DUBAI COLLEGE June 11th 2017
KEYNES ECONOMICS NEWSLETTER
June 2017
TABLE OF
Contents 03 Editorial 04 The Anglo-American Loan Economics: 06 Sicilian How the Godfather Handled His Empire Effects of Zimbabwe's Fast-Track 08 The Land Reform 10 The Value Behind Value Investments Farming: The Formation of 12 Maple the Federation of Quebec Maple
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Syrup Producers Tutor2U's Flying Start! External Speakers: Mr Pankaj Amin & Mr Zul Javaid Economics Bookshelf
June 2017
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Editorial Welcome to the second issue of Keynes, a student-led newsletter tasked with examining significant economic events, theories and advancements in a collaborated effort to discern the ever changing landscape of our global economy. In his magnum opus, The Wealth of Nations, Adam Smith contends that, “Every individual... neither intends to promote the public interest nor knows how much he is promoting it... he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain.” Fast-forward 240 years, and our economy is riddled with the very notion of self-interest that Adam Smith established in his 1776 classic; Robert Mugabe’s largely politically motivated ‘fast-track land reform’ (Page 8) left Zimbabwe domestically infertile and internationally uncompetitive, and the ‘Five Families of New York’ (Page 6) were reliant on exploitation in their pursuit of territory and political influence. The question we must continue to ask ourselves is whether greed and self-interest are fundamental fuel to our economy, or whether they act as barriers to economic stability and determinants of inequality, inefficiency and debt.
"The question we must continue to ask ourselves is whether greed and self-interest are fundamental fuel to our economy, or whether they act as barriers to economic stability and determinants of inequality, inefficiency and debt. "
There are certainly cases in which self-interest leads to economic welfare – both Mr. Pankaj Amin (Page 16) and Mr. Zul Javaid (Page 17) discussed the value of entrepreneurship in spurring innovation and boosting international competitiveness, and Adam Smith regarded selfinterest as the motivator of economic activity, "It is not from the benevolence (kindness) of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." In fact, one may argue that self-interest drove the Anglo-American loan that saved Britain from post-war economic collapse (Page 5); Keynes’ ability to recognise the root of America’s self-interest (a powerful European ally) was central to successfully negotiating a financial settlement. While there appears to be an implicit acknowledgement of the acts of selfinterest that already exist in our increasingly interconnected economy, its potential consequences need to be better defined in order to understand its benefit, if any. For this reason, it becomes the role of our generation to better outline the intersection of self-interest and economic instability; at what point does our self-interest do more harm than good? And should we attempt to alleviate the negative implications of self-interest or allow it to play out in the global economy? As you navigate through the articles in this newsletter, I urge you to find the intersection and start the debate. Hasan Malik Editor
hasan7713@dubaicollege.org
4 June 2017
The Anglo-American Loan Craig Buchan The so-called “special relationship” between the UK and the USA is often talked about as the binding element of the close relationship between these nations. Britain and America have enjoyed a powerful and close alliance for a long time now, and still hold many shared values to back it up. Although the alliance stretches back further, relations in the state they are today trace back to World War 2; the phrase “special relationship” itself was coined by Winston Churchill just after in 1946. Although the Allied Powers were victorious in the war, it had cost Britain dearly. The UK was on the verge of losing its claim to great power status as it watched its empire begin to crumble and its influence began to dwindle. The welfare reforms so desperately craved by the British people and their newly elected Labour government were only affordable at the expense of overseas expenditure.
