Early 2017 Reading Pile

The following books will be on my reading pile for early 2017:

 

  1. Sheelah Kolhatkar’s Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street (New York: Random House, 2017). Kolhatkar is a staff writer at The New Yorker. I followed the insider trading case against Steve A. Cohen and his hedge fund SAC Capital for several years. I thought about writing a PhD chapter on it — but getting access to the court records was going to be expensive and it was out-of-scope to my main focus. Kolhatkar has saved me the trouble — and illustrates why investigative journalism is important.
  2. Ed Thorp’s A Man For All Markets: From Las Vegas to Wall Street, How I Beat the Dealer and the Market (New York: Random House, 2017). Thorp is a giant in quantitative investing and card counting in poker. There’s a lengthy interview with Thorp in Jack D. Schwager’s book Hedge Fund Market Wizards, and this book promises more revelations. Features a foreward by Nassim Nicholas Taleb.
  3. Andrew W. Lo’s Adaptive Markets: Financial Evolution at the Speed of Thought (Princeton, NJ: Princeton University Press, 2017). Lo is the Charles E. and Susan T. Harris Professor, a Professor in Finance, and the Director of the Laboratory for Financial Engineering at the MIT Sloan School of Management. This book outlines Lo’s Adaptive Markets Hypothesis – a challenger to the Efficient Markets Hypothesis – and offers a conceptual basis for why some hedge fund trading works.
  4. Siva Vaidyanathan’s Intellectual Property: A Very Short Introduction (New York: Oxford University Press, 2017). Vaidyanathan is Professor of Media Studies at the University of Virginia. Intellectual Property (IP) is an intangible asset class that includes copyrights (works of creative expression), trademarks (logos and symbols that differentiate a company in the marketplace), patents (know how and processes), and trade secrets (confidential and secret information). Vaidyanathan explains how IP works and examines its legal / cultural debates. A good primer for content creators.

Picks & Pans

Constructing Public Opinion: How Political Elites Do What They Like and Why We Seem to Go Along with It by Justin Lewis (New York: Columbia University Press, 2001). (TS-3). Lewis is Professor of Communication at the Cardiff School of Journalism, Media, and Cultural Studies at Cardiff University. This book explains how opinion polls are constructed, and how political elites use them to create ideological support on controversial issues. Throughout, Lewis considers the ideological role of information and how an informed citizenry can arise. This book provides some answers for the role of opinion polls in the US Presidential election in 2016, and in particular, the specific tactics used by the Clinton and Trump campaigns.

 

Psychological Operations and Political Warfare in Long-Term Strategic Planning edited by Janos Radvanyi (New York: Praeger Publishers, 1990). (TS-4). An academic collection of late Cold War comparative thinking about psychological operations and political warfare in the United States, the Soviet Union, Poland, West Germany, France, and in insurgent, militant and terrorist groups. This book illustrates one attempted way to implement Hari Seldon’s psychohistorical thinking (the Foundation trilogy) in the realm of special warfare between different political blocs and systems. Secondhand copies are expensive so look for library copies.

 

Psychoanalysis in the Age of Totalitarianism edited by Matt Ffytche and Daniel Pick (New York: Routledge, 2016). (TS-4). Fascism’s rise in Nazi Germany, Mussolini’s Italy and Hirohito’s Japan posed a challenge to Sigmund Freud’s psychoanalytic circle. This essay collection by cultural historians and psychoanalysts documents how Freud and colleagues analysed fascism and totalitarianism. It explores the spillover effects for Western democracies, post-colonial events in Communist Yugoslavia and Apartheid South Africa, and US intelligence agency interest in exploring mind control. The final essays reconsider psychoanalysis and the ‘talking cure’ in a post-psychoanalysis and post-totalitarian world.

