• Does power corrupt people, or does it attract the corruptible?
• Are people in power hypocrites?
• If people in power are in fact hypocrites, why do they act like that? Is everyone in power a hypocrite?

To investigate these questions, Joris Lammers and Adam Galinsky, two scientists from Tilburg University and Northwestern University respectively, conducted a series of experiments. They first classified the volunteers into two groups: Power-group and non-power group. They did this by asking the volunteers to write about a moment in their past when they felt powerful or powerless Previous research shows that this is an effective way to identify people who feel in power. Below is a summary of their findings, including some extracts from The Economist:

Does power corrupt people, or does it attract the corruptible?

• High power and low power groups were asked whether they thought over reporting travel expenses at work was immoral. They were also asked to privately roll two dice numerous times and report their results. The number they rolled would determine the number of lottery tickets that they would be given at the end of the study.
• In the dice game, the high-power participants reported, on average, higher values than low-power individuals. This evidences that high-power people were “undoubtedly cheating—perhaps taking the term “high roller” rather too literally.”(Economist)
• The high-power group also “beat” the low-power individuals in that they thought that over-reporting expenses was more immoral.
• To me, the results show that high-power people tend to cheat more (are more corrupt) and are more hypocrites, since they think it is immoral for other people to do bad things such over reporting business expenses, but it is acceptable for them to cheat as evidenced in the dice game. I don’t necessarily agree that these results indicate that power tends to corrupt, as the magazine states. I did not see the cause-effect relationship in those findings

Are people in power hypocrites?

• To answer this question, scientists asked members of each group “how acceptable it would be for someone else to break the speed limit when running late for an appointment and how acceptable it would be for the participant himself to do so. Others were asked similar questions about tax declarations.” (Economist)
• “The results showed that the powerful do, indeed, behave hypocritically. Low-power individuals, by contrast, saw everyone as equal.” (Economist)
• High-power people felt that it was immoral when others broke tax laws, but that it wasn’t so bad if they did so themselves. “In this case low-power individuals were actually easier on others and harsher on themselves.” (Economist)
• To me, these results made it clear that high-power people are hypocrites. The difference between this experiment and the one about over reporting business expenses is that in this one they were actually asked to give their perspective on their actions as opposed to other people’s actions. It seems to me though that this experiment ignited the scientist to investigate on high-power people’s behavior towards morality. “It is not just that they abuse the system; they also seem to feel entitled to abuse it.” (Economist)

If people in power are in fact hypocrites, why do they act like that? Is everyone in power a hypocrite?

• Individuals were first asked to write about past experiences when they felt that the power it was given to them was in fact legitimate. Others were asked to write about their feelings when they were in power and whether they felt they deserved to be in that position. This was done to further classify high-power and low-power people.
• “All of the volunteers were then asked to rate how immoral it would be for someone to take an abandoned bicycle rather than report the bicycle to the police. They were also asked, if they were in real need of a bicycle, how likely they would be to take it themselves and not report it.” (Economist)
• The results from these experiments were very similar to the aforementioned studies. It was clear that high-power groups believed that they deserved to be in power. “Sense of entitlement” (Economist)
• The interesting results came from high-power groups who felt they were not entitled to their power. “These people showed a similar tendency to that found in low-power individuals—to be harsh on themselves and less harsh on others—but the effect was considerably more dramatic. Dr Lammers and Dr Galinsky call this reversal “hypercrisy”.” (Economist)
• It was concluded that people with power “think is justified to break rules not only because they can get away with it, but also because they feel at some intuitive level that they are entitled to take what they want.” (Economist)
• “This sense of entitlement is crucial to understanding why people misbehave in high office. In its absence, abuses will be less likely. The word “privilege” translates as “private law”. If Dr Lammers and Dr Galinsky are right, the sense which some powerful people seem to have that different rules apply to them is not just a convenient smoke screen. They genuinely believe it.” (Economist)
• “What explains hypercrisy is less obvious. It is known, though, from experiments on other species that if those at the bottom of a dominance hierarchy show signs of getting uppity, those at the top react both quickly and aggressively. Hypercrisy might thus be a signal of submissiveness—one that is exaggerated in creatures that feel themselves to be in the wrong place in the hierarchy. By applying reverse privileges to themselves, they hope to escape punishment from the real dominants. Perhaps the lesson, then, is that corruption and hypocrisy are the price that societies pay for being led by alpha males (and, in some cases, alpha females).” (Economist)
• I agree with the inferences taken from the last experiment’s results. I can see how some powerful people really think that they have the right to take actions on things that they would consider to be immoral if others would do them. It is not uncommon for individuals in high morality positions such as judges and politicians to be involved in numerous corruption cases. Some of them take actions on issues that go against what they preach. Similarly, I think that the results of people in high-power positions that don’t have a sense of entitlement were very interesting. At least, however, they are less hypocrites than the ones that feel they have the right to act immorally.

