Category: Entrepreneurship

Philosopher MacAskill’s “Effective Altruism” Was Neither Effective Nor Altruistic

(p. B1) In short order, the extraordinary collapse of the cryptocurrency exchange FTX has vaporized billions of dollars of customer deposits, prompted investigations by law enforcement and destroyed the fortune and reputation of the company’s founder and chief executive, Sam Bankman-Fried.

It has also dealt a significant blow to the corner of philanthropy known as effective altruism, a philosophy that advocates applying data and evidence to doing the most good for the many and that is deeply tied to Mr. Bankman-Fried, one of its leading proponents and donors. Now nonprofits are scrambling to replace millions in grant commitments from Mr. Bankman-Fried’s charitable vehicles, and members of the effective altruism community are asking themselves whether they might have helped burnish his reputation.

“Sam and FTX had a lot of good will — and some of that good will was the result of association with ideas I have spent my career promoting,” the philosopher William MacAskill, a founder of the effective altruism movement who has known Mr. Bankman-Fried since the FTX founder was an undergraduate at M.I.T., wrote on Twitter on Friday (Nov. 11, 2022). “If that good will laundered fraud, I am ashamed.”

Mr. MacAskill was one of five people from the charitable vehicle known as the FTX Future Fund who jointly announced their resignation on Thursday (Nov. 10, 2022).

. . .

(p. B5) Benjamin Soskis, senior research associate in the Center on Nonprofits and Philanthropy at the Urban Institute, said that the issues raised by Mr. Bankman-Fried’s reversal of fortune acted as a “distorted fun-house mirror of a lot of the problems with contemporary philanthropy,” in which very young donors control increasingly enormous fortunes.

. . .

Mr. Bankman-Fried’s fall from grace may have cost effective-altruist causes billions of dollars in future donations.  . . .

His connection to the movement in fact predates the vast fortune he won and lost in the cryptocurrency field. Over lunch a decade ago while he was still in college, Mr. Bankman-Fried told Mr. MacAskill, the philosopher, that he wanted to work on animal-welfare issues. Mr. MacAskill suggested the young man could do more good earning large sums of money and donating the bulk of it to good causes instead.

. . .

A significant share of the grants went to groups focused on building the effective altruist movement rather than organizations working directly on its causes. Many of those groups had ties to Mr. Bankman-Fried’s own team of advisers. The largest single grant listed on the Future Fund website was $15 million to a group called Longview, which according to its website counts the philosopher Mr. MacAskill and the chief executive of the FTX Foundation, Nick Beckstead, among its own advisers.

The second-largest grant, in the amount of $13.9 million, went to the Center for Effective Altruism. Mr. MacAskill was a founder of the center. Both Mr. Beckstead and Mr. MacAskill are on the group’s board of trustees, with Mr. MacAskill serving as the chair of the United Kingdom board and Mr. Beckstead as the chair of the U.S. subsidiary.

For the full story, see:

Nicholas Kulish. “Collapse of FTX Strikes a Philanthropy Movement.” The New York Times (Monday, November 14, 2022): B1 & B5.

(Note: ellipses, and bracketed dates, added.)

(Note: the online version of the story was updated Nov. 14, 2022, and has the title “FTX’s Collapse Casts a Pall on a Philanthropy Movement.”)

P&G CEO Defended Using Harsh Criticism of Workers

Deirdre McCloskey frequently says we should use more “sweet talk.” Edwin Artzt defended using harsh talk. Is there room for both?

(p. A8) Edwin Artzt, who expanded Procter & Gamble Co.’s global reach in the 1980s and then, as chief executive officer in the early 1990s, rattled the company’s managers with cost-cutting drives and harsh criticism of their work, died at the age of 92, the Cincinnati-based company said.

As CEO from 1990 until 1995, Mr. Artzt was known for berating managers and using words including “stupid” and “imbecilic” to describe some of their proposals, as recounted in “Soap Opera: The Inside Story of Procter & Gamble,” a 1993 book by Alecia Swasy, a former Wall Street Journal reporter. He didn’t sugarcoat his desire to eliminate weak brands and underperforming employees.

