Driving Less

I just cannot shake this gas price thing.  I took the data from NationMaster and converted a few of the notable countries to cost per gallon at the pump:

Some people say that we have so much money in America that even if we doubled the gas price, consumption would not change.  I think we should give that a try.  We currently use 378 million gallons of gasoline per day so a $3.00 per gallon gas tax (in addition to current taxes) would raise $137 Billion in tax revenue each year.  Sure, maybe our consumption would go down -- which would also be good  -- so let's call it $100 Billion.

That would not quite pay for the interest on the national debt ($164B), but it would pay for the State Department ($51B) and HUD ($47B).  See the Wikipedia page on the 2010 budget here. 

Hanging Out with Nambia and Bangladesh

In the event you are interested in knowing where we stand on gasoline taxes and the resulting price at the pump, there is a great website that you should check out called NationMaster.  There you can see a chart comparing us to all other nations.

It turns out that in America we pay 77% of the worldwide average price for gasoline.  Sounds pretty good until you look more closely and see who we are hanging out with on the list:

It seems like the weaker the government, the lower the gas price.  Gotta keep the people happy I guess.  All of the way at the bottom are Venezuela, Iran, Iraq, and Turkmenistan.  At the top are Uruguay (who da thunk), the UK, Israel, and Argentina.  They pay 2X the worldwide average, or 3X what we pay.

If they can do it -- why can't we?

Book Review: The Frugal Superpower by Michael Mandelbaum

We have spent all of our money and no longer have the ability to project power to all four corners of the globe.  We probably knew this was coming because it has happened to every world dominating superpower to date.  We inherited the role as the protector of the free world when the sun set on the British empire.  For a time we shared the responsibility with the USSR, the protector of the not free world, but on November 9, 1989 the job became all ours.

As Lord Acton pointed out in 1870, the Pope is not immune from fallibility.  If the Pope is not, we are probably not either.  Lord Acton is the guy that first said:  "Power tends to corrupt, and absolute power corrupts absolutely."  

Michael Mandelbaum does a very good job of surveying our current situation and placing it in the context of recent history.  His authority on the subject comes through in the writing as well as in his BIO (Yale, Cambridge, Harvard, professor at Johns Hopkins, 10 books...), he keeps to the point, and offers one simple solution:  Increase the tax on gas in the US.

Imagine that, we have a very complex problem that threatens our role on the world stage, and probably our quality of life, and it very well could be fixed with one easy to implement policy.  

Huh.

Here are some other reviews:

The Washington Times

The Guardian

Growing or Shrinking

I think it is a miracle that our economy grows at all.  I can't say that I have an intricate understanding of the way we calculate GDP or inflation.  But here are the things from my life that are pulling the deflationary lever: 

Computers:  In 1988 I bought at 286 machine for $5,000 -- now I buy computers for less than $1,000.

Cell Phones:  In 1990 my cell phone bill was $600 per month.  It is still $600 per month but I have 11 phones and a handful of data devices on it.

Housing:  I do pay more for housing because my family is bigger and we have upgraded our house.  But I don't see any reason to expand any further and at 30 years old, my house is a long way from wearing out.  On a larger scale, we have about 15% vacancy in housing units (empty houses, rental units, and other unoccupied inventory) I would say it will be a while before we need more housing as a nation.

Cars:  We just bought a car for about the same price as the last new car I bought in 2002.  And this one is nicer.

Media:  I pay less for my phone, internet, cable TV, music, and movies than in the recent past.

Travel:  We seem to get great deals on airfare and hotels whenever we decide to travel.  We may be traveling more that we used too -- so this could be a net increase.

Healthcare:  Our family spending on healthcare -- even with insurance -- goes up significantly every year.

Education:  My kids are now in private school because I could not risk a public education.  Up a bunch here too.

In the end, more items are going down or staying flat than items going up.  The ones going up, healthcare and education, are going up a lot.  So my personal net GDP change is up.  This "growth" is pretty much a demographic thing -- my kids are growing up and requiring more medical attention and more education spending.  Without those two things, my individual GDP change would be down.

