Re: Guest Post - Nick S.

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I'm not seeing much to disagree with here. Most consultants are not that useful, in my experience. And it's also true that "everyone knows what's going on around here, even though nobody knows what's going on around here". This principle seems to be confirmed in direct proportion to the size of the institution.

God forbid anyone might stoop to listen to the people who do the actual work.


Posted by: Natilo Paennim | Link to this comment | 02- 6-12 10:01 AM
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Just how good-looking are these recent college graduates? And are they good-looking in a way that fits with the corporate environment? I think a recent college graduate who can totally rock the short-skirt long-jacket look could do a lot for an organization.


Posted by: rob helpy-chalk | Link to this comment | 02- 6-12 10:10 AM
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Just how good-looking are these recent college graduates?

In the original article that phrase ("good-looking") links here.

Anecdotally I have heard other people comment that consultants tend to of above-average attractiveness.


Posted by: NickS | Link to this comment | 02- 6-12 10:20 AM
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I don't know why Robin Hanson doesn't simply talk to executives and consultants. Is he trying to signal something to us?


Posted by: Disingenuous Bastard | Link to this comment | 02- 6-12 10:22 AM
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Hey, I'm in consulting. Does that make me handsome?


Posted by: Alex | Link to this comment | 02- 6-12 10:29 AM
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Hey, I'm in consulting. Does that make me handsome?

According to Sifu Tweety, in the IQ thread, yes.


Posted by: NickS | Link to this comment | 02- 6-12 10:31 AM
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My old firm hired McKinsey right around the time that associates salaries started to sky-rocket (and hours expectations along with them). They had a presentation for the associates and I recall them using the phrase "virtuous growth cycle" to explain why we should work a lot harder so profits per partner could increase (at the time they were already about $600,000 per year), so that we could attract the best partners, so that they could bring in the best work.

It very much had the feel of "you wouldn't buy this if we tried to sell it to you, so we brought in the most prestigious consulting firm in the country to do the job." It did not have the desired effect.

Maybe they weren't hot enough though. They didn't really leave an impression either way.


Posted by: tulip | Link to this comment | 02- 6-12 10:33 AM
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Many companies have processes or people that were set long in the past, and don't have in-house expertise to decide eg Mac or PC? much less whether some expensive new machine is worthwhile for them. So there's a rational market for consultants, definitely.

On the other hand, resource allocation within an organization can be pretty messed up, driven much more by the quirks of a small number of senior people than it should be. Having reputable outsiders come in can break up log jams.

On the third hand, the personalities it takes to put something new together successfully are not enough to run something big and stable. On the fourth hand, consulting usually means a lot of travel, which bumps against family obligations of the middle-aged.


Posted by: lw | Link to this comment | 02- 6-12 10:39 AM
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I can remember one set of consultants that were hired to teach classes on statistics. Then they asked me to go because I knew statistics, which was annoying but paid the same. They taught how to run regression analysis and correlations using Excel. This was before R and there was no software budget.


Posted by: Moby Hick | Link to this comment | 02- 6-12 10:45 AM
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feels unconvincing to me without corroborating evidence.

I'll corroborate. My single experience with consultants involved a situation where we needed to seriously change course, the guy who brought in the consultants knew this, and the consultants provided the cover needed to make it happen.


Posted by: politicalfootball | Link to this comment | 02- 6-12 10:47 AM
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I get brought in to consult internally, on problems. No fucker pays much attention to what I recommend [when they aren't narrow cheap technical fixes], as I always recommend not being such cheapskate bastards. I expect if I was an external consultant they'd pay more attention. Maybe if I was more handsome?


Posted by: nattarGcM ttaM | Link to this comment | 02- 6-12 10:51 AM
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You should grow a beard if you want technical cred.


Posted by: Moby Hick | Link to this comment | 02- 6-12 10:53 AM
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I have a pretty decent beard these days. Longer certainly than at past meetups.


Posted by: nattarGcM ttaM | Link to this comment | 02- 6-12 10:54 AM
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I'm going by your twitter picture.


Posted by: Moby Hick | Link to this comment | 02- 6-12 10:56 AM
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I'm disappointed the link in 3 didn't go to a picture of a good-looking recent college graduate.


Posted by: Spike | Link to this comment | 02- 6-12 11:04 AM
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I think a recent college graduate who can totally rock the short-skirt long-jacket look could do a lot for an organization.

As long as she's got the right allocations.


Posted by: Josh | Link to this comment | 02- 6-12 11:06 AM
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So the conjecture is that the emperor hires good looking children to tell his subordinates that they have no clothes.

That's no way to run an empire.


Posted by: Tripp | Link to this comment | 02- 6-12 11:07 AM
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According to Sifu Tweety, in the IQ thread, yes.

Did correlations cease to be symmetrical while I was out?


Posted by: rob helpy-chalk | Link to this comment | 02- 6-12 11:07 AM
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A certain amount of consultancy consists of going round the workplace listening to the employees (who generally know their stuff) and then telling the managers what the employees said. For some reason, it is more acceptable for managers to pay attention to what their employees say when it's filtered though the reports of consultants. Perhaps it is because the consultants are paid lots of money.


Posted by: Gareth Rees | Link to this comment | 02- 6-12 11:11 AM
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the short-skirt long-jacket look could do a lot for an organization
Well, presumably it's successful because it's the late 90s and the economy is doing quite well.


Posted by: oudemia | Link to this comment | 02- 6-12 11:12 AM
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I ran across that post previously, and thought it was arrant bullshit. (But then again, I would, wouldn't I?)

I wouldn't dispute that some consulting engagements match that description, but it is rare, IME, and certainly not the modal case, as the post contends.

If a CEO just wanted a blue chip name to put their imprimatur on a course of action already decided upon, a brief engagement for a few hundred grand would do the job. But the top shelf consulting firms (the ones which attract the top undergraduate talent) make the bulk of their money from much larger engagements.

So why pay all that money? Generalizing a bit, it's usually because crucial decision-relevant facts are unknown, or in doubt. How it comes to pass that some 24-year-old Ivy League snots can be better at generating those facts than "the people who do the actual work" is a complicated story, but it's not a myth. I see it every day.



Posted by: knecht ruprecht | Link to this comment | 02- 6-12 11:16 AM
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I ran across that post previously, and thought it was arrant bullshit. (But then again, I would, wouldn't I?)

I was hoping that you would weigh in on this question.


Posted by: NickS | Link to this comment | 02- 6-12 11:20 AM
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17. I think the harsh version is that the boss is reluctant to listen to anyone at all, and only by bringing in just the right people is it possible to get even a little of her attention. The benign version is paying for specialized advice or ongoing auditing that the company can't afford or can't maintain in-house.

It's definitely true that abuse downstream and sycophancy upwards is SOP in a bureaucracy from the earliest Chinese civil service exams to Hapsburg times to today. Bosses that grow up in that environment will systematically disregard everyone beneath them on an org-chart.

It's not a modern problem-- large organizations have been completely nuts for centuries. Personally, I think it's a less serious problem in modern times than in the past owing to automated reporting (so large problems are harder to hide) and pressure imposed by relatively rapid change.


Posted by: 17 | Link to this comment | 02- 6-12 11:21 AM
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whoops, 23 was me


Posted by: lw | Link to this comment | 02- 6-12 11:22 AM
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I'm sure I've shared the story of Ryan, my cob-logger, and I hatching a weird consulting scheme over brunch one Sunday. The plan was to go into a bar/restaurant on a sleepy afternoon when business was at a lull. We'd then try to engage the bartender or serving staff, slowly revealing hints of our "job", which was something like Restaurant Design Consultant. Once the bartender/server was on-board and interested, the plan was to get them going about what parts of the job, including facility layout, menu items, anything really, that they loved and hated, with the whole point of the charade being to try to game a free drink out of deal.

We even went as far as making business cards with fake names, and we came up with elaborate backstories for each of us (keeping all those details straight). (Being in your 20s without kids means lots of free time, you see.)

In any event, he claims he did actually give it a shot one time, and ended up getting an earful from the bartender, along with a tour of the whole restaurant, including the kitchen and storage areas. No free drink though.


Posted by: Stanley | Link to this comment | 02- 6-12 11:23 AM
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25.last: Listening to people is alarmingly effective at getting them to talk.


Posted by: Moby Hick | Link to this comment | 02- 6-12 11:27 AM
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If only not listening would make people shut up.


Posted by: Moby Hick | Link to this comment | 02- 6-12 11:28 AM
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Some version of 21 is always what the consultants say.

I have never heard anyone who is not a consultant agree. Generally, it's "they showed up, gave a fancy presentation, told us 9 things we knew and one thing we didn't, and then went on their way.". And the only project I know of where McKinsey played a substantive role and people took its advice was an unmitigated disaster.

But theres got to be something being done there. Like much work done by fancy law firms and investment banks, I'd say the pay for high end consultants is about 40% fair pay for useful work and 60% profit skimming based on a cozy relationship with management.


Posted by: Robert Halford | Link to this comment | 02- 6-12 11:59 AM
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28.2.last: same.


Posted by: Annelid Gustator | Link to this comment | 02- 6-12 12:05 PM
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Some version of 21 is always what the consultants say.

What a shock.


Posted by: teofilo | Link to this comment | 02- 6-12 12:17 PM
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So why pay all that money? Generalizing a bit, it's usually because crucial decision-relevant facts are unknown, or in doubt. How it comes to pass that some 24-year-old Ivy League snots can be better at generating those facts than "the people who do the actual work" is a complicated story, but it's not a myth. I see it every day.

