1. Golf is a test bed for what happens when financial interests end up driving its course. The sport has been hit by three competing global leagues/tours each of which trying to lure players into it and barring non-members from playing its events. The two largest, LIV Golf and US-based PGA tour, have even at each other in recent months and have taken their dispute to the courts.
Into this comes Saudi Arabia, whose SWF Public Investment Fund (PIF) has now infused $3 billion to merge LIV Golf and PGA tour, and also brought the commercial operations of the Europe-based DP World Tour under the umbrella of the joint entity created for the merger. The Saudis were the promoters of the breakaway LIV Golf, which had broken away from the PGA Tour and lured top stars by paying massive signing bonuses. The new entity's Board will be chaired by the CEO of PIF, though the US PGA Tour will have majority voting rights. This is an explainer of the deal.
This is part of Saudi Arabia's push into global sport. In football, it recently handed over ownership of its top four football clubs to PIF, which also owns Newcastle United. It also has significant interests in Formula One. At a global scale, this is also part of Prince Mohammed Bin Salman's efforts to project the Kingdom on the global stage, something which critics have denounced as "sports-washing". An FT article writes
Sport is one of 13 “strategic” sectors identified by the PIF, partly to deliver more entertainment options for a youthful domestic population, but also to champion Saudi Arabia’s brand overseas... this week’s investment gives Saudi Arabia for the first time partial control of a professional sport circuit. The PIF will have a significant minority stake in the new entity that will unify the commercial operations of the PGA, the European DP World Tour and LIV.
From being a risk-averse vehicle to park the country's reserves, the PIF has grown into a brash international investor with investments in Uber, SoftBank's Vision Fund, gaming companies, and a lot more. But its main focus has been to help boost and shape the domestic economy.
It has created 79 companies, ranging from a coffee producer, to a new airline, a waste-recycling business, a defence firm and even a vape business. The fund and its subsidiaries are responsible for everything from Riyadh’s renewable energy goals to urban regeneration and food security. As well as establishing new industries, the PIF has been tasked with developing a string of megaprojects. The most eye-catching — and controversial — is Neom, a $500bn scheme to create a massive futuristic development along the Red Sea coast with a 170km-long linear city in the desert, known as the Line, at its heart... Some analysts have described the fund — which committed to invest $200bn in Saudi Arabia in the five years through to 2025 — as a state within a state.
The length of electrified railway lines in India has more than doubled since 2014, from 21,000km to more than 50,000km in 2022. The proportion of electrified lines reached 65.8 per cent in 2021, higher than France’s 60.3 per cent and the UK’s 38 per cent.
And this on the impressive reduction in accidents, notwithstanding the recent tragedy
Contrast Europe to the US, where over the past 12 months 10 of the biggest tech firms accounted for 65 per cent of stock market returns — which is itself an alarming sign of industry concentration. The similar signs of concentration are even more concerning in Europe. There, 10 of the biggest luxury stocks, from LVMH to Ferrari, have accounted for about 30 per cent of returns — a share unmatched since records began...
Europe’s list of top 10 companies by market capitalisation, which has historically been dominated by banks, utilities and industrial conglomerates, now features four luxury names, up from zero at the start of the 2010s. Its big luxury brands are even more profitable than big US tech, with earnings amounting to nearly 25 per cent of revenue... The top European brands now account for a third of global sales, up from a quarter in 2010. Europe’s top four luxury companies, by market cap, are all French: LVMH, L’Oréal, Hermès, and Christian Dior (which is owned by LVMH)...Increasingly, the global luxury industry is based on goods that are still made by small Italian firms but sold by big French conglomerates. Gucci, Bulgari, Fendi — all are Italian brands now under French owners. While US tech firms overshadow all rivals, the same can be said of French luxury. Among the top luxury firms, the French have annual sales three times higher than the Swiss, more than four times the Americans and Chinese and 12 times the Italians.
Sharma argues that the dominance of luxury, in contrast to technology in the US, highlights the problems faced by European economies in terms of productivity growth and economic dynamism.
