Tuesday, December 30, 2008

Blog Note: Added 'Interesting (?) Links'

links.gif I've added a widget to this blog to help me keep track of interesting economics- and UT-related articles and blog posts I come across.

If you're reading this on the web, you can find it in the right column with the uninteresting title "Interesting (?) Links" (shown here).

If on the other hand you're reading this in a feed reader (which I personally recommend—it's a much more efficient way to consume news) you'll see a daily summary of links in the feed.

Friday, December 26, 2008

Loosely-Coupled Economies

Yesterday my good friend Mike Curtis and I were talking about the current economic condition and how our shared experience with technology might inform our thinking about it.

Anyone who's been paying attention to (Internet) technology over the last 15 years has a good intuitive sense for the value of loosely-coupled systems. Loose couplings provide a measure of elasticity that can dampen the impact of a shock to any one part of the system. The tradeoff for this increased flexibility is decreased efficiency: tightly-coupled systems are typically more optimized for the specific task at hand and as a result incur less overhead. So by comparison, loosely-coupled systems are less efficient.

My suggestion was that as the global economy becomes more interconnected, it will need to also become more loosely-coupled in order to avoid the kind of cascading failures we're seeing now. But what about the accompanying decrease in efficiency? Well, I'm not so sure there needs to be one.

A more loosely-coupled economy would be one comprised of entities that are smaller and more numerous, and interact with each other at arm's length: ecosystems instead of conglomerates, freelancers instead of employees, many-to-many instead of one-to-one. But this system can only come into being if transaction costs between such entities becomes low enough. Frankly, I think we're getting there.

At my company, we outsource a lot of our non-core work including payment processing, server hosting, and even marketing. Our employees and contractors provide their own computers, phones, and offices. Virtually all of the corporation's connections—both to other companies and to people—are what I would call loose couplings. And technology makes the cost of the company's transactions with those loosely-coupled entities incredibly efficient.

It's simply cheaper for us to use PayPal to accept credit card payments than to process them ourselves. We're satisfied with their service but could switch to Google Checkout or Amazon Payments if we needed to. Our marketing function draws upon the expertise and creativity of tens of thousands of people around the world, but is completely automated and is designed in a such a way that it always pays for itself. And moving our server operations from one supplier to another can be done in a single day. We could move all of these functions in-house but doing so would not only make our business more tightly-coupled (and therefore more susceptible to the failure of any of of them) but also cost us more for every transaction.

I believe the dichotomy between tightly-coupled, highly-efiicient systems and loosely-coupled, less-efficient ones is false. In my experience, loosely-coupled, highly-efficient businesses are absolutely possible. And I believe that model shows the way forward for the broader economy—but there's a hitch.

Charles Fitzgerald, Microsoft's former GM of Platform Strategy, wrote about the difficulty of transitioning a company's business model from low-volume, high-cost to high-volume, low-cost:

The problem is to get to high volume, low cost, there is usually a low volume, low cost waypoint. The radical change in cost structure required is just too painful for most companies to contemplate.

lo-lo-detour.gif I believe there's a similar waypoint in the transition I'm proposing. For companies (or economies) to get to loosely-coupled, highly-efficient, they have to go through a loosely-coupled, less-efficient phase (illustrated here) which isn't an appetizing prospect, especially in times of economic hardship. But a push from government could help.

There are several things government could do to support and accelerate this transformation: make it easier and cheaper to form and dissolve corporations and execute contracts electronically, make it possible for individual small investors to put money into private companies, and maybe most importantly, guarantee people the freedom to create and own their own intellectual property even while employed by another person or corporation. The bizarre and retrograde IP serfdom that is imposed as a matter of course in Silicon Valley is in my opinion this country's greatest hindrance to innovation. I'll be writing much more about that in the future.

So, what are your thoughts about my suggestion of a loosely-coupled economic future?

Wednesday, December 24, 2008

The Economics of Growing Christmas Trees

As I read a University of Minnesota discussion on the Economics of Growing Christmas Trees (linked to from a list of stories about the economics of Christmas) my eye caught one of the costs that should be considered: "fertilizer". My mind read it—no joke—as "marketing".

See? A few years of practical business experience does have an effect.

Merry Christmas!

Tuesday, December 16, 2008

Tyler Cowan Reads Keynes (So You Don't Have To?)

keynes.jpg George Mason University economics professor Tyler Cowan is going through Keynes' General Theory of Employment, Interest, and Money chapter by chapter "with an eye toward a deeper understanding of what Keynes wrote and why it is so important". Here's his analysis so far: Cowan is taking a break for the end of the semester but promises to pick back up in January. I'm nearing the end of my Schumpeter biography and hope to catch up on Keynes and start following along in real time then.