In cases like this where there are genuinely difficult decisions to be made with all kinds of unknowns, it's worth a lot of money to have someone else to blame when the decision turns out to be wrong.


Posted by: peep | Link to this comment | 02- 6-12 12:26 PM
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"Cozy relationship with management" in 28 is wrong. "desire of management to spend huge amounts of money to cover their own asses" is more accurate.


Posted by: Robert Halford | Link to this comment | 02- 6-12 12:27 PM
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It's worth mentioning that consulting is decidedly second tier career option among the truly ambitious. Finance is the path.

Also, I think the beauty thing is complicated. I think the ideal is good looking but not distractingly beautiful, and this is especially true for women.

Finally, I think the political economy of consulting is potentially pretty interesting but "status plus signalling" sounds like a mediocre econ paper.


Posted by: simulated annealing | Link to this comment | 02- 6-12 12:33 PM
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I've never encountered a management consulting firm in the wild -- in personal experience -- but I had assumed that they have assembled resumes regarding the firms they had helped turn around. I mean, what's the cost-benefit ratio of engaging the consulting firm, and the likelihood that the advice forthcoming will actually add value?

I'm naive in the extreme about these things, but I would assume that a person wouldn't lay out even a few hundred grand for a brief engagement, as KR puts it, unless s/he were satisfied that the results would exceed that layout. No doubt consulting firms have to play these things very close to the vest: we can't really tell you what we did and said for Company X, but it was awesome.


Posted by: parsimon | Link to this comment | 02- 6-12 12:35 PM
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31, 32: Comity?

Also, a message from the commenting gods to stop.


Posted by: peep | Link to this comment | 02- 6-12 12:36 PM
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If a CEO just wanted a blue chip name to put their imprimatur on a course of action already decided upon, a brief engagement for a few hundred grand would do the job. But the top shelf consulting firms (the ones which attract the top undergraduate talent) make the bulk of their money from much larger engagements.

I'm curious about that. I would think that, whatever the benefits are of bringing in an outsider with a fresh perspective, they would be greatest when there's a well-defined mandate and scope. Intuitively I would expect that the broader and less well defined the relationship was the more I would expect diminishing returns from whatever skills the consultants do possess because it would be more likely that they will get into areas where industry knowledge they don't possess is valuable.

So what is the reasoning between bringing consultants in for "much larger engagements?"


Posted by: NickS | Link to this comment | 02- 6-12 12:37 PM
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FWIW, I have a cousin who does software consulting. I haven't asked him this question yet, but it's easy for me to imagine that there is value in hiring experts to come in and help figure out how to get the most value and performance from a given software suite.

(Heck, I'm a contractor myself, so I certainly think that I have valuable knowledge which I can bring to specific projects.)


Posted by: NickS | Link to this comment | 02- 6-12 12:40 PM
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It's really hard to step away from the thought that the heads of organizations have no idea what to do, and have to plead for help, at great expense. Why not just employ, on the payroll, an analyst and strategist, in that case? Don't large-scale companies already do that?


Posted by: parsimon | Link to this comment | 02- 6-12 12:43 PM
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House of Lies (which is somehow a cross between Californication and Entourage and not as enjoyable as I had hoped it would be) does not paint consultants in a particularly favorable light, but I finally at least kinda understand what one type of consultants actually do.


Posted by: Parenthetical | Link to this comment | 02- 6-12 12:51 PM
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In large organizations, conflict is often between existing branches of the organization; for example, the OMB and CBO within the US government often produce overlapping analysis. The problem with internal employees is that internal organizational loyalty (who chose the analyst, who does the analyst report to) trumps objectivity when there's serious conflict.


Posted by: lw | Link to this comment | 02- 6-12 12:51 PM
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it's easy for me to imagine that there is value in hiring experts to come in and help figure out how to get the most value and performance from a given software suite.

Sure. I thought we were talking about the ex-lacrosse playing cockfaces at strategy consultant firms like McKinsey. Sorry, Knecht, you're one of the good ones, we can make fun of my profession next.

I would assume that a person wouldn't lay out even a few hundred grand for a brief engagement, as KR puts it, unless s/he were satisfied that the results would exceed that layout.

It depends what the "results" are. If the results are "I won't look bad, because I was following the advice of McKinsey and look, Harvard MBAs," that can be worth an awful lot of money, and management often has an awful lot of money to play around with.


Posted by: Robert Halford | Link to this comment | 02- 6-12 12:51 PM
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Why not just employ, on the payroll, an analyst and strategist, in that case? Don't large-scale companies already do that?

They do, they call them VPs of Strategy, and then they get trapped in the tarpit (or they were given a job without operational responsibility because they're a dullard), and then they call in...consultants!


Posted by: Alex | Link to this comment | 02- 6-12 12:53 PM
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I thought we were talking about the ex-lacrosse playing cockfaces at strategy consultant firms like McKinsey.

That's why I was interested in the stories and opinions of the 'tariat. I honestly have no idea what strategy consultants do.


Posted by: NickS | Link to this comment | 02- 6-12 12:54 PM
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I have never heard anyone who is not a consultant agree. Generally, it's "they showed up, gave a fancy presentation, told us 9 things we knew and one thing we didn't, and then went on their way."

...which is exactly what you would expect to hear from someone who just got schooled by a bunch of 24 y.o. Ivy League snots.

Come to think of it, there is probably a bit of sample bias at work here, because the consulting projects that are most likely to be visible to the rank and file are precisely the genus of projects that are most likely to be ass-covering (e.g. re-organizations, delayering, etc.) or pure fluff (e.g. mission statements).


Posted by: knecht ruprecht | Link to this comment | 02- 6-12 12:56 PM
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Come to think of it, there is probably a bit of sample bias at work here . . .

Wouldn't you also expect that the majority of consulting value is produced in a small number of consulting project (Pareto principle) and, therefore, that consulting could be valuable even if most consulting projects do waste time and resources (heck, my increased exposure to large bureaucracies over the last six months has convinced me that almost anything that big companies do wastes time and resources -- but they have so much leverage that the benefits from doing the right thing, however reluctantly, can outweigh a lot of waste).


Posted by: NickS | Link to this comment | 02- 6-12 1:00 PM
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Also, it is doubtless true that consultants tell their clients a lot of things that "everyone already knows". The thing is, a lot of the facts that "everyone knows" are actually wrong, and it is frequently the consultant's job to distinguish between fact and folklore. I have personal experience of saving clients tens of millions by disabusing them of folklore that no one ever thought to question before.


Posted by: knecht ruprecht | Link to this comment | 02- 6-12 1:02 PM
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44.1: Not to mention the fact that the 9 known things most likely came from a pool of a few dozen things that might or might not be important. Picking the right 9 out of that mess is valuable, and after the fact people will tend to edit their memories as to how they ranked the issues before it was pointed out that only 9 were of any real importance.


Posted by: togolosh | Link to this comment | 02- 6-12 1:04 PM
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You don't serve your profession well by referring to the rank and file, knecht.


Posted by: parsimon | Link to this comment | 02- 6-12 1:07 PM
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the majority of consulting value is produced in a small number of consulting project (Pareto principle) and, therefore, that consulting could be valuable even if most consulting projects do waste time and resources

Almost certainly true.

I have personal experience of saving clients tens of millions by disabusing them of folklore that no one ever thought to question before.

I don't think anyone would disagree that there are instances where this can be true. Whether or not the current "management consultancy" industry, at the high end, is set up to produce these results consistently, and whether consultants are reasonably compensated for their roles, is a different story entirely.


Posted by: Robert Halford | Link to this comment | 02- 6-12 1:08 PM
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IMX, second-rate management hires second-rate consultants and there's a circle-the-drain effect until the final flush.

However, any CEO knows the advice gotten from internal sources is going to be biased in favor of the person giving the advice. Therefore consultants.


Posted by: Biohazard | Link to this comment | 02- 6-12 1:12 PM
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It's a troubled organization indeed that can't trust the advice given by its own in-house advisors. If people were paid more fairly, some of this problem might go away.


Posted by: parsimon | Link to this comment | 02- 6-12 1:15 PM
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In large organizations, conflict is often between existing branches of the organization; for example, the OMB and CBO within the US government often produce overlapping analysis. The problem with internal employees is that internal organizational loyalty (who chose the analyst, who does the analyst report to) trumps objectivity when there's serious conflict.

Boy is this ever true in the government. The scale of the turf wars is astounding.


Posted by: teofilo | Link to this comment | 02- 6-12 1:17 PM
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How it comes to pass that some 24-year-old Ivy League snots can be better at generating those facts than "the people who do the actual work" is a complicated story, but it's not a myth.
Could you expand this, please?


Posted by: Eggplant | Link to this comment | 02- 6-12 1:18 PM
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knecht, have you ever advised a company to pay its people more, in order to facilitate organizational loyalty and, you know, it's a better practice, and all that.

I'll leave off now.


Posted by: parsimon | Link to this comment | 02- 6-12 1:18 PM
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knecht, have you ever advised a company to pay its people more, in order to facilitate organizational loyalty the purchase of clothing made with quality sheer fabrics?


Posted by: Moby Hick | Link to this comment | 02- 6-12 1:24 PM
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I know of a company that recently brought in a consulting firm (not a big six or whatever, but management consultants) to help plan some major, organization-wide changes, and the consultants recommended large raises nearly across-the-board.