 

Capital Without Borders: Wealth Managers and the One Percent by Brooke Harrington (Boston, MA: Harvard University Press, 2016). (TS-4). Harrington is Associate Professor of Sociology at Denmark’s Copenhagen Business School. Economist Thomas Piketty and anthropologist David Graeber have popularised the study of the top 1% of income earners in the on-going debate about income inequality. But how do the 1% perceive themselves as high net worth individuals? Harrington studied wealth management for two years with the London-based Society of Trust and Estate Practitioners. She then undertook an ethnographic study between 2008 and 2015 to interview 65 wealth managers in 18 countries. The results document how wealth management actually works as a professional elite.

 

Dog Days: Australia After The Boom by Ross Garnaut (Collingwood, Australia: Black Inc, 2003). (TS-3) Australia survived the 2007-09 global financial crisis due in part to a mining and resources sector boom. It was truly the ‘lucky country’ (David Horne). Then the mining and resources boom burst: Australia faced a socio-economic crisis, rising income inequality, and uncertainty. This book for a broad audience by a noted Australian economist was one of the first responses to this ‘dog days’ scenario of limited economic growth and unstable governments. For an update see the Quarterly Essay by George Megalogenis called ‘Balancing Act: Australia Between Recession and Renewal’ (2016).

 

“Enhancing” the Australian-U.S. Defense Relationship: A Guide to U.S. Policy by Dr Thomas-Durrell Young (Carlisle, PA: Strategic Studies Institute, U.S. Army War College, 1997). (TS-3). In 2016, several current and former Australian politicians questioned the survival of the United States-Australia security alliance under incoming President-Elect Donald Trump. This Strategic Studies Institute paper lays out the historical context and the importance of this bilateral security relationship from a United States perspective. It is also helpful in understanding the Five Eyes signals intelligence alliance in the Anglo-American sphere.

 

Takeover: Foreign Investment and the Australian Psyche by David Uren (Sydney: Penguin Australia, 2016). (TS-3). Australia’s Foreign Investment Review Board can be a flashpoint for protectionist fears about the role and influence of foreign nation-states in domestic economies. Uren, who is The Australian’s economics editor, provides historical, political and cultural analysis of how debates about foreign investment have shaped Australian mind-sets, attitudes, and values. Takeover explains how rent-seeking in Australia’s ill-fated car industry occurred and why Chinese investors are targeted in fears about a housing investment bubble.

Academic Moneyball

Inside Higher Ed reports that a group of Massachusetts Institute of Technology academics have created a Moneyball style data analytics model to predict and evaluate tenure track applications and performance.

Here are some of my thoughts on Academic Moneyball from December 2014:

The Moneyball Thesis

 

Oakland A’s coach Billy Beane faced a dilemma: competing teams poached his high-performance players and the baseball team faced budget restraints. Beane used Bill James’ sabermetrics – the statistical analysis of baseball player skill – to build a team of contrarian baseball players using performance-based optionality; that experienced positive asymmetric payoffs (a winning streak of successful games); and that achieved a dramatic change in competitive tournament rankings.

 

Definition of Academic Moneyball: develop a Moneyball valuation framework for academic research programs.

 

Definitions

 

Academic: a higher education staff member who does teaching, research, and academic service.

 

Researcher: a higher education staff member whose main work activity Is to conduct research.

 

Research Program: a programmatic suite of research activities including collaboration, dissemination, publishing, and contract research.

 

Structure

 

  1. The University’s Enterprise Bargaining Agreement defines the Minimum Standards for Academic Levels (MSALs): the expected scope and observable impact of an Academic’s teaching, research, and academic service activities (i.e. MSALs establish the baseline for expected performance).

 

  1. An Academic’s work can be modelled as a Present Value cashflow stream of value creation activities from: (i) undergraduate and postgraduate student fees for the Academic’s units of study; (ii) Higher Education Research Data Collection (HERDC) funding, and Research Support and Research Training program funding, received from the Australian Government for the Academic’s eligible research publications, competitive grants, Higher Degree by Research student completions, and other eligible research income (Category 1 to 4); (iii) consulting and contract research income that is non-HERDC eligible; (iv) intellectual property rights income such as patents, joint ventures, and spin-outs; and (v) Academic contribution to Field of Research scores in national and international performance rankings, such as the Excellence for Research in Australia and Shanghai Jiao Tong ranking exercises.

