Category: economics

Posted on

Credit donations

“credit” stems from the original latin word “cedere”. In the 1st person you write “credo”, which means I believe. If said in a religious building or church you show with this pronunciation that you believe tbe narrative of the religious community. In the 3rd person “credit” stand for s/he/it believes. In the financial sense it is the receiver of money from your credit card who believes or trusts you that you made an honest payment. Now, banks take commissions from each of these exchanges of trust. You are credit worthy or not. In some churches you now make donations using your credit card to facilitate business. Credit card companies also charge you on your donation. Win win situation we call this. I keep asking myself, whether I still “believe in angles” or only business angles. (Image Église Notre Dame des Victoires Brussels 2024-7)

Posted on

Sport Fashion

Sport is fashion and fashion is sport. Not only in the Euro 2024 the teams make a big fuzz about the design of their sportswear, but certainly the Olympic games in Paris 2024 will demonstrate the close links between the 2 worlds. We might say playing football is a bit like a fashion catwalk. Keep going right on target, despite obstacles, when thousands of people are watching your performance and potential failures very closely. Making a “bella figura” is a must in both spheres. There is also a strong tendency for “the winner takes all”, that s/he takes the trophy and the jackpot.
Both worlds are also big business in their own right. It is at least 100 years old that sport and fashion got married. The “Musée des arts décoratifs” in Paris had an excellent exhibition on the combination of sport and fashion (booklet link). According to the curators both spheres have always been interlaced. High-level performance and specialized fashion just made for a splendid combination. As the rich and wealthy had more than a penny or two to spend on their leisure activities the combination of sport and fashion soon became itself a big business, beside the visible beauty of the bodies, movements and dresses. Just watch the breakdance fashion as the latest addition to the repertoire of olympic disciplines. In a recent article in “Le Monde” (2024-7-11) the value of the market of sports including its fashionable merchandising is estimated to reach a turnover of € 500 billion in 2022.
The competition of sports has been turned into a competition of the best images and videos. Fashionable as well as functional clothing can assist in climbing the podium. In the Euro 2024 Football Final the teams equipped with Adidas (Spain) and with Nike (England) compete for the trophy. Changing equipment sponsorship from one to the other can raise substantial amounts for a team (€ 100 million/year for the German national team). Big business seems to take over sports and fashion after the century-old marriage of sport and fashion. Since then, they have jointly been on an extended honeymoon. (Image from www.emptyspacetm.com 2024-7)

Posted on

Olympic Games 1924

100 years after the Olympic games were held in Paris, they will take place there again. Each time for the Olympic games new locations (Colombe) were built. For the 1924 games for example the first 50m swimming pool was built (Stade nautique des Tourelles, Porte des Lilas, Paris 20th), but a new one will host the 2024 competitions. However, the old pool will still serve in 2024 for the preparation of the competitions. The successors of Johnny Weissmuller (5 gold medals in swimming 1924) and star in many Hollywood films, the access to the stadium has become much more secured these days. In fact, security has turned into a crucial issue to host the “peaceful games”. In 1924 Germany was still not allowed to participate in the Olympic Games in Paris as the security of participants could not be guaranteed. Some competitions at the time turned rather violent as the example of the rugby competition, in which the converted American football team as rugby players had beaten the Fench rugby team.
The idea of alternative games has also been around for decades. There were already in the 1920s international competitions of worker associations (for example Frankfurt 1925) and the Olympic idea had to defend itself against the accusation of a Western countries’ domination. The set of disciplines in the competitions is always up for discussion and negotiations. We shall see interesting new additions in 2024, like break dance, to broaden the understanding of Olympic disciplines.
Even 100 years after Pierre de Coubertin steered the modern Olympic games the idea is to bring more to the games than “Faster, higher, stronger”, notably to be together. To be together in a peaceful way remains the biggest challenge for humanity. The inclusive turn is, however, a challenge to host the games, particularly to host paralympic games in inner cities that have abundant barriers of access for impaired persons. Inclusiveness for many countries is another challenge that goes beyond the simple participation in the games, but consists in training facilities and equipment for many disciplines.
(Image: BNF Gallica)