"John Maynard Keynes was entrusted to negotiate a financial settlement that would allow the continuation of Britain’s foreign policy strength whilst allowing what money the British government had for themselves to be spent rebuilding Britain and putting into place a welfare system that included the NHS." The UK government realised that it was in America’s interest for Britain to remain strong. If the spread of communism was to be contained, the USA would surely need a powerful ally in Europe. However, the US had abruptly ended its Lend Lease program after the war, and Britain was unable to keep up with payments. Britain was only exporting a fifth of what it had been before the war, whereas non-military imports were five times higher. Prime Minister Attlee promptly dismissed one of Britain’s most talented economists from which DC’s economics society derives its name. John Maynard Keynes was entrusted to negotiate a financial settlement that would allow the continuation of Britain’s foreign policy strength whilst allowing what money the British government had for themselves to be spent rebuilding Britain and putting into place a welfare system that included the NHS. The general mood in Britain was that wartime contributions would be recognised. Many were even expecting a grant rather than a loan as the outcome of negotiations due to the costs faced before America entered the war. What’s more, the UK had an economist on the job who, regardless of your stance on his policies, is remarkably talented.
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However, Keynes was not able to secure the deal the Brits had hoped for. Although by all accounts, Keynes’ performance at the negotiating table was that of a lifetime, Britain was only able to secure a loan. The Americans stood stubbornly and were not willing to relent on the terms. What was decided made Britain uneasy and was even denounced by the House of Lords, but the UK simply had no choice but to accept. The original loan was signed in July 1946 for $4.34bn, with 2% interest and annual payments structured like a mortgage. Most of the money was from the US, with a $1.25bn top up from Canada. While saving Britain from financial ruin, the loan had a substantial long-term effect on the UK economy, with the final loan not being repaid until 2006.
Make no mistake, his loan was extremely significant at the time. Despite the harsh and stubborn conditions, it effectively saved Britain from post-war economic collapse. What’s more, the loan was a precursor to the Marshall Plan, and was made with similar intentions. It had a profound economic, social and political effect, supporting the UK economy as it implemented social welfare reforms whilst maintaining a degree of their international influence. Not only that, but it was a significant yet often forgotten example of the great service of John Maynard Keynes.
6 June 2017
Sicilian Economics: How the Godfather Handled His Empire Aryan Oberoi Many people know the mafia as a highly recognized and dramatized organization in modern American history with violent wars and blood stained results. However, when looking slightly deeper into what is considered one of the greatest movies and books of all time, the weapons of choice are more cunning and shrewd than any knife or gun. What the reader and audience actually observes, is an extremely clever and deadly game of politics, law and economics. The original Godfather, Don Vito Corleone, in my eyes was the greatest asset to the Corleone family. Never again would cinema or book see such a character, one who utilized the corruption of government institutes and programs, gambling and politics to maliciously dissect and dismember the Five Families of New York City in the 1940s. Political influence and friendship are key cornerstones in understanding the success and power the Godfather yielded. In fact, this is a clear example of the foundations modern networking in business. Instead of treating clients as, well clients, he masks this term by offering his friendship instead and luxuriously hosting them. However, being Don Corleone, he fully exploits the basic definition of a friend. The Godfather explains his theory the best in the opening lines of the movie “Someday, and that day may never, I will call upon you to do a service for me, but until that day, accept this justice as a gift on my daughter’s wedding day”. By establishing this 2-way connection with people, Vito Corleone, suddenly expands his inner circles of social networking by bringing in increasing numbers of economic, social and political assets. This is why, we as the audience see the Don handle matters with such ease and without any concern for the law. Through his political “friends” not only in New York but all over USA, and through his knowledge of networking, his reach, far and wide, and his power, everexpanding.