 

  1. The gap between the MSALs and the Academic’s Present Value cashflow stream creates a potential spread in terms of work expectations versus value creation activities that create arbitrage conditions. The University can extract Alpha (excess return above a benchmark) through active management of an Academic’s research program, such as gaining new contract research income, exercising options on intellectual property rights, or creating new, scalable research enterprises. Alternatively, the University can extract Beta (passive returns from a market index) through cultivating an Academic cohort / group’s expertise, and matching it to relevant grant and consulting income sources.

 

  1. Developing an Academic’s research program is one way to change the Future Value cashflow stream from research activities, in a structured process.

 

  1. Moneyball strategies for research programs include: (i) scalability and international scope; (ii) target journals for publication; (iii) book publisher selection for publication; (iv) research methodology training (as a Doctoral candidate and as a Post-Doc); (v) co-authors or collaborative research team; (vi) international conference attendance for collaborative network and referral building; (vii) matching to grant and consulting income opportunities; and (viii) research enterprise development.

Academic Inequality in University Hiring

Slate‘s Joel Warner and University of Colorado’s Aaron Clauset have detailed a study by Clauset and his colleagues on academic inequality in university hiring.

 

Clauset and his colleagues found:

The data revealed that just a quarter of all universities account for 71 to 86 percent of all tenure-track faculty in the U.S. and Canada in these three fields. Just 18 elite universities produce half of all computer science professors, 16 schools produce half of all business professors, and eight schools account for half of all history professors.

 

Clauset’s findings echo what David D. Perlmutter (Promotion and Tenure Confidential) and Karen Kelsky (The Professor Is In) have written about the tenure track process in United States universities. What matters is doctoral degree prestige, having a fundable research program, productivity in research publications, and making a definable impact on a field or domain of knowledge, that is validated through academic networks.

 

These findings mirror what I have seen in research management:

 

  1. The doctoral experience is important to a subsequent research career. It provides an opportunity for the doctoral candidate to immerse themselves in a field or domain, to read its best journals, to be mentored by established researchers, to present research findings at conferences, to master research methods, and to develop a personal voice as a professional author.
  2. Having a research program that is focused and fundable is important to success in competitive grant schemes, and to attracting contract research income. The research program needs to address a significant research or social problem. You need to be aware of the four or five other research teams in the world that are exploring the same research or social problem. You need to address current scholarly debates. The research program should develop expertise that can be shared with government policymakers and industry partners.
  3. Knowledge of journals gained in doctoral education, and a focused research program, can support productivity in research publications. A key is to get a stream of publications that advance the research or social problem identified in the research program. Being strategic about co-authored and collaborative publications is also important. Your publications track record should have a narrative to it that implements your research program. It should systematically build your expertise at national and international levels.
  4. The sum of the first three activities is that, over time, you have a definable impact on a field or domain. Universities look for this definable impact in the minimum standards for academic levels criteria used in promotions and tenure applications. This definable impact can be measured in several ways. Academic publisher prestige can be important for books. National and international conferences can be used to build networks and to workshop material that will later be published in a book or refereed journal article. Social media outreach and the careful use of sites like Academia.edu, ResearchGate and Google Scholar can increase citations. Academic networks can validate the definable impact.

 

Clauset’s study findings support earlier research: Lazear and Rosen’s work on labour tournaments, and Robert K. Merton’s work on the Matthew Effect or success to the successful. Doctoral candidates and Post-Docs who follow the above advice will improve the probability of career and research funding success.

John Birmingham Goes Indie

ABC News reports that Brisbane-based author John Birmingham is embracing indie self-publishing.