Posted on

Beggar thy neighbour

Modern economics has developed the concept of so-called external effects. The oldest version of it might also be referred to as “beggar thy neighbour”, as it was coined by Adam Smith the founder of classical economics. This describes an economic policy which does not care to make your neighbours worse off by enriching yourself. Applied to environmental economics or to regions, cantons or neighboring countries, this means a ruthless pursuing of investments, which are known to shuffle a large part of the costs onto other regions through damages, might be pursued nevertheless. This might be a valid hypothesis to test how the investment in skiing at high altitudes, increases the risks of flooding at the lower altitudes of rivers or valleys. There is scope for a redistribution of wealth from one region to another. The poor neighbor, however, is in a rather weak position to claim compensation as the link between the 2 events is hard to establish scientifically and mediated by an abstract form of overall climate change. The recent example from Switzerland adds to an increasing number of natural disasters, which are in fact man-made following a beggar thy neighbor rationale. (Image newspaper reading room in Stabi Berlin with NZZ from 2024-6-24).

Posted on

Nutrition Policy

The evidence on nutrition policies has accumulated a series of policy recommendations based on the best available evidence. The German Institute of Human Nutrition has presented these results repeatedly not only to the scientific community, but also to the interested public at the Science Week or the Long Night of Science. Their leaflet on the tools to improve our human nutrition in market economies highlights “nutrition competence” as a key component of a broad strategy to improve our food and subsequently health. Nutrition goes beyond the biological ingredients of food to include basic understandings of human metabolism including the times and timing of meals. This competence has to be transmitted to preschoolers, pupils as well as adults to stem the waves of obesity (ARTE Docu). Learning how to manage your own nutrition is a crucial competence to strive and survive. In schools it can have substantial impacts on performance and inequality of opportunities as well.

The science-based policy recommendations propose to alter the structure of costs, for example via tax reductions, in favor of healthy food. Plain water should be substantially cheaper than sweet beverages or alcoholic drinks. Nuts and proteins from vegetables fall in the same category as plain water. It is in the longer term interest of all of us that schools, canteens at work places or homes for the elderly offer also healthy nutrition at least as a daily option. More sustainability in food production is last, but not least part of nutrition policies. A lot to chew on to improve nutrition.

Posted on

Smoke Gamble

Smoking is like a gamble. Your input is your health and money. This is not including those who might rely on you or family relationships that might suffer one way or another. The other link has gambling at its source and smoking goes along with the continuous risk taking or the belief to be able to master the risks involved with both forms of potential addictions. Research has accumulated evidence that in fact both smoking and gambling occur frequently in combination with each other. Taking risks against the odds of suffering losses, maybe only in the medium or longer run perspectives like for health seems acceptable for those people. Society has put rather high taxes on both activities to discourage people and invests in prevention of addictions. However, it does not have substantial effects on people as smoking remains around the same level and gambling (poker online) or betting on sports (Euro 2024) are rising rapidly. Vaping and internet gaming have broadened the spectrum of addictive behaviors mostly for younger persons and young adults. The risks are manifold and increasing in their addictive potential since the smartphone is always in some pocket just like the smoking device. The behavioral turn in the social sciences has been well understood by the industries as well. The stakes for human development are high in this endeavor to offer young people equal opportunities at entry into adulthood.

Posted on

Smoking Vaping

Both smoking and vaping are big business. Nicotine is well known for its addictive capacity. Once started, it is very hard to give it up again. For many decades we devote considerable efforts and costs to encourage people to give up on smoking or, better, not to start smoking in the first place. The young are particularly vulnerable as damages persist for a longer time. Progress has been made to reduce passive smoking of children and people in restaurants, at work and public spaces. The relatively recent trend of vaping instead of smoking is considered less harmful, but scientific long-term evaluations, whether these effects are lasting for several years, are still missing.
A repeated cross-section study in England (Tattan-Birch et al. 2024) has revealed that the declining trend of nicotine use has already been reversed among youth due to the rise in vaping. Vaping seems to move from the fashionable niche product to the popular mainstream among youth. The addicts are only cost-sensitive on the margin. The relative prices of smoking and vaping might play a role to put people on different health trajectories. The question is not between either smoking or vaping, but for some it is both, although it should be none of both. The question of smoking yes/no is likely to be framed as either vaping/or smoking.  The re-framing of the question shows the harmful potential in the longer run. We shall have a hard time to convince people and particularly youth not to be tempted by either/or but to focus on their long-term health trajectory and potential. (Image: Extrait from Arnold Böcklin, Self-portrait with death playing the violine 1872, Alte Nationalgalerie Berlin)