Mr. Artzt, who died on April 6, was sometimes called “The Prince of Darkness.” Some colleagues said the nickname reflected a hot temper. He said it came from his habit of working late.

“I certainly don’t want to have a short trigger with people and not give them a chance,” he told The Wall Street Journal in 1991. “But sure I’ve cleared out deadwood. Probably some of it was still breathing when it was cleared out.”

Two years later, he said: “Terrifying people is not my intention…People come to me years later and say, ‘Remember that meeting 10 years ago? You laid it on me, but I sure remember that lesson.’”

For the full obituary, see:

James R. Hagerty. “P&G CEO’s Harsh Talk Rattled a Bureaucracy.” The Wall Street Journal (Saturday, April 15, 2023): A10.

(Note: the online version of the obituary was updated April 12, 2023, and has the title “Edwin L. Artzt, P&G CEO Known for His Tough Talk, Dies at 92.”)

The book on Proctor & Gamble mentioned above is:

Swasy, Alecia. Soap Opera: The Inside Story of Proctor & Gamble. New York: Crown Publishing, 1993.

“Muskies, Muskites, Muskrats and Musketeers” Hail Musk as “Pretty Awesome . . . Genius” and “Modern-Day Da Vinci”

(p. B1) Cryptocurrency enthusiasts are cheering for a decentralized social network. Supporters of Donald J. Trump hope that the former president will return to tweeting. Some free speech advocates envision an end to censorship. And loyal fans of Elon Musk are betting that the billionaire will innovate.

. . .

. . ., Twitter has lodged itself into the fabric of society. The platform’s future under Mr. Musk has become a symbolic receptacle of people’s desires to push the world (p. B5) in the direction they want it to go.

Few tech executives elicit the kind of blind adoration that Mr. Musk does. His fans — known variously as Muskies, Muskites, Muskrats and Musketeers — defend even his most questionable moves. His deal to buy Twitter has had plenty of critics, including the company’s employees, some lawmakers and disinformation researchers. Many fear what he will do with the platform, over which he now has more or less absolute power as its owner. But on Musk-focused message boards, Discord servers, blogs, podcasts and YouTube channels, the deal is a triumph.

“Him buying Twitter is pretty awesome,” said Bryce Paul, the host of the podcast “Crypto 101.” Mr. Paul does not consider himself a Musk fanboy but believes the billionaire is a “genius” and a “modern-day da Vinci.”

For the full story, see:

Erin Griffith. “It’s All Musk’s and All Changing: It’s a Happy Day for the Millions of ‘Muskies,’ Who Are Anticipating Less Moderation and More Innovation.” The New York Times (Saturday, October 29, 2022): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the story has the date Oct. 28, 2022, and has the title “For Many, Elon Musk’s Buying Twitter Is a Moment of Celebration.” In the print version, the title “It’s All Musk’s and All Changing” covered two separate articles that each had their own subtitle.)

Early Wealthy Cell Phone Adopters Funded Innovations That “Made Cellphones Affordable to the Masses”

In Openness to Creative Destruction, I argue that early new technologies are often primitive, expensive, and buggy. They are initially bought by the rich who allow the technology to survive while it is being made better and cheaper. See below that cellphones are another example.

(p. A14) On April 3, 1973, four months after the last manned moon mission, a 44-year-old Motorola engineer took a small step onto Sixth Avenue outside the New York Hilton. There Martin Cooper did something commonplace now but at the time revolutionary: He made a call on a cellular telephone.

“Joel,” Mr. Cooper said to the man who picked up, “I’m calling you from a real cellular telephone—a handheld unit.” Joel Engel worked at Bell Labs, the research division of AT&T. Mr. Cooper was calling to gloat about surpassing the phone monopoly.

. . .

“The function of a cellphone—I can’t express it any better—it is to set people free,” Mr. Cooper, 94, says.  . . .  “A cellphone gives a person the freedom to be connected to the rest of the world, wherever they are and whenever they want to.”

. . .