 

Birmingham’s David Cooper series had poor sales after its Australian publisher broke an embargo, and the first book was pirated. He waited eight months to pursue self-publishing.

 

A Girl In Time is Birmingham’s “first self-published novel” out now.

 

Birmingham’s experience has several lessons. Authors create unique intellectual property that reflects their voice. Publisher contracts have non-compete clauses that embargo new books. Agents respond to publisher incentives.

 

Birmingham will still work with trade publishers in the future. For now, indie publishing enables him to build up a mail list of readers and to diversify his intellectual property portfolio. If his self-published books are successful, it may improve Birmingham’s negotiation stance with trade publishers.

 

In negotiation terms, indie self-publishing is Birmingham’s Best Alternative to a Negotiated Agreement.

 

I follow a few indie authors including South Africa’s Nerine Dorman and Masha du Toit, and Amy Lee Burgess of the United States. They have each been successful in indie self-publishing – sometimes after being signed to indie publishers. They have each developed a niche and effective, targeted self-marketing.

 

Birmingham shows that there are plenty of good indie self-published authors to discover.

Crossing The Rubicon of Recognition

The Atlantic Magazine’s Daniel Lambroso has posted a brief documentary about the white supremacist think tank National Policy Institute and its alt-right founder Richard B. Spencer.

 

His goals include the reformation of the Roman Empire, the strengthening of white tribalistic European heritage, and the rollback of identity and immigration laws in the United States. Spencer is also involved with the racialist publisher Washington Summit.

 

The Atlantic‘s short documentary also features Scottish blogger Millennial Woes.

 

The racialist philosophers Madison Grant (The Passing of the Great Race) and Alfred Rosenberg have returned, and are now armed with blogs, tweets, and video blog casts. Gavriel D. Rosenfeld foresaw this also in his book Hi Hitler!: How The Past Is Being Normalized In Contemporary Culure (Cambridge: Cambridge University Press, 2015).

Responding to Russia’s Information Warfare

Mark Galeotti is a senior researcher at the Institute of International Relations in Prague. He has penned an interesting New York Times op-ed on responding to Russia’s information warfare. He also actively tweets and blogs at In Moscow’s Shadows.

 

In his NYT op-ed Dr Galeotti has several suggestions for his readers. First, strengthen cybersecurity including for targets such as domestic media outlets and political parties. Second, educate the public about disinformation and propaganda, such as how to critically evaluate media and news sources. Third, use multilateral agreements to target Russia’s finances. Fourth, use economic statecraft measures such as asset freezes and sanctions. Fifth, strengthen and uphold collective security treaties. Sixth, target Vladimir Putin’s psychological vulnerabilities such as his fear of failure.

 

These suggested policy actions reflect an on-going debate in international relations circles. University of Chicago professor John Mearsheimer has advanced an offensive realist approach: (1) the international system is anarchical; (2) great powers seek asymmetric military strength over other nation-states; and (3) great powers in a defensive stance will use alliances and other means as buck passing to prevent the emergence of threatening rivals and competitors.

 

Dr Galleotti’s suggestions reflect a liberal internationalist approach that differs from Mearsheimer’s offensive realism. The domestic populace is educated and key institutions are secured from other great powers who seek to influence them. Alliances and treaties that impose a rules-based liberal order on the anarchical international system are prioritised and strengthened. Foreign policy is broadened from diplomatic and military responses to include cybersecurity, economic, and sociological dimensions. As part of this policy shift, insights from political psychology are used to understand foreign leaders, politico-military institutions, and the decision elites who mobilise them.

 

At the end of his NYT op-ed Dr Galeotti observes:

 

All of this requires a new mind-set. It means accepting that Russia has chosen to be at war with us – albeit a special and limited war. Russia needs to be treated as a political combatant.