Posted on

Aussensicht Innensicht

Die Sicht vom Skulpturengarten der Neuen Nationalgalerie auf die laufende Ausstellung „Zerreissprobe…“ erlaubt einen tiefen historischen Einblick in die 1980er Jahre. Die Sammlung von Postern des Künstlers Klaus Staeck zeigen die bewegenden Themen der achtziger Jahre. Frauenrechte, Umweltschutz, Sicherheit sowie Medienwirtschaft. 40 Jahre später beschäftigen uns weiterhin, Lösungen für die plakatierten Themen zu finden. Images können Themen so zuspitzen, dass Anklagen daraus werden. Texte sind im Vergleich zu der Eindrücklichkeit der Bilder ein vergleichsweise stumpfes Schwert. Es ist aber gerade die Verbindung von Bild und Text, die Eindrücke verstärkt. „Meme“ Creators sind ein standard tool das die Kommerzialisierung und die Promotion weiter befördert haben. Kunstformen hatten diesen Trend bereits vorweggenommen.

Posted on

Broken Promises

In a library catalogue, the entry of « broken promises «  returns more than 3000 times that the title has been used. « Promises kept » is almost as popular. A rapid inspection of titles reveals that the former titles suggest more factual analyses, whereas the latter is frequently used in the form of an imperative in combination with “should be kept”. The book by Fritz Bartel “The Triumph of Boken Promises …” (2022) demonstrates the importance of the concept of broken promises in the social sciences. The rivalry between socialism, capitalism and the rise of neoliberalism is strongly influenced by the way they handle the breaking of promises made to their respective societies. The promises of increasing wealth and wellbeing have been part of all political regimes. To keep these promises is a completely different story. Especially since the first and second oil crises and many other kinds of crises, it has become much harder to keep these promises. Working hours, retirement ages or minimum wages are all at risk to no longer live up to the promises made in earlier periods. This has put welfare states under pressure that millions of voters perceive politics as a “game” of broken promises. Socialist political regimes like Russia are ready to use physical violence to shut up people that remind leaders of these broken promises. In democracies the ballot box is often used to sanction governments that do not live up to expectations of previous promises. A lot is about public infrastructure which is failing people. Migration, education, social and labor reforms are on top of the political agenda if it comes down to broken promises. The elections of the European Parliament gave many a chance to express their discontent about various broken promises. Maybe democracy is better in providing forms of letting off steam early and protracted protests rather than the Russian way to suppress any critical analysis, let alone opposition movements. Just like the move from industrial production to services as production models, with AI we are likely to see similar problems and probably also broken promises. The challenge is huge and promises should be made with an eye of what promises could be kept.

Public swimming pool closed for reconstruction 2024
Posted on

Adaptive Expectations

In economics it is important to understand the concept of adaptive expectations. We all form expectations about prices and inflation, but there is more than just simple expectations. These expectations guide our behaviors in many domains. If we expect a drastic price change for goods and/or services we shall most likely modify our behavior in response. We might want to advance a purchase to take advantage of currently lower prices in the expectation of higher costs later on. Most people would follow the price changes on a regular basis and adapt their expectations according to the updated information. It is an important process as there are millions of people who do this and this process drives price levels in many countries. In Europe we would like to see not only inflation, but also expectations about inflation to be around the target level of 2% per year. After the high price rises of energy and food (Putin’s war) as well as the disrupted supply chains (Covid-19 crisis) we were unsure, whether we would have to adapt our expectations for the coming years. The credit crunch in the last few years forced people to adapt spending plans and expenditures. We seem to have overcome these major crises due to rapid adaptive expectations. The crucial mechanism to achieve this is a timely and open communication of changes. Media have a role to play to not only spread the information, but to explain underlying reasons. This contributes to a widespread understanding of basic economic principles that helps countries to navigate stormy weather. It is like players of chess who adapt their strategy after the other player has acted or not according to their expectations. It’s simple, isn‘t it?

