17th Feb 2019

This week’s reads focus on tribal identity, the science behind junk food addiction, India’s new IT law, the two types of office workers, the lack of evidence for brain training and frugal living.

1. Long read: Tribal World – Group Identity is All
Author: Amy Chua
Source: Foreign Affairs (https://www.foreignaffairs.com/articles/world/2018-06-14/tribal-world)

25 years ago Samuel Huntington had taught those who read his controversial book “The Class of Civilisations and the Remaking of the World Order” that all of us are tribal people and will ultimately focus on looking after our own. All our education and our reading is merely a façade said the great intellectual (who like other great thinkers could not care less what people thought about him). Beneath the façade all of us have strong tribal instincts which extends to wanting to the downfall of other tribes.
Uber-successful American author, Amy Chua, expands on this point in her super piece in Foreign Affairs. She makes three distinct points:
a)      American politicians have for generations failed to understand this point around how tribal identity works. This failure has hobbled US foreign policy for generations. Irag, Afghanistan, Vietnam, etc are, according to Chua, debacles driven by American failure to understand the tribal politics of these countries. In Vietnam, for example, the Americans completely ignorant of the hatred the Vietnamese had for the Chinese who lived in Vietnam, who dominated 80% of the business interests in that country and to whom the Americans were giving business.
b)      Research conducted by psychologists show that children as young as four demonstrate these tribal instincts. So Jewish kids have little sympathy for Arab kids and vice versa. Research also shows that if kids don’t have such instincts, they can be very easily trained to harbour such instincts.
c)      As economic life in America polarises between the “haves” on the coast and the “have nots” everywhere else, the have nots are behaving exactly as you would expect a tribe under pressure to behave. They are electing someone who behaves like them – Trump – to lead them. They are ostracising the “have nots”. They are supporting measures to crush other tribes eg. immigrants.
Unless the elites in America wake up the tribal instincts that people display – in America and elsewhere – they will continue to suffer reverses at home and abroad.

2. Long read: The Extraordinary Science of Addictive Junk Food
Author: Michael Moss
Source: The New York Times (https://www.nytimes.com/2013/02/24/magazine/the-extraordinary-science-of-junk-food.html)

A six year old article but a fascinating one nonetheless about the science that gets us addicted to junk food. Michael Moss who won the Pulitzer Prize in 2010 for his reporting on the meat industry, authored “Salt Sugar Fat: How the Food Giants Hooked Us”, a superb piece of investigative journalism, from which this article is adapted. Michael spent four years researching what was a conscious effort on part of the food industry using a combination of scientific experiments in laboratories to well thought through marketing campaigns to get people hooked on to junk food. “What follows is a series of small case studies of a handful of characters whose work then, and perspective now, sheds light on how the foods are created and sold to people who, while not powerless, are extremely vulnerable to the intensity of these companies’ industrial formulations and selling campaigns.”
“As a culture, we’ve become upset by the tobacco companies advertising to children, but we sit idly by while the food companies do the very same thing. And we could make a claim that the toll taken on the public health by a poor diet rivals that taken by tobacco….
…one in three adults is considered clinically obese, along with one in five kids, and 24 million Americans are afflicted by type 2 diabetes, often caused by poor diet, with another 79 million people having pre-diabetes. Even gout, a painful form of arthritis once known as “the rich man’s disease” for its associations with gluttony, now afflicts eight million Americans…
….In the process of product optimization, food engineers alter a litany of variables with the sole intent of finding the most perfect version (or versions) of a product. Ordinary consumers are paid to spend hours sitting in rooms where they touch, feel, sip, smell, swirl and taste whatever product is in question. Their opinions are dumped into a computer, and the data are sifted and sorted through a statistical method called conjoint analysis, which determines what features will be most attractive to consumers. Moskowitz likes to imagine that his computer is divided into silos, in which each of the attributes is stacked. But it’s not simply a matter of comparing Color 23 with Color 24. In the most complicated projects, Color 23 must be combined with Syrup 11 and Packaging 6, and on and on, in seemingly infinite combinations. Even for jobs in which the only concern is taste and the variables are limited to the ingredients, endless charts and graphs will come spewing out of Moskowitz’s computer. “The mathematical model maps out the ingredients to the sensory perceptions these ingredients create,” he told me, “so I can just dial a new product. This is the engineering approach.”
“There’s no moral issue for me,” he said. “I did the best science I could. I was struggling to survive and didn’t have the luxury of being a moral creature. As a researcher, I was ahead of my time.”
Sometimes innovations within the food industry happen in the lab, with scientists dialing in specific ingredients to achieve the greatest allure. And sometimes, as in the case of Oscar Mayer’s bologna crisis, the innovation involves putting old products in new packages. ..
….The prevailing attitude among the company’s food managers — through the 1990s, at least, before obesity became a more pressing concern — was one of supply and demand. “People could point to these things and say, ‘They’ve got too much sugar, they’ve got too much salt,’ ” Bible said. “Well, that’s what the consumer wants, and we’re not putting a gun to their head to eat it. That’s what they want. If we give them less, they’ll buy less, and the competitor will get our market. So you’re sort of trapped.”
….To get a better feel for their work, I called on Steven Witherly, a food scientist who wrote a fascinating guide for industry insiders titled, “Why Humans Like Junk Food.” I brought him two shopping bags filled with a variety of chips to taste. He zeroed right in on the Cheetos. “This,” Witherly said, “is one of the most marvelously constructed foods on the planet, in terms of pure pleasure.” He ticked off a dozen attributes of the Cheetos that make the brain say more. But the one he focused on most was the puff’s uncanny ability to melt in the mouth. “It’s called vanishing caloric density,” Witherly said. “If something melts down quickly, your brain thinks that there’s no calories in it . . . you can just keep eating it forever.”