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Yet, it was not just this primary understanding of networking that so greatly aided the Don. It is all well and good making a friend, but it can be just as easy, if not easier, to lose one. Thus, an interesting variable is thrown into the Don’s methods. A clear example of this was seen when the Godfather is offered a business opportunity in narcotics and drugs in exchange for providing political and legal protection to the operation. Despite his son and more importantly his consiglieri (main adviser to the Don) advising his to take the deal, the Don disagrees. The Don, had an ability, unlike others in his time, to step back and look at the bigger picture; how would the deal turn out in a macroeconomic perspective. The Don displayed a prime example of basic risk aversion theory and behavioral economics. Vito Corleone not only looked at the financial gain of $5 million in the first year, but also at the implications the deal would have on his political assets. He strongly believed that drug trafficking was a “dirty” business and realized that his friends in politics wouldn’t be so friendly if they found out he was trafficking drugs by alluding to the idea that when politicians and police men that he was buying off see him go into narcotics compared to gambling, they lose the close connection and friendship that was vital to the Don’s success. This mirrored very closely the reallife events on the fight against the mafia: as the police would turn their back on the Corleone Family, the increased prosecution would cause the omerta (code of silence) to fail. The police would then adopt from politicians, somewhat unconstitutional laws like the RICO Act that allowed police to wiretap for little reason. All these events could have easily taken place and systematically destroyed and eradicated the Mafia. Thus, when the sustainability of his political . relationships, which were a huge advantage to the Don, came into question, he rightfully, chose to whether the storm rather than economic incentive.
"When the sustainability of his political relationships, which were a huge advantage to the Don, came into question, he rightfully, chose to whether the storm rather than economic incentive." So, how did the great Don Corleone, despite his political influence, networking skills, risk aversion, and understanding of behavioral economics, legitimize the Corleone Family? After all they were criminals. The easiest way to think of the Corleone empire, is as the most amazing physical representation of entrepreneurial activities. The business-like fashion in which the family was managed solved many of the issues they faced under the New York legal framework. By taking advantage of the easily corruptible police and court systems the high rates of returns of illegal industries such as racketeering, prostitution and gambling were crystalized profits. Don Corleone knew and recognized the power of the corruptible law stating, “A lawyer with his briefcase can steal more than a hundred men with guns”.
As the old phrase goes, “everyone has a price in this world”, and Don Corleone knew every cop and lawyer’s price in New York, thereby alleviating any and practically all risk associated with the activities, and as a result legitimizing the family. Don Corleone was truly a man ahead of his time, treating crime with sophistication and class of a real businessman. Utilizing the timeless tools of networking, risk aversion, behavioral economics and, although illegal, corruption, he himself created the legendary fallacy “I’ll make him an offer he can’t refuse.”.
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The Effects of Zimbabwe's Fast-Track Land Reform Sophie Rhys-Maitland Throughout the twentieth century, Rhodesia flourished from a burgeoning colonial state into what was often referred to as the ‘bread-basket of Africa’; with a steadily growing economy, a hugely profitable agricultural industry, and the highest literacy levels in Africa, Salisbury was a prosperous capital. The dawn of the eighties brought independence from the British Empire, and Rhodesia became the sovereign state of Zimbabwe under Kanaan Banana’s Presidency. At the time, Robert Mugabe was the subsidiary Prime Minister, and an influential member of Zimbabwean Parliament. By 1987 Mugabe had ousted Banana, becoming the single most powerful authority of Zimbabwe and the leader of ZANU P-F.
"2008 saw supermarket shelves empty for an extended period of time, and the economic distress of Zimbabwe drove thousands of families of middle and upper income groups away in search permanent financial refuge, and with them went money that would no longer circulate Zimbabwe." The Land Reform Act had been a proposal drafted by President Banana, with the aim of redistributing large pockets of farming land - the majority of which was controlled by the white descendants of remittance men and colonists - to black native Zimbabweans. Financial backing from the UK was used to provide farmers with settlements in return for their land, but when Blair pulled the funding in 1997, Mugabe chose to persist with often violent means. Considering that Zimbabwe had derived the majority of its wealth from its agricultural exports, which provided a livelihood for over 30% of the working population, the Land Reform Act was ill-advised at best. Approximately a third of all the land that was formerly used for the cultivation of sugar, maize and tobacco was left unused, and efficiency plummeted. The land that had been in the hands of experienced farmers went largely to associates of Mugabe’s who lacked the expertise to consistently cultivate and export the same amount of produce as formerly achieved. This drop in efficiency took a toll that would later prove to be disastrous, but even in the short term Zimbabwe saw unsustainable increases in prices and vaster levels of unemployment that lead to more than just increased social tension and general disillusionment.