Source: http://www.economist.com/sciencetechnology/displaystory.cfm?story_id=15328544

• When we came to Paris it was clear and cold and lovely.
• I always worked until I had something done and I always stopped when I knew what was going to happen next. That way I could be sure of going into the next day.
• But sometimes when I was starting a new story and I could not get it going….I would stand and look out over the roofs of Paris and think, “Do not worry. You have always written before and you will write now. All you have to do is write one true sentence. Write the truest sentence that you know.”
• “We are always lucky”, I said and like a fool I did not knock on wood. There was wood everywhere in the apartment to knock on too.
• I learned to understand Cezanne much better and to see truly how he made landscapes when I was hungry. I used to wonder if he were hungry too when he painted; but I thought possibly it was only that he had forgotten to eat…Later on I thought Cezanne was probably hungry in a different way
• It was a wonderful meal at Michaud’s after we got in; but when we had finished and there was no question of hunger any more the feeling that had been like hunger when we were on the bridge was still there when we caught the bus home. It was there when we came in the room and after we had gone to bed and made love in the dark, it was there. When I woke with the windows open and the moonlight on the roofs of the tall houses, it was there. I put my face away from the moonlight into the shadow but I could not sleep and lay awake thinking about it. We had both wakened twice in the night and my wife slept sweetly now with the moonlight on her face. I had to try to think it out and I was too stupid. Life had seemed so simple that morning when I had waked and found the false spring and heard the pipes of the man with the herd of goats and gone out bought the racing paper. But Paris was a very old city and we were young and nothing was simple there, not even poverty, nor sudden money, nor the moonlight, nor right and wrong nor the breathing of someone who lay beside you in the moonlight.

Below are some things that I learned with the book:

• The term Lost Generation was coined by Gertrude Stein and my interpretation of the statement was that all the expatriates that served at war like Hemingway drank themselves to death instead of leveraging their talents writing and getting things done.
• Members of the Lost Generation: Ernest Hemingway, Gertrude Stein, Scott Fitzgerald, James Joyce, Ford Madox Ford (as he liked to be called), among others.
• Learned more about Ernest Hemingway. Below is a list of things I already knew and learned about him:
  • Born in Illinois in 1899.
  • Former journalist and Wold War I ambulance driver.
  • Settled in Paris in 1921, where he became the voice of “the lost generation” through his writings, including the book The Sun Also Rises (which is a book I highly recommend.)
  • Hemingway lived in Key West Florida and later on in Cuba, but traveled widely to Europe and Africa.
  • Later he covered the Spanish Civil War, portraying it in For Whom The Bell Tolls, which is a book I would love to read.
  • Hemingway’s most popular work, The Old Man and the Sea (1952) awarded him the Pulitzer Price in 1953 and the Nobel Prize in Literature in 1954.
  • He suffered a series of accidents, including car accidents, two plane crashes and a bushfire accident, which left him with serious burns.
  • Married four times.
  • Died by suicide in Idaho, in 1961.
• Shakespeare and Company was the name of the rental library owned by Sylvia Beach where Hemingway borrowed books. Would love to see this bookstore one day.
• Learned about Scott Fitzgerald, his low tolerance for alcohol, his insecurity towards his hawkish wife Zelda, who was jealous of Scott’s talent and wanted to “destroy” him by making him drink his way to death, and that he wrote a book I would love to read some time called The Great Gatsby.