3. Long read: India Proposes Chinese-Style Internet Censorship
Author: Vindu Goel

Source: The New York Times(https://www.nytimes.com/2019/02/14/technology/india-internet-censorship.html)

The Indian Government’s proposed amendment to the IT act to regulate content on social media and messaging platforms has triggered a roaring debate among tech companies to freedom-of-speech activists to political parties. Whilst the headline of this NYT piece might have gone too far in comparing it with China (several countries including those from the west have implemented rules to various degrees in this direction), it does raise questions given the timing of the law – weeks before what will undoubtedly be a crucial general election from the perspective of the country’s long term political future.
“…Under the proposed rules, Indian officials could demand that Facebook, Google, Twitter, TikTok and others remove posts or videos that they deem libelous, invasive of privacy, hateful or deceptive. Internet companies would also have to build automated screening tools to block Indians from seeing “unlawful information or content.” Another provision would weaken the privacy protections of messaging services like WhatsApp so that the authorities could trace messages back to their original senders….
… “The proposed changes have an authoritarian bent,” said Apar Gupta, executive director of the Internet Freedom Foundation, a digital rights group, which plans to challenge the rules in court if they are enacted. “This is very similar to what China does to its citizens, where it polices their every move and tracks their every post on social media.” India’s proposals add to the growing resistance worldwide against internet behemoths like Google and Facebook, which once flourished largely unimpeded. In Europe, officials last year enacted tough new rules to protect people’s online data, forcing the companies to change some practices. China has long used a system of internet filters, known as the Great Firewall, to block content and shut out global tech companies. And in a 2017 review, The New York Times tallied more than 50 countries that had passed laws in recent years to gain greater control over how their people use the web…..
…In a filing with the ministry last week, Microsoft said that complying with India’s new standards would be “impossible from the process, legal and technology point of view.” The company — whose Hyderabad-born chief executive, Satya Nadella, is a business icon in India — said the proposal lumped together all intermediaries, as varied as social networks and Wi-Fi hot spots, even though each has a different level of control over content that flows through it. In the filing, Microsoft said it would be difficult to screen out gambling content, as the rules would require. Filtering the full range of content demanded by the government would not only violate privacy and freedom of expression, the company wrote, but would also be so challenging that “the cost of even attempting compliance will be prohibitive.”
 “WhatsApp cares deeply about creating a space for private conversations online,” Carl Woog, a company spokesman, said at a news conference in New Delhi. He said the proposed rules “would require us to re-architect WhatsApp, leading to a different product, one that would not be fundamentally private.”
….Indian authorities are struggling to deal with inflammatory messages that spread on social platforms. They shut down the entire internet in 2017 in the state of Punjab just before a popular spiritual guru was convicted on rape charges. That did not stop his followers from flooding the streets, and at least 30 people died in the violence.
… One of the biggest cheerleaders for the new rules was Reliance Jio, a fast-growing mobile phone company controlled by Mukesh Ambani, India’s richest industrialist. Mr. Ambani, an ally of Mr. Modi, has made no secret of his plans to turn Reliance Jio into an all-purpose information service that offers streaming video and music, messaging, money transfer, online shopping, and home broadband services.
In a filing last week, Reliance Jio said the new rules were necessary to combat “miscreants” and urged the government to ignore free-speech protests. The company also said that encrypted messaging services like WhatsApp, “although perceivably beneficial to users, are detrimental to national interest and hence should not be allowed.”

4.       Short read: The two tribes of working life
Author: The Bartleby column
Source: The Economist (https://www.economist.com/business/2019/01/31/the-two-tribes-of-working-life#ampf=undefined)
Office goers, says this column in The Economist, can be split into two groups. The first tribe are called FOMO: people who love meeting other people and who are haunted by the fear of missing out (FOMO) lest they don’t attend a meeting, a networking event or a business trip. The second tribe are called JOMO: people who like to sit at their desk and actually do some useful work and hate attending meetings/events/conference calls outside normal business hours. They actually enjoy spending time with their family. That’s the joy of missing out (JOMO).
In a well run company you need both tribes. The FOMO people run around looking busy, attending meetings are staring at Powerpoint presentations, emailing, videoconferencing and whatsapping like mad. The JOMO people sit at their desks and get the work done.