“We expected the first phones to go to wealthy people,” Mr. Cooper says. “To a large extent that was true. But it turns out that one of the biggest users were real-estate people.” They needed to take calls from clients and go out to show properties. “The cellphone allowed them to do both at the same time. They could be showing a home and still answer the call. So to them the phone, even at that huge price, doubled their effectiveness.”

These early adopters, for whom the technology was worth the cost, helped fund further innovation, which ultimately made cellphones affordable to the masses. Advancements in data-transmission, display and input technology made possible the inexpensive, versatile smartphones we take for granted today.

They also brought ill effects, especially for young people, such as compulsive cellphone use and social media that promote both groupthink and bitter division. “Those are all big problems,” Mr. Cooper says.

. . .

But he accentuates the positive. “We are just starting to figure out what the value of the cellphone is,” he says. “Humanity will solve these other problems if the advantages are big enough. And the advantages—the services you get out of the cellphone, the value to you to make you more efficient—are so great that there’s no question in my mind that humanity is going to solve these problems.”

He is confident that the benefits already outweigh the costs. “Today, people are healthier. There are fewer people in poverty. They live longer than ever before. Something has made that happen, and I think the cellphone is one of the contributors.” By improving efficiency, “it has taken away a lot of the time issues, given people more time to do other things.”

For the full interview, see:

Faith Bottum. “THE WEEKEND INTERVIEW; From the ‘Shoe Phone’ to the Smartphone.” The Wall Street Journal (Saturday, April 15, 2022): A13.

(Note: the online version of the interview has the date April 14, 2023, and has the title “THE WEEKEND INTERVIEW; Opinion: From the ‘Shoe Phone’ to the Smartphone.”)

My book that I mention above is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

Global Warming “Presents a Fleeting Opportunity for Glacial Archaeologists”

(p. 14) Espen Finstad was trudging through mud in the Jotunheimen mountains of eastern Norway this month when he happened upon a wooden arrow, bound with a pointed tip made of quartzite. Complete with feathers, it was so well-preserved that it looked as if it could have been lost just recently.

. . .

The find, which Mr. Finstad and his colleagues believe belonged to a reindeer hunter in the late Stone Age or early Bronze Age, is among thousands of artifacts and remains that have emerged from melting ice in recent years, as climate change thaws permafrost and glaciers around the world.

. . .

The thaw presents a fleeting opportunity for glacial archaeologists: They must find the historical treasures just as they emerge from the ice and before they are destroyed by the elements.

“We’re sort of in a race against time,” said Lars Holger Pilo, a glacial archaeologist and a colleague of Mr. Finstad’s.  . . .

For more than a decade, their team, which runs the Secrets of the Ice project, has scoured mountain passes across the country.  . . .

Since then, the team has discovered around 4,000 artifacts and remains, including a 1,000-year-old wooden whisk and Viking mitten, medieval horseshoes, Bronze Age skis and more than 150 arrows.

Similar work is taking place near Anchorage, Alaska, as well as in northeastern Siberia and Mongolia.

Among the most exciting finds have been Yuka, a 39,000-year-old baby Mammoth found in Siberia in 2010, and a 280-million-year-old tree fossil found in Antarctica in 2016. But the most famous of all is Ötzi — a 5,300-year-old iceman found in 1991 by hikers on the northern Italian border with Austria.

For the full story, see:

Livia Albeck-Ripka. “Melting Ice in Norway Reveals Ancient Arrow.” The New York Times, First Section (Sunday, September 24, 2023): 14.

(Note: ellipses added.)

(Note: the online version of the story has the date Sept. 23, 2023, and has the title “Ancient Arrow Is Among Artifacts to Emerge From Norway’s Melting Ice.”)

The Most Powerful A.I. Systems Still Do Not Understand, Have No Common Sense, and Cannot Explain Their Decisions

(p. B1) David Ferrucci, who led the team that built IBM’s famed Watson computer, was elated when it beat the best-ever human “Jeopardy!” players in 2011, in a televised triumph for artificial intelligence.

But Dr. Ferrucci understood Watson’s limitations. The system could mine oceans of text, identify word patterns and predict likely answers at lightning speed. Yet the technology had no semblance of understanding, no human-style common sense, no path of reasoning to explain why it reached a decision.

