Timothy Taylor reported on a working paper that looked at the top 1% of society and examined some trends over time. Highlights include:

• Non-Finance Executives, Medical Professionals, and Farmers have declined as a proportion of the 1% between 1979 and 2005.
• Finance Professionals, Lawyers and Real-Estate Professionals have all risen in the same period.
• The largest income gains since the 1980s have gone not to the 1%, but, in fact, the 0.1%.

To see expanded tables and to read more about how income as a share of GDP has risen, as well as which profession has seen income triple, and how the data may have changed since 2005 click here.

Source: Conversable Economist

Ryan Paul had the opportunity to go to Facebook headquarters and get a behind the scenes look at how a typical Facebook update deployment works. Highlights include:

• Minor updates to Facebook happen every day. Major updates happen every week – usually on a Tuesday. This rapid development schedule is part of the reason for Facebook’s agility and success.
• The frequent updates make testing difficult. There are three main stages of testing. First after the developer submits the code, the update is rolled out to all Facebook employees. After that the pages of a small number of randomly selected public users are updated. If there are no problems then the update finally goes out to everybody’s page in a process that takes about half an hour. There is rarely any downtime.
• During the update rollouts every developer is expected to be on hand in case of any problems. Developers are responsible for the code they submit and if their code breaks down they have to fix it. Those that do badly get a thumbs down and can accumulate negative karma.
• Facebook monitors several sources of data for evidence of problems with updates. These include Twitter streams and how favourably people are tweeting about Facebook.
• There is a well-stocked bar where the release engineering team works. The team leader sits within arm’s reach of the bar.
• After a successful update the developers celebrate by taking a few shots.

To read more about Facebook’s plans for the future, the one man in the world who has access to a dislike button, how disgraced developers can increase their karma through alcohol, and the 1.5 gigabyte binary executable file that creates the magic, click here.

Source: ArsTechnica

Jonathan V. Last writes that “men will die for God or country, kinship or land. No one ever picked up a rifle and got shot for optimal social utility. Economists cannot account for this basic fact of humanity. Yet they have assumed a role in society that for the past 4,000 years has been held by philosophers and theologians.” In an article that looks at the role that economics has come to play in our life, and how it has become a term that has become all encompassing (Centives being an example of this), there are several highlights:

• Economics claims to have no belief system, but it does, that of utility maximization. However optimum outcome does not always mean most efficient outcome.
• Yet we have come to let the economic philosophy of rational utility maximization dominate our lives. Examples include:
  • Buying your way out of lines at amusement parks.
  • Express lanes to avoid traffic.
  • Paying students to get good grades.
  • Naming subway stations after businesses.
• When markets are first introduced they tend to expand. Consider life insurance which was banned for several decades because people didn’t like the idea of speculating on death. It eventually won acceptance as a way for men to take care of their family in case they die. Today companies routinely buy life insurance policies on their employees – benefitting if their employees die.
• Taken to its extreme, utility maximization would mean no merit-based admission to universities. Instead the highest bidder would be able to get in.

To read more examples of economics coming to dominate our world, the implications for our society, how economics went from being a study of prices and unemployment to one of human behaviour, and why markets should not be demonized, click here.

Source: The Wall Street Journal

Paul Graham recently discussed some of the most frighteningly ambitious start-up ideas he’s encountered. They include:

• A new search engine. Google has become cluttered, confusing, and no longer returns useful results all the time. Individuals are trying to take on the search behemoth by creating a new search engine.
• A replacement for email. Google is once again part of the problem. Gmail has become slow and clunky. Moreover email has now become a list of things that you need to do or require your attention. A new email protocol would take into account this aspect of email and give you more control.
• The next Steve Jobs. High level executives and informed insiders are pessimistic about the future of Apple after Steve Jobs. A new tech company could sweep the markets.

To read other ideas including a replacement for universities, cable television, and what the example of Bill Clinton tells us, click here.

Source: Paul Graham

Via: Marginal Revolution

Ronald Bailey had the chance to sit down with the authors of Abundance: Why The Future Will Be Much Better Than You Think. Some of the things they talked about included:

• Our future looks set to be pretty amazing with technology improving the standard of living for everybody.
• The reason why we’re so often pessimistic and afraid of the future is because we’ve evolutionary evolved to be scared and focus on negative information.
• There are three tiers of challenges that have to be overcome before we enter a period of global abundance. They are:
  • Water, food, and shelter.
  • Energy, education, and information.
  • Freedom and healthcare
• Luckily the solutions to these problems multiply – providing clean water, for example, helps solve a lot of diseases.
• Technology spreads exponentially. From being a luxury product in the 90s, there are 5.6 billion mobile phones in the world today.

To read about the way to overcome the three tiers of obstacles, a take on the Green Revolution, and the role that entrepreneurship has to play, click here.

Source: Reason

Via: Newmark’s Door

Laura Vozzella had a chat with a professional line stander –somebody who stands in line for notable events such as concerts and important court hearings so that individuals interested don’t have to spend their time on the street. Highlights include:

• One line-stander claims to earn $15 an hour
• He makes $50,000 a year.
• Line standers might further subcontract and hire homeless people so that they can go home and recharge.

To meet a professional line-stander, and to find out why he avoids interviews, click here.

Source: Washington Post

Economists agree: the age of the bank run – when millions of people withdraw their money from their bank accounts, throwing the financial system into jeopardy – has come to an end. However a different type of bank-run might dominate the 21^st century. Tyler Cowen writes:

• The shadow banking system which involves sophisticated financial products has become larger than the traditional commercial banking system.
• The money that individuals save in their bank accounts is insured by the government, leading to the end of commercial bank runs.
• However money in the shadow banking system is not insured and not risk free. Potential crises can become actual crises when investors pull their money out of the shadow banking system on short notice.
• Dealing with such shadow bank runs is complicated and has far-reaching consequences. The Eurozone is currently struggling with these issues.

To read more about the unappealing steps that countries can take to mitigate the effects of shadow bank runs, why this will lead to a “risky quest for yield”, and what the European Central Bank has been doing about it, click here.

Source: The New York Times

Via: Marginal Revolution

James Surowiecki reports on research that suggests that retail chains that hire more workers and spend more money training them are more successful than those who don’t. Highlights include:

• Every dollar spent on additional workers and training can lead to an extra $28 in sales.
• Having more sales staff rectifies the problem of the “phantom stock-out” – this is when the store has the product but the customer is unable to find it.
• Companies that drastically reduce payroll costs don’t do well. Circuit City fired 3,000 employees, and sales dropped as the new inexperienced hires couldn’t help customers find the products they were looking for. The company went bankrupt.
• Despite this research companies continue to find ways to cut payroll costs due to the way that managerial incentives are set up, and because the benefits are distributed over time.

To read more about how businesses have been outsourcing work to consumers, how this isn’t necessarily a bad thing, more details of the study, and what the experience of Home Depot demonstrates, click here.

Source: The New Yorker

Via: Freakonomics