Posted by: Sifu Tweety | Link to this comment | 02- 6-12 1:26 PM
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One of the interesting things about H5N1 and BSE was how the responses brought branches of government into conflict (in China and the UK).


Posted by: lw | Link to this comment | 02- 6-12 1:29 PM
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In my current job I have seen a fair number of "communications strategy" powerpoint presentations, mostly safely away from clients or any consultants. Most of it really is horseshit, but every once in a while I see a positioning paper that actually delivers something useful and meaningful.

The best one I ever saw had done a series of interviews about the product within about three demographic groups (easy-to-get, medium-to-get, and probably impossible), and then didn't sugarcoat the quotes they got back but drew valid and applicable positioning conclusions from them. The work honestly could have been done by anyone with a basic set of powerpoint skills, a good rolodex and a connection to set-up focus groups, a decent head for stats, and a good GPA in a discipline requiring careful treatment of word-based evidence. All that and an outside perspective.

The horseshit ones are really impressive, though.


Posted by: Jackmormon | Link to this comment | 02- 6-12 1:30 PM
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56: and the consultants recommended large raises nearly across-the-board.

For upper management, or for the rank and file?


Posted by: parsimon | Link to this comment | 02- 6-12 1:38 PM
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I don't see any reason why consultants would be reflexively anti-wage increase. Their bias goes towards entrenching the position of the person who hired them -- whether the CEO or the board or whatever subgroup, and there are times when that goal can be achieved through a wage increase as easily as through mass layoffs.


Posted by: Robert Halford | Link to this comment | 02- 6-12 1:48 PM
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At my firm, a management consultant recommended changes in the compensation system that would result in a larger segment of the pie going to the lawyers below the top level, and less to the top level. Predictably, this was not implemented.

The consultant was not young or good-looking.


Posted by: unimaginative | Link to this comment | 02- 6-12 1:53 PM
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Anyway, there's a current NYRB piece outlining changes in income inequality here.

The money shot, for the purposes of this thread:

Hence, I would argue, an unstated but still real compact was made between the employers and the new upper-middle class. Their pay would be raised to support their ascending status. As the samplings in Table B show, while real earnings for the overall workforce have risen only 7 percent since 1985, professions like physicians and professors have done several times better. Incomes of lawyers and executives, for their part, have soared much further than anyone would have forecast a few decades ago.

That's about a quarter of the way into page 2 of the linked article.


Posted by: parsimon | Link to this comment | 02- 6-12 1:54 PM
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There are also cases where the recommendation is to pay some people more and to phase out others (early retirement, layoffs, redefining positions - it depends), and maybe to open new positions that when filled will be paid at a higher level than some of the phased out positions. Consulting is all over the library world, usually motivated by the "adapt or die" situation w/r/t technology changing and budget cuts and so on,* but I doubt the big firms get involved in most cases.

*Also, the job market is such that some people who find that as non-consultants they still end up changing organizations relatively frequently figure they'd be better off as consultants.


Posted by: fake accent | Link to this comment | 02- 6-12 2:03 PM
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I think the two most common reasons for the boss to bring in a management consultant are either to convince other people to do what the boss already wanted to do, or to buy time for a boss who wnats an excuse ot do nothing. The consultant in our office on mid-level attorney compensation was for the second purpose. Perhaps that's why they didn't bother to get someone good-looking.


Posted by: unimaginative | Link to this comment | 02- 6-12 2:09 PM
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It's exhausting overall. It's difficult to retain a focus on people who actually help people, by, say, providing home health care, or teaching. Our societal emphasis on what counts as value is way fucked up. I can't say I have an answer.


Posted by: parsimon | Link to this comment | 02- 6-12 2:10 PM
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I wonder about how much of the value added from strategy consulting is basically spying on your competitors. The 'decision relevant facts' or 'best practices' at issue could be what your competitors who the consultant has also worked with are doing or have done.


Posted by: PGD | Link to this comment | 02- 6-12 2:19 PM
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consultants tend to be of above-average attractiveness.

I'm not sure I would endorse that -- I offer myself as evidence for skepticism. I'd say that the recruits at top flight consulting firms are probably roughly representative of the recruiting pool they come from, which is to say maybe a bit better looking than the general population, but not more so than their SES would predict.


Posted by: knecht ruprecht | Link to this comment | 02- 6-12 2:19 PM
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I'm high SES and I know it.


Posted by: Moby Hick | Link to this comment | 02- 6-12 2:22 PM
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66: I wonder about how much of the value added from strategy consulting is basically spying on your competitors.

Yeah, I don't see any way around that.


Posted by: parsimon | Link to this comment | 02- 6-12 2:23 PM
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68: Yeah.

I work out. Yeah.


Posted by: Megan | Link to this comment | 02- 6-12 2:24 PM
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68: So clap your hands.

That is, if you really want to show it.


Posted by: rob helpy-chalk | Link to this comment | 02- 6-12 2:25 PM
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Girl, look at that GRE score.


Posted by: Moby Hick | Link to this comment | 02- 6-12 2:25 PM
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For upper management, or for the rank and file?


Posted by: Sifu Tweety | Link to this comment | 02- 6-12 2:29 PM
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73 rewritten with properly closed tags:
For upper management, or for the rank and file?

I wouldn't have thought the term "across-the-board" was terribly difficult to parse, but here we are.


Posted by: Sifu Tweety | Link to this comment | 02- 6-12 2:30 PM
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"Wiggle-wiggle-wiggle-wiggle-wiggle--yeah!"


Posted by: Moby Hick | Link to this comment | 02- 6-12 2:32 PM
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74: Yes, I had noted that upon a second read. Good for that consulting firm.


Posted by: parsimon | Link to this comment | 02- 6-12 2:33 PM
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have you ever advised a company to pay its people more

Not really. Compensation and benefits consulting is its own specialized field. I have recommended hiring more people.


Posted by: knecht ruprecht | Link to this comment | 02- 6-12 2:34 PM
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They didn't recommend it out of sheer munificence. The company wasn't paying competitive wages (because senior executives were significantly underpaid, which pushed down the wage scale) and risked being unable to retain valuable staff.


Posted by: Sifu Tweety | Link to this comment | 02- 6-12 2:36 PM
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Compensation and benefits consulting is its own specialized field

I had no idea of that. I said I was naive from the get-go. Thanks.


Posted by: parsimon | Link to this comment | 02- 6-12 2:36 PM
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senior executives were significantly underpaid, which pushed down the wage scale

How much were the senior executives being paid? How much did that push down the wage scale in the rest of the organization? Was there some sort of formula in place according to which an entry-level secretary mustn't be paid more than x% of senior executives' pay? So in order for the secretary or office manager to actually make a living wage, the senior executives would have to make significantly more, or else everybody would just be all confused?


Posted by: parsimon | Link to this comment | 02- 6-12 2:43 PM
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It's exhausting overall. It's difficult to retain a focus on people who actually help people, by, say, providing home health care, or teaching. Our societal emphasis on what counts as value is way fucked up. I can't say I have an answer.

Where does, say, "selling books" fall on this typology of social worth?


Posted by: teofilo | Link to this comment | 02- 6-12 2:47 PM
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Was there some sort of formula in place according to which an entry-level secretary mustn't be paid more than x% of senior executives' pay?

No.


Posted by: Sifu Tweety | Link to this comment | 02- 6-12 2:47 PM
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Meow, teo.


Posted by: nosflow | Link to this comment | 02- 6-12 2:48 PM
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Like much work done by fancy law firms and investment banks, I'd say the pay for high end consultants is about 40% fair pay for useful work and 60% profit skimming based on a cozy relationship with management.

Without agreeing with Halford's swag about value, I will agree that the comparison to Big Law is apposite. Your top shelf consultants and top shelf law firms command high prices in part because they are working on big issues. If you can reliably improve your expected outcome from litigation by $25M by procuring good lawyering, it's worth paying several million for it. Could you have gotten the same outcome from a $200/hour lawyer instead of a $500/hour lawyer? Quite possibly -- if you find the right one. But the $200/hour lawyer who is perfect for the job is hard to distinguish from the mass of other $200/hour lawyers in a noisy marketplace. And time is running short. Do you really want to take the chance?

In that sense, the notion of signaling value has some explanatory power.


Posted by: knecht ruprecht | Link to this comment | 02- 6-12 2:55 PM
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Could you expand this, please?

There's a lot to say to this topic, and I'm out of time now. Maybe another time.


Posted by: knecht ruprecht | Link to this comment | 02- 6-12 2:56 PM
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Selling used books, which involves rescuing them from, eventually, the pulping bin, and providing them at a reduced cost to interested parties, falls somewhere in the middle. We could let them all be pulped, if you think that would be better. I don't think it would be.


Posted by: parsimon | Link to this comment | 02- 6-12 3:05 PM
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In my 15+ years of observing, hiring, and being a consultant (albeit in the nonprofit field), I can't say that I have any definitive sense of the profession.

There are many dreadful consultants and some valuable ones. There are many poorly designed consulting engagements and fewer well-engineered ones. Almost all parties seem entirely ignorant of the idea that there is such a field as organizational psychology and that it might have something useful to say about why and how organizations can most effectively use consultants.

The one thing I can say is that I have observed a significant correlation between quality of advice and time invested by the consultant, and little if any correlation between quality of advice and money spent on the consultant.