Posted on

Co-authorship Kafka

In science Co-authorship is a tricky issue. Therefore, many higher reputation journals list precisely who has contributed what to the paper. In the teaching and supervision of bachelor, master or doctoral dissertations it is imperative to scrutinize the original contributions of authors to the subject. There are huge differences between universities to the amount of innovation or originality that is required to award degrees or the publication of the research and results. Rüdiger Safranski published with Hanser 2024 an essay on Kafka which has 224 pages, but a 16 page long list of the sources of the copy-paste citations used from the orignal Kafka writings. By scientific co-authorship practice Kafka should claim co-authorship of the book and the costs of the „Process“ should be paid by the publishing house. However, I enjoyed the many links between comments and the originals next to each other. It is like a data analysis that sticks plausibly to the original data. AI still has a hard time to rival with these skills, although AI is catching up faster than many of us might believe or want to believe. From a social science perspective we might say the original work of maybe only 180 pages is inflated to make for a longer text of 240 pages. This justifies, probably, the publisher’s price (€26) and the marketing costs. On the other hand it becomes evident that Kafka has an enormous impact on writers and seems to take possession of them in an encompassing fashion. You move with him, but rarely beyond him. Tough lessons indeed from the publishing world.

Posted on

Bikenomics

There is a whole cluster of enterprises associated with bicycles. Selling a bike is only the first we might think of. Repair works are the most tricky part of bikenomics, a bit like bidenomics. In many cities during spring and summer it is even more difficult to get an appointment for bicycle repairs than for a doctor’s appointment, and that can be hard at times. Shortages of skilled technicians are pervasive in this sector. DIY for do it yourself is the best alternative. With the arrival of e-bikes and the digital connectivity the skill set has been enhanced recently as well. Insurance for bikes, lockers, helmets, airbag system or clothing including spectacles are part of the standard safety and security set of bicycle riders nowadays. Many, many job opportunities there and the willingness to pay for bicycles has steadily increased over the last years.

Berlin has just seen its 48th bicycle demonstration in 2024-6 on roads including 2 motorways with several ten thousands of participants. In a star like fashion multiple tracks met at the city center. The final meeting with stands and information was at the Deutsche Technik Museum with refreshments and repairs. The exhibition of cargo bikes and taxi bikes or “rickshaws” was another highlight. We need to rethink our mobility concepts and try to get the sharing to work more comfortably. For different purposes and activities you need a different bike. Ownership of each is no longer adequate as for example with aging alone your preferences for mobility with bikes also changes. Sharing is caring and this is also part of bikenomics.

Posted on

Law Nature

There exists a rather complicated relationship between law and nature. It is part of constitutional law to check whether nature figures at all in a state’s constitution as part of the fundamental legal principles. On a global scale the nations or people living in the closest relationship with nature most often do not have written constitutions. In the same vein, animals or biodiversity do not figure in most constitutional documents (nice project to substantiate this claim). The philosophy of law has line of literature devoted to “Naturrecht” which is more concerned with human beings and their differentiation than the millions of other species.
Administrative law is probably the domain with most of the legal judgements with relevance to nature or the environment as for example any larger scale construction is either land, water, air or biodiversity grabbing. Rights and limits need to be defined precisely. In this field the role of law as “appeasement” is widely applied. However, this is more complicated in cases when a whole population of an island in the ocean is threatened to disappear due to the rise of the sea level like in the case of the Torres Strait Islands, next to and part of Australia.
The UN Human Rights Committee (UN-HRCee) in Geneva has made a decision on the claim of these people to have rights that the nature of the islands as low-lying islands is threatened by disrespect of their fundamental rights of existence and survival. The claim has been received by the court, but the court deems that the threat to their culture and survival is not imminent. In practice, therefore, the sword of law is rather weak and time until the disaster is used as a right to continue the usual economic exploitation of earth as before despite the deferred consequences for the planet in a rather unequal way.
(Image by AI copilot designer 2024-6-2 “5 judges in red gowns sit in a flooded courtroom”, 2 propsitions)