 

Understanding limited, special warfare that has economic, psychological, and sociological dimensions does need new thinking. This is the shadowy realm of disinformation, information warfare, propaganda, and psychological operations. These are areas that Russia has sophisticated conceptual / theoretical and applied expertise in. The United States and its allies need to gain a similar level of knowledge. Policymakers need to better appreciate what living in a possible multipolar world (rather than a neoconservative ‘unipolar moment’) is like. Other great powers and strategic actors (such as those in Adam Segal’s recent book The Hacked World Order) do not necessarily have a liberal internationalist worldview.

 

Dr Galeotti’s policy advice is a first step. More can be done.

Races to the Bottom in Doomed Digital Media and University Research

“Clicks don’t pay the bills.”

 

That’s the brutal assessment of New Republic features director Theodore Ross about doomed digital media in 2016. Amongst the downsizing and casualties: The Guardian, Univision, the Huffington Post, Mashable, the International Business Times, Al Jazeera America, Medium, and Gawker. The disturbing trend for Ross? Google and Facebook capture of 85% of the digital advertising market. Pivoting to viral video seemed promising. “Companies have already begun to question whether video clicks really are the best clicks,” Ross notes. In a tweet on 14th December 2016 announcing his New Republic article, Ross mourned, “I will never be able to retire.”

 

I learned this the hard way in April 2000.

 

Five months earlier, I had joined The Disinformation Company Ltd (TDC) to edit and write for their Disinformation website. Publisher Gary Baddeley and Creative Director Richard Metzger agreed to sponsor me to work in the United States. I had to finish my overdue Bachelor of Arts degree first. We had great contributors. TDC’s parent company Razorfish was worth $US1 billion. The future looked very bright.

 

Then in late March 2000 the dotcom crash began to happen. On 14th April 2000, I wrote about the unfolding crash for Disinformation in real-time. “The new e-poor,” I commented. Razorfish’s stock price soon imploded. The US move fell through. I continued to work for TDC as an overseas independent contractor. They later pivoted to television, book, DVD, and Video on Demand production. I finished my Bachelors degree, started a Masters, and then worked in university research for the Smart Internet Technology CRC based at Swinburne University.

 

In 2006, I met a Fairfax Media online editor at a telecommunications conference. He talked passionately about the algorithms that ranked stories for readers. Age and Sydney Morning Herald readers preferred celebrity and sports coverage. The algorithms drove Fairfax Media’s publishing platform. I privately reflected that watered down op-ed columns had replaced a strong editorial vision.

 

You have to follow Jim Collins’ advice and confront the brutal facts. The Disinformation experience taught me that web content is a loss leader that builds you an audience. You then offer other content and services such as ebooks, documentaries, or web-based training to earn revenues. You cut costs. You have something to offer more than digital advertising. You cross-promote other sites and authors. You use Facebook, Twitter, Google Scholar and other free tools as outreach. Your authors need to be accessible to their audience (whilst also still protecting sources if needed).

 

Fairfax Media and the rest of Ross’s doomed digital media did not follow these lessons. They initially funded journalism with high overhead costs like traditional print media. They focused on digital advertising and not other revenue sources. They published content that was noise: it was not distinctive and did not have a unique, compelling voice. They let marketing algorithms take-over editorial policy. They diversified into too many other areas.

 

I discovered similar mistakes in the university research world. In the past, universities invested in early career researchers to fund conference travel, projects, publishing, and skills development. University research institutes built a large infrastructure to promote their programs and teams. This all involved a lot of money, a lot of administration time, and a lot of negotiation. In other words, high transaction costs. Universities did this in part because they used to take a long-term view of career and talent development.

 

But in today’s austerity world these high transaction costs are no longer feasible. They are regarded as inefficiencies or overheads. Universities have cut funding for early career researchers (known as ECRs) who compete for precariat, short-term contracts. An ECR’s average career path is between three to eight years before burnout if there is no ‘up or out’ promotion to the professoriate. University research institutes have had to embrace contracts, donor philanthropy, and strategic partnerships. They have had to diversify their funding sources as grants become more competitive.

