The Refragmentation • Hacker News Board

Re: The Refragmentation

#171

Post by csours » Sat, Jan 02, 2016, 9:49 PM UTC

petra wrote: post #113

wpietri wrote: post #80

Earlier quoted context omitted.

I don't know about steel, but Rother's Toyota Kata makes this case for cars. There's one graph in particular that shows carmaker productivity per worker over several decades. Toyota, working in a Japan decimated by war, definitely came from behind when competing with Detroit's big 3. Toyota starts lower than the other 3, and all of them improve gradually together. But at some point US carmakers plateau. Toyota just k…

>> Toyota works hard to teach them Why did Toyota did that ?

At that point in time, Toyota still did not have manufacturing in the USA. Honda did, but Toyota did not; they were still not sure how to do it.

Additionally, and more relevant - American suppliers could not make parts to Toyota's quality specifications.

One of the craziest parts of this story is that GM simply did not believe the stories that were coming out of NUMMI - for instance, NUMMI could change press dies (for stamping sheet metal) in under a 30 minutes where other plants took several hours.

It is crazy to think about, but GM at that point in history had enough cash to simply buy Toyota; being the biggest dog in town leads to self-satisfaction and complacency.

GM and the big three at that time had an inspect and reject batch lot production system. Each stage of production would make a bunch of parts that would later be used downstream, possibly a few days or a week later. These parts would be inspected for defects before being used, but by then there may be a buffer of several thousand parts - that may all need to be scrapped. Toyota ran on a lean system, which meant that upstream production could cause severe downtime if those upstream suppliers or plant operations failed. This caused 2 things - emphasis on more robust operations and less waste due to scrap.

The whole time period is fascinating no matter what business you are in.

Disclosure / disclaimer - I work for GM, but did not during this time period - I've just read a lot about it.

Re: The Refragmentation

#172

Post by 13thLetter » Sat, Jan 02, 2016, 9:52 PM UTC

lisper wrote: post #125

wh-uws wrote: post #122

Earlier quoted context omitted.

"No leftie is arguing or longing for any of these policies. What we're looking for is just more equality in economic opportunities and esp capital and that distribution of capital to be more fair across all the classes and not to be a privilege only for rich people and highly connected people." And what non lefties are asking is how do you solve income inequality without those policies? And more fair? Fair by what me…

Income inequality is not the problem, it's a shorthand for the real problem, which is the mutual reinforcement of wealth inequality and political corruption. Rich people use their disposable income to buy political influence which they then use to get laws passed that allow them to collect rents. The solution is to 1) roll back the corrupt laws (like the preferential tax treatment of carried interest and high-speed t…

"2) get rid of the absurd legal doctrine established by the Citizens United decision that money=speech and hence the First Amendment applies to bribery."

Unfortunately it's not that simple. The immediate question at hand in Citizens United was about a group of private citizens being prevented from releasing a movie criticizing a Presidential candidate during an election. A movie costs money to produce and requires a large number of people to coordinate, inevitably shading over into a corporate legal structure... just like, say, a union, or a political party, or a newspaper. So how are you going to decide which corporate legal structures are making "legitimate" political speech, whatever that means, and which aren't?

Re: The Refragmentation

#173

Post by curun1r » Sat, Jan 02, 2016, 9:53 PM UTC

hoorayimhelping wrote: post #129

gotchange wrote: post #101

A very fascinating article that I have truly enjoyed reading minus the last 10 or so paragraphs where Paul expressed it unequivocally that he's a status-quo warrior and that nothing can be done to remedy the problem of the ever widening gap of income inequality in the global economy and more specifically in the US and that it's a "natural" product of the state of affairs in our world. A classical example of « the nat…

The last paragraph was the whole point: > I worry that if we don't acknowledge this, we're headed for trouble. If we think 20th century cohesion disappeared because of few policy tweaks, we'll be deluded into thinking we can get it back (minus the bad parts, somehow) with a few countertweaks. And then we'll waste our time trying to eliminate fragmentation, when we'd be better off thinking about how to mitigate its co…

> He's saying income inequality is a feature of technology allowing people to be paid their market value and that you can't 'fix' that.