6. Daron Acemoglu and Simon Johnson may well have made the most definitive argument against the unimpeded progress of AI evolution.
Tech giants Microsoft and Alphabet/Google have seized a large lead in shaping our potentially A.I.-dominated future. This is not good news. History has shown us that when the distribution of information is left in the hands of a few, the result is political and economic oppression. Without intervention, this history will repeat itself... The fact that these companies are attempting to outpace each other, in the absence of externally imposed safeguards, should give the rest of us even more cause for concern, given the potential for A.I. to do great harm to jobs, privacy and cybersecurity. Arms races without restrictions generally do not end well. History has repeatedly demonstrated that control over information is central to who has power and what they can do with it...This technology is in the hands of two companies that are philosophically rooted in the notion of “machine intelligence,” which emphasizes the ability of computers to outperform humans in specific activities... This philosophy was naturally amplified by a recent (bad) economic idea that the singular objective of corporations should be to maximize short-term shareholder wealth. Combined together, these ideas are cementing the notion that the most productive applications of A.I. replace humankind. Doing away with grocery store clerks in favor of self-checkout kiosks does very little for the productivity of those who remain employed, for example, while also annoying many customers. But it makes it possible to fire workers and tilt the balance of power further in favor of management. We believe the A.I. revolution could even usher in the dark prophecies envisioned by Karl Marx over a century ago... Our future should not be left in the hands of two powerful companies that build ever larger global empires based on using our collective data without scruple and without compensation.
They have three proposals to control these data monopolies and future of civilisation
Congress needs to assert individual ownership rights over underlying data that is relied on to build A.I. systems. If Big A.I. wants to use our data, we want something in return to address problems that communities define and to raise the true productivity of workers. Rather than machine intelligence, what we need is “machine usefulness,” which emphasizes the ability of computers to augment human capabilities. This would be a much more fruitful direction for increasing productivity. By empowering workers and reinforcing human decision making in the production process, it also would strengthen social forces that can stand up to big tech companies. It would also require a greater diversity of approaches to new technology, thus making another dent in the monopoly of Big A.I.We also need regulation that protects privacy and pushes back against surveillance capitalism, or the pervasive use of technology to monitor what we do — including whether we are in compliance with “acceptable” behavior, as defined by employers and how the police interpret the law, and which can now be assessed in real time by A.I. There is a real danger that A.I. will be used to manipulate our choices and distort lives.Finally, we need a graduated system for corporate taxes, so that tax rates are higher for companies when they make more profit in dollar terms. Such a tax system would put shareholder pressure on tech titans to break themselves up, thus lowering their effective tax rate. More competition would help by creating a diversity of ideas and more opportunities to develop a pro-human direction for digital technologies. If these companies prefer to remain in one piece, the elevated tax on their profits can finance public goods, particularly education, that will help people cope with new technology and support a more pro-human direction for technology, work and democracy.
7. On a related note, another article points to a recent strike by over 11000 film and TV writers in the Writers Guild of America Union which went, calling for among other things, studios to guarantee them weeks of work at a time instead of hiring by the day.
This protest yet again highlights the biggest problem with the gig economy. Labour is an important cost in any industry, but especially so in the services sectors. But services sectors also allow for flexibility to employers in the management of their workforce. This flexibility gets enabled by technology. For workers, the same flexibility also proved the attraction, though it has now soured with instability and low wages.
8. Byju's, the eponymous Edtech firm, is hurtling towards what should be its inevitable denouement. First, it missed a $40 million repayment due on June 5 and cheekily sued its lenders over alleged harassment in the loan recovery. The lenders have accused Byju's of moving $500 million out of Byju's Alpha, the US borrower. The company's $1.2 billion debt is trading at 64 cents. Second, its auditor since 2016 and re-appointed for another five years in 2020, Deloitte, has quit with immediate effect citing "long-delayed" financial statements. The auditor also said there was a "significant impact" on its ability to perform the audit according to standards and that it has "not received any communication on the resolution of the audit report modifications for 2020-21. The auditor's statement is a damning indictment,
The financial statements of the company for the year ended March 31, 2022 are long delayed. In accordance with the Companies Act, 2013, the audited financial statements for the year ended March 31, 2022 were due to be laid before shareholders in the Annual General Meeting by September 30, 2022.We have also not received any communication on the resolution of the audit report modifications in respect of the year ended March 31, 2021, status of the audit readiness of the financial statements and the underlying books and records for the year ended March 31, 2022 and we have not been able to commence the audit as on date.As a result, there will be significant impact on our ability to plan, design, perform and complete the audit in accordance with the applicable auditing standards. In view of the aforesaid, we are tendering our resignation as statutory auditors of the company with immediate effect.