Eleven years later, despite enormous advances, the most powerful A.I. systems still have those limitations.

. . .

(p. B7) The big, so-called deep learning programs have conquered tasks like image and speech recognition, and new versions can even pen speeches, write computer programs and have conversations.

They are also deeply flawed. They can generate biased or toxic screeds against women, minorities and others. Or occasionally stumble on questions that any child could answer. (“Which is heavier, a toaster or a pencil? A pencil is heavier.”)

“The depth of the pattern matching is exceptional, but that’s what it is,” said Kristian Hammond, an A.I. researcher at Northwestern University. “It’s not reasoning.”

Elemental Cognition is trying to address that gap.

. . .

Eventually, Dr. Ferrucci and his team made progress with the technology. In the past few years, they have presented some of their hybrid techniques at conferences and they now have demonstration projects and a couple of initial customers.

. . .

The Elemental Cognition technology is largely an automated system. But that system must be trained. For example, the rules and options for a global airline ticket are spelled out in many pages of documents, which are scanned.

Dr. Ferrucci and his team use machine learning algorithms to convert them into suggested statements in a form a computer can interpret. Those statements can be facts, concepts, rules or relationships: Qantas is an airline, for example. When a person says “go to” a city, that means add a flight to that city. If a traveler adds four more destinations, that adds a certain amount to the cost of the ticket.

In training the round-the-world ticket assistant, an airline expert reviews the computer-generated statements, as a final check. The process eliminates most of the need for hand coding knowledge into a computer, a crippling handicap of the old expert systems.

Dr. Ferrucci concedes that advanced machine learning — the dominant path pursued by the big tech companies and well-funded research centers — may one day overcome its shortcomings. But he is skeptical from an engineering perspective. Those systems, he said, are not made with the goals of transparency and generating rational decisions that can be explained.

“The big question is how do we design the A.I. that we want,” Dr. Ferrucci said. “To do that, I think we need to step out of the machine-learning box.”

For the full story, see:

Steve Lohr. “You Can Lead A.I. to Answers, but Can You Make It Think?” The New York Times (Monday, August 29, 2022): B1 & B7.

(Note: ellipses added.)

(Note: the online version of the story was updated Sept. 8, 2022, and has the title “One Man’s Dream of Fusing A.I. With Common Sense.”)

“The Sense of Freedom That Flight Creates”

(p. B12) Frank Frederick Borman was born on March 14, 1928, in Gary, Ind.  . . .  When he was 5, Frank visited Wright Field in Dayton, Ohio, and a lifelong passion for aviation was kindled.

“Dad took me for a five-dollar ride with a barnstorming pilot in an old biplane,” he recalled in “Countdown” (1988), a memoir written with Robert J. Serling. “I sat next to Dad in the front seat, with the pilot in the cockpit behind us, and I was captivated by the feel of the wind and the sense of freedom that flight creates so magically.”

. . .

What awed him most, he said, was his view of Earth from Apollo 8. As he put it, “The contrast between our memories of the Earth and the color on the Earth and the totally bleak and dead moon was striking.”

It was an image, he said, that he would “recall till the day I die.”

For the full obituary, see:

Richard Goldstein. “Frank Borman, 95, Astronaut Who Led First Orbit of the Moon, Dies.” The New York Times (Saturday, November 11, 2023): B12.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the obituary has the date Nov. 9, 2023, and has the title “Frank Borman, Astronaut Who Led First Orbit of the Moon, Dies at 95.”)

The memoir Borman co-authored that is mentioned above is:

Borman, Frank, and Robert J. Serling. Countdown: An Autobiography. New York: Silver Arrow Books, 1988.

Xi’s Communist Assertion of Control of Private Firms Dulls the Entrepreneurial Innovation and “Unbridled Energy That Powered China’s Explosive Growth”

(p. A3) Just a few weeks later, Mr. Xi personally intervened to block the $34 billion initial public offering of one of China’s biggest private firms, Ant Group, partly out of concerns it was too focused on its own profits rather than the state’s goal of controlling financial risk.

