Over the past weeks, Romania has witnessed the largest uprising since the fall of communism in 1989 – when former dictator Nicolae Ceausescu was overthrown – over a hastily-imposed decree that would have decriminalised abuse in office by officials, if the sums involved were amounting to less than $48,500. This decree aimed to weaken anti-corruption legislation and offered potential amnesty for those convicted of corruption. Following huge riots, the government finally agreed to abrogate the contentious decree. However, an estimated half a million Romanians continued to protest across the country, demanding that a number of politicians leave office. Romania has come to be known as one of the most corrupt places in Europe until 2014, when a large number of politicians was convicted for abuse of power, starting with Adrian Nastase from the Social Democratic Party(PSD), former PM. However, even given the constant fight for a “system clean-up”, during the last 2 decades, Romanians have started to feel more and more numb when presented with the opportunity to vote. Presence at the parliamentary elections from December 2016 amounted for less than 42% of the population. This led to PSD winning 45% of the votes. Generally, the population has always seemed to be divided between PSD voters and non-PSD voters. In Romanian commonplaces, the typical PSD voter is the uneducated, either very wealthy or extremely poor person, an unethical person that lacks the mindset directed to progress and only seeks to accumulate wealth through fraud. For many Romanians, the party’s victory in the elections meant a disaster, a conviction to emigration for the bright, and in general, a halt from progress. Unsurprisingly, given their reputation for hiding their problems with the law under the carpet, the recently elected PSD-ALDE government – a coalition of the PSD and ALDE (the Alliance of Liberals and Democrats) made a priority from weakening the anti-corruption legislation. Although the government denied multiple times the existence of any emergency ordinance for amnesty and pardon, or of any intentions to modify the Criminal Code, rumours spread that these issues are currently real. In fact, PSD has been for years supporting this ordinance, taking small steps in favouring the accused ones almost every year. In the government meeting from the 18th of January, the coalition secretly agreed on voting in favour of the ordinance for amnesty and pardon, which would have stopped investigations for pending corruption offences, officials imprisoned for corruption, and canceled initiatives of further investigations related to those offences from being brought to justice. Many perceived the decree as a dedication for PSD leader Liviu Dragnea, whose proposal for PM seat was refused due to the fact that he was indicted for abuse of public office and forgery allegedly committed. He had been previously forced to resign from the cabinet in 2015, following a conviction for electoral fraud, for which he received a two-year suspended sentence last spring. President Klaus Iohannis ruined their plan, unexpectedly coming in that morning to lead the meeting. He made them aware of the fact that there are “two huge elephants in the room, which are being held invisible”, referring to the the emergency ordinance and modifications in the Criminal Code. When the media disseminated what happened during the meeting, in the same evening thousands of people started to protest in the streets of Bucharest. The population felt sickened by the plans of the government and mainly labeled them as a back-door opportunity for politicians to solve their legal issues. Klaus Iohannis and many important members of the National Liberal Party mingled with the people and joined the protests from the evening of the 22nd of January, as a proof of solidarity towards the protestants. Members and supporters of the coalition criticised the president for his involvement in the riots and insulted the protesters without any shame. They called the people in the streets “Nazis” and “disgusting creatures that refuse to improve the living conditions of prisoners”. The government had been trying to defend the decision, supporting the fact that living conditions in prisons are unacceptable and the European Court for Human Rights threatens them with fines. This was obviously just a fake lame excuse, as decriminalising an important class of offences is not the right way to improve the situation in prisons. Anyways, all these tensions did not really result in a transparent debate on the topic and a “collective agreement”. The decree was issued out of the blue at 10pm on the evening of the 31st of January and did not have to face parliamentary scrutiny. People continued to see it as a continued back-door attempt by the government to help its supporters, both within the party and in the media, who are currently either in jail or under investigation for corruption. Immediately after the media made the announcement, people start to gather around Victoria Palace, their number reaching 200.000. Protesters tried to block the entrances of the building in order to avoid the officials leaving, but as these were already gone, some television reporters were left stuck in the building until 4AM. While people were arduously exposing their disgust and disagreement towards the government’s decision from that night, Florin Iordache, Minister of Justice, nonchalantly announced around midnight the publishing of the emergency ordinance in the Official Monitor. This obviously worsened the situation and led to multiple protests across the country, which reached a peak on the 5th of February, when more than half a million of people participated in the riots. During the same day, the government had already announced the abrogation of the decree, however, the manifestations did not end. As people felt betrayed and disregarded for weeks, they continued to protest, demanding that a number of politicians, beginning with the PM, leave office. Meanwhile, thousands of Romanians in the diaspora felt deeply intrigued by what was happening home and participated in riots from major cities across Europe. Following the events, some important politicians resigned, including Business Environment Minister, Florin Jianu. However, without any last bit of shame, the PM, the PSD leader and the Minister of Justice refuse to leave office. Protests against them are continuing despite harsh meteorological conditions.