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These increased prices and lower quality goods made Zimbabwe less competitive in the international market. And as a state that was no longer part of the British Empire, Zimbabwe could no longer rely on the UK as a mutual beneficiary of a special relationship that allowed for easier trading. The higher prices rose, the less was sold in a cycle of indisputable economic ruin. Nationally, the increases in prices and ineffective manufacturing of Zimbabwean-produced goods made it cheaper to import rather than to produce locally. This was disastrous for the local industry, resulting in the foreclosure of scores of businesses. 2008 saw supermarket shelves empty for an extended period of time, and the economic distress of Zimbabwe drove thousands of families of middle and upper income groups away in search permanent financial refuge, and with them went money that would no longer circulate Zimbabwe. The country that had been the world’s sixth largest producer of tobacco in 2001 was producing less than a third of what it had exported at the turn of the 21st century by 2005. The ultimate consequences of the Land Reform Act can still be felt in Zimbabwe today, and have not just been undesirable numbers: the production of maize- the chief everyday food of most Zimbabweans- has been reduced by over thirty percent, which has lead to the malnourishment of an estimated 45% of the population. The corruption that plagues the Zimbabwean government means that the majority of the foreign aid that is sent from Western agencies through the government never reaches those who need it most. It is remittances from family members living abroad that ensures the livelihood of many of those still left in Zimbabwe- in fact, in 2014 Zimbabweans living under or on the poverty line received collectively an estimated $837 million in remittances, exceeding humanitarian assistance by over $100 million. Mass famine and the consequences of a wildly unstable currency have pervaded Zimbabwe more than once in the last two and a half decades, and the current imminent Acts drafted by ZANU P-F are bound to exacerbate the economic desolation that Zimbabwe finds itself in.
10 June 2017
The Value Behind Value Investments Yash Bhansali “Price is what you pay, but value is what you get”. This aphorism beautifully encapsulates the established and fruitful principle of value investing – a strategy whereby stocks are selected that trade for less than their intrinsic values. Value investors actively seek stocks they believe the market has undervalued as only then will they be able to turn a profit on that particular trade. One of the fundamentals underpinning this concept is that each company has an intrinsic value. However due to the high sensitivity of financial markets, the trading price of a company may be higher than its real price. The trick is to wait till the market fluctuates in a manner as to lower the market price to below your estimate at the intrinsic value of the stock.
"The secret to success on Wall Street, put as simply as it can be, ‘ is to be fearful when others are greedy & greedy when others are fearful’ and that is exactly what differentiates the great from the good...the value investor from the irrational investor."
To contextualise this… most folks would agree that whether you buy a piece of clothing when it's on sale or when it's at full price, you're getting the same article, made of the same material and of the same style. Stocks are the same way: the company's stock price can change even when the company's intrinsic value is the same. Stocks, like TVs, go through periods of higher and lower demand. These fluctuations change prices, but they don't change what you're getting. Another key concept of value investments is the ‘margin of safety’. Let us once again use our clothes analogy: a particular shirt might look good and feel comfortable in the store, but then when you wear it in real life, it feels too tight or too loose or it fades or shrinks in the washing machine. If you buy a shirt on sale for $20 instead of buying it at full price for $60, you will only lose $20 on a bad shirt purchase. If you pay $60, your loss will be significantly greater. By purchasing the shirt on sale for $20, you limit your potential loss. This same applies for stocks, however the upside of stock in comparison to a shirt is that whilst the price of that shirt can never appreciate, the price of a stock can, and as it does, your profit margins appreciate with it.
