The W: A Weekly Reading List

In this week’s edition…IBM’s CEO letter to employees…India’s tax reform…work friends are worth it…diversity and Silicon Valley…Elvis Pressley and hip-hop…and more.


Business & Economics

It’s Time to Tie Executive Compensation to Sustainability

In our research on the S&P 500, only 2% of the companies tied environmental metrics to executive compensation, and 2.6% had a diversity metric. The most common sustainability metric was for safety, at 5% of companies — often those with much to lose from accidents. Indeed, by far the largest sector for sustainability metrics was the energy industry, which accounted for 25% of companies that had them. Now that sustainability has become a broader pressing issue, more industries need to do the work of assessing the potential business case. (Harvard Business Review)


This is Why Trump’s Advisory Council Disbanded

The tweet with the news came after the latter reportedly decided to disband on its own, a chain of events confirmed by a letter IBM CEO Ginni Rometty sent her employees the same day. “By now, you’ve seen the news that we have disbanded the President’s Strategy and Policy Forum. In the past week, we have seen and heard of public events and statements that run counter to our values as a country and a company. IBM has long said, and more importantly, demonstrated its commitment to a workplace and a society that is open, inclusive and provides opportunity to all. IBM’s commitment to these values remains robust, active and unwavering.” (Fortune)


The English Premier League is experiencing a textbook case of hyperinflation

It has been widely reported that the football industry is experiencing an acute form of hyper-inflation. Specifically, we are seeing a classic case of what economists call “demand-pull inflation”. This is when there is an increase in the supply of money (demand) while the supply of goods stays constant or depreciates. This is precisely what is happening in English football – the increase in available transfer funds has not been matched by a growth in the number of world-class players and prices have rocketed. (The Conversation)


The Secret Economic Lives of Animals

If Adam Smith had strapped on a bee suit—or a safari jacket, or a scuba mask—he could have discovered that the animal kingdom is, in fact, a chamber of commerce. “Biological markets are all over the place,” says Ronald Noë, a Dutch biologist at the University of Strasbourg who first proposed the concept of the biological market in 1994. Scientists have since described biological markets in the African savannah, Central American rainforests, and the Great Barrier Reef. Baboons and other social primates exchange grooming for sex. Some plants and insects reward ants for protection. Cleaner wrasses eat parasites off other fish and behave more gently when a “client” has the option of visiting a rival wrasse. (Bloomberg)


Politics & Policy

The Deficit Tango

Facing large defaults, foreign financial intermediaries may then fail as well, possibly even bringing down their national financial systems. That is what happened in 2007-2008, when the subprime-mortgage crisis in the US morphed into a global financial crisis. It is also what happened in Spain and Ireland shortly after. But it is excessive public spending financed by external borrowing that is most worrisome, because highly indebted governments can default more easily than private entities. Unlike firms and households, states cannot be closed down or forced to sell assets. Moreover, they may have some political leverage, as was the case with Greece and Portugal during the euro crisis. (Project Syndicate)


India’s Tax Reform: The GST Is an Important, Limited First Step

New Delhi will now tax goods and services at their final destination rather than their source, meaning that goods will have to be tracked across the entire value chain, from their origin as raw materials to their transformation into finished goods at the point of consumption. To accomplish such tracking in a $2 trillion economy, India has built a new GST Network system using state-of-the-art technology. Nearly ten million registered businesses will have to register on the new network. Fifty million more small and medium-sized businesses that are currently out of the formal taxation network may also have to register in order to provide and receive tax credits. The GST Network is expected to generate and store 3.2 billion invoices every month at a peak rate of 120,000 transactions a second. (Foreign Affairs)


If an AI creates art, who owns the rights?

Naruto, a rare macaque monkey, shot to fame in 2011 when it picked up a British photographer’s camera and seemingly took a selfie. David Slater, the photographer in question, claims he owns the copyright to the stunning images, despite him not being the one who held the camera or clicked the shutter. Instead, he says the images belong to him because of the work he did in setting up the shot. Without developing some form of framework recognizing AIs as legal persons, just as monkeys are not, we cannot award an AI copyright. “And we’re a long way from that moment, if we’ll ever get there,” Bridy says. The most likely near-term solution would be to award copyright to the owners of the AI itself, which would be similar to how employers automatically own the work their employees produce. (Quartz)


Arts & Culture

Ruthless, vicious, moving: Earl Spencer’s oratory revisited

Come for the zeugma; stay for the auxesis. Here, in a sentence, our speaker modestly offered that he was only a “representative” — but then made clear that he was a representative of a family, a country and the whole world, three categories nested under his representative auspices like Russian dolls. “We are all united, not only in our desire to pay our respects to Diana, but rather in our need to do so.” (Financial Times)