Posted on

Cars electrified

It is not only cars, but the whole automotive industry that got somehow electrified. The U.S. have imposed a 100% tax on electric cars produced in China recently. Europe is feeling the heat as well (compare Fressoz in Le Monde 31.5.2024). Production of cars is not a for fun activity. It is firmly embedded in our economic system which believes in profit maximization even at high environmental costs. Therefore, the production of cars follows the logic to build cars that generate the highest profits. Bigger cars yield bigger profits and this has been known for decades. Why should we expect our car producers to deviate from this logic. Investors push hard in this direction as well. Small e-cars generate small profits. This can only be economically valid if large numbers are produced. China’s home market has the market size and air pollution levels that make this a viable strategy also for the lower income people. If not sold in the US or Europe, the home market is able to absorb huge amounts of electrified cars. Downsizing of cars needs to happen particularly in inner cities. The implementation of this is not going to be easy and without resistance.

Posted on

Killing me softly

The problem with pollution is, it is killing you softly from inside. It is almost impossible to escape air pollution as it is pervasive in cities, but also in the countryside where you do not expect it that much. This is the result of the study by Kuzma et al. (2024) published in “The Lancet Regional Health Europe”. Based on a data set of 8 million persons from Eastern Poland the effects of air pollution on myocardial infarction incidence was analysed. The use of the “European Union’s Earth Observation Programme” contributed data on air pollutants like PMs, BaP (benzo(a)pyrene), SO2 and NO2 concentrations. The multi-level data of 5 voivodeships, 101 counties, and 709 communities in Poland allows to differentiate the effects of damage to the heart tissue on cardiovascular disease. The other well-known factors are arterial hypertension, diabetes, obesity, chronic kidney disease, hyperlipidaemia, and smoking as most of us know already. The effects of  BaP (benzo(a)pyrene) is shown for rural areas despite the lower observed traffic density in these areas. The killing occurs softly from within our bodies by just breathing in and out, and in and out continuously. The disease burden in these regions is observed with “recorded 63,154 hospitalizations and 5921 in-hospital deaths (9.4%) due to STEMI; and 76,543 hospitalizations and 4079 (5%) in-hospital deaths due to NSTEMI”. In short, the need to reduce air pollution further is an urgent demand that saves lives eventually.
(Image from public domain wikipedia or “do-it-yourself” here).

Posted on

AI Racing

AI has entered the racing of cars after we have been racing horses, dogs and camels for many decades. The fact behind all these races is the huge market for gambling. Anything you can bet on will do for juicy profits in that industry. The recent “Abu Dhabi Autonomous Racing League” is the latest addition to the racing craze. Moving online with 600000 spectators at its peak on video and gaming platforms the investment seems promising. The only problem, AI is not yet ready to really compete with the world of real drivers. The progress, however, is astonishing. Just one lap of 2 minutes on the circuit yields 15 Terrabyte of data from 50 sensors. These are closed circuits so no person can enter or animal can get in their way. The challenge to integrate more data and faster processing as well as algorithms for fast decision making is steep. Great learning opportunities for advances in robotics. The hype has not been able to live up to the expectations as no real racing took place yet. We have replaced the gladiators of the Roman empire with Formula 1 drivers. It is only fair to retire those drivers soon and let AI race cars against each other. It feels like a computer game on screen and it is as we shall most likely watch these races on a screen as well. Hence, what is the point. Watching youth on TWITCH play racing games will probably not change the viewing behavior of the masses. The programmers have nevertheless great learning opportunities and will find their way rapidly into the job market. The other challenges of ASPIRE seem more important for humanity like human rescue and food for the growing world population. In the meantime let the boys play around with cars and learn about potentials as well as failures of AI-programmers and dealing with both.