Posted by: Witt | Link to this comment | 02- 6-12 3:33 PM
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But the $200/hour lawyer who is perfect for the job is hard to distinguish from the mass of other $200/hour lawyers in a noisy marketplace. And time is running short. Do you really want to take the chance?

At least in law, the problem isn't so much noisy signals in the marketplace (in-house lawyers at businesses usually know a bunch of very good, relatively cheap lawyers) as fear of getting fired. If there's a risk of a $50 million loss and you hire impeccable reputation firm, you have a better excuse when things go wrong than if you hire someone cheaper who you know is just as good. I assume that the same is true for hiring consultants.

Actually, I don't know much about consultants, except that they sure are a bunch of ex-lacrosse playing cockfaces.


Posted by: Robert Halford | Link to this comment | 02- 6-12 3:37 PM
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88: I perhaps am the only one here old enough to remember the "No one ever got fired for buying IBM" IT saying.


Posted by: Biohazard | Link to this comment | 02- 6-12 3:40 PM
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89: nah, I know that one.


Posted by: Sifu Tweety | Link to this comment | 02- 6-12 3:42 PM
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89: I am married to a repository of old-school IBM lore: Buck gazes lovingly into the eyes of Thomas H. Watson hanging over his monitor. I've heard the phrase.


Posted by: LizardBreath | Link to this comment | 02- 6-12 3:43 PM
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There's a lot to say to this topic, and I'm out of time now. Maybe another time.

What if we hired you?


Posted by: JRoth | Link to this comment | 02- 6-12 3:44 PM
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Even I know that saying.


Posted by: nosflow | Link to this comment | 02- 6-12 3:46 PM
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My sense of consulting, from my short time in it and my dad's experiences in his own small business are that when it's done well, it's really great problem solving. Sometimes it's as simple as getting different parts of an organization to talk to each other (dad's in benefits); sometimes it's knowing that sprocket makers made better sprockets by doing X, Y, and Z, and now a widget maker is trying to make better widgets, and the consultant can help figure out how the lessons from the sprocket maker case can help the widget maker.

That's not a common skill. (Breaking down problems into small pieces to solve them? Yeah, can't think why I'd be decent at that.) Sometimes it's just a matter of an outside perspective.

My sense was that they weren't better looking, exactly, but definitely UMC, definitely polished in a conservative way, and at least when young, trim and athletic. Well-groomed, but not supermodels.


Posted by: Cala | Link to this comment | 02- 6-12 3:58 PM
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||

Holy fucking Christ. I just got a call from my GP's office saying that he wanted to discuss one of the medications I'm on. After I managed to get my heart back in my chest I asked which medication it was in regard to; turns out my fucking health insurance company *contacted my doctor to suggest a medication for me*. What the fuck?

(I suppose this is actually kinda-sorta on-topic for the OP.)

|>


Posted by: Josh | Link to this comment | 02- 6-12 4:00 PM
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A certain amount of consultancy consists of going round the workplace listening to the employees (who generally know their stuff) and then telling the managers what the employees said.

See also, Unions.


Posted by: Sir Kraab | Link to this comment | 02- 6-12 4:00 PM
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95: Was it an anti-anxiety med?


Posted by: Moby Hick | Link to this comment | 02- 6-12 4:11 PM
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95: Dude, that's whacked out unless they're suggesting a generic replacement for a bnp.


Posted by: Turgid Jacobian | Link to this comment | 02- 6-12 4:13 PM
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Buck gazes lovingly into the eyes of Thomas H. Watson hanging over his monitor.

This guy, a likely future management consultant, is either the grandson or great grandson, depending on which one you mean. Also, "Thomas J."


Posted by: Robert Halford | Link to this comment | 02- 6-12 4:19 PM
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||

Prop 8 decision comes out tomorrow at 10am.

|>


Posted by: Megan | Link to this comment | 02- 6-12 4:24 PM
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95: My insurance company randomly cancelled my insurance, actually insisting that they were told to do so by my employer as of the end of last year. Complete nonsense. I've tried to imagine a nefarious scheme on their part (in the past year I've had 3 different surgeries and a baby and an MRI and a few emergency room visits, in addition to visiting my GP and OB/Gyn and dermatologist), but none really flies since I just called up the plan administrators and said, Wha? and they fixed it.


Posted by: oudemia | Link to this comment | 02- 6-12 4:28 PM
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I have personally been a party to the buying of IBM consulting services. And I wasn't fired. So it's true.


Posted by: JP Stormcrow | Link to this comment | 02- 6-12 4:35 PM
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But you never know what kind of things workers are going to want once they've been given genuine voice.


Posted by: PGD | Link to this comment | 02- 6-12 4:36 PM
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Whoops, 103 to 96.


Posted by: PGD | Link to this comment | 02- 6-12 4:37 PM
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Consulting is so woven into the ecosystem of how large organizations work for so long that it isn't really that useful to even try to do a simple-minded thought experiment of everything being the same but just without the consultants. Nonetheless, I will offer my simple-minded explanation which is that consultants offer a pretty good alternative mechanism for organizations to "do what it takes" (broadly construed), and that there are many reasons (which can be deemed "good" or "bad" by those so inclined to judge) for why someone/something nominally external to the organization is well-positioned to aid in making that happen.


Posted by: JP Stormcrow | Link to this comment | 02- 6-12 4:42 PM
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I will offer my simple-minded explanation . . .

Could you elaborate a little bit.

As somebody who doesn't have any sense of the ways n which consulting is "woven into the ecosystem" I can't get anything useful out of a line like, "there are many reasons (which can be deemed "good" or "bad" by those so inclined to judge) for why someone/something . . ."


Posted by: NickS | Link to this comment | 02- 6-12 4:47 PM
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21: But the top shelf consulting firms (the ones which attract the top undergraduate talent*)

*I.e. those who show potential for being smooth enough to fuck the pig without even raising a squeal.


Posted by: JP Stormcrow | Link to this comment | 02- 6-12 4:48 PM
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97, 98: I don't actually know what med it is, or even what condition it relates to. Could be one of four or five, and the doctor's office either couldn't or wouldn't give me details over the phone. I have an appointment on Wednesday to talk about it in person.

At least now I've come down off the ceiling and am less freaked out and more pissed off.


Posted by: Josh | Link to this comment | 02- 6-12 4:57 PM
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97 was more of a joke than a real question.


Posted by: Moby Hick | Link to this comment | 02- 6-12 5:26 PM
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109: Shockingly.


Posted by: JP Stormcrow | Link to this comment | 02- 6-12 5:32 PM
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109: You mock my pain!


Posted by: Josh | Link to this comment | 02- 6-12 5:34 PM
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Actually, I don't know much about consultants, except that they sure are a bunch of ex-lacrosse playing cockfaces.

This is quite mistaken. Lacrosse players go into asset management. Consultants, to the extent they are athletic at all, tend to be cross-country skiiers or marathoners (i.e. individual disciplines). In fact, consultants skew way more geeky than athletic -- about the same as lawyers.

99 is equally mistaken. Consultants (at the big strategy firms) are at least as Democratic as the campuses they come from, or even a little more -- which is to say, significantly more Democratic than the general population. Keep in mind that the modal college graduate going into consulting is doing so because he or she finds investment banking distasteful. Just as a for instance, individual donations from McKinsey employees to Obama in 2008 were over $230,000, versus less than $30,000 to McCain (you can look it up yourself on opensecrets.org).

In other words, Halford really has no clue what he's talking about w/r/t this topic.


Posted by: knecht ruprecht | Link to this comment | 02- 6-12 5:38 PM
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Come on, the cockface percentage in consulting is super high.


Posted by: Robert Halford | Link to this comment | 02- 6-12 5:40 PM
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Cite! Cite!


Posted by: parsimon | Link to this comment | 02- 6-12 5:47 PM
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I'll concede that the dude in 99 is more likely to go into finance than consulting, before settling into his life of managing his investments.

Also marathoners and cross country skiers and Obama voters can totally be cockfaces. Totally.


Posted by: Robert Halford | Link to this comment | 02- 6-12 5:55 PM
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115.last: Well, I never.


Posted by: parsimon | Link to this comment | 02- 6-12 5:58 PM
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"Democratic voter" and "horrible plutocrat" are not mutually exclusive categories.


Posted by: Minivet | Link to this comment | 02- 6-12 6:03 PM
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Technically, I think those are "marginally less than horrible plutocrats."


Posted by: Moby Hick | Link to this comment | 02- 6-12 6:07 PM
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An interesting critique of McKinsey; a variation.


Posted by: Bave | Link to this comment | 02- 6-12 6:13 PM
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Poor knecht. Poor Halford (who I don't think makes the median income either).

What's the story, then? An argument among the upper 5% about just who deserves the money he makes?

I realize that I'm querulous as all get-out today, and should give it a rest.


Posted by: parsimon | Link to this comment | 02- 6-12 6:21 PM
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What's the story, then?

Mostly, I like working out my myriad irrational resentments online and using the word "cockface." Can't speak for Knecht.


Posted by: Robert Halford | Link to this comment | 02- 6-12 6:24 PM
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119.2 is interesting. I never know how much to trust Yves Smith.


Posted by: Robert Halford | Link to this comment | 02- 6-12 6:29 PM
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Heh. I apparently like working resentments out (in a thread that lends itself to the subject) as well.