 

A race to the bottom drives both digital media and university research. The average academic journal article has between 800 and 1100 unique views. The average book by a university publisher has a 300 copy print run. Authors often assign their copyright and other intellectual property rights to publishers — and so don’t earn licensing or residual fees. These facts and norms are little known outside academia and they highlight the high cost and waste of much research. The Conversation website illustrates some of these trends: it curates academic research to a broader audience but it also doesn’t pay its academic contributors.

 

I told the Fairfax Media online editor in 2006 that he needed to take a more proactive approach to publishing content. The model I was grasping towards is an event-driven, stream-based approach like the Bloomberg financial news network or complex event processing. The publishing platform helps you to anticipate, respond to, and shape coverage. What is also needed is to build a portfolio of branded intellectual property that discovers and engages with a passionate audience. It’s less like traditional news or university research, and more like Creative Artists Agency (James Andrew Miller’s Powerhouse), perpetual deal-making (Robert Teitelman’s Bloodsport), or even life-hacking (Tim Ferriss’ Tools of Titans).

 

You will probably still need another job. And, multiple income sources.

Aleppo’s Fall and the Ross-Morozov Twitter Debate

Turkey and Russia’s ceasfire deal in Aleppo, Syria is falling apart.

 

7-year-old Bana Alabed captured the Western media’s attention with this harrowing tweet on 12th December 2016:

 

Final message – people are dying since last night. I am very surprised I am tweeting right now & still alive. – Fatemah

 

Bana’s family was caught in the cross-fire and shelling between Syrian government and militia forces. Quartz provided some context to Bana’s tweet:

 

As the battle for the city enters its final phase, many residents have turned to Twitter to post their goodbyes.

Seven-year-old Bana Alabed, along with her mother Fatemah, have been tweeting the horrors from East Aleppo since September. After sending several distress calls to the rest of the world, Bana and her mother have resorted to tweeting their last messages.

In 2009, Dr Ben Eltham and I wrote a conference paper on Twitter’s role in Iran’s election. We were inspired by a request from Eric Ross, who at the time worked for Hillary Clinton’s US State Department, for Twitter to support protesters by staying online and rescheduling a planned maintenance period. Ross reflected liberal optimism that social networks like Facebook and Twitter would empower democratic revolutions like the Arab Spring.

It was only a few weeks after Iran’s election but Eltham and I reached unsettling conclusions. We discovered that Iran’s Basij paramilitary used Twitter to hunt down and kill Iranian protesters. Ross’s liberal optimism was perhaps misplaced. Internet critic and journalist Evgeny Morozov was closer to our view. For a TED Talk in July 2009, Morozov memorably warned that the Net aids dictatorships.

Aleppo is now replaying Iran’s dark outcome as trapped Syrian civilians fight for their lives. We saw the CNN Effect in the 1990-91 Gulf War as smart-guided missiles destroyed Iraqi buildings on international television screens. But now Twitter is showing what the lived experience is like of trapped civilians during a fierce battle. The rules of engagement seem to hardly matter to the combatants.

Bana Alabed’s plight brings the Ross-Morozov debate about Twitter into a stark focus. Alabed’s tweet — and the global media coverage that followed over the next 24 hours — highlight how Twitter can be used for humanitarian concerns. There is hope for Ross’s liberal vision: social media can give a powerful voice to the otherwise voiceless. What it now needs is a more robust critical infrastructure to also deal with Morozov’s concerns.

Its co-founders originally conceived Twitter as a messaging platform to provide status updates. How can Twitter function effectively in a chaotic war-zone? What infrastructure can be built around it — in a pre-crime way — to leverage the Responsibility to Protect norm? These are potential questions which the Ross-Morozov debate about Twitter’s effectiveness hint at, but we do not have the answers yet.

Perhaps Twitter’s designers or the next generation of social media infrastructure can develop and roll-out answers. This solutionism may be too late for Bana Alabed and other Aleppo civilians. But such social media infrastructure might help to monitor and protect civilians in future wars and conflicts.