The thing that I worry about is whether this feature is destroying the conditions that allowed it to become a feature in the first place.

He mentioned the example of Apple and IBM, which I see as illustrative in another way. Would personal computing devices have become popular in a highly fragmented world? According to Wikipedia, the Apple II cost over $5k, accounting for inflation. Absent a healthy middle class, which was created by the era of conformity and relative income equality, would there have been enough consumers to create a market for a $5k computer? As we see income inequality rise, are we not also going to see the opportunity for wealth creation diminish as capital congregates in the hands of a class that largely conserves it?

I think we're already seeing this. As an exercise, try to think of something non-niche that costs around $5k, the price of the Apple II, for which there isn't some form of financing (auto/home/college loans and such). I'm hard-pressed to think of something and I believe it's because there's an increasingly small number of people that can afford such a product. We're already losing the conditions that allowed Apple to introduce the personal computer. There's a long ways that this trend can go before it becomes untenable, but the end result of income inequality will be an environment where it's quite difficult to get paid your market value because the market that funds the employment market will have dried up.

Re: The Refragmentation

#174

Post by csours » Sat, Jan 02, 2016, 9:53 PM UTC

err4nt wrote: post #135

petra wrote: post #113

Earlier quoted context omitted.

>> Toyota works hard to teach them Why did Toyota did that ?

Helping a competitor may cost them in the future, but I am guessing they got paid enough money in the present for the consultation to be worrh the risk. I cant speak for Toyota, but they probably also would feel their own future would look bleak if their competitors died off - a good healthy level of competition is good for all players in the market, and it drives up innovation and drives costs down for consumers. In…

I don't think Toyota got paid directly.

See my comment above, but it is important to remember that Toyota did not have any production facilities in the USA at this time; they were not sure (purportedly lazy) American workers could or would conform to the Toyota Production System.

Also, at that time GM had more cash than Toyota's Market Cap. [citation needed] [1]

1. I wish I had better source for this, but Roger B Smith spent 80 billion on automation in the 80's, and Toyota's Market cap was 31-45 billion in 1992.

http://www.businessweek.com/bwdaily/dnflash/content/jan2009/...

http://www.wolframalpha.com/input/?i=toyota+historical+marke...

Re: The Refragmentation

#175

Post by Zigurd » Sat, Jan 02, 2016, 9:54 PM UTC

It's a very American take on fragmentation and cohesion. The idea of wars creating cohesion is only valid in big, powerful, victorious nations. In Germany, defeat resulted in the rejection of nationalism. If you don't live in a great and powerful nation, or if you don't think your nation is as great as advertised, you might not miss cohesion on national lines.

Good thing PG is a realist: "we'd be better off thinking about how to mitigate its consequences."

But even that point of view is reactionary. What mitigation is good? The kind that preserves mass-market politics as practiced in America? The kind that can take us to war with some distant threat that is not even a blip in terms of national survival? The kind that tells us cops and doctors and uniformly good and competent? Surely not the kind that says "What's good for GM (or Disney, or Goldman Sachs) is good for America."

Skeptical, questioning, objective people with loyalty only to those we can personally qualify will be people less likely to be taken for a ride by the kinds of cynical mass-market charlatans it takes to harness national cohesion.

The weakest part of this article is about taxation and the wealth gap: If taxes rates are weakly related to wealth creation, the spectre of wealth-destroying taxation remains a boogie man, if a popular one these days.

Re: The Refragmentation

#176

Post by randcraw » Sat, Jan 02, 2016, 9:54 PM UTC

vzcx wrote: post #102

bawana wrote: post #73

Refragmentation is the result of the fungibility of money. When we wanted to make things (stuff people could use to make war or make a better life) money was spent to make those things. Like the water cycle, money would be transformed from one phase into another so that work could be accomplished that directly impacted humanity. But we have short circuited that cycle. Now money is being used directly to make more mon…

Bold claims. Forgive me for saying so, but your knowledge of finance does not strike me as particularly deep! Do you not think that use of financial instruments is vital for allocating resources in a world of imperfect information? For me, their utility and necessity is obvious. If you think about it, making stuff that people want is actually rather complicated. The world is rife with hazards and risk; the intricate…

I see little value generated by treating money as an end rather than as a means to an end. Liquidity and better pricing of goods are the classic rewards of that gambler / investor culture. Meanwhile its demerits (like the 2008 financial meltdown) are blithely overlooked.