The message isn’t lost on entrepreneurs, who are reorienting their businesses to appease the state or giving up on private enterprise altogether.

“For us small businesses, we have no choice but to follow the party,” says Li Jun, a 50-year-old owner of a fish-farming business in the eastern Jiangsu province. “Even so, we’re not benefiting at all from government policies.”

Mr. Li recently closed down a seafood-processing plant because it couldn’t get bank loans—a persistent problem for private firms, despite Beijing’s repeated pledges to make credit more available for them.

The risk for China is that Mr. Xi’s vigorous assertion of statist prerogatives will dull the kind of innovation, competitive spirit and unbridled energy that powered China’s explosive growth in recent decades. The economic policies that helped nurture e-commerce giant Alibaba Group Holding Ltd., tech conglomerate Tencent Holdings Ltd. and other global success stories seem to be at an end, say economists inside and outside China. As a result, they say, Chinese companies are becoming less like American ones, which are driven by market forces and depend on private innovation and consumption.

. . .

In one of the clearest signs of China’s direction, more state firms are gobbling up private companies, redefining a government initiative called “mixed-ownership reform.” The original idea, dating back to the late 1990s, was to encourage private capital to invest in state firms, bringing more private-sector acumen to China’s often-bloated state-owned enterprises.

Now, under Mr. Xi, the process often works the other way around, with big state companies absorbing smaller ones to keep them going, and reconfiguring the smaller firms’ strategies to serve the state.

For the full story, see:

Lingling Wei. “Xi Ramps Up Control of China’s Private Sector.” The Wall Street Journal (Friday, Dec. 11, 2020): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date December 10, 2020, and has the same title as the print version.)

If Regulators Allow, Improved Photosynthesis Can Feed More of the Poor Using Less Land

(p. A13) For decades, scientists have pursued a tantalizing possibility for bolstering food supplies and easing hunger for the world’s poorest: improving photosynthesis, the biological process in plants that sustains nearly all life on Earth.

Now, researchers say that by using genetic modifications to increase the efficiency of photosynthesis, they significantly increased yields in a food crop, soybeans, providing a glimmer of potential that such methods could someday put more food on tables as climate change and other threats make it harder for vulnerable populations across the globe to feed their families.

. . .  Their methods will also have to pass muster with government regulators before crops transformed this way will ever reach farmers’ fields.

. . .

Without major changes to agriculture, governments’ targets for mitigating climate change are at risk, scientists warn. Yet addressing malnutrition and hunger in the short term might require pressing more land and other resources into service, which could accentuate warming.

That is why scientific advancements that could help us produce more nourishment without using more land, whether by improving photosynthesis or otherwise, hold such promise.

. . .

The new research in Illinois focuses on “non-photochemical quenching,” a mechanism in plants that protects them from sun damage. When plants are in bright sunlight, they often receive more light energy than they can use for photosynthesis. This mechanism helps them shed the excess energy harmlessly as heat. But after the plant is shaded again, it doesn’t stop very quickly, which means the plant wastes precious time and energy that could be put toward producing carbohydrates.

The researchers’ genetic transformations help plants adjust more quickly to shade. In multilayered plants like rice, wheat, maize and soy, this extra nimbleness could theoretically increase photosynthesis in the middle layers of leaves, which are constantly flitting between sunlight and shadow during the day.

For the full story, see:

Raymond Zhong and Clare Toeniskoetter. “Researchers Alter Genes To Refine Photosynthesis And Improve Crop’s Yield.” The New York Times (Friday, August 19, 2022): A13.

(Note: ellipses added.)

(Note: the online version of the story has the date Aug. 18, 2022, and has the title “Scientists Boost Crop Performance by Engineering a Better Leaf.”)

“You Will Do Your Best Creative Work by Yourself”

(p. A12) The value of gathering to swap loosely formed thoughts is highly suspect, despite being a major reason many companies want workers back in offices.

“You do not get your best ideas out of these freewheeling brainstorming sessions,” says Sheena Iyengar, a professor at Columbia Business School. “You will do your best creative work by yourself.”

