Saturday, January 19, 2008

Evolution: Not Random

Evolution is not random.

"The findings of an international team of biologists demonstrate that evolution is not a random process, but rather occurs through the natural selection of successful traits...The findings, which constitute a significant milestone in establishing and reaffirming the mechanism of Darwin’s theory, will help in understanding how evolution works in all living creatures"

The Culture-Productivity Factor

I am currently studying for my Bachelors degree in Finance. In the course of my studies, particularly a leadership and professionalism course, a question was asked on a pre-assessment regarding what cultural diversity did to a workplace. The answer, of course, was not that it produced a richer cultural environment; rather that it increased productivity because different cultures have different ways of approaching and solving problems.

In fact, a recent study corroborates this information. The study shows that culture dictates the wiring of the brain, so to speak:

Neuroscientists Trey Hedden and John Gabrieli of MIT's McGovern Institute for Brain Research asked Americans and East Asians to solve basic shape puzzles while in a functional magnetic resonance imaging (fMRI) scanner.

It’s a fascinating study; and, in fact: "There's a hint that six months in a culture already changes you," he said, referring to psychological, rather than neurological, research. "It suggests that there's a lot of flexibility."

Friday, January 18, 2008

I, Economist

The Greeks used the words oikos for house and nomos for law which would eventually be combined to reflect philosophies which would evolve from the writings in the Muqaddimah, written by the Arab historian Ibn Khaldun in 1377. Mercantilists and physiocrats would eventually arise in Europe, becoming known as economists, studying the separate discipline of economics with the publishing of Adam Smith’s quintessential work The Wealth of Nations in 1776. A discipline falling within the purview of the larger study of business, it is formally considered a social science studying production, distribution, and consumption of goods.

When I was previously in school for one of my business degrees I categorized the three business sub-disciplines of accounting, finance, and economics into what I dubbed “Matthew’s Levels of Money” such that each of the fields dealt with money at different levels: Accounting deals with the simple “accounting” of funds inasmuch as making sure what money is where; economics deals with the greater movements of such things through groups of businesses, industries, markets, national economies, and larger systems. Finance deals with money flowing in intermediate systems, between the scales which accounting and economics covers. Lastly, I posed that there were areas in which accounting merged with finance and where finance and economics merged as fields of study.

While finance and accounting are all well and good, economics, at least to me, is the physics of the business world. Physics is the study of the relationship between matter and energy, one of the fundamental sciences on which everything else in the universe can be understood and is built upon. Economics is a business and social field of study which can shed immense amounts of light onto many things, not just those that involve money, distribution, or production.

For instance, when observing behaviors of others, the economist understands that people are apt to do one of two things: Seek pleasure and avoid pain. Put another way, one needs to find the incentive in the actions of individuals or groups thereof to understand their stated or unstated intentions. People speed in their cars along their route between points A and B because there is a perceived incentive that they would rather be at point B rather than either of the other alternatives. People cheat on their taxes because there is the perceived incentive that they will not have to pay as much money to the Internal Revenue Service or that they will get more money in tax refunds. They may be honest because that makes them feel good, or they may tell lies because they feel that there is an incentive in being perceived a different way than what reality would otherwise dictate: People chasing the incentive is a powerful tool.

A concept in economics which is closely related to a person’s incentive to do something is one that is old as the science itself: Utility. It is essentially defined as the degree of usefulness which a person assesses to a situation, product, or anything involving choice; classical economics dictates that each person should be maximizing utility in any situation involving choice. While practicality is often what textbooks teach in regards to how utility is measured, this can vary based on culture or any one of a multitude of other factors. For instance, companies have a tendency to use Canada as a test market, as opposed to the United States, because Canadians tend to attach more practicality to their measure of utility and Americans tend to attach more status or prestige to their perceived utility in a decision, such as one to purchase a product. Put another way, Canadians will buy the test pizza at a fast food chain restaurant because they find it convenient or tasty. Americans will purchase the pizza because it is the cool thing to do that week.

Economics is a versatile science which allows the practitioner to look at the details of a given situation or the big picture. From the intelligent interactions between agents to the dynamics of national economies, economists rely on data and an understanding of the geometry of a given situation. Calculated, the economist is an effective decision maker that can sort through and process large amounts of information and think effectively on their feet.

In the art of corporate warfare, the economist is an able participant and a lethal combatant. Even in the hands of any other member of the business team, a firm understanding of economics will make one’s effectiveness that much more potent.

Monday, January 14, 2008

Monkey Mondays: Mouse of Keyboard Monkey

The mouse which the kid of Keyboard Monkey would use.

See it here.