Third, its three largest investors, Sequoia, Naspers, and Chan Zuckerberg Initiative, have quit the company's Board, leaving it with only family members - husband, wide, and brother. The resignation came just after Byju's firmly denied any resignations, thereby clearly pointing to problems with all its investors.
As it has always been, the real money is in coaching 16-year-old Indians from big cities and small towns, helping them get into a top engineering, medical or management program. Most will fail because of the sheer demand-supply gap, but all will pay to try. For this segment, online resources like question banks are valuable, but only as a supplement. They are no substitute for talented teachers whose reputations fill stadium-sized classes.
This does not involve any loss of public money, so does not attract indignation in the media. But I'm strongly. inclined to believe that such practices are not uncommon in almost all the major Indian companies in procurements and recruitments. After all the social norms, which allow such corrupt practices, are the same whether in the public or private sectors.
10. Donald Shoup proposes replacing the free street parking slots in New York City with paid parking. His idea is to recover parking charges and use it to pay for benefits in the area.
Several US cities have established parking benefit districts that charge demand-based prices for curb parking within a selected area and use the resulting revenue to pay for public services on the metered blocks. The purpose of a parking benefit district is to convince stakeholders they want to charge for their curb parking, by connecting those fees to visible neighborhood amenities. If stakeholders see substantial local benefits from the meter revenue, a new golden rule of parking prices may emerge: Charge others what they would charge you.Revenue generated by the meters can be used to pay for public services, such as repairing sidewalks, planting street trees or providing other improvements. Few will pay for curb parking but all will benefit from public services. For example, Boulder, Colorado, uses its downtown meter revenue to buy transit passes for all downtown workers. Drivers who park on the street subsidize commuters who ride the bus. If the meter revenue pays for public services that residents and area business owners want and will get only if the city charges for curb parking in their neighborhood, market prices begin to make political sense.
He estimates this to generate $237 million a year in revenues if implemented in New York's Upper West Side district's 12300 free curb spaces.
Suppose the city spends this revenue to buy an MTA transit pass ($33 a week) for each of the Upper West Side’s 111,000 households. The total cost would be $189 million a year. The remaining revenue could be used to clean and maintain the Upper West Side’s 14 subway stations. Curb parkers would improve life for many more transit riders. Parking revenue would pay the transit fares, and the fare-free transit for residents would boost MTA ridership.
The FT has an article which describes US cities as one big parking lot. This is striking
“At the centre of our biggest cities, some of the most valuable public land on earth has been exclusively reserved for the free storage of private cars,” writes Henry Grabar, author of Paved Paradise: How Parking Explains the World. There are more square feet of housing in the US for each car, he notes, than there are for each human... The authors of A Pattern Language, the classic 1977 study of livability and urban design, note that cars require a thicket of infrastructure useless to carless humans — driveways, garages, asphalt. When there are too many cars, residents feel "that the outdoors is not meant for them, that they should stay indoors, that they should stay in their own buildings, that social communion is no longer permitted or encouraged". The authors suspected that 9 per cent of an area's land devoted to parking was the threshold. Yet fully 30 per cent of central Detroit is devoted to parking. So is 28 per cent of Louisville, 24 per cent of Dallas and 21 per cent of Phoenix. Swaths of city centres across the country exist solely to house cars. Some 20 per cent of all studied city centres were parking lots.
This is a stunning map of downtown Detroit
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