11 June 2017
The final, and perhaps defining factor of any value investment, is the investor’s confidence, not in the market, but in themselves, their analysis and their judgement. The secret to success on Wall Street, put as simply as it can be, ‘is to be fearful when others are greedy & greedy when others are fearful’, and that is exactly what differentiates the great from the good… the value investor from the irrational investor. They don’t follow the herd - not only do they reject the efficient market hypothesis which stipulates that stock prices take all information regarding the financial product into account, but also would much rather buy a niche stock of an unheard company with sound financials than submitting to a wave of irrationality and betting on the most popular stock of the day (one that is typically overpriced to begin with). The fact is that Value investors only care about a stock's intrinsic value. They are unaverred by market biases, enabling them to make long-term steady investments in even the most volatile and unpredictable market. They realise that in its rawest form, the stock market is merely a device for transferring money from the impatient to the patient because they know, that a fool and his money, are lucky enough to be together in the first place!
12 June 2017
Maple Farming: The Formation of the Federation of Quebec Maple Syrup Producers Ishaan Arora Let’s talk about maple farming. It’s very hard. If you wanted to farm maple syrup, you’d need to pray for the perfect conditions so that the quality and yield of the maple you produced was acceptable. The climate had to be just right. Therefore, price fluctuated a lot as some years’ yields were high while in other years, supply would be too low. This meant that it was very hard for maple farmers to have a stable income. So, in 1966, a large group of maple farmers banded together and formed the Federation of Quebec Maple Syrup Producers (FPAQ). This federation could regulate the supply of maple syrup all over Quebec as well as be in charge of all the marketing. They also aimed at protecting farmers’ incomes and making sure prices were good for farmers to have stable incomes.
"Using their strategic reserve, they can easily control prices. If they feel like there is a supply that is too high, just add more to the reserve and sell less. This was, by limiting supply, they can keep prices artificially high. They do this to stabilise the revenue and keep themselves happy." How do they do this? The Federation maintain a strategic reserve of maple syrup officially known as the International Strategic Reserve (ISR) or the Global Strategic Maple Syrup Reserve. What the federation does is put quotas on all the farmers of how much maple syrup they should produce. The farmers can go over the limit and the syrup will be taken by the federation and then, any surplus is added to the reserve while the rest is sold off. This creates a government sanctioned cartel that is very powerful. Just how powerful? As of last year, the cartel had control over 94% of Canada’s maple sap. They also control 77% of the total supply in the world. This makes them a monopoly.
13 June 2017
Using their strategic reserve, they can easily control prices. If they feel like there is a supply that is too high, just add more to the reserve and sell less. This was, by limiting supply, they can keep prices artificially high. They do this to stabilise the revenue and keep themselves happy. But if you [point at someone] decide that you don’t want to be in the cartel, that’s fine. Don’t be. Produce all the maple sap you want. But remember, we’ll still put a quota on you. If you do go over the quota, we’ll seize all of your surplus and you can be left with and sell your limited amount of sap alone while we add the rest of your product to our reserve. Oh, and you’ll get paid. But we’d be too nice if we paid you right after seizing your sap. No… We’ll wait a few years and then give you your money back. Basically, you have to join the cartel. Here’s the problem the Federation faces. Because of their high prices, people have started to look for substitutes. The substitutes exist. They are just other natural sweeteners or even just artificial sweeteners like high fructose corn syrup or something. So, if people ever feel like the authentic maple syrup is just too expensive, they just swapped. The Federation has tried to combat this. They keep telling people how their product was real maple syrup and that you don’t get the authentic taste from the other sources. They also talk about the health benefits of their products. Too bad this doesn’t work. People just don’t care about authenticity and health. The other problem that the Federation faces is that other countries are also starting to produce more and more maple syrup. The US has increased their maple production in the past few years. The Canadians can start a price war if they want. Their reserve can supply the world for a whole year and they don’t need to produce anything. But, the cost of production of maple syrup is so low that profits may fall, but you don’t necessarily put farms out of business. Also, the states can increase their supply by so much too. They can build up a reserve if they want. The state of New York does have three times the amount of maple trees that all of the farms in Quebec have combined. They also can’t just cut their production to drive prices higher because that would lead to a loss of market share. So, overall, the federation have stabbed themselves in the back by