Our Standard of Living

We put a good deal of weight behind averages.  Whether it is GDP, GDP per capita, inflation rate, cost of living, or even the cost of gas -- these numbers are national averages that only tell part of the story.  There was a good opinion piece in the NY Times (from Reuters Breakingviews) yesterday about how Americans have gotten used to continual increases in living standards and how the wind has now turned against that trend.

Of course the article is citing the average living standard.  With the polarization of incomes becoming ever more dramatic, the average living standard does not tell the whole story.  Some people are doing better, the wealthiest 10 percent of households got 35% of income in 1980 and got 48% in 2008.  And the other end of the spectrum are the unemployed, now numbering 20 million.  Here is a good article on this subject in Businessweek if you want to read more.

The rising tide is not raising all of the ships.  Those in the knowledge economy that can compete on the world market will do well.  Anyone that wants to earn 10 times what someone offshore earns -- had better figure out how to contribute 10 times as much.

The Dinosaurs Have No Money

One of the best ways to move a large marketing organization from unmeasured marketing to measured marketing is to test everything and kill the things that cannot prove their value -- then move that budget to things that can prove their value.

This is not new, every sizable marketing organization has been doing this for at least a decade.  This reality translates to a great deal of disruption -- even if the overall budget is only changing slightly.  

The same thing is happening in the labor market.  Our unemployment rate is stuck at 10%, but 3.2 million new jobs were created in August.  This number cannot be evaluated without also looking at the job separations -- also 3.2 million.  So no net new jobs -- no change in unemployment rate.

Some would say that nothing is happening in either marketing or employment.  I say that a great deal is happening.  For every dinosaur company that is letting people go, there is a rising company hiring.  For every dog of a marketing idea getting killed, there is a new one starting up.

The next time you hear "we have no budget for that" remember that somewhere else someone is saying "let's do it!".

LATER:  Jobs numbers just out:  95,000 net jobs lost in September.

Packing Brains instead of UHauls

Anyone who has tried to hire a software engineer lately will tell you that the unemployment rate in that part of our economy is just as low as it always was.  It would fit my experience to say that the unemployment rate in the tech industry is around 5% - which is half the national average of 10% and a third of the often cited number of over 15% which counts the people who are underemployed or who have quit looking for work.

So people with the right skills do not have any problem finding a job right now.  And since averages are pretty straightforward, we know that for everyone who is experiencing 5% unemployment, there must be another person experiencing 25% unemployment, to make the average 15%.

When comparing the US to the Euro-zone, economists often cite worker mobility as the reason the US consistently outperforms.  The mobility the economists are talking about here is physical.  An American will move from Detroit to Dallas for a job before a European will move from Greece to Germany.  In China people are moving to the cities before they even have jobs - but that is another story. 

In a knowledge economy, the willingness or ability to relocate does not solve the problem.  Our workers need to repack their brains instead of UHauls in order to move from the 25% group to the 5% group.  In fact, the way the work follows the smart people around now, there is no need for the UHaul at all.  Just pack your brain with the right knowledge and the work will come to you.

We saw "Waiting For Superman" last night.  I will write more about that later.  The movie paints a big target on the teachers unions -- a fight I am very interested in following.  The teachers unions, and all of our unions, are in a perfect position to play a critical role in the packing of American brains to compete on a world stage.  In the area of education, the teachers unions have two layers because they have to decide if they want the teachers to get smarter, so the teachers can make all of the students smarter.  This is unbelievable leverage and one of the reasons so many people in the technology industry (from Bill Gates to George Lucas) are trying to figure out how to fix our education system.

If you are thinking about seeing the movie -- do.  My only complaint is that it is about half an hour too long.  If you want to think more about this subject, check out my review of Work Hard, Be Nice.

American Jobs

Robert Scoble has a good post this week about keeping jobs in America.  He is absolutely right.  