Update: Ryan Romanchuk (@rromanchuk) via Twitter: "Henry Hazlitt also wrote a book called 'The Failure of New Economics' that also does a chap by chap analysis The General Theory". A PDF of the whole book can be found here. Thanks, Ryan!

Monday, December 15, 2008

Inclined to Liberty

Inclined to Liberty True to my word, I've re-subscribed to the Mises Economics Blog, and as a result have added another book to my reading list: Inclined to Liberty by Monex founder Louis E. Carabini.

Hopefully that will appease all you Ron Paul nuts out there.

Just kidding. :-)

Saturday Night's Alright for, uh, Finals?

I just looked up the final exam schedule for the spring semester and discovered that mine will be on Saturday, May 16 from 7:00p-10:00p.

That pretty much blows my plans to drive to Sherman that weekend to see my stepsister Keatan graduate from Austin College. Bummer! Maybe I can get Dr. Hickenbottom to let me take it at another time. Hmm.

Sunday, December 14, 2008

Other (not specific to economics) Reading

Of course I read a bunch of other sources that often have great economics-related material but aren't dedicated solely to economics, including Paul Kedrosky's Infectious Greed.

Paul is an eclectic thinker, prolific blogger, rabid Twitterer, and frequent CNBC contributor. A recent blog post points to a piece n the New York Times by Keynes biographer Robert Skidelsky.

Wednesday, December 10, 2008

Economics Reading

prophet-of-innovation.jpg To get myself in the proper mindset to start my economics studies in the spring I've been doing some reading, including Adam Smith's Wealth of Nations (I've just started my slog through Book IV) and Thomas McCraw's biography of Joseph "Creative Destruction" Schumpeter, Prophet of Innovation, which I'm enjoying quite a bit.

I've also subscribed to a number of economics-related blogs, which, although mostly concerned with either macroeconomics or popular Freakonomics-type topics, are nonetheless interesting: I've tried and then unsubscribed from a few others, including the Mises Economics Blog which I found too strident for my taste.

Suggestions for additional reading are welcome.

Wednesday, November 19, 2008

Anyone Out There in My ECO 304K Class?

I haven't mentioned the exact session I registered for, so here it is:

Course: ECO 304K
Title: Introduction To Microeconomics
Unique: 32985
Meeting time: MWF 1:00p-2:00p
Location: JGB 2.324

If you're in my class and you happen to read this, let me know!

Wednesday, November 12, 2008

Ye Shall Know The Truth and The Truth Shall Set You Back $2,000


I paid my tuition bill yesterday: $1,940.00 for one three-hour class1 and a Class C parking permit. Upon review, the C permit looks like it was a mistake. When I was last at UT, there were a couple of C lots relatively close to campus. Now it looks like they're all east of I-35. Yikes!

I haven't yet "claimed" my permit, and My Parking Profile is offering other, better, and of course costlier garage permits, albeit still for the Fall semester. I wonder when the Spring permits go on sale? Hmm. I've sent them an email to find out.

Judging from this PDF map the San Jacinto Garage would be by far the most convenient (my class is in GEO, right in the middle) but it looks like it's sold out for the year. I think the Trinity Garage is my next best bet.

1 I'm still enrolled in the School of Natural Sciences, which is more expensive per-hour than some others.

Tuesday, October 28, 2008

UT Spring 2009 Google Calendar

ut-cal.png The life of a student at UT revolves around the University's academic calendar, which includes important dates for registration, add/drop, tuition payment, classes, and finals. While UT does provide the academic calendar online, it's not in a very useful format. I deal with electronic calendars all day long, so I decided to fix that.

I've created a public Google calendar that includes the events from UT's 2008-2009 academic calendar that are relevant to the Spring 2009 semester.

If you have a Mac and use iCal, you can subscribe to it by clicking this link: If you use Google Calendar, just click here:

Registered for ECO 304K

This morning I registered for my Spring 2009 class: Economics 304K - Introduction to Microeconomics. Very exciting. I chose an early afternoon class (MWF 1:00p-2:00p) taught by Wayne Hickenbottom, a senior lecturer. It's in the Geology building (JGB), which I remember as a bit dark and dreary, but that was almost 20 years ago so there's a chance they've renovated it.

I chose Dr. Hickenbottom over the other professor teaching 304K, Olivier Giovannoni, based on the Course-Instructor Survey (CIS) Results for the last few semesters. The CIS is a nifty tool that lets you browse the results of surveys completed by students at the end of each semester. Dr. Hickenbottom's overall rating by students is somewhat higher than Dr. Giovannoni's, so he got the nod.

Frustratingly, my registration isn't complete until I've paid my tuition bill, and I'm not allowed to pay my bill until November 11. I suppose that gives everyone time to add and drop classes and resolve waitlist issues, but I'd really prefer to be able to close it out now. Regardless, it's on my calendar.

