P.S. You Should Read This

I recently read a very interesting write up on the link between entrepreneurs and criminals, and how criminals could be entrepreneurs if given the right type of opportunities.  This would seem like an alien concept to most, as how can entrepreneurs, who are lauded by our society, have any sort of a connection to criminals, who are vilified?

The arguments proposed are very valid and logical, but not something that is not intuitive.  Apparently, people who have shown characteristics such as a desire of independence and an aversion to rules can be criminals or entrepreneurs.  Just as criminals have an aversion to being bound by laws and social norms, entrepreneurs do not like being in a bureaucratic corporate environment that restricts their creativity and conflicts with their working style. The author even cites a statistical analysis that identifies a relationship between teenage crime and being self-employed once the other socioeconomic factors have been eliminated.

I concede that while both entrepreneurs and criminals might share similar character traits, it is quite a stretch to draw a link between them and conclude that criminals could become entrepreneurs under the right conditions.  There are plenty of differences between criminals and entrepreneurs as well, but these are not exposed in the article. To also propose a solution of using incentives to convert criminals to entrepreneurs is also a little too simplistic. Firstly, incentives could help any criminal become more productive, and not just the entrepreneurial ones. Secondly, criminals are not formed simply due to lack of incentives, but due to everything from upbringing to their environment. Society would have to change all these factors before criminals can be made more productive members of the community.

Corporate Social Responsibility is a much talked about subject these days. Every company seems to be adopting it, and generating press about their efforts at being a good citizen. Well according to one study in Business Week, philanthropic efforts by corporations have actually dropped in comparison to those 25 years ago.

The study used a much more quantitative measure to conduct this study, rather than basing it off the popular press. It notes that in contrast to 25 years ago, when corporations donated 2% of their pre-tax earnings for philanthropic causes, companies nowadays only allocate 0.7% of their earnings. I guess that companies have started finding it easier (and cheaper) to publicize good actions than to actually do them. After all, the only thing that matters to their business is what the public thinks of them, rather than how much good they are actually doing. However, I agree that just looking at a single figure is not reflective of all the efforts, but it is definitely better than a purely qualitative measure.

The study could be improved by looking at a number of factors, ranging from conducting surveys of employee happiness to having a detailed analysis of each of the company’s efforts (and “crimes”). It should also be noted that the simple action of donating a significant portion of a company’s revenue does not make it a socially responsible one, as it could be causing damage (like undercutting employees or pollution) or having poor practices in so many other ways. Similarly, a company does not need to donate to be responsible. It could just prevent pollution, increase expenses (by offering higher wages) or even generate awareness.

Despite the study being flawed, I still feel that it does hold truth. The only way to inculcate the concept of CSR is to bring out the truth about companies, both the good as well as the bad ones. Society in itself will need to make a more of an effort to ingrain these concepts, and prevent itself from being swayed by simple press releases and media articles.

I found an article on BusinessWeek which talks about how college graduates are turning away from jobs on Wall Street. As I am currently studying in a top-tier business school myself, I am able to appreciate many of the ideas brought up in the article.

Call me cynical, but I believe that the media has sensationalized students who have chosen alternative careers to either financial services or consulting. I applaud those who had the option of choosing a profitable career path but chose a more humanitarian cause, especially if there was a huge difference in the salaries and stability. That is an extremely hard decision to make, and one which few would attempt to do. For others who say that they are looking at alternate career fields because they became ‘philanthropic’, I’m a lot more skeptical of their actions. I believe that the primary reason why they would switch out of the traditional career paths is when these fields are no longer as optimal, such as in these currently depressed markets. Should you offer these recent college graduates a top job, I am positive that many, if not most, would drop their philanthropic interests in a hurry.

This brings me to my next point. If given the choice, should recent grads be choosing the more charitable job? Don’t pelt me with stones, but I’m going to have to answer: not necessarily. I’m a firm believer that every person has their own niche, and that their goal should be to maximize their marginal utility to society. For example, if you are a much better banker/consultant than a NGO worker, don’t drop everything you have to try and save the world. Both you and society would be a lot better off if you did what you were best at. Should you continue to have humanitarian inklings after working in your career for years, you should then take the leap and do what you desire. You’d have a much larger say in the world by then, and therefore, you could make that much more of a difference.

Something else that would make me reconsider working in philanthropy upon graduation is the fact that many of the organizations (such as the World Bank or the United Nations) are very bureaucratic. Starting off your career by working there could mean that you would have to spend years trying to rise up the ladder before you can make a significant impact in your projects.

Google was recently asked to hand over records of video viewership to Viacom by a federal judge. Viacom had earlier filed a 1 billion dollar suit against Google for copyright infringement, due to the number of videos which had been posted illegally on YouTube, the largest video site on the web.

The main objection to the decision was the fact that user information, such as the login name and the IP address, would be handed over to Viacom. The implications: Viacom would be able to tell exactly which users watched which videos, thus exposing the habits of millions of people. Although both Google and Viacom have said that the IP addresses do not allow the exact identification of individuals, IP addresses have been used in the past in combination with other data to identify people.

This in turn raises many questions and concerns. Does Google even have a right to pass over such information, especially as it violates the privacy of the users? Viacom also claims that the viewer information is necessary to analyze the popularity of copyrighted clips, but surely a simple view count of the clips, rather than the IP addresses, would be able to determine that. So why is such information needed? While I may not have the answers to those questions, what I do know is that users in the future will be a lot more careful with the websites they give their personal information to. I’m afraid that the popularity of websites such as YouTube could get hurt by this ongoing saga.