Ernest Hemingway is an outstanding writer and I highly recommend this book. As he wrote to his friend in 1950:

“If you are lucky enough to have lived in Paris as a young man, then wherever you go for the rest of your life, it stays with you, for Paris is a moveable feast”

• Nominal GDP is below levels of 1992
• Deflation
• Nikkei 225 is 73% below its peak in 1989
• Urban properties prices have fallen by almost two-thirds
• Companies profitability, wages and investment have all declined in the past decade

It would not be ludicrous to think that Japan has experienced “two lost decades”. However, it is my impression that the information given above is data comparing the Japan of today with the powerful Japan of 1989. I believe that their economy right now is in a very decent shape. Japan not only is the second largest economy in the world and has $16.3 trillion in savings, but also they are world class exporters and many of their citizens live a pretty comfortable life.

Is Japan psychologically depressed?

I believe that the “two lost decades” is more a state-of-mind than a reality. I don’t blame them: They have seen their property values go down, the number of full-time jobs have fallen in the past years and young people have a hard time finding good jobs. This deflationary mindset of the Japanese people is what I believe is causing the most harm to the economy. It is a pernicious effect that could cause a significant, long-term damage to the economy. It is only up to them to snap, stare at the greatness of their Mount Fuji and start believing in the potential of their economy. Some lessons to learn are probably to impulse domestic consumption, better control potential future bubbles and leave behind memories from some dream boom years.

Source: The Economist
“Japan’s two lost decades – An end to the Japanese lesson”
” Deflation in Japan – To lose one decade may be misfortune…”

Pros

• No personal income tax
• Houses are big and affordable
• Includes best cities for job creation
  • Companies are given generous tax breaks
  • Other incentives: Free land, cheap electricity, subsidies towards wages higher-paid workers, funds for training and long tax holidays.
  • Big investors are exempted from paying property taxes*
  • “Right to work state”: Small percentage of workforce is unionised
  • Torts are now restricted (In the past, doctors were leaving TX due to medical suits)
• Besides having lots of oil, Texas is blessed with gas and wind.
• Public finances are in good shape. The State has a “rainy-day fund”, created mostly thanks to cash given by the federal government and paid for by taxes on oil and gas companies.
• Prices, compared to other states, are low. A person in California can save approximately 30% of his salary by moving from Silicon Valley to Austin.
• Biggest exporting state since 2001
• Texaplex (Houston, Dallas, Austin and San Antonio) cities complete, rather than compete with one another.
  • Dallas is strong in telecommunications, aerospace, distribution and banking
  • Houston has oil, gas, NASA and a “Mega Medical Center”
  • Austin has the government and high-tech companies
  • San Antonio handles trades, houses many military bases and has a good distribution system.

* This “abatement” law affects local school districts which largely depend on this money.

Cons

• Highest proportion of people lacking health insurance of all 50 states
• Third highest poverty rate
• Second-highest imprisonment
• Highest teenage birth rate
• Lowest voter turnout
• Lowest proportion of high-school graduates
• Still depends on few commodities (oil, cattle, cotton), however it has been diversifying lately.
• It spends less on its citizens that any other state
• Has one of the most unequal income distributions of any state

Conclusion

I agree with the Economist that the “low-tax” “low-spend” model needs to be revised in Texas. The state needs to invest more in education, which will allow it to stay competitive in a now global market. As of now, Texas only has three “tier-one” universities (meaning a university that undertakes at least $100m-worth of research per year) and has the lowest proportion of high-school graduates. This needs to change.

It would be interesting to analyze how to improve both education and health care without having to raise significant amounts of money or add excessive regulations. I believe that investing money in education is important, but I don’t consider that by just pouring money into the education system the problem will be solved (Otherwise California would have significantly better scores than Texas, which is not the case according to McKinsey.) Also, anything that is excessive is always bad, some regulation is appropriate, but too many laws just make things more difficult and inefficient. After all, don’t forget the famous state slogan: “Don’t Mess with Texas”.

Source: economist.com/specialreports

I am starting a blog to share with you a little bit about my world. This is an ideal space for me to store and share the vast amount of information I am presented with every day. I will include topics ranging from business to technology.

In this blog I will include topics that interest me. For example, I would like to share with you summaries of articles that I read. I am an avid user of freeware and for the longest time I have been wanting to give back to the community. Since I read many articles every day, I would like to start summarizing the most interesting ones so that anyone can reference them when needed.

Finally, I would also like to post information on issues that I was presented with that took me some time to research and get to a result. Many times I have benefited from other bloggers doing the homework for me, but this time I hope to contribute the same way.

I hope you enjoy my blog and please feel free to leave comments!