Speaking of which, I've created a public Google calendar for UT's Spring 2009 Academic Calendar. I'll share the details in my next post.

Saturday, October 25, 2008

Petition Approved! (and UT's Evolved IT)

fec.jpg Last week after the RackSpace event in the KRLU studios at CMB, I walked over to the Undergraduate Studies dean's office to request a waiver for the required UGS courses. There I spoke with Erin Collins, who is in charge of such things, and filled out a one-page form.

Yesterday I got an email directing me to the University's Secure Academic Notes (SAN) system, where I picked up this message:

Dear Charles,
The decision regarding your petition(s) to the Undergraduate School is as follows:
Petition approved/override complete for first-year signature course waiver, 2008-10 catalog. Please feel free to contact me if you have any questions.
Erin Collins
Core Curriculum Petition Coordinator
School of Undergraduate Studies

While I'm glad to have cleared that administrative hurdle, I also found the SAN system itself interesting. According to its about page, it's is a sort of CRM application that deans and academic advisors use to communicate securely (and in compliance with the Family Educational Rights and Privacy Act) with students. Notably, all communication through the SAN system becomes part of the student's official academic record.

In my previous time at UT ('88-'92) I saw some impressive advancements in the University's IT systems. As a freshman, I registered for classes by standing in line—along with 50,000 other students—at the Frank Erwin Center (pictured here) and affixing a sticker for each course to an actual sheet of paper. By the time I graduated, registration was done via an IVR system called TEX (which has since been retired, but check out the awesome video).

These days nearly everything at UT is done online. I'm sure that's not novel to most students, but it's a big enough change from what I remember that I'll be describing some of the various systems I encounter here.

Next up: registration. My registration window opens Tuesday morning. And happily, I'll be doing it from my office instead of the Superdrum.

Tuesday, October 21, 2008

Planning My Degree Program

brb.jpg A few weeks ago I scheduled an appointment with Jana Cole, one of the undergraduate Economics advisors, to plan out the courses I'd need to complete in order to add an Economics major to my degree. She and I went through the degree requirements and found that I had satisfied all of them except the required Economics courses themselves—plus one more thing.

The University now requires students to take an Undergraduate Studies (UGS) course each of their first two semesters. No such courses were offered when I was last in school, but they were described to me as a sort of "gentle introduction to college". Surely, I said, I wouldn't need to take those classes. Jana agreed that I probably wouldn't need them, but did say that I'd need an "accommodation" from the Dean of Undergraduate Studies.

Interestingly, the nifty online Interactive Degree Audit (IDA) tool doesn't seem to care that I've never had a UGS course. (If you haven't noticed yet, UT loves TLA's.) But it is complaining that I haven't declared a a minor, and doesn't seem to have a way for me to do that online.

So tomorrow after I attend the RackSpace Cloud Event as both a blogger and the president of a cloud-based applications company I'll head from CMB over to the FAC as a readmitted student and talk to an advisor there.

Once all that is taken care of, I should be all set to register next week. Very exciting.

The 40-Year-Old Freshman?

ut-campus.jpgWhen I enrolled as a freshman at The University of Texas in the fall of 1988, I did so under protest. I didn't have any friends who cared about school, I didn't care about school, and I didn't care that I didn't care about school. The University called me a Presidental Scholar and an Undergraduate Fellow, but beneath the titles and the test scores I was a disaffected, angry young man.

I thought the idea teaching a bunch of eighteen-year-olds the theoretical underpinnings of the world was ridiculous. With little to no practical experience on which to hang the theory, how could they possibly exercise any critical judgement? They would have no intuitive feel for the topics they were being taught and would have to take it all on blind faith. Universities, I said, were more appropriate for people who had lived long enough to truly develop their own worldviews than for teenagers.

Over the next four years not much changed apart from the fact that I earned—with the absolute minimum effort required—a degree in Computer Science.

Fast forward twenty years.

It's now 2008, and I'm a bit more mature than I was then. I've grown up and built a career, a couple of companies, and a family of my own. I know something about discipline, achievement, responsibility, and sacrifice. I'm proud of what I've done, and I find that I've become one of those people I imagined when I was eighteen who's experienced enough of the world to truly appreciate higher education. So I'm putting my theory to the test and going back to school.

I considered getting a master's in CS, but have decided instead to add an Economics major to my degree. I'll still be working on Spanning Sync (and other, unannounced projects) full time, so I'll only be have time for one or two classes each semester. My first day of class is Tuesday, January 20. 

And of course, I'll be blogging the whole thing here at FortyYearOldFreshman.blogspot.com1. Hook 'em.

1 OK, I'm not yet 40 (38, actually) and I won't be a freshman (degree-holding senior, technically), but "The 38-Year-Old Degree-Holding Senior" isn't quite right.