JCL Blog

How Much to Pay the Guy Driving

It is interesting how humans adapt to systems and even more interesting when you consider that humans created the systems.  The idea I outline here has a remarkable parallel in Jaron Lanier’s thoughts about how people react to computers.   It also may translate into thoughts about how much we pay CEOs.

Years ago in sailboat racing there was the International Offshore Rule.  The IOR rule was, like all of the rating rules before and hence, intended to be a fair way to handicap boats that were different so they could race against each other.  And racing rules like the IOR go through a predictable cycle just like businesses and cause people who think they are rational to do the most irrational things.  I submit that the phases for sailboat rating rules are invention, adoption, popularity, optimization, insanity, and retirement; and bear a fair amount of similarity to business cycles.


  1. Invention happens about the same time the prior rule is in the insanity phase and one person wakes up one day and says that the current way of doing things is crazy and there has to be a better way.
  2. Adoption is when that one person comes up with a better way and convinces others to follow.  Of course a better rating rule is no good to one person because the whole idea is to race against other people and without others – there is no point.
  3. Popularity comes about when enough people defect from the old rule to the new rule (in sailing this is usually a process of getting your boat measured so you can get the new rating number, and then switching to sail in races governed by the new rule instead of the old one).
  4. Optimization happens as the stakes get higher.  Now that a lot of people are sailing under the new rule and their natural competitiveness causes them to make changes to their boats to improve their ratings.  The funny thing about this is often the changes make the boats slower or more difficult to handle but the rating benefit more than offsets the performance handicap.  That is right, racing sailboat owners voluntarily make their boats slower in order to be more competitive. 
  5. Insanity comes at the extreme end of this cycle when people spend hundreds of thousands of dollars to have new boats build with extraordinary shortcomings that could only be induced by the rating rule itself.  Strangely, and presumably for the same reasons that Jr. High boys find the outcome of flushing bleach down the toilet an irresistible attraction, this insanity phase can last for some time.  Eventually though the seeds are sown for next rating rule and usually by someone we usually brand as a geek.
  6. Retirement of the old rule happens as the new rule gets to the popularity phase.


Followers of Schumpeter would call this a healthy market and a productive use of resources in the pursuit of higher performance.  And they could be right.  The most insane of the boats under the old rule really cannot convert to the new rule and get sold to outlying markets where the old rule has not yet run its course.  Depending on how insane the insanity was there is a reasonable counterargument that the resources invested at the end of the cycle do not produce anything useful – excepting maybe creating a fertile environment for the new rule.

During the insane period of the IOR era the custom built boats had a distinct hollow section in the shape of their hulls where the measurements were taken that sucked the boat down into the water - so the boats were very squirrelly sailing downwind when it was windy.  This hollow section and other elements of the rule induced the designers to put up massive amounts of sail area downwind with oversized spinnakers.  So here you are going downwind in heavy wind with these giant sails pulling the boat forward while the back of the boat is getting sucked into the water by the hollow section and the combination would induce a death dance of wild rolls from one side to the other - and yes you can put the mast of a 15 ton racing sailboat into the water rather decisively.

There were only a few people on the planet that had the right combination of skill and bravado to drive one of these boats downwind in a breeze.  You had to steer very aggressively and often times at the end of a roll, right before you could wipe out, the rudder would start to lose its effectiveness and the best thing to do was just let go, watch the wheel spin wildly and then decisively grab the wheel to reestablish flow over the rudder and send you down the next wave – if you were lucky.  It was quite a thrill and even with the reverence in the business for accomplished downwind IOR helmsmen, most people were quite glad not to be driving. The strange thing is that the properly designed boats with clean lines needed less sail area, stepped up on a plane going downwind in a breeze, and actually got more stable.  And they could be driven by mere mortals and with very little drama. So, who should get paid more, that crazy guy in the IOR boat driving like a madman while everyone else holds on for dear life, or the guy in the properly designed boat with almost no visible effort and the hearts of his crew beating hard because of the thrill and not the terror? 

Bear in mind that when the IOR boat wipes out the race is pretty much over, and some big checks are going to have to be written to sail makers and the boatyard.  And the boat not designed to the IOR rule?  It would actually be going considerably faster through the water. This is why we pay CEOs so much these days – let’s hope someone invents a new rule soon and makes their skills obsolete.

Book Review: You are not a Gadget by Jaron Lanier

Rant, Rant, Rant, Definitions, Octopus. It is an unual pattern for a book, but I absolutely recommend "You are not a Gadget" for anyone who thinks about technology and its impact on our lives. I have heard some critics say that this book answers a non-problem. Well, some time ago the problems we face today were not as obvious as they are now.  We are lucky to have people like Jaron Lanier to shine a light on issues we are creating for ourselves.  This book has caused quite a stir and many great reviews have been written (see links below).  Here is what I got out of it:

The Rants:  There is no question that the first half of the book is quite a rant against the way we are subjugating ourselves to machines.  It may go on a little long, but it is absolutely necessary.  An issue must first be described before it can be addressed.  In short he points out that computers are far from, and never will be, human.  The notion of artificial intelligence and more importantly our attraction to it is a threat to humans reaching their potential.  He gives many good examples and none of the companies in the web 2.0 world are spared.  You can try to argue against this idea, but right in the middle someone will pass by you speaking into their iPhone in the only idiotic sounding language that the Google voice to text machine can understand, and you will see the point.  We are willingly reducing ourselves to a composition that the much inferior computers can relate to. 