5. Short read: Evidence deficit haunts billion-dollar brain trainers
Author: Anjana Ahuja
Source: Financial Times (https://www.ft.com/content/a0166eea-1e41-11e9-a46f-08f9738d6b2b)

In our quest to become smarter, many of us have to taken to using books, apps and trainers. In this piece, Anjana Ahuja says that there is no evidence that any of this stuff is actually of any use.
“Scientists, though, have long been sceptical of the brain-training industry, forecast to be worth more than $8bn by 2021. The claim is that tailored video games can sharpen cognitive skills and delay the hallmarks of senility such as memory loss. The view of the Alzheimer’s Society is that “no studies have shown that brain training prevents dementia…
Til Wykes, professor of clinical psychology at King’s College London, who was not involved in the study, suggested that eight hours a month might be better spent going for a walk or to the gym. Exercise helps cognitive health, as does staying mentally engaged by, say, playing board games.
Her dismissive analysis hints at the evidence deficit haunting the brain-training industry. Individual studies purporting to showcase a causal link between games and better brainpower tend to be small, short-term and of wildly varying designs, making results inconclusive or unreliable. Any benefits tend to be judged using other computer tests, rather than whether users cope better with everyday challenges (the “generalisability” problem).”

6. Short read: The Biggest Returns
Author: Morgan Housel
Source: The Collaborative Fund (https://www.collaborativefund.com/blog/the-biggest-returns/)

Morgan Housel uses the energy efficiency analogy to bring out the point that we have a better shot at securing our financial future by regulating our lifestyle than generating superior returns on our investments.
“The biggest energy story of the last four decades has nothing to do with oil or gas. It’s not wind turbines or solar panels…It’s conservation and efficiency. We don’t need as much energy to do stuff as we used to. The United States uses 60% less energy per dollar of GDP today than it did in 1950. Globally, it’s dropped 25% since 1990. The average miles per gallon of all vehicles on the road has doubled since 1975. U.S. oil and gas production has increased 65% since 1975, while conservation and efficiency has more than doubled what we can do with that energy. Easy to see which has mattered more to energy markets…
…And efficiency is largely in your control, versus the rest of the energy industry that relies on a slippery mix of having the right geology, geography, weather, and geopolitics. The decision to buy a lighter car or ride a bike is up to you and has a 100% chance of improving efficiency. But getting energy from wind only works where it’s windy; not in your control. Fracking only works where geology and regulators allow it; not in your control, and subject to change….
…Things that are in your control and have the highest likelihood of working can make the biggest difference over time. It follows Jeff Bezos’s rule of betting on things that never change, since you can confidently throw your weight behind them. The importance of every endeavor is its potential multiplied by the odds of it working and how long it will work for. Conservation and efficiency don’t rank high on the first part, but they’re so strong on the second two that over time their impact exceeds what’s been done in more exciting parts of the industry.
Investment returns have a lot of potential to make you rich and achieve your goals. But whether a strategy will work, and how long it will work for, and whether markets will cooperate, is always a question. Personal savings and frugality – finance’s conservation and efficiency – are parts of the money equation that are largely in your control and have a 100% chance at being as effective in the future as they are today.
If we have the same assets and I can earn an 8% annual returns, and you can earn 12% annual returns, but I need half as much money to be happy while your lifestyle compounds as fast as your assets, I’m better off than you are. I’m getting more benefit from my investments despite lower returns…
….My personal investments are designed to maximize for sleeping well at night, not necessarily scouting for the highest returns. But my wife and I are so good at happily living an efficient life – you can call us cheap – that adding our lifestyle efficiency to our investment returns leaves us better off than others who may earn higher returns. Investing alpha is hard and often fleeting, but the lifestyle version is more in your control and permanent. There are those who can earn excellent returns and live an efficient life. Warren Buffett, living in the same house he bought in his 20s, is the best example. But the idea that there are two ways to improve your financial wellbeing, and one is more in your control with higher odds of success than the other, is as overlooked in finance as it has been with energy.
Vanguard founder Jack Bogle, who passed away last week, began his book Enough with the following paragraphs. From an investor who improved the financial wellbeing of tens of millions of people through cost efficiency, not outperformance, this is invaluable:
At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds,“Yes, but I have something he will never have . . . enough.”
Enough. I was stunned by the simple eloquence of that word—stunned for two reasons: first, because I have been given so much in my own life and, second, because Joseph Heller couldn’t have been more accurate. For a critical element of our society, including many of the wealthiest and most powerful among us, there seems to be no limit today on what enough entails …We chase the false rabbits of success; we too often bow down at the altar of the transitory and finally meaningless and fail to cherish what is beyond calculation, indeed eternal. That message, I think, is what Joseph Heller captured in that powerful single word, enough.”

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