Posted on

Puccini Media

In honor of Giacomo Puccini the Media enterprise Bertelsmann features one of its treasures. In cooperation with the “Archivio Storico Ricordi” of Milano, Italy, 100 years of Puccini’s oeuvre is celebrated with this exhibition. Fans of Puccini’s operas will have to visit the archives but the interest of this small exhibition lies in the impressive success story of Puccini and his publisher (part of Bertelsmann). Continuous innovation and adaptation to new media, like disks, accompanied an extraordinary marketing campaign throughout the 100 years. Even today there are cycling tours around Puccini’s hometown for the modern eco friendly tourists. We learn a lot about how the media industry functioned in the 20th century. It was absolutely vital to fighting for the rights of authors, composers and rights to receive royalties for performances as well as for the publishing on media. The exhibition in “Unter den Linden 1” is just next door to the Staatsoper which also gave honor to Puccini’s “Madame Butterfly” in 2024. His uncompleted Opera Turandot closes the exhibition with his rough sketches of the final scene. Merchandising is not an invention of the 21st century, but almost a century old tradition. This exhibition is a great testimony for this. It remains an important effort to allow authors and composers to gain a comfortable living during their lifetime. The gains for humanity as a whole are enormous.

Bertelsmann, Berlin 2024 Puccini.
Posted on

Photos Exhibit

Our usual expectation of an exhibition of photography is to look at photos at a wall. Sometimes there is more it. The Exhibition Space at the “Haus am Kleistpark” features Michael Schäfer who attempts to go a bit beyond these traditional forms. In the works of photo cubes on water surfaces “2021_57”, or a dice floating on the waves of oceans, the video representation of his photographs takes the assembled images beyond their flat 2D surface. However, the 2D representation is at the origin, then transformed into a 3D dice, which then is animated as a 4D format. Moving beyond the flat screen image takes photography into the 21st century.
His work “Les acteurs 1-26” from 2007 is shown at the entry hall of the exhibition. It shows pupils of a class at an elite school who deem themselves in leadership roles in the near future. Is it acting? Is it projection into a future role they are likely to take on. They represent stereotypes, of course, but some are pretty convincing in these roles already. Some others still seem to reflect on what they are doing there. Even acting these roles, they are aware of the meaning of social rank and class in society. Without having read the sociologist Bourdieu, all are aware of the fine, little elements of distinction as they have evolved over time. We could teach an interesting sociology class in this exhibition.

Posted on

May 1st

More people take to the streets on the 1st of May in Germany. The costs-of-living crisis with high inflation has increased the claims for pay rises for workers and adjusted wages for employees. We all have observed “greedflation”, i.e. excessive company profits in several sectors. Additionally, “shrinkflation” has affected consumers in their daily shopping experience. Political efforts to curb inflation have taken a long time to come about and most initiatives have ended already (Energy sector). This spurred a new drive for trade unions to come out in huge numbers to protest and claim adequate wage increases to cover the increased costs of living. In Germany the DGB informed on the annual 1st of May demonstrations across the country about a strong new entry movement of members of 400.000 persons. It is higher than the loss of members of the large baby boomer cohorts who retire.
Through a broad and engaged membership the pressure on higher wage settlements will persist. Companies have used the crises to generate extra profits. It is only fair that those employees who largely contribute to the success of a company will claim their share as well.
For society as a whole it is important to consider that the discrepancy between managerial pay and shop floor wages do not increase further. The social fabric of societies is in danger if perceived injustices grow. More radical forces can all to easily exploit this causing a severe danger for democracies. Meeting people on the 1st of May and joining forces across sectors and trades ensures that a society continues to build and rely on solidarity. High inflation times are a great reminder of the economic basics of societies in history as well as today.

Posted on

Find Trust

Societies have different levels of trust. Trust in politicians or political institutions has been researched a lot. Another example of trust is related to things lost and found. Losing an item on a train or a mobile phone somewhere are severe tests of the level of trust in a society. How likely is it that the item is going to be found and returned to you. We usually estimate the probability of the return of items as being rather low. The more we are surprised to find out that there are thousands of items found and returned. The Deutsche Bahn has a special service in operation to take care of lost items. Additionally, there are auctions of items found but nobody claimed the ownership of it in the following months. Not giving up on a lost item is the first step to find it again. It would be a nice test whether in high trust societies it is more likely to find something lost. If you have a higher trust that items will be returned you are also more likely to make the effort to claim the item back.