artificially creating high prices for consumers. However, the FPAQ now have to deal with another problem - the black market. For the last decade, the market has seen an increase in demand, both the US and farmers in Vermont decided to increase their supply. This, along with the fact that yields were quite high, meant that the FPAQ has lost market share while the US has gained 10 % of the market share. This is because there is no limit on how much the farmers in the US and Vermont can produce. But, due to the fact that farmers in Quebec had quotas set on them whether they wanted to be a part of the FPAQ or not, meant that many farmers decided to stop giving all of their surplus sap to the Federation and start selling it to the black market. The thing about maple syrup is, that once it’s on the market, you can’t actually tell where it came from. So, to combat the problems that they themselves have created, the Federation have decided to increase the allowances that they have set on farmers. This way, farmers will be getting paid more for their yields and will not sell as much to the black market. So, to conclude, the future is quite uncertain and the Federation’s next could really ruin them or make them dominant. But, I doubt that they’ll be able to do anything if the US decides to increase maple sap production. So, in the end, the FPAQ has dug themselves into a hole so deep, they might not make it back out.
14 June 2017
Tutor2u's Flying Start! Economics Revision Workshop
Georgina Hoolbrook & Isabella Lahdo Did you know that in 2016 organic carrots were removed from the CPI calculation in 2016? No? Neither did we until Sunday 26th of March, when students flocked from across the globe to the Exams Hall of Dubai College in order to meet and be taught by Tutor2u’s finest Geoff Riley and Mo Tanweer. On this day we revisited some of the key topic areas of the AS Economics course, as well as quintessential exam techniques. These were then coupled with fantastic facts about economics in practice and the current state of the global economy throughout the day. As keen economists and the rising necessity of contextual detail in our future exams, we found this extremely valuable as we were able to not only enhance our economic knowledge beyond the boundaries set by exam boards, but were also able to apply this information to real life situations, further solidifying our understanding of economic principles on a global perspective. In the first session, captivating Co-Founder of Tutor2u, Geoff Riley guided us through the significance of statistical application within economics in which was titled ‘Think of a Number.’ Throughout this session, a few of the areas covered were elasticity, inflation, economic growth and equity. As students of the 21st century, we tend to have little patience when it comes to researching and analysing data, and often underestimate the importance of these skills. Therefore, this session was very useful as, under the clear guidance of Geoff Riley, we were exposed to extensive yet condensed forms of data in which we can incorporate into future work.
15 June 2017
This application of knowledge followed through in the second item of the day, guided by the highly intelligent Mo Tanweer, where we delved into the different forms of market failure in the UK and discussed the significance of government intervention to overcome them. From the rotavirus vaccine to sunscreen labelling, we evaluated the externalities on a broad range of topics. It is safe to say that we will all think twice when looking at ratings towards the protection of UVB and UVA rays when buying sunscreen. In addition to this, we also reviewed microeconomic diagrams illustrating variations of government intervention and their effects on stakeholders, which is a notorious weak spot of nearly all A level Economics students. Therefore we all found this exceptionally helpful. Given the uncertainty that has accompanied Britain’s departure from the EU, it is becoming of increasing importance to monitor the performance of the nation’s economy. With the ambiguity of the term ‘economic performance’, we discovered that there are a multitude ways in which we are able to evaluate the state of the UK economy. By looking at levels of unemployment, inflation, and the exchange rate, we acquired an in-depth understanding of the impact that these indicators of growth had on aggregate demand. To end the day not only did we look at the theory behind demand and supply side policies, but we also gained an understanding of the current policies that are currently in use in the UK. We found that by discussing such policies in depth, we were able to acquire the skill to apply our theoretical knowledge into the decisions taken by key UK bodies. With growing emphasis being placed on evaluation in the new A Level linear economics course, we found that these two last sessions were particularly useful in strengthening our knowledge of the ways in which both demand and supply side policies can be evaluated, and how they can have both negative and positive impacts on the economy as a whole. Overall, we found it very impressive how Geoff and Mo managed to deliver such an immensely useful and informative AS economics workshop, whilst keeping it highly enjoyable and captivating through working in teams, competitions, quizzes and Geoff’s terrible... I mean terribly funny jokes. On a whole we would like to extend our thanks to the Tutor2u economics department for coming to Dubai College and Mr Christopher for organising such a wonderful event.
