/or the CIA. We must respect the legitimate security interests of Moscow (an argument originally used to justify the continued existence of the Berlin Wall). A ghastly Pandora’s box will be opened by ……. (fill this space with: Poland’s Solidarnosc, Charter 77, the Leipzig demonstrators – sorry, mob – in 1989, anti-Milosevic students in Belgrade, Georgian rose revolutionaries, or now Ukrainians).

I quoted one of the seemingly offending Guardian articles last week. Quite a few right-wing commentators have raised a hullabaloo about Ian Traynor’s article about US backing for the Ukrainian opposition, and other oppositions in central and eastern Europe. The reason I quoted it was because it was the first time in a long time that I thought the US was doing the right thing, not because I was horrified by State Department meddling.

Journalists’ right of privilege 

Eugene Volokh in The New York Times:

  Because of the Internet, anyone can be a journalist. Some so-called Weblogs — Internet-based opinion columns published by ordinary people — have hundreds of thousands of readers. I run a blog with more than 10,000 daily readers. We often publish news tips from friends or readers, some of which come with a condition of confidentiality.
  The First Amendment can’t give special rights to the established news media and not to upstart outlets like ours. Freedom of the press should apply to people equally, regardless of who they are, why they write or how popular they are.

He wrestles with an important question and comes up with a helpful solution:

  Maybe a journalist’s privilege should likewise be limited. Lawmakers could pass legislation that protects leakers who lawfully reveal information, like those who blow the whistle on governmental or corporate misconduct. But if a leaker tries to use a journalist as part of an illegal act – for example, by disclosing a tax return or the name of a C.I.A. agent so that it can be published – then the journalist may be ordered to testify.

Incidentally, even the stuffy old New York Times could do better on a definition of weblogs (and why so-called and the capital W?). I know plenty of weblogs that are something far removed from opinion columns. You might as well call the whole New York Times a series of opinion columns on that definition.

Sack me or sack me 

Boris Johnson:

  I’d recommend getting ignominiously sacked – and I want you to know that I insisted on my right to be sacked: “Sack me,” I said, by way of an ultimatum, “or sack me!” — because it is only by being sacked that you can truly engender sympathy. Nothing excites compassion, in friend and foe alike, as much as the sight of you ker-splonked on the Tarmac with your propeller buried six feet under.

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Clearly a must read 

Taegan Goddard has picked up details of Malcolm Gladwell’s new book, Blink, and it sounds wonderful. It’s about how quickly taken decisions can often be better than ones that are carefully weighed and considered:

  Perhaps the most stunning example he gives of this counterintuitive truth is the most expensive war game ever conducted by the Pentagon, in which a wily marine officer, playing ‘a rogue military commander’ in the Persian Gulf and unencumbered by hierarchy, bureaucracy and too much technology, humiliated American forces whose chiefs were bogged down in matrixes, systems for decision making and information overload.

Sounds like an ideal companion volume to The Wisdom of Crowds.

Another lost technology 

The Washington Post has a wonderfully written elegy to the slide projector, which is effectively no more. My favourite passage:

  Decades from now, science will conclude that nobody ever learned anything from a PowerPoint presentation, that it was, in fact, actually worse for the brain than slide shows. That juries missed crucial evidence because of the prosecution’s determination to use PowerPoint during closing arguments. That productivity in the American workplace, especially in middle management, hit an all-time low because of PowerPoint, and that employees forced to watch PowerPoint considered suicide at a rate previously unseen.