Posted on

Comparative Advantage

In economics all students go through the calculus of comparative advantage. People, regions or whole countries tend to apply comparative advantage to their production systems and ensuing internal or external trade. The basic  rationale developed by David Ricardo has not changed that much over 200 years. The fields of application, however, are continuously expanded. Lindsay and Gartzke (2020) have applied the comparative advantage rationale to military strategy. The paper quotes 26 times Clausewitz and demonstrates the links of strategy to the basic economic and social rationale of comparative advantage. It is the politics of production that even the presence of trade may override the rationale of comparative advantage to favour local production of “operational domains” or military equipment.
In Russia’s aggression and war against Ukraine own production and trading of weapons has returned to the forefront of the concerns. In addition to the production of ammunition, the provision of drones has dominated the international arms trade related to the Russian aggression. Resources and time for production are additional factors that have an impact on availability of weapons at the right time at the right place and with the sufficiently trained persons to operate them.
The strategies that cross domains or combine domains seem the most promising. The careful analysis of your own comparative advantages or disadvantages needs to be the basis of any strategic decisions. This has been known for 2 centuries at least and is still valid in many fields of application. Additional considerations for “home production” might add to the complexity of the issue. Sustainability has also found its way into the field of comparative advantage at last. This may alter the analysis of comparative advantage of operational domains as well. Lots of unresolved puzzles still around. It will need years to sort this out despite the urgency of the Russian aggression on Ukraine.(Image: AI Copilot.2024-4-30 2 political leaders deal weapons. One has a comparative advantage in ships. The other one has a comparative advantage in aircrafts. they deal together)

Posted on

AI Disruption

Many scientists started to question the disruptive potential of AI in, for example, the military’s domain. The Journal of Strategic Studies featured 3 papers on AI and autonomous systems more generally. The major argument by Anthony King is the reliance of autonomous systems on other systems mainly human operators even in the background to get these systems off the ground and maybe back again. Not only logistic support but also satellite communication is needed to guide and protect the operations. In quoting Clausewitz, Anthony King stated that war is a “collision of two living forces”. Strategy and counter-strategy will co-evolve as will attack and defence.
Jackie G. Schneider and Julia Macdonald (2024) advocate the use of autonomous and unmanned systems for their cost effectiveness. Economic costs as well as political costs are lower for these new strategic weapons. Mass fire power from swarms of drones is much cheaper than nuclear warheads and the home electorate is assumed to be more willing to accept and support limited and more precisely targeted unmanned missions. The disruption potential of AI is huge but it is most likely an addition to the arsenals than replacing them. (Image 2 swarms of drones fly in the air above tanks, created by AI – copilot-designer 2024-4-29).

Posted on

Hospital Bias

Asking people about differences between private and public hospitals, you are most likely getting answers that the private hospitals deliver superior patient outcomes. Whereas private hospitals seem to have a positive stigma attached to them, public hospitals commonly have a negative stigma. Scientific evaluations are helpful to set the record straight again. The study published in “The Lancet Regional Health” in 2024 shows that in the simple descriptive statistics on several patient outcome indicators, this is what the data showed between 2026 and 2019. However, a more precise statistical analysis reveals that there is also a selective admission to the private and public hospitals in England. Using so-called instrumental variables approaches that account for the selection process between admission to the 2 types of hospitals (private versus public) most of the differences between the hospital types disappear. The underlying mechanism is a sorting of different patients into the private or public hospitals. Put in easy words, for a routine intervention people tend to chose the private hospital, but the more rare and difficult operations were more likely admitted to public hospitals. The number of co-morbidities (heart disease) is also of importance as they might negatively affect patient outcomes. Jumping to conclusions and reinforcing stigma about public or private provision of services hinders progress and an equitable provision of services.
The analysis of a potential selection bias can reveal the “creaming” effect of private provision of (health) services. Just caring for the “easy” or routine cases and avoiding the more difficult and costly cases has economic advantages, but for society as a whole the costs overall remain the same. A good public service in health is a definite asset.