Posted by: parsimon | Link to this comment | 02- 6-12 6:31 PM
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108: My prescription drug insurance company called me on Friday to say that the new med I had started taking two weeks ago* interferes with the hormonal birth control I use. I really like my doctor, but I have quite a bit to (politely) discuss with her.

*not an antibiotic, btw.


Posted by: J, Robot | Link to this comment | 02- 6-12 6:31 PM
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Sometimes somebody will say, "I need a statistical consult" as a way to get me to do something. I don't think that makes me a consultant because doctors just like the word "consult."


Posted by: Moby Hick | Link to this comment | 02- 6-12 6:33 PM
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Maybe they're saying "I need a statistic consul" but mumbling because doctors and you actually have veto power over the doctor senate.


Posted by: Sifu Tweety | Link to this comment | 02- 6-12 6:35 PM
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"statistical consul", rather.


Posted by: Sifu Tweety | Link to this comment | 02- 6-12 6:37 PM
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124: Forget your doctor, you have quite a bit to discuss with your pharmacist. That's one of their primary job responsibilities! (Not to say you shouldn't also bring it up with your doctor.)


Posted by: Josh | Link to this comment | 02- 6-12 7:08 PM
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Also:

My insurance company randomly cancelled my insurance, actually insisting that they were told to do so by my employer as of the end of last year. Complete nonsense.

WTF? That's beyond fucked-up.


Posted by: Josh | Link to this comment | 02- 6-12 7:10 PM
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128: I think bcp interactions often don't get commented on, though I was only on them for a while and don't have much pertinent experience. I have to admit I got some great hand-me-downs from the coworker whose wake-up call about the interference mentioned was the positive pregnancy test.


Posted by: Thorn | Link to this comment | 02- 6-12 7:13 PM
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128: Also true. But seriously, of all the things I don't want to have messed up...


Posted by: J, Robot | Link to this comment | 02- 6-12 7:39 PM
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So I just got home and now I think I know what the call was about: I got a mailer from my (now former) health insurance company urging me to stay on the blood pressure meds I'm already on. Uh, thanks, I guess?


Posted by: Josh | Link to this comment | 02- 6-12 8:11 PM
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131: As long as you stick to the dry humping, you should be OK.


Posted by: knecht ruprecht | Link to this comment | 02- 6-12 8:16 PM
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124, 128: There's really no excuse for not having computers check this. I wonder how good the free online drug interaction checkers are... This one seems to catch birth control antibiotics interactions.


Posted by: Unfoggetarian: "Pause endlessly, then go in" (9) | Link to this comment | 02- 6-12 8:29 PM
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106: Could you elaborate a little bit.

Not coherently, I am finding as I try to think about it. But, yes, I was too abstract. As to its ubiquity, note that "consulting"* represents on the order of a four hundred billion dollar worldwide annual spend.

A number of the reasons for using them ("good" or "bad") have been mentioned in the thread--most of them "organizational" in nature.

*More broadly construed than what McKinsey does.


Posted by: JP Stormcrow | Link to this comment | 02- 6-12 8:43 PM
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At one point 135.2 said something non-trivial but then I got interrupted by a long phone call and now I can't recall and have lost interest anyway.


Posted by: JP Stormcrow | Link to this comment | 02- 6-12 8:49 PM
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I've been away from the internet for most of the day. Has Flippanter kissed Lunchy yet? If not, why not?


Posted by: essear | Link to this comment | 02- 6-12 8:55 PM
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132: Nice. Mine tried to switch me back to the one prompting serious thoughts of suicide & worse. Had to get the doc to write a letter.


Posted by: Biohazard | Link to this comment | 02- 6-12 8:56 PM
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As somebody who doesn't have any sense of the ways n which consulting is "woven into the ecosystem"

You're not implying that there's a mixed metaphor, are you?


Posted by: Cryptic ned | Link to this comment | 02- 6-12 9:12 PM
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139: And that's not even the worst of that sentence.


Posted by: JP Stormcrow | Link to this comment | 02- 6-12 10:03 PM
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I haven't read this yet but Aaron Bady (also known to old-time blog readers as zunguzungu) has posted a long review of Debt over at the New Inquiry. In the comments, Graeber shows up and implies that if someone doesn't like the price of the book, there might be other ways of obtaining a copy.


Posted by: fake accent | Link to this comment | 02- 6-12 11:29 PM
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141.last: Barter?


Posted by: Josh | Link to this comment | 02- 7-12 12:03 AM
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142: No, anything but that.


Posted by: teofilo | Link to this comment | 02- 7-12 12:14 AM
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I just read the review, and it's quite good. He explains the argument of the book in more detail than I've seen anywhere else, and points out some interesting parallels to OWS that go a lot deeper than you might think.

Yglesias also had a post quoting from the review but inexplicably failing to link to it. MY's own comments (rather less inexplicably) were limited to nitpicking that while technically true totally misses the point.


Posted by: teofilo | Link to this comment | 02- 7-12 12:17 AM
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There's really no excuse for not having computers check this.

I bet a consultant could help with that.


Posted by: simulated annealing | Link to this comment | 02- 7-12 2:12 AM
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Something else. People in an organisation usually know a lot of true things about it. However, they also usually know a lot of things about it that are not, actually, true. Quite often they know that this is the case, but for one reason or another, this is not socially legitimate knowledge.

One reason to hire outside consultants is to discover which of the things everyone knows about your organisation are actually myths, as well as which of your organisation's myths are actually facts.


Posted by: Alex | Link to this comment | 02- 7-12 3:53 AM
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MY's own comments (rather less inexplicably) were limited to nitpicking that while technically true totally misses the point.

Oh, hey, there's a news flash.


Posted by: Flippanter | Link to this comment | 02- 7-12 5:13 AM
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Nick S, I was looking to send you an e-mail and clicked on the contact link on your blog, but discovered that for me not only the contact, but every other internal link on your blog (other than the main page) is returning a 404.


Posted by: JP Stormcrow | Link to this comment | 02- 7-12 7:03 AM
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"The fact is, America is a society that values skill," said Blodgett, after calming down. "If I was in their position and didn't have a skill or job, I guess I'd do the same thing."

Wow. I honestly can't decide whether the fact that this cockface wasn't beaten to death says something good or something bad about OWS.


Posted by: urple | Link to this comment | 02- 7-12 7:27 AM
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Funnily enough just this week I am teaching some classic studies in the field of Christ Look At How Fucked-Up This Organization Is to a class of America's Future MBAs. When Hanson says "Most intellectuals underestimate ..." he means "Most economists", and even then only officially. Researchers who actually look inside organizations tend not to underestimate their weirdness and dysfunction at all. The situation is somewhat complicated by the presence of OB and Strategy researchers at B-schools, who are sometimes great and sometimes the source of much crap, depending on whether they've been captured by the legitimacy demands of the institution they belong to.


Posted by: Gonerill | Link to this comment | 02- 7-12 7:30 AM
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149: Skills.


Posted by: JP Stormcrow | Link to this comment | 02- 7-12 7:35 AM
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Other than the actually being a part of it part*, organizational behavior has been one of the big fascinating ongoing revelations of my life.

*I guess that part is "fascinating" as well, I just don't enjoy it as much and resent its ability to erode my otherwise carefully defended ironic distance.


Posted by: JP Stormcrow | Link to this comment | 02- 7-12 7:40 AM
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The situation is somewhat complicated by the presence of OB and Strategy researchers at B-schools, who are sometimes great and sometimes the source of much crap

Tee hee.


Posted by: Sifu Tweety | Link to this comment | 02- 7-12 7:42 AM
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144, 147: I have actually succeeded in my pledge to abandon MY in his move to Slate. I'll read him if someone else links to him (it's not a boycott), but I no longer read him daily, or even weekly. Not missing him at all.

I'm reading Drum, but don't really find it edifying.


Posted by: JRoth | Link to this comment | 02- 7-12 7:44 AM
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149: Isn't Blodgett an ex-con, not to mention someone who's been predicting the collapse of the iPhone every quarter for the last 4 years?

I honestly don't understand why it is that certain people are event-proof. I feel certain that if I designed a bunch of horribly failing buildings that my career would be negatively impacted.


Posted by: JRoth | Link to this comment | 02- 7-12 7:48 AM
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This book, Systemantics by John Gall, is a fun and thought-provoking read about organizational behavior. IMO undeservedly obscure, I think he's as good as Parkinson.


Posted by: lw | Link to this comment | 02- 7-12 7:50 AM
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I'm reading Drum, but don't really find it edifying.

Very true - most people agree it wasn't as good as Mandingo.


Posted by: One of Many | Link to this comment | 02- 7-12 7:50 AM
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Blodgett's career has been negatively afected, he's been reduced to writing for the public.


Posted by: lw | Link to this comment | 02- 7-12 7:51 AM
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||
Per the recent bedrock discussion, a short NYTimes piece on some Manhattan outcrops.
|>


Posted by: JP Stormcrow | Link to this comment | 02- 7-12 7:52 AM
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155: sorry, no, that quote was from the link in 99. He's just some bratty Princeton student.


Posted by: urple | Link to this comment | 02- 7-12 7:52 AM
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Gonerill, who is good for writing about organizations?


Posted by: lw | Link to this comment | 02- 7-12 7:54 AM
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Gonerill, who is good for writing about organizations?

This is the stupidest book I have ever read. So, not this author.


Posted by: Sir Kraab | Link to this comment | 02- 7-12 8:18 AM
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This is the stupidest book I have ever read, but it was at least short.