16 June 2017
External Speakers Mr. Pankaj Amin
Ankita John Mr. Pankaj Amin, a graduate of both Princeton and Harvard University, recently visited Dubai College as an external speaker for the Dubai Keynes Society. His talk enlightened us students on the value of entrepreneurship and the challenges that accompany it. Using a Harvard case study based on the fictional entrepreneur Jim Sharpe, Mr. Amin conveyed the importance of being a good leader: treating your peers as equals, addressing their concerns, and creating a positive working atmosphere. He also stressed about how being a good leader is not only a quality found in people with an MBA (especially one from Harvard), but is in fact a quality that is inbuilt in us, derived from respect to and from one’s peers. Mr. Amin emphasized that while starting your own business and becoming your own boss may seem an attractive option, selfentrepreneurship poses unique challenges. He discussed how buying into his IT Company had been a major risk due to the equal likelihood of success and failure. Another downside involved with starting your own business is the significant costs associated with it. When asked about the main reason behind businesses failing, he informed us that mismanagement of business costs is the primary issue and that most small businesses fail to adequately plan out their spending.
17 June 2017
Mr. Zul Javaid Hasan Malik On the 25th April, Dubai College welcomed Mr Zul Javaid, VP Business Analysis and Performance at Etisalat, to speak to the Dubai Keynes Society about ‘Open Innovation’. Mr Javaid defined ‘Open Innovation’ as ‘innovating with partners by sharing the risks and rewards’, and made use of tech-giants, Apple, Tesla and Google to exemplify a shift towards adopting such measures; Tesla recently removed its patents in the spirit of open source movement, and both the Google Play Store and Apple App Store are likewise examples of increasing accessibility to emerging markets. Mr Javaid also introduced the ‘Dubai Future Accelerators Programme’ – a programme whereby government entities such as Dubai Police, RTA, and DEWA seek to innovate by providing investment to emergent businesses and technologies. This in turn, boosts the Emirate’s international competitiveness and signals its transition to an innovation-led economy. We look forward to welcoming Mr Javaid to speak at Dubai College again in the future and thank him for what was a highly relevant and informative presentation.
18 June 2017
Economics Bookshelf
Arnav Lahiry
'Messy: The Power of Disorder to Transform Our Lives'
“Messy: The Power of Disorder to Transform Our Lives” by Tim Harford celebrates messiness in our lives: why it’s important, why we resist it, and why we should embrace it instead. This truly insightful read explores the value of the unexpected, the unfamiliar and unforeseen in generating new ideas and opportunity that is often masked by the deep fragility of tidiness. Through exciting anecdotes and convincing research this masterpiece into behavioural economics welcomes readers to accept the benefits that disorder brings into both our personal and professional lives. Harford’s argument goes beyond aesthetics in the workspace however, and can be prevalent in the most incredible of situations. During World War II for example, General Erwin Rommel’s messy autonomy allowed him to succeed against great odds. Even when the British had broken Germany’s codes, they couldn’t predict his actions. They had no idea that he would disobey direct orders; neither, of course, did his superiors. “Life cannot be controlled. Life itself is messy,” Harford writes. When we try to be rigid in response, the result is a messy failure. Tim Harford, the author of this fascinating book is a renowned economist, journalist (senior columnist at the Financial Times) and a broadcaster for multiple BBC television and radio series.