(Image: Exposition Isa Genzken 2023 in Neue Nationalgalerie Berlin)

Posted on

Hannover Fair

The annual science fair at Hannover is a kind of a show of things to touch and of those things that come to the public market in the near future. Most of the annual hype is about potentials of production. Rationalization, using few resources or innovative solutions of digitization are high on the agenda. Create your digital twin, save energy, make production more safe or cyber secured.
Robotics is another reason to visit the fair. Some 7 years ago I had my Sputnik experience there. The robotics company KUKA had demonstrated live the that assembling a car from pre-manufactured components takes just 10 minutes for the robots. Shortly afterwards the whole company was bought by Chinese investors. Roughly 5 years later we are swamped by cars from China. It was not that difficult to predict this at that time. Okay, we need to focus on more value added production and take our workforces (not only) in Europe along on the way. Reclaiming well-paid, unionized jobs in manufacturing, as Joe Biden does, will not be an easy task. Robots and their programming is expensive, but skilled workers, too. Hence, the solution is likely to be robot-assisted manufacturing as a kind of hybrid solution for cost-effective production systems.
Following the proceedings of the 2024 fair we are astonished to realize that visiting the fair is still a rather “physical exercise” walking through the halls. After the Covid-19 shock we expected a lot more “online content”. Instead we keep referring to webpages and newletters rather than virtual visits and tours. The preparation of the visit in advance remains a laborious adventure. However, the in-person networking activities in the industry are largely advanced by ease of exchanging virtual business cards and the “FEMWORX” activities.
This year’s Sputnik moment at Hannover is probably most likely related to the pervasive applications of AI across all areas of the industry and along the whole supply chain. Repairing and recycling have become mainstream activities (www.festo.com). Robotics for learning purposes can also be found to get you started with automating boring household tasks (www.igus.eu).
Visiting Hannover in person still involves lengthy road travel or expensive public transport (DB with ICE). Autonomous driving and ride sharing solutions might be a worthwhile topic for next year’s fair. Last year I thought we would meet in the “metaverse fair” rather than in Hannover 2024. Be prepared for another Sputnik moment next year, maybe.
(Image: Consumer’s Rest by Stiletto, Frank Schreiner, 1983)

Posted on

Digital Estonia

The progress of Estonia in going digital is quite advanced. The electronic identity card which allows data to be linked to health data and accounts or banking gives an impression of how far-reaching digitalization may go. Great steps have been taken to guide the population on the way to move towards the digital (only) world. Learning and coaching of a huge amount need to take place so that people do not abandon or get lost on the path towards “everything digital”. For the so-called digital natives, who have grown up with the sound of their smartphone at the bedside all the time, this move feels “natural”. Some experienced or silver workers got on track, if they were accompanied in suitable forms. The 65+ population might find it harder to adapt to the permanent use of digital devices for not only getting around in your city, but also to do your tax declaration, pay your dues and vote in elections.
Digitalization is not a goal in itself. It has advantages to reach communities in remote places or islands, but it might alienate older persons that have no other person around to assist them in the digital only world. An easy way to get some social science data to inform the debate is to refer to Eurostat and the surveys with information about the “overall life satisfaction” of people (EU-SILC). Checking for some major countries of the EU and neighbours of Estonia with less digitalization the differences are rather small. In terms of overall life satisfaction (16+ years old) Estonia has been catching up to the EU-average mainly between 2013 and 2021. Since then, stagnation at the EU-average is what the data tell. A quick testing of the hypothesis that the older persons (65+) might not see the past evolution as rosy is reflected in the EU-data as well. Good pensions seem to drive the “happiness” of older persons in the EU more than good digitalization. Eventually the two features of a society will have to go hand in hand to improve life satisfaction to higher levels. (Image: Data Eurostat EU-SILC Life satisfaction 65+, selected countries 2013-2023, retrieved on 2024-4-23, comparison with table all ages here, Data source)