In fact, now that there's so much automated trading of all manner of financial instruments, there should be no real need for any new tradable vehicles. In fact, if liquidity and accurate stock pricing are the only desiderata of non-equity traders, and these ends are met otherwise, it sounds like we could easily do away with the entire derivative / option markets altogether as being purposeless and overly dangerous, serving only the professional gambler banker and his vain pursuit of gigabucks.

Re: The Refragmentation

#177

Post by gist » Sat, Jan 02, 2016, 9:54 PM UTC

jakozaur wrote: post #100

Great article, but it misses two triggers: 1. Globalization. A lot of manual labour was tied to USA, not so ago to local labour. In last 20-30 years a lot of things get imported from China or outsourced to India. 2. Software (briefly mentioned in original article). Previous technology advancement can give someone leverage, but software got probably the largest leverage in humankind history. Single program can automat…

Interesting. If you are correct (I don't know if you are actually) it means that none of the 16 people who read drafts of this came to that conclusion. I say because I've always wondered why PG does this (so many people reading drafts I wonder if this is common in book publishing that can easily be updated and corrected just based on HN comments) and can't just leave his own thoughts to stand on their own.

Re: The Refragmentation

#178

Post by edanm » Sat, Jan 02, 2016, 9:56 PM UTC

jacquesm wrote: post #47

golergka wrote: post #36

Earlier quoted context omitted.

That seems to be just small businesseses, not startups. Startups either go Facebook or go bust, they're not created to stay stable at small scale.

> Startups either go Facebook or go bust, they're not created to stay stable at small scale. Nonsense. Plenty of companies start out as small companies and suddenly find themselves on the upwards slope of a hockey stick, others start out as aiming for that hockey stick and end up being 'just' sustainable businesses. This whole start-up naming thing denies 125 years of objective reality. You can't start a scalable com…

But wait, some people start a pizza place or a grocery store or something similar. Those kinds of businesses are definitely new businesses, and people who start these kinds of businesses is what was traditionally meant by the word "entrepreneur".

But startups are qualitatively different - they are usually started with the express (and usually only) purpose of growing very large, very fast.

Call them startups or not, but we definitely need a term for the kind of company that behave in this "go big or go home" fashion, and startup is the generally recognized term for it.

Re: The Refragmentation

#179

Post by Zigurd » Sat, Jan 02, 2016, 10:01 PM UTC

WoodenChair wrote: post #144

> It would be insane to go to war just to induce more national unity. It's probably out of the scope of this essay, but we have in fact been at war for 14 years. It's not at the scale of WW2, but it's war none the less. I think it has not induced national unity due to precisely what Graham describes - fragmentation in society.

That's right. The GWoT is the failed last hurrah of a feeble politician attempting to drape himself in war-leader glory. And that's a good thing. The future is about the ability to create, not coerce and extract, and America needs to retool for that world.

Re: The Refragmentation

#180

Post by timdellinger » Sat, Jan 02, 2016, 10:01 PM UTC

AstroChimpHam wrote: post #156

PG started off talking about the fragmentation in politics, and I wish he would have wrapped that back in at the end. It feels to me like the two party system in the US is dying now as the oligopolistic system of just a few big companies began dying in the 90s. The two party political system is more unnatural than the few-big-companies system. Libertarians and Evangelicals agree on very little yet they've been voting…

Politics is a bit of a different beast than business. Things that occur to me off-hand are:

- Political entities get large not to achieve economies of scale (i.e. increased efficiency and effectiveness, which may or may not materialize in business... thereby sowing the seeds of future fragmentation when they don't), but rather to achieve scale itself: more votes.

- There's been no de-regulation akin to what occurred in business in the 70s and 80s, mostly because the big parties literally write the rules.

- Elections are pretty much a zero-sum game.