Posted by: Moby Hick | Link to this comment | 02- 7-12 8:23 AM
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This pioneering work shows how revolutionary discoveries in quantum physics, chaos theory, and biology provide powerful insights for transforming how we organize work, people and life.
Gah! Come back Social Darwinism, all is forgiven. (Not really - Ed).


Posted by: chris y | Link to this comment | 02- 7-12 8:26 AM
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Blodget's continued career is annoying, but sadly I don't think wanker-boy is any relation - note the additional "t".


Posted by: Alex | Link to this comment | 02- 7-12 8:42 AM
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sometimes the source of much crap

well, nobody's perfect... [said as he wrestles fear and self-contempt to the ground while prepping his own version of this course]


Posted by: simulated annealing | Link to this comment | 02- 7-12 8:49 AM
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160: Ah, I see.

158: But he's been wrong in his public writing, as well. I mean, I get that that's the pundits' game - Friedman and Brooks still have jobs - but criminy.


Posted by: JRoth | Link to this comment | 02- 7-12 8:52 AM
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MY's own comments (rather less inexplicably) were limited to nitpicking that while technically true totally misses the point.

Have you ever really thought about the word "manufacturing"? What does it really mean, when you really think about it? Nothing, that's what. Think about it!

So you see, our problems have all been misdiagnosed, therefore they don't exist.


Posted by: Cryptic ned | Link to this comment | 02- 7-12 8:55 AM
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162: Peterson's Platitude: The number of bad books on organizations will expand to match the available attention of people working at their level of incompetence.


Posted by: JP Stormcrow | Link to this comment | 02- 7-12 8:55 AM
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168: Ah yes, I'm a fan of the argument that we don't have to worry about manufacturing because we can still make sandwiches.


Posted by: Eggplant | Link to this comment | 02- 7-12 9:09 AM
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Also, not all "manufacturing" jobs are good jobs. That was an artifact of post-WWII American hegemony. What we need to worry about is not the disappearance of good "manufacturing" jobs, but the disappearance of good jobs which happen to be in "manufacturing". Which is inevitable and might as well happen as quickly as possible.


Posted by: Cryptic ned | Link to this comment | 02- 7-12 9:15 AM
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but discovered that for me not only the contact, but every other internal link on your blog (other than the main page) is returning a 404.

Thanks.

This is an annoying problem. Apparently wordpress re-writes the .htaccess file on a regular basis. Whatever. But a couple of months ago it stopped having write permissions, and now it deletes the .htaccess when it tries.

I gave it permissions, and now it's lost them again. . . .

Anyway, easy to fix, but annoying.


Posted by: NickS | Link to this comment | 02- 7-12 9:15 AM
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168, 170, 171: You appear to be talking about something potentially interesting except I don't have a clue what you are actually talking about. Some hobbyhorse of MY's I presume?


Posted by: JP Stormcrow | Link to this comment | 02- 7-12 9:22 AM
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173: Very much so. He basically doesn't give a shit about manufacturing, he spends a lot of time arguing that "manufacturing" is a made up category (because canning peas in a factory isn't manufacturing, but making cans in a factory is), and he constantly harps on his vision of a future in which we all give each other yoga lessons.


Posted by: JRoth | Link to this comment | 02- 7-12 10:05 AM
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164: One of my few pleasures in b-school was writing a takedown of that book.


Posted by: Sir Kraab | Link to this comment | 02- 7-12 10:42 AM
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174: Hmmm. Hmmm. I can see where, for example, mining coal is something different from harvesting plants which one has planted, and then refining those products or using them to make something else are all different things, but so what? Why is that way of looking at things better than what we have now?

Or shouldn't I bother asking?


Posted by: Tripp | Link to this comment | 02- 7-12 11:01 AM
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For Moby at 163, I offer
this alternative view.


Posted by: politicalfootball | Link to this comment | 02- 7-12 11:12 AM
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Local news of someone trying to take advantage of this definition-assault: would-be developers of a new retail space change its description from "food retail" to "manufacturing," without a change in the planned types of stores.


Posted by: Minivet | Link to this comment | 02- 7-12 11:51 AM
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158, 150, 165 -- I wasted about 45 minutes of my time one night researching the origins of braying Princeton jackass Whitney B/lodgett. It turns out that he is not related to Harry Blodget. On the other hand, as I mentioned upthread, he is the great-grandson of the founder of IBM and the grandson of Thomas J. Watson, Jr., the longtime superfamous head of IBM. So he is a super rich cockface.


Posted by: Robert Halford | Link to this comment | 02- 7-12 1:53 PM
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He was captain of the Boys' Varsity Crew team at the Lawrenceville School in New Jersey. That's about all I know about him.


Posted by: urple | Link to this comment | 02- 7-12 2:07 PM
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Actually, as a junior he was part of the US National team that won a gold medal at the Junior World Rowing Championships.

That's probably the "skill" he was referring to in his comments.


Posted by: urple | Link to this comment | 02- 7-12 2:12 PM
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IIRC from my pointless stalking of him, his father was also a CEO of some smaller company who was involved in some kind of fraud scheme. So the "skill" America rewards is clearly having a superrich grandfather and greatgrandfather and defrauding investors. Sounds about right to me.


Posted by: Robert Halford | Link to this comment | 02- 7-12 2:19 PM
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Thing thing about MY is that he started out in blogging as a quick-witted college student. If he'd gotten a job, he would have changed into something else, but since he's been able to make a professional go of it, he's still a quick-witted college student. Now, there are some tasks that quick-witted college students are the best able to handle: explaining how Republicans are worthless human beings, or explaining monetary policy. But now that that he's moved onto more general economics topics, God, does the outcome suck. The "food service is really manufacturing" posts are classic examples.


Posted by: Walt Someguy | Link to this comment | 02- 9-12 5:13 AM
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I would like to read a review of Debt that could tell me if the book is, you know. true. The Bady review is more typical. He says "I won't try to summarize the historical argument he makes on this point; I found it compelling but it's way outside my pay-grade."


Posted by: Walt Someguy | Link to this comment | 02- 9-12 5:17 AM
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184: I would read it as an interesting and illuminating way of thinking about debt, and without relying on it for the truth of any particular historical fact. I think the bit about "No one's ever seen or recorded a barter system that pre-existed money" is reliable, because I've seen it repeatedly elsewhere. Anything else specific might easily be true, but I wouldn't rely on Graeber to have checked it.

The thing is, though, I do think the book's worthwhile as interpretation and argument even if his facts are all shaky. Just go ahead and read it.


Posted by: LizardBreath | Link to this comment | 02- 9-12 5:26 AM
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I still like Yggles! Sure he has some annoying tics, but I even find some of his business posts to be very interesting. I hadn't realized he'd become so hated.


Posted by: simulated annealing | Link to this comment | 02- 9-12 5:32 AM
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185: You saw the claim about barter pre-Graeber? It was new to me. I had completely believed the Econ 101 version of the invention of money.


Posted by: Walt Someguy | Link to this comment | 02- 9-12 5:45 AM
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187: I defended him here as recently as two week ago, but the last two weeks have really demonstrated all of his worst tendencies. Even when he makes points that are true, he imbues them with incredibly exaggerated significance. Like his posts on licensing. I can believe that too many professions are overcredentialed, but this is nowhere near the top 100 social problems of our age.


Posted by: Walt Someguy | Link to this comment | 02- 9-12 5:51 AM
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I have -- can't give you a link offhand, but I know I've read it before. And if you think about it, it really makes way too much sense not to be true: barter is insanely impractical for any kind of day-to-day dealmaking. The Econ 101 argument for why money was so much better than barter is really, when you think about it, an argument that barter is, as a general thing, too unwieldy to have been an ordinary way of getting transactions done at all.


Posted by: LizardBreath | Link to this comment | 02- 9-12 5:52 AM
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Interestingly, Isaylegs' thing about statistical classifications of manufacturing is a 1980s British leftie trope - part of the apparent de-industrialisation in the UK is explicable by outsourcing/contracting out/process re-engineering decisions that externalised services that used to be managed in-house. While Widgets Ltd. ran its own payroll and its own facilities management and its own canteen and its own truck fleet, everyone who worked in those services was counted as a manufacturing worker.

When they decided to have ACS run the payroll and Sodexho the canteen and BT Fleet the trucks and Serco the maintenance on the machine tools, all those functions were suddenly provided as services and recorded as such in the sectoral GDP accounts. This could go quite deep into the business - who would doubt that someone who's a toolmaker in an industrial plant is manufacturing? but if that business function gets outsourced, even across the street, it's counted as part of the service economy.

This used to be a big point for Alternative Economic Strategy types. Perhaps they were right?


Posted by: Alex | Link to this comment | 02- 9-12 5:54 AM
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I refute 188.last: doctors.
(operating on the theory that credentialism is just one of the bastard child of rent seeking).


Posted by: Annelid Gustator | Link to this comment | 02- 9-12 6:31 AM
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Thing thing about MY is that he started out in blogging as a quick-witted college student. If he'd gotten a job, he would have changed into something else, but since he's been able to make a professional go of it, he's still a quick-witted college student.

Quite right. And his move to a narrower niche at Slate aggravates the tendency. His old beat at least gave him license to say something quick witted about professional basketball or the Cuba embargo from time to time.

The more he focuses on economics and business, the more he is forced to recycle the couple of tropes he has mastered. I can't see him doing a full-on Kaus, because the ideological inclination isn't there. But I could see him (MY) in 20 years still riding the same hobby horses, long after they've become orthogonal to contemporary policy debates. like Kaus with his idées fixes about unions, developed in the 1970s and never since modified in light of experience.