Every single person in our country should be thinking about the balance of trade.  Each month we send away 40 billion dollars of our money.  This means we buy $40B more in goods from other countries than they buy from us.  This is not sustainable, and we all need to be thinking about it.

The trick of course is to create products in our country that can compete while paying a wage that can support the lifestyle to which we have become accustomed.

Thomas Friedman has a good piece on China vs the US in Jobs associated with climate change.  Here is a good quote:

So while America’s Republicans turned “climate change” into a four-letter word — J-O-K-E — China’s Communists also turned it into a four-letter word — J-O-B-S.

One of these days our elected leaders should probably stop crabbing at each other and get down to work.

More on Buying American

Here are a few more thoughts on each individual taking responsibility for their share of the trade deficit.  There are three main parts of the trade deficit - exports (things we make that people in other countries buy), imports (things we buy that are made in other countries), and domestic consumption (things we both make and buy).  

Domestic consumption is what I did when I bought a Jeep.  I know there are parts in the Jeep that invariably are made in China, but let's not let get dragged down that rabbit hole just yet.  Domestic consumption is not as good as exporting something, but a lot better than importing something, so if we have to consume, let's consume the things we make.

The argument against domestic consumption for the sake of domestic consumption (or avoiding imports) is that it dulls our competitiveness.  If we all just buy products made in America, because they are made in America, our manufacturers will get soft and lose their edge.  This also happens when domestic consumption is boosted by tariffs or other protectionist measures.

So the main measure of the health of our industries is not the extent to which our products compete for the domestic market, but the extent to which our products compete abroad.  

What about the labor union part of my last post?  The labor unions are better positioned to make a difference in the trade deficit than any other group.  If the unions spend all of their energy holding onto the past -- including onto benefits earned in the past from companies that cannot possibly sustain them -- it will deal American manufacturing a double blow.  Once for holding us back and once for not moving us forward.

Conversely, if the labor unions used their relationships with the workforce and employers to invest more in building the workforce of tomorrow -- we could prevail.  Sure it takes less workers to load a ship with a crane instead of by hand -- but we can afford to pay the crane guy many times the amount a manual laborer would command.  Sure it takes less workers to build a car with robots, but the robot operators and repair people make many times what the old assembly workers got paid.

We could dominate the next century of manufacturing as long as we invest in the right places and the labor unions are the key.

In the end it all boils down to the trade deficit.  We are surviving now because we can finance our trade deficit ($50 Billion per month).  Every time we dig that hole deeper we get weaker, and less likely to be able to continue to finance it.  Let's make products that compete on the world market, and also buy them at home.

Our New Car

After driving my wife's last car into the ground we broke down and bought a new one this week.  Thinking that everyone in our country ought to make purchase decisions with the balance of trade in mind, we committed early to buying an American car.  

After driving all kinds, we settled on a Jeep Liberty.  It is an awesome car, just big enough but not too big.  Just tough enough but not too tough.  

There were a few revelations during the process:

The process at the car dealership (Bellevue Chrystler Jeep) was awesome.  Our salesperson, Joe Langhans took great care of us -- and once we decided to buy -- we were done in under 2 hours -- awesome.  Of course I was prepared for the worst -- but it did not even come close to happening.  I recommend Joe and his dealership highly.

I made a comment during the purchase process that Americans should buy American made cars and the reaction:  Republicans think like that but not Democrats.  Hmmm.  I had never thought about it that way before.  Today Rham Emanuel and our President are getting blasted for saying not very nice things about the UAW and its products.  Maybe a little leadership will bring the D's back to buying our cars.

Waste Wipes Out Stimulus

David Brooks has a good post in the NY Times yesterday where he compares the strategies of the US (big stimulus) and Germany (small stimulus) and the outcome: US not recovering and Germany growing big time.  I would add one thing:  stimulus spent in a wasteful way doesn't do any good.  In fact it does harm because it increases the deficit and debt load.

Germany spent its money and energy stimulating the production of products other countries want like machine tools.  We spend our money and energy propping up failed banks and expanding benefits for the unemployed.  While the comparison of the size of the stimulus is one data point, how it is invested is the other.  

We all should be watching the trade deficit as the most important measure of our success.  It measures how successful we are as a country producing products and services that other countries value enough to buy.  Right now our trade deficit is increasing -- so whatever stimulus money is making it past the bankers is being spent to buy products made elsewhere.

Electronic Pearl Harbor could do 1 trillion dollars damage

If you want a quick and high quality update on the state of cybersecurity you should watch this episode of Ideas In Action.  Thousands of companies have been compromised, our government is spending billions, but are we doing enough?  Do we think there is a real threat?

If foreign governments are gaining access to our computer networks and stealing everything from designs of weapons systems to the formulas for drugs, is it an act of war?

Earlier this year I was at a conference where a cyber crime panel proclaimed that 50% of all credit cards are compromised and the banks know it -- but they don't want to say anything for fear it would destroy the marketplace for credit card services.  These compromised credit card numbers are routinely sold on the black market for 10% of the available balance.  So whoever is buying them plans to use them.  

Just yesterday I wanted to send some iTunes money to my daughter and found that Apple no longer does email iTunes gift cards -- I suspect because of the fraud.  

Many experts are waiting for the cyber crime equivalent of Pearl Harbor to wake up America and bring about the changes necessary to secure our systems from attack.  

We probably should all be thinking more about this.

The People Have Voted: Wall Street Still Not Safe

In our country government is less powerful than business.  This is probably the most visible in the military industrial complex, but there is evidence that the lobbyists call the shots in other areas as well.  A few months back I wrote in this post that Wall Street would not be regulated until it decided it was in its best interest to be regulated. 

Since then our representatives in Washington passed the financial reform bill in an effort to manage the forces that lead to the last melt down and possibly prevent a repeat.  During July, the very month the legislation passed, individual investors took $15 billion more out of equities than they put in, and so far this year, the total cash flow out of the stock market has been $33 billion.   The people are voting with their wallets and the verdict is that the stock market is not safe for the individual investor - reform legislation or not.  

If you don't know who the sucker is at the poker table -- it is probably you.  A couple more years of this and the Wall Street firms may just start asking for real reforms to reassure the public that the market is regulated and safe.

Re-Entering Civiliziation

I have been out on vacation for the last couple of weeks and to my surprise was able to just about disconnect from the news stream.  Today I am reconnecting through one of my favorite activities -- reading the Sunday NY Times.  This has sparked a string of maybe a dozen blog post ideas, some of which I will just rip out here and then come back and dig into deeper in the days ahead.

What is China Going to do in Afghanistan?

China is not even in Afghanistan!  Well, the British were there a hundred years ago, and it contributed to their fall from world leadership, the Russians were there in the '80s and it drained their coffers, and we are getting humbled there now as detailed in the Wikileaks story of last week.  So could it be that China's rising star will land there next?

Waste and Corruption are the Same Thing

Following this thought, if we were to assess corruption by a the single measurement of money wasted, the US would be the most corrupt country on the planet.  The big numbers of course are: $1T on military spending and unneeded wars, $1T on the half of healthcare that makes our system cost twice as much as the next one on the list and without any incremental benefit, $1T of bail outs of banks and other institutions that don't reform, and $500B in trade deficits created by buying more from others than we can convince them to buy from us.   I am not sure how to parse the interest we pay on past debts, and undoubtedly there are many smaller numbers to add up.  So let's just call it $5 trillion wasted every year -- no one can top that!

The Internet as Border Town

From the NY Times piece on Mexico today: "In 1958, Orson Welles used the border as backdrop for his classic noir film “Touch of Evil.” (“This isn’t the real Mexico,” says the character Mike Vargas. “You know that. All border towns bring out the worst in a country."  

The story goes on to list all of the bad stuff you can do in Tijuana -- all of which you can get on the Internet quite easily: porn, sex, gambling, danger... maybe not drugs so much but I am sure if you looked hard enough you could.

Apple and Facebook are underway building the new AOLs to protect us from our attraction to a quick trip across the border for a little fun.

Alarming the Alarmists

The BP oil spill may have been avoided had the crew not disabled the alarm.  When was the last time you got up to see if the neighbors home or car alarm actually meant there was a robbery underway?  Not a day goes by without someone trying to tell us that we should pay more attention to the global temperature alarm.  Our economic indicators for GDP and unemployment are at a constant full volume. Now that we are so overloaded with alarm inputs -- how are we possibly going to focus our attention on the important things?

Often vacation is referred to as slowing down.  This high temperature re-entry into the news atmosphere leads me to believe that my vacation somehow released me from the usual confines and now I am returning to earth. 

The Demise of Large Top Down Organizations: Will China Be the Exception?

Sometime during World War II the large centrally controlled organization started to be undermined by the rise of smaller autonomous actors.  While the Americans and the Russians are still arguing over who won the war, everyone agrees that the Germans and the Japanese lost.  And they were defeated by a scattered array of small semi autonomous units from an informally coordinated group of Allies.  D day and Hiroshima were big institutional operations for sure, but the Allies made it happen, and the coordination was minimal or ineffective. 

Ever since then the large organizations has been on the decline. The world was re-ordered and marshaling the resources of an enterprise has been in rapid evolution from centralized to decentralized.

I bring this up now because evidence of this evolution is presented to us every day.  From our ineptitude in every war since WW II, to our inability to manage healthcare cost or quality, to the steady decline in the effectiveness of our education system, or our failure to regulate the financial markets and the protection of the environment, top down administration on a large scale is failing and doing so quite spectacularly.

I have a hard time imagining that China can be exempt from this trend away from large centralized institutions.  One significant contributor to their demise is their ability to deceive themselves about reality.  I don't know about Hitler, but the Japanese Emperor clearly was not getting accurate information towards the end of the war.  Later, the fall of the USSR was sudden and dramatic because those in power were deceiving the public and probably themselves too.  It would be interesting to look into how well China is doing in assessing the effectiveness of its policies.  When in complete control of the information, changing the results reported is often easier than changing the actual outcomes.  

This will be an interesting area to watch.

Immigration Policy is Making US Insane

The parable goes like this:  If you offer a Russian anything they want, with the proviso that whatever they pick their neighbor will get twice as much, the Russian will say:  "Put one of my eyes out".  

According to this piece in the NY Times today, the parable should be revised to read:  "If you offer an American...".

The article argues convincingly that we underfund education because we want to ensure that children of immigrants are not the beneficiaries of our educational system.  We are committed enough to this idea that we are willing to sacrifice the education of our own children in order to accomplish it.  That is some extreme protectionism.

There is no question that immigration policy is a very complex issue with many variables.  Just read this paper by the UN's Social and Economic Affairs group on the relationship between policy reform and income distribution and you will gain a new appreciation for the complexity.  For a quicker reference, here is a link to the CIA World Factbook's list of income distribution showing that of the 134 nations on the list we are 45th from the end that is most polarized (Namibia) and a long way from the least polarized (Sweden).

I put in these two reference points because I still think of our country as the land of opportunity.  America is the place people want to go when they want to improve their lives through hard work -- not through a free ride.  We hear often these days that our current policy changes are socialist, and maybe they are, but we are a long way from the socialist end of the income distribution curve and our recent willingness to let the hand outs go to those that don't need them only pushes us more towards the rich get richer model.

We want our economy to grow.  In order to have growth we need immigration.  Highly skilled people want to move here (for now at least) -- so let them in.  Along the way some not so skilled people will get in too -- that is also going to work out for us in the end.

Here is a link to the posts in this blog tagged Immigration.  There you will find the numbers on Immigration showing that we have strayed from our roots and our immigration rate is well below where it has been in the past.  should loosen immigration policy.

Labor Arbitrage, Automation and Customer Service

The feature article in the NY Times Magazine yesterday told the story of IBM's AI team creating a credible Jeopardy contestant.  Clearly the IBM team has made some progress since Deep Blue beat Garry Kasparov in May of 1997.  The computer may not win, but IBM will win a great deal of attention during the event next fall.  Probably both great technology and great marketing.

While reading the article, some roads converged in my technology imagination, mostly in the areas of labor arbitrage, automation, and customer service.  The effects of these changes are going to be felt slowly over some time -- but they will be significant.

Labor Arbitrage

We are a decade into the Internet enabled off-shoring movement fueled mostly by low cost labor.  Technology innovations only happen when the innovation is ten times better.  Offshore labor does not have to be 1/10th the onshore cost, but it needs to be at about a third in order to work.  If we are paying $9 per hour onshore for something that can be done for $3 per hour offshore -- the inefficiency of distance and the added cost of travel and/or transport can be overcome.  If onshore and offshore labor rates converge, off-shoring will become less compelling.  This convergence can happen by offshore labor rates rising as competition for workers and living standards are raised in offshore markets, or as onshore labor rates fall.  Wait, how can onshore labor rates fall?  Through automation.

Automation

Everywhere we look we see automation.  Cars are still being built in this country because robots do most of the work.  We see the combination of automation and self service every time we go to the bank machine or the grocery store.  Google signs up customers without any salespeople -- which is automation displacing labor in yet another way.  The IBM Watson project may seem too theoretical to start displacing humans, but as the NY Times piece points out, the first application may be in the call center.  Giving the computer the job of answering customers complex questions.  Just like on the manufacturing line, the bank machine, or the grocery store, the computer does not have to answer all of the questions, just a good percentage.  When the human's job becomes handling the extreme exception and managing the machine -- the skills required and the associated pay are each increased significantly.  At the end of this road lies a customer service capability for companies who have never operated in that mode.

Customer Service

Search for "Google Lack Customer Service" and you can read for days about how Google just does not do it.  This is a cause for relief by some of Google's more customer centric competitors.  When IBM delivers to Google an engineering driven answer to this deficiency it will be as big as any significant change in an ecosystem.  Kill all of the wolves and the elk population goes through the roof.  Google is not the only engineering driven company that will benefit.  HTC and many of the other sophisticated OEMs, will be able to accelerate their evolution from manufacturer for others to full competitor.  The ecosystem will never be the same.

Earlier this year I heard a presentation by Jaron Lanier where he gave the low cost labor countries like India, China, and the Philippines 20 years to get up the education ladder far enough to be safe from the flood caused by automation.  Could be 20, I would guess 10.

Could Hollywood Go Direct?

The Wall Street Journal reported today that the Hollywood studios are considering releasing movies to home viewers as early as 30 days after their theater release instead of the customary four months.

This is very likely a good step forward for an industry that has struggled to address the changing nature of its market.

This is very unlikely to be a good thing for the owners of the movie theaters.  These partners of the studios could suffer a significant drop in their business volume at the same time that the studios could gain an increase.  

So should  the studios do it?  What would happen to the movie industry if a whole bunch of movie theaters go out of business?

Physics, Nature, and the Rule of the Mob

Life is governed by the laws of physics, the laws of nature, and the rule of the mob.  Physics is "what goes up must come down". I don't know what the laws of nature are, but we say they have been violated when we see something really disturbing, so I am sure they are useful. And the rule of the mob is about to take down two companies we thought were invincible just a few months ago:  Goldman Sachs and Facebook.

There are undoubtedly books on the rule of the mob and I have not read any of them.  My description goes like this:  when a person or an organization gets to the top of the heap, it has to spend so much energy just staying at the top of the heap, that it cannot stay on the top of the heap any longer.  The timing of the process is highly variable, but the faster one gets to the top of the heap the more likely the mob will vigorously pursue a change in the hierarchy.  