Iyengar has compiled academic research on idea generation, including a decade of her own interviews with more than a thousand people, into a book called “Think Bigger.” It concludes that group brainstorming is usually a waste of time.

Pitfalls include blabbermouths with mediocre suggestions and introverts with brilliant ones that they keep to themselves.

. . .

Plenty of people have always bemoaned brainstorming. Longtime Wall Street Journal readers may recall a 2006 “Cubicle Culture” column that skewered the popular practice, and Harvard Business Review published a research-based case against the usefulness of brainstorming in 2015.

. . .

Sometimes leaders bring employees together to create the illusion of wide-open input, says Erika Hall, co-founder of Mule Design Studio, a management consulting firm in San Francisco. In-person brainstorming is part of the back-to-office rationale for many of her clients, and she generally advises the ones that truly want to improve collaboration to first carve out some alone time for their workers.

When Hall needs inspiration, she goes for a run.

“It’s freaky,” she says. “I will go run on a problem, and things will happen in my head that do not happen under any other circumstance.”

Others might find “Aha!” moments in the shower or while listening to music. Leaving breakthroughs to private serendipity can feel, to bosses, like losing control, she acknowledges, but it might be more effective than trying to schedule magic in a conference room.

For the full commentary, see:

Callum Borchers. “ON THE CLOCK; Switch Off Brainstorming If You Want Brighter Ideas.” The Wall Street Journal (Thursday, May 18, 2023): A12.

(Note: ellipses added.)

(Note: the online version of the commentary was updated May 18, 2023, and has the title “ON THE CLOCK; Office Brainstorms Are a Waste of Time.”)

The book by Iyengar mentioned above is:

Iyengar, Sheena. Think Bigger: How to Innovate. New York: Columbia Business School Publishing, 2023.

To Force Use of Organic Farming, Government Banned Chemical Fertilizers; A Ban Which “Devastated” Crops and “Destroyed the Farmers”

(p. A6) GALENBINDUNUWEWA, Sri Lanka—For more than half a century, Pahatha Mellange Jayaappu has tilled the field on his modest farm in Sri Lanka’s agricultural heartland, unswayed by recurrent political and economic turmoil.

Now the 71-year-old is just trying to eke out enough of a harvest to feed his family after an abrupt ban on chemical fertilizers last year devastated his crops. He says he has given up on planting for profit.

“We have lived through armed insurrections and bad government policies,” Mr. Jayaappu said. “This is the worst year I’ve ever seen. They have destroyed the farmers.”

Many Sri Lankans aren’t getting enough to eat, and farmers and agricultural experts say the food shortages are set to worsen. The government reversed the ban in November and promised fresh supplies of chemical fertilizers, but farmers said many received only a small amount, and too late for the current growing season.

. . .

The ban on imports of agricultural chemicals took effect in May 2021, and the rice harvest the following March was down 40%, according to government data. Prices soared. Sri Lanka, which had been largely self-sufficient in rice, was forced to use some of its fast-dwindling foreign reserves to import the key staple. Other crops, like tea, an important foreign-exchange earner, have also suffered. In May, the country defaulted on its external debt.

. . .

Mr. Wickremesinghe was installed by Parliament last month after his predecessor, Gotabaya Rajapaksa, fled the country and resigned in the face of mass protests over fuel shortages and food prices.  . . .

Mr. Rajapaksa billed the ban as a nationwide shift to organic farming, but agricultural experts say that requires a yearslong transition. Opposition lawmakers said cutting off imports of fertilizer, which the government heavily subsidizes for farmers, was a shortsighted attempt to hold on to foreign reserves.

. . .

Farmers complained that the organic fertilizers that came on the market after the ban took effect were poor quality, full of material that wasn’t fully decomposed. And the haste of the ban left insufficient time to make their own compost, or learn how to farm organically.

For the full story, see:

Shan Li and Philip Wen. “Sri Lanka’s Farmers Struggle to Survive.” The Wall Street Journal (Saturday, August 20, 2022): A6.

(Note: ellipses added.)

(Note: the online version of the story was updated Aug. 19, 2022, and has the title “Sri Lanka’s Farmers Struggle to Feed the Country—and Themselves.”)