Posted by: knecht ruprecht | Link to this comment | 02- 9-12 6:38 AM
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I refute 188.last: doctors.

A good example of why Yggles's rhetorical approach is misguided. MY, from his ivory tower, recognizes the fundamental similarity between rent-seeking by doctors, funeral directors, and manicurists. But a generalized assault on credentialing is likely to succeed at harming the politically weak and comparatively innocuous manicurists and interior designers, while sparing the politically influential doctors and funeral directors and strengthening the hand of mindless anti-government types.

Far better to take on the truly problematic cases of credentialism head on: "The high cost of medical care demands that we expand the scope for lower-skilled providers to serve high volume, low-acuity cases." There is no crisis of the high cost of manicures.


Posted by: knecht ruprecht | Link to this comment | 02- 9-12 6:46 AM
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192: MY sounds like he's actively reading academic economics, presumably to combat this. The effect has been to fuck up his prose style, since he's picking up their worst rhetorical habits, like phrasing everything in terms of somebody's boring-ass model. If you find yourself using the phrase "cash-in-advance constraint" in a blog post, and you are not an economist, then you've fucked up.


Posted by: Walt Someguy | Link to this comment | 02- 9-12 6:53 AM
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If you find yourself using the phrase "cash-in-advance constraint" in a blog post, and you are not an economist, then you've fucked up.

Advice that comes far too late for my Dubtrot blog.


Posted by: Sifu Tweety | Link to this comment | 02- 9-12 6:58 AM
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Presumably durability is the important line between manufacturing and non-manufacturing, right? That's why the durable goods index is important. (Although a can of peas does seem like it would hold its value.)

I also take it that the reason durable goods are important is that markets for them are less prone to fluctuation and bubbles. Yoga and sandwich shops can go out of style in a way that washing machines cannot.

Is that right? I'm just trying to check my economic common sense. I'll take my answer off the air.


Posted by: rob helpy-chalk | Link to this comment | 02- 9-12 7:10 AM
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185: I would read it as an interesting and illuminating way of thinking about debt, and without relying on it for the truth of any particular historical fact. I think the bit about "No one's ever seen or recorded a barter system that pre-existed money" is reliable, because I've seen it repeatedly elsewhere.

The problem with that is, is that no one has much of any idea how economic systems worked pre-coinage. I mean, I've got some idea about Mykenae and the palace economy and the Sumerian (that is, say, circa 2600 BC), which is kind of weird, and so on and so forth but there's not much to tell beyond that. (Not in the economics sense - plenty of things to know about what people ate and made.) No one has recorded bartering existing prior to coinage because no one has recorded much of anything about economics prior to coinage (and not a lot afterwards either, for a long long time). I mean, a lot of what you know about economics in Alexander's time is going to consist of a list of the various amounts of silver that Alexander demanded from cities that had surrendered to him, and that's only in the hagiographic version of Alexander's campaigns. (There are not really any other versions to read.) That said:

187: I had completely believed the Econ 101 version of the invention of money.

It's a toy model and it's wrong. (Most of the economic information we have prior to 800 BC indicates lots of long-distance trading (to a surprising degree if you thought ancient people were basically stupid) between what appear to be endless variants on palace economies. So the default economic system of bronze age economies seems to sorta resemble actually existing Communism (Stalinism, that is) or feudalism, but without all the stuff those people took for granted. Non-agricultural economies are just totally not Adam Smithian, based on the evidence from *modern* pre-agricultural societies.) So there, now you don't have to read the book.

(I was inclined towards reading it, but the more you guys talk about it, the less I want to, especially given that I'm still grinding on the big stack of sale-price books that I scooped up during Xmas season.)

183: But now that that he's moved onto more general economics topics, God, does the outcome suck.

Just a version of the virgin (to this area) mind dealing with the econ version libertarianism (as in Ayn Rand minus the philosophy). He'll get over it eventual.

max
['Hey, I did - but of course, I was 12 and dealing with OpEd columnists ranting about Carter and inflation. One has to accumulate contrary evidence before one can tell the usual suspects to go blow.']


Posted by: max | Link to this comment | 02- 9-12 7:13 AM
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The fact that My Little Pony is simultaneously a) my 6-year-old daughter's favorite TV show and b) the subject of a weird subculture of adult men is almost more cognitive dissonance than I can bear.


Posted by: Walt Someguy | Link to this comment | 02- 9-12 7:13 AM
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I think the difference is that manufacturing employees use large amounts of relative fixed capital. This fixed capital, and the need to keep it running, gives the workers leverage and stability and other things that make it possible to organize.


Posted by: Moby Hick | Link to this comment | 02- 9-12 7:14 AM
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199 to 196.


Posted by: Moby Hick | Link to this comment | 02- 9-12 7:15 AM
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198: That is teh creepy. I also don't understand why anyone would watch Voltron or Thundercats if they weren't having to share the TV with a child.


Posted by: Moby Hick | Link to this comment | 02- 9-12 7:16 AM
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196: The problem with the whole line of reasoning is that it completely misunderstands what's important in economics, which is technological advance (and maybe institutional advance). When economists try to explain economic growth in terms of inputs like labor and capital, they find that most of economic growth is because of "everything else", not any measurable input. This seems overwhelmingly because of technological advance. Manufacturing is important because it's where most of the technological advance happens. We're so rich now not because our fast food restaurants are so efficient, but because of things like 32nm CMOS process technology to make chips.

Pointing out that the national accounts can't get everything right, and that some things are misclassified is exactly the point that a quick-witted college student would be drawn to. And it's just not that important in the big scheme of things.


Posted by: Walt Someguy | Link to this comment | 02- 9-12 7:24 AM
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the subject of a weird subculture of adult men

Would I in fact be emotionally richer for having a clue what this is about?


Posted by: chris y | Link to this comment | 02- 9-12 7:47 AM
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No.


Posted by: Moby Hick | Link to this comment | 02- 9-12 7:54 AM
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On yggles - I went back to find a post I'd liked in teh last month, but it turned out to end like this:

I think developing a more realistic account of how firms function and why should be on the agenda for economic research and business reporting alike.

Which suggests I like it just because it says we should do research like I want to do.

On manufacturing, there is a lot Yglesias is right about. A huge amount of the work in manufacturing is actually services, and lots of folks were attributing the US productivity numbers of the 90's to the fact that the country was more flexible in its approach to services. As a researcher, I still feel a yes but not all jobs are the same. When Yglesias says the future is in yoga instruction and food preparation, I am surprised he doesn't think about his other hobby horse that inequality reduces innovation. This seems like a perfect example of inequality leading to jobs as servants rather than widespread improvements in services for all.

On the other hand, I think Walt Someguy is wrong in this.

We're so rich now not because our fast food restaurants are so efficient

Admittedly there has been radical revisionist analysis of the productivity data in the last year or so that I'm not completely up on. But not so long ago, the conclusion was that retail and services led the productivity improvements in the 90s.

As far as organizing manufacturing vs. services, it seems to me that services would be very vulnerable to work actions of the sort that happened when manufacturing was organized. I have a hard time seeing the inherent nature of the business as the main driver of lower unionization.


Posted by: simulated annealing | Link to this comment | 02- 9-12 8:51 AM
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The problem with that is, is that no one has much of any idea how economic systems worked pre-coinage.

If by 'pre-coinage' you mean in a history of the world sense, you're right: coinage goes just about back to the history/prehistory line. But there have been plenty of contacts with cultures who haven't developed money, and AFAIK, they all fit Graeber's pattern: no one ever found a culture where people were obtaining goods from each other on a day-to-day basis by counting up ten chickens for a piglet.


Posted by: LizardBreath | Link to this comment | 02- 9-12 8:55 AM
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What's the significance of this barter vs. favors argument? Neither are workable as the society grows, which is the problem money is supposed to solve.


Posted by: Eggplant | Link to this comment | 02- 9-12 8:59 AM
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I think the main point is an attack on homo economicus: people do not have an innate tendency to truck and barter, they have an innate tendency to enter into thick social relations which incorporate the exchange of goods almost incidentally. Arms-length monetary transactions aren't simply a modern, efficient way of doing what people have always done, they're a real cultural innovation.

(It's funny, I've been recommending that people read Debt, as thoughtprovoking, but it's very much not my kind of thing. In a lot of ways, it's the leftist version of an "on the veldt" argument.)


Posted by: LizardBreath | Link to this comment | 02- 9-12 9:04 AM
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If the point of supporting manufacturing is to support technological innovation, than shouldn't agriculture count as a part of the sector we are trying to support? Agricultural tech (government supported, at that) has been the major transformer of society over the last 150 years.


Posted by: rob helpy-chalk | Link to this comment | 02- 9-12 9:25 AM
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Agriculture has been using tech, but I don't think it has been the source of innovation.


Posted by: Moby Hick | Link to this comment | 02- 9-12 9:32 AM
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205: I thougth Walt was assuming some richer definition of "wealth" than simply "economic growth."


Posted by: rob helpy-chalk | Link to this comment | 02- 9-12 9:32 AM
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211: I thought it was more of a long-term argument. A paleolithic village with an efficient service sector is still going to be poor.


Posted by: Eggplant | Link to this comment | 02- 9-12 9:37 AM
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210: Well, one big driver of agricultural productivity has been the discovery of the Haber-Bosche process which I think was originally specifically developed to create nitrogen fertilizers.