The first question you get when you decide to apply for an economics bachelor’s is how good you are in mathematics. As you go through the courses you understand the origin of the preoccupation quite well: at a certain point, mathematics no longer has numbers, only letters. You study statistics, econometrics, calculus, linear algebra, and everything imaginable or not, see the irrational numbers, regarding exact sciences. In the midst of studying so many exact science courses, you have different ones which focus on the abstract theory of economics itself, the perspective which sees the subject as a social science. It’s impossible not to feel strangled between two opposite, yet complementary views. With that being said, we lay out the situation in which most great economists found themselves at some point in their lives: is economics a science that should be analyzed as natural sciences are—or is it more subjective, having closer ties to sociology, philosophy and so on? Even though economists lost their prestige after the 2008 crisis, most of what they predict or analyze is still regarded as scientific. As an article from Wendy Carlin in the Financial Times Magazine said: “This could be a golden age for economics. Recent advances in theory, economic history and quantitative methods have provided tools to address pressing issues of inequality of opportunity, financial instability and climate change. At airport bookshops, Freakonomics, Why Nations Fail and Irrational Exuberance compete with John Grisham’s latest. Students flock to introductory courses.” To better understand the rise of economics as a “star” subject, we first have to understand the history of economic thought. Only in the end of the 19th century and beginning of 20th century was economics extensively analyzed mathematically. Before this tsunami of models, graphs and functions, economics was regarded as a philosophical subject. Take for instance authors such as Adam Smith and David Ricardo. One considered the founding father of economics, and the other a classic in the area, yet neither of their most famous papers had an extensive focus on mathematics or logical reasoning. They founded their theories based on observations, inferences and intuition, yet without making any further mathematical analysis they proved the importance of their papers with striking innovative theories. Only further down on the path of economics was mathematics introduced as a key point in its analysis, and to better understand how that happened, it’s necessary to look back into the history of economic thought and methodology. The first group to think about economic methodology as a whole was the logical positivists. They made use of the methods followed in natural sciences to set rules and procedures that would dictate a way of exercising economics. They were known for their descriptive models and their love for numbers. I like to see them as that student who is doing economics simply because he likes maths. Of course, he will excel at explaining the models we use mathematically and logically, but most of the times, when something goes out of the normality and requires the least bit of out of the box thinking, he will flank. What followed the logical positivists’ ideas was a major turn towards the need of making economics as close to natural sciences as possible. As a bachelor of economics, I believe this happened for a simple reason: in a world where natural sciences are taken as the most relevant type of knowledge, economists have an individual motivation to drive economics as close as possible from that path. After all, if economics is regarded as an important subject, the monetary compensation for the professionals in the area will be higher, as well as their feeling of self-accomplishment and prestige within society. To finish this history class, which might be boring for you if you are an economics student that loves maths, I would like to point out the name of what I believe are the greatest economists of the past century: Milton Friedman and John Maynard Keynes. Friedman was the father of microeconomics, a precursor of neoliberal ideas, and a huge protector of capitalism during the cold war. He is the one that gave the final touch to a lot of theories heavily used in our daily life, especially the ones regarding firms. The biggest criticism towards his work pointed out the ridiculous assumptions taken by Friedman in order to support his theory: one of which assumes that information is free to everyone in the world. Yes, that’s right—this assumption holds that a poor kid in Africa living on one dollar a day has the same access to information as you do, dear reader, where you are probably reading this on your smartphone, tablet or laptop. Was that considered absurd at the time? Not at all; Friedman believed that the assumptions which supported his models were only accessories to the theory, as the important part was the predictive power of models. As long as the model could predict what was going to happen, it didn’t matter what assumptions he would take. Or as Machiavelli once said, the end justifies the means. Now I’m a bit subjective in talking about Keynes since I believe he was the greatest economists of all times, but I will do my best to keep it in my pants. Keynes gave a different approach to economics, as most of his observations didn’t include extensive statistical and analytical data. His papers were similar to the ones developed by Smith and Ricardo in a sense that they included intuitive and logical aspects of economics, which made his ideas much closer to a social analysis. On the contraty to what Friedman believed, Keynes did not believe in the free market ideas, and had big criticism towards capitalism, even though he believed it was the optimum economic system. He once said, “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” Once the historical aspect of economic thinking and methodology is taken into consideration it’s logical to see why the extensive discussion regarding how to view economics as a science exists until today. It’s a fact that both logical positivists, Friedman and Keynes failed in observing and predicting multiple economic phenomena, and that the models used so far, especially with respect to economic policy, aren’t as precise as they should be. What we learn today, as bachelors of economics, is poorly related to any aspect of economics as a social science. Economics bachelors are stripped down, filled with models and numbers, wrapped around in a financially focused foil and shipped to the greatest hedge funds and banks in the world. Economics cannot be interpreted, nor used, as a natural science, as it cannot predict the aspects of something flexible as human behavior. The job of the economist is to describe, to analyze and understand the motivations behind human actions, interpreting them and unravelling information that might be useful for further research. We cannot forget that economics is a social science, and as such, it should focus on the problems of our societies.

About two and a half years ago, a video called ‘Humans Need Not Apply’ was released by YouTuber and podcaster CGP Grey. In his mini-documentary, Grey talks about the increasing usefulness of robots in the society and how they are becoming more integral and necessary in the whole economic and social structure of our society. His central idea is that this continuous integration of automated machines in our society will ultimately lead to a world where human labour is no longer required to sustain systems that were inherently man-made. I highly suggest that you give it a quick watch before going through this article, as it is quite thought-provoking. A paper by Carl Benedikt Frey and Michael A. Osborne from 2014, that seems to be a popular reference when talking about robotic automation of labour, makes a claim that is rather scary. They are estimating that about 47 percent of total US employment is at risk, showing that wages and educational attainment correlate negatively with an occupation’s probability of computerisation. The latter seems to hint that the fields that are the most likely to be affected by automated labour are the low-skilled ones—which should come as no surprise, as those are most often easier to solve for robots. However, there still seems to be a strong sense of doubt in the minds of people. It