Having Work Friends Can Be Tricky, but It’s Worth It

The difficult truth is it just may not be possible to have friendships at work without some degree of fallout. There are real entanglements that can arise when the boundaries between work and friendship become blurred. Work responsibilities need to take precedence over socializing. Managers and leaders need to continue being able to assign tasks and role hierarchy does need to be respected. Performance evaluations need to happen authentically and honestly. Competition is often part of workplace culture — will you or your peer get promoted? — which can lead to lack of trust or willingness to get too close. After all, how would your friendship fare after you become their manager? (Harvard Business Review)


Technology & Computing

Diversity in Silicon Valley

The vast majority of VCs in Silicon Valley, and elsewhere, are young or middle-aged white men. The number of women partners in venture capital is very small: about 6 percent. The number of minority VC partners is even smaller. I so rarely see a black or Hispanic person in my field that it’s a surprise when I do. It’s remarkable how homogeneous the VC group is. I can tell you from my own experience that diversity matters a great deal, because different people with different backgrounds think differently from each other. Bringing a diverse viewpoint is essential to creating great companies. There are many research studies out there that show that when you bring diverse viewpoints to companies you get better projects, better outcomes and generally just better earnings. Yet Silicon Valley fails to learn this lesson again and again. (Reconnomics)


Where the Robots Are

For good and ill, then, this is where the industrial robots are and aren’t. Long to short, their incidence reflects the nature and geography of the nation’s highly automated advanced manufacturing sector. Which prompts a couple observations. First: The uneven map of industrial robotics makes a simple point about technology change. Automation—like so many other economic trends—won’t occur in the same way everywhere. Far from being entirely novel, automation will resemble other economic changes in that it will touch down in disparate communities in disparate ways determined by the workings of global value chains as they are shaped by the local industry mix, skills, location. (Brookings)


Traditional Asset Tokenization

We think of the difference in value between the public company and identical private company as an “illiquidity discount,” or analogously a “liquidity premium.” How big is the illiquidity discount? Financial economists have attempted to measure the illiquidity discount in a variety of ways. A common rule of thumb is 20–30%. This represents a huge amount of value and therein lies great promise. Tokenizing relatively illiquid assets and creating a market in which to trade these tokens can reduce the illiquidity discount substantially by reducing frictions to trade. Traditional assets will tokenize because they will lose the liquidity premium if they don’t. (Hackernoon)


Psychology & Health

Teens Explain Their Obsession With Sarahah, Summer’s Hottest Anonymous-Gossip App

Despite the potential for bullying, and the actual bullying happening, on the app, the teens who talked to Select All didn’t seem too concerned. (Their parents, however, seem to feel markedly different. “My son signed up for an account, and within 24 hours someone posted a horrible racist comment on his page, including saying that he should be lynched,” reads one review of the app. “The site is a breeding ground for hate.”) “[I’ve seen] a lot of inappropriate stuff,” said Travis, 18, from Michigan. “Nobody has been too hurt over what has been said that I’ve seen so far.” When asked why he thinks people flock to apps like Sarahah, his answer was simple. “My guess is they like the attention and drama.” “Everyone’s into drama and making people feel bad to make themselves feel better,” Kenny said, echoing Travis. “It’s what teens do. Not necessarily me, but teens in general.” (Select All)


The Body Language of Power

To the many consequences of the improbable accession of Donald Trump to the world’s highest office, add this: More people now appreciate the role of body language in politics. But Trump is not the best subject for contemplation. “You tiny, tiny, tiny little man,” is how J.K. Rowling, of Harry Potter fame, reacted on Twitter to Mr. Trump’s shove of the Montenegrin prime minister, and that is about all that needs to be said. Anybody interested in gaining or keeping power – or simply understanding it – would do better to study the body language of Angela Merkel. (Handelsblatt Global)


Media & Entertainment

And The Fighter Still Remains

Franco goes out of the ring on a stretcher, and when Jose and the rest of Team Haro gather back in their dressing room, they say a prayer for him. Then they open a bottle of water and pretend it’s champagne, and that’s Jose’s celebration. He sleeps that night with his USBA championship belt, and in the morning he receives a text from Whit Haydon informing him that Daniel Franco’s brain is bleeding in two places, that he’s already been in surgery, that surgeons removed a portion of his skull in order to relieve the pressure caused by the hemorrhage, that he’s in an induced coma and may die. Suddenly, Jose goes from an athlete who has completed a lonely, unlikely comeback to a man who has very nearly beaten another man to death, and once again he feels as though he’s back to zero. (ESPN)


The Complicated Relationship Between Elvis Presley & Hip-Hop

The question of whether Presley was a culture vulture isn’t a simple one to answer. He certainly lifted from black music—that can’t be debated—but to some fans and critics, his genuineness and artistry exempt him from judgment. When he began recording singles for Sun Records in the summer of 1954, Elvis was a poor truck driver with a weird voice and funny way of dressing. Rock ‘n’ roll had yet to explode onto the national stage, and while Presley had a showbiz dream, he had no reason to believe his music would ever get played on the radio, let alone make him the most famous man on the planet. (Genius)