The other driver has been high-yield hybrids, which as again driven by a desire for agricultural productivity.

These are big innovations, representing deep knowledge of chemistry and genetics.


Posted by: rob helpy-chalk | Link to this comment | 02- 9-12 9:37 AM
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Aside from the innovation argument, don't we want a thriving manufacturing sector because if we want other countries to keep giving us things, we need to give them things in return. Ideally, those things should be renewable and hard to make and requiring a lot of initial capital.


Posted by: Eggplant | Link to this comment | 02- 9-12 9:40 AM
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213: But chemistry and genetics didn't really get going until manufacturing came to replace agriculture as the bigger source of society wealth.


Posted by: Moby Hick | Link to this comment | 02- 9-12 9:41 AM
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You all are crazy when it comes to making Yglesias predictions. First you think he's going to endorse Romney (obviously nuts, as recent posts have proven), and now you're worried he's going to be talking about the stuff he's talking about now for 20 years? He spent a few years with Iraq as his big thing, then it was monetary policy and helicopter drops, and now its city governance and how it fucks up housing prices. In a few years it'll be something new.


Posted by: Unfoggetarian: "Pause endlessly, then go in" (9) | Link to this comment | 02- 9-12 9:44 AM
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Also, I was wondering what else cool people have started hating in the past few years. As someone who still like Yglesias and Gladwell, perhaps I can use the "no longer cool" list for recommendations of other things I'd still like.


Posted by: Unfoggetarian: "Pause endlessly, then go in" (9) | Link to this comment | 02- 9-12 9:45 AM
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I think I was the person behind the Romney prediction, and it wasn't really a prediction.


Posted by: Eggplant | Link to this comment | 02- 9-12 9:46 AM
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Irrigation, fertilizer, and mechanized tilling and harvesting are all important for farmers. Similarly efficient distribution; first stockyards then refrigeration helped a lot in making trade between the wealthy East coast and the plains in the US.


Posted by: lw | Link to this comment | 02- 9-12 9:48 AM
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Similarly efficient distribution; first stockyards then refrigeration...

And then they had to learn how to work them efficiently. Putting the cows in the refridgerator and the cheese in the stockyards didn't work.


Posted by: Moby Hick | Link to this comment | 02- 9-12 9:52 AM
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I really dislike Clay Shirky; he's good about newspapers, terrible otherwise. Marie Popova and la Rochefoucauld for short form work.


Posted by: lw | Link to this comment | 02- 9-12 9:53 AM
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Putting the cows in the refridgerator ... didn't work.
Right, you have to take the elephant out first.


Posted by: Eggplant | Link to this comment | 02- 9-12 9:57 AM
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Anyway, Yglesias seems to have bought the argument that if another country is subsidizing an export industry (with reduced current consumption) we shouldn't worry if it hollows out the corresponding domestic industry, because, hey, cheap goods!


Posted by: Eggplant | Link to this comment | 02- 9-12 10:00 AM
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I don't have a strong opinion about Gladwell. I liked Yglesias until recently. The past couple of weeks, I've just scrolled past most of his posts.

229: Right. What matters is technology. Here, Yglesias takes on the burning issue of regulations preventing cooking on-site. Truly this will cripple the US economy.

205: I've heard it claimed that most of the measured productivity gains in services are because of Walmart. Krugman mentions a version of the claim here. We're going to see continued 3% economic growth from the increasing Walmartization of the American economy?


Posted by: Walt Someguy | Link to this comment | 02- 9-12 10:15 AM
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What matters is technology.

That explains why the USSR, which armed China and India as well as sending tractors, has done so well.


Posted by: lw | Link to this comment | 02- 9-12 10:22 AM
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Yes, the computers of the USSR were every bit as good as those made by IBM.


Posted by: Walt Someguy | Link to this comment | 02- 9-12 10:33 AM
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Krugman has another column where he reviews the evidence that the USSR had basically no productivity growth whatsoever -- their economic growth was entirely through capital accumulation.


Posted by: Walt Someguy | Link to this comment | 02- 9-12 10:34 AM
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They took the lazy side of Germany.


Posted by: Moby Hick | Link to this comment | 02- 9-12 10:37 AM
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Irrigation, fertilizer, and mechanized tilling and harvesting are all important for farmers.

Field leveling turns out to also be a very big deal.


Posted by: Megan | Link to this comment | 02- 9-12 10:52 AM
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229: Why is that?


Posted by: Annelid Gustator | Link to this comment | 02- 9-12 11:00 AM
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229: My family had its land leveled back in the 50s or 60s. They did it to make irrigation easier.


Posted by: Moby Hick | Link to this comment | 02- 9-12 11:03 AM
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Alex's 190 is interesting. Thanks.


Posted by: parsimon | Link to this comment | 02- 9-12 11:05 AM
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Makes it easier to get machinery in the field, but primarily it is for irrigation. If you have furrows, they'll flow more regularly if your field has an even half-inch drop per quartermile (and no local humps). If you have fancy drip irrigation, you don't get presssure irregularities in your very long plastic pipes or hoses.

My professor used to come back from places like Mali wishing that if he could give those farmers one thing, it would be laser levelling.


Posted by: Megan | Link to this comment | 02- 9-12 11:08 AM
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If two things, laser levelling and a Ruby Tuesday.


Posted by: Moby Hick | Link to this comment | 02- 9-12 11:11 AM
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I copy all typos, apparently.


Posted by: Moby Hick | Link to this comment | 02- 9-12 11:12 AM
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and a Ruby Tuesday.

As long as it's given anonymously and is relatively short-lived.


Posted by: JP Stormcrow | Link to this comment | 02- 9-12 11:33 AM
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Echoing Walt in 184, I'd like to see a review of Debt by an anthropologist. The argument doesn't sound facially absurb to me based on what I know of the relevant research, but that's not very much, and it would be helpful to get a sense of where Graeber's ideas fall in the context of active debates among economic anthropologists. I presume it'll eventually get reviewed by the major anthropology journals, but that can take years.


Posted by: teofilo | Link to this comment | 02- 9-12 12:20 PM
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Why do conversations about irrigation end so quickly?


Posted by: Moby Hick | Link to this comment | 02- 9-12 1:01 PM
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Shock & awe.


Posted by: | Link to this comment | 02- 9-12 1:02 PM
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Because I try to have some consideration for the blog.


Posted by: Megan | Link to this comment | 02- 9-12 1:04 PM
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Sometimes the original soil contours are still visible after decades of plowing & fertilization, either because the subsoil was shallow or because our ag is basically extractive.


Posted by: clew | Link to this comment | 02- 9-12 1:06 PM
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Why do conversations about irrigation end so quickly?

Because it's a family blog.


Posted by: JP Stormcrow | Link to this comment | 02- 9-12 3:45 PM
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Ooops, he did it again!

If the Chipotle kitchen in Chicago were an independent firm, in other words, it would be considered a "manufacturer" of carnitas, just like the people who bring you canned peas and Spam.
As it stands, Chipotle is instead classified in the much-derided service sector.

But again, I think Yglesias is totally right about the innovations at Chipotle - they're real, important, and they matter for the lives of more people than iphone + apps.


Posted by: simulated annealing | Link to this comment | 02-10-12 2:47 AM
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I just came here to make fun of that very article, which demonstrates that I'm right about everything. If Chipotle is the future of American capitalism, then maybe communism wasn't such a bad idea after all.


Posted by: Walt Someguy | Link to this comment | 02-10-12 8:12 AM
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243,244: At some point I'd like to see a more comprehensive discussion, as although he might take it to an extreme, I do not see where Yglesias is fundamentally wrong.


Posted by: JP Stormcrow | Link to this comment | 02-10-12 1:23 PM
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Chipotle has great pork.


Posted by: Moby Hick | Link to this comment | 02-10-12 1:29 PM
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I read that post like it was written by OPINIONATED GRANDMA.


Posted by: Eggplant | Link to this comment | 02-10-12 1:30 PM
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Chipotle has great pork.

I've never eaten at a Chipotle, and am not even aware of having seen one, though Google tells me there's one across from Duke Hospital. Maybe I'll give it a try over the weekend.


Posted by: apostropher | Link to this comment | 02-10-12 1:33 PM
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That area has better Mexican food that Chipotle.


Posted by: Moby Hick | Link to this comment | 02-10-12 1:47 PM
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Or had.


Posted by: Moby Hick | Link to this comment | 02-10-12 1:48 PM
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Chipotle's food has astounding amounts of sodium in everything.


Posted by: Sifu Tweety | Link to this comment | 02-10-12 2:03 PM
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Be sure to remind the guy who ate the Double Down that fast food might not be healthy.


Posted by: Moby Hick | Link to this comment | 02-10-12 2:23 PM
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Wait, I ate a Double Down. Remind myself that fast food isn't healthy?


Posted by: Sifu Tweety | Link to this comment | 02-10-12 2:27 PM
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Apo was the one who blogged it. Unless I've gotten confused. I didn't eat a Double Down because I like the chicken with bones.


Posted by: Moby Hick | Link to this comment | 02-10-12 2:29 PM
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Anyway, I'm not going to use the two-for-one Filet-o-Fish coupon somebody left on the counter because this conversation was reminded me that sometimes I feel sick after eating stuff like that.


Posted by: Moby Hick | Link to this comment | 02-10-12 2:49 PM
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