Definitions:  Lanier then gets into some definitions.  Despite the validity of the rants, I was pretty glad when we arrived at this part of the book.  Computationalism is defined as: "...the world can be understood as a computational process, with people as a subprocess."  Logical Positivism: "is the idea that a sentence or another fragment -- something you can put in a computer file -- means something in a freestanding way that doesn't require invoking the subjectivity of a human reader."  Realism: "...humans, considered as information systems, weren't designed yesterday, and are not the abstract playthings of some higher being, such as a web 2.0 programmer in the sky.  My take away:  The last one is the authors recommendation to not get sucked in.  Since we have to elect to become subservient to the machines -- we should have the the power to avoid it.  Thus the reason for the rants -- because unless we see the problem we are unlikely to wish to avoid it.

Octopus:  Lanier then goes on to talk about how our brain interacts with odors, how that differs from sight and sound, and how it will be a long time before computers can smell.  Then on to finches and how they sing alot more once they achieve assured mating, and a bit on how language interacts with the brain.  This leads to a discussion of Neoteny: the extent to which a species can survive from birth -- essentially 100% nature, or conversely must rely on learned behaviors after birth -- nature plus nurture.  OK, so on to the Octopus.  Here the author describes the incredible capabilities of an octopus to conceal itself by such elaborate camouflage where its entire skin is a canvas painted with great detail to match its highly complex surroundings.   All of this is accomplished by the brain of the octopus understanding its surroundings and then somehow conveying the image to its "display" surface in a blink.  Even more amazing when you consider that the octopus is 100% nature -- not learning anything from mom after birth.  Just try that you web 2.0 developers!

Overall I am taken by Jaron Lanier.  He is a good writer, knows volumes about a wide variety of subjects in a true renaissance way.  I was lucky enough to hear him speak in person and I would recommend that as well.  We are fortunate to be reading his book at a time when computing has not yet advanced to the point where it is even harder to perceive the problem.  Sure it seems ridiculous now to allow ourselves to be defined by Facebook, but a few Moore's law cycles from now we may find we have met the machine halfway -- and that would be a shame.  One last quote:  "At the end of the road of the pursuit of technological sophistication appears to lie a playhouse in which humankind regresses to nursery school."  Let's at least resist the urge to go there.

Other reviews I recommend:


Wall Street Journal

New York Post

New York Times

To buy the book on Amazon

People are not Computers

Last week a very interesting book came out, "You Are Not a Gadget" by Jaron Lanier. I am about half way through it and will post a review on this page soon. I had the good fortune of meeting Jaron this morning when he make a short presentation at Emerald City Rotary Club in Seattle. Here are the two main thoughts I took away from his talk and the discussion after:

People are not Computers (or visa versa)

The book goes into this in great detail, but Jaron does a good job of encapsulating the danger of thinking of computers as capable beings. He uses Facebook as an example of a system that we may think tracks in parallel with humans. He went on to point out that Facebook does not come very close to approximating the richness of human relationships. If we give Facebook enough authority in our society we will subject ourselves to its inadequacies. If we subject ourselves to Facebook, and Facebook cannot approximate real life, we will start to limit ourselves in real life to only the things that Facebook can recognize. So what you ask?

In America we are all big fans of reinvention. We built our country on the idea. Those of us that grew up before Facebook never thought twice about creating a whole new self if it suited us. We may not have gone as far as Don Drapper, but I know I tried on many personalities before I decided who I was. It is true that Facebook cannot stop us from doing that (or anything), but we can stop ourselves from doing it because we are worried about how it will be represented on Facebook.

We are giving away both ends of the value creation chain

Some time ago we came to the conclusion that inventing was the place to be, and the making could be done somewhere else. This follows our belief that labor is the main component of making and that ideas are the main component of inventing and we want to be the idea people. Some time later, about ten years ago, we decided that ideas should be free. We decided that writing, music, software, and many other pursuits of the mind should be shared freely (on the Internet) and that money would be made some other way. Sure these two changes were separated by about half a century. So we can forgive ourselves for not connecting them together. But now that we don't make things, and we give our ideas away for free -- what part of value creation do we own?

I am really looking forward to getting to the end of the book because Jaron has made some pretty good arguments that we are driving the bus right off the cliff. I for one don't want to go off the cliff. When I get to the part about what we should do -- I will report back. I suspect education and privacy will be involved.

Here is a link to Jaron Lanier's web page.  

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