Goldman Sachs got there slowly and stayed at the top for a very long time.  Most of us cannot even remember a time that Goldman was not at the top.  SEC Chairman Mary Schapiro was quoted in the Wall Street Journal on Saturday saying "If we don't get serious about this process, we may cease to exist." Goldman may own parts of the government, but this kind of resolve will be hard to overcome.  Who would you pick for longevity, the SEC or Goldman Sachs.  I go with the SEC.

Facebook blew past 300 million users to its current 500 million or so and its founder has turned down hundreds of millions of dollars to keep running it.  The tide is turning however and it is now cooler to quit Facebook than to use it.  The tech community turned against Facebook several weeks ago, and the rest of the mob will likely defect in the weeks ahead.  In fact there is a web site dedicated to this movement called Quit Facebook Day.

One interesting element to these actions by the mob is the lack of viable alternatives.  Goldman Sachs is probably not any more evil than any of the other firms on Wall Street.  Their unique crime is that they are just so good at taking their client's money.  Clearly market demand for a system we can use to organize our relationships on the web has driven Facebook to its current heights.  No clear successor has presented itself, although the mob is putting some weight behind the Diaspora Project, but four kids with an idea does not a viable alternative make.

If you are Mark Zuckerberg, or Lloyd Blankfein, you can be comforted to know that the crowd will only take you down a few notches and probably not out of the picture all together.  After all, your predecessors put you in good company.  Firms like Standard Oil, IBM, and Microsoft all fell victim to the mob.

Funny, my spell checker wants to replace "Zuckerberg" with "Boodsucker" -- even spellcheck has turned against him!

-image courtesy of www.thefirstreporter.com

 LATER:  NYT post from Friday about how the Web itself is a social network.

Know Your Place and Your Responsibilities

A few years ago I took a trip to India.  I was fortunate to meet many of the leaders of the business community in the capital city of New Delhi.  Like many people from the US I found myself in surrounded by people educated much better than I was, and I was prepared for that.  

I was not prepared for the widespread accepance by the elites that the good of the nation was more important than the good of any individual family dynasty.  Sure, they may have just been saying this, but there was some evidence to support it.  You may recall that just a couple of decades ago there were state protected monopolies in India for oil, cars, and just about every other major market.  These were owned by families and as we learned in Econ 101, protected monopolies are not efficient.  Somehow these powerful individual interests were put asside at what must have been an unnerving threat of financial risk to the people in power in exchange for an uncertain payoff as the Indian economy entered the open  world markets.

Now surely these families were seeking any advantage they could secure as they crossed the chasm.  But even so it was a show of defference to the greater good that we could learn from.  While in India the evidence of the caste system is one of the things that you just cannot avoid thinking about.  Being from the US, I do not believe the caste system will bring benefits to India.  I cannot help but marvel at the way the worlds largest democracy incorporates this complex history in a way that may just work.  

This past week I was fortunate to be part of a conversation at Mark Anderson's Fire conference about alternative energy.  Mark has done an amazing job with Fire and he continues to push the people attending to think of new things about how the future could be.  A few years ago he started the CTO challenge.  He assembles the CTOs at the conference into a team and challenges them to think hard about a big problem.  Not unlike a code-a-thon, this 48 hour effort is not expected to solve everything, but to apply a burst of creativity and concentrated energy with the hope of advancing the ball down field a bit.

This year the challenge was to think deeply about how to scale alternative energy.  Many ideas were presented, and along the way it was just assumed that any viable ideas must steer around the vested interests of coal and oil because those elites would never give up their singular pursuit of their best interests (or give up their lobbiests).  

At that moment it struck me that just maybe the responsibility the elites in India feel a for the best interest of their nation comes from the caste system.  Could it be that a horrible construct that condemns people to their place for generations also conveys a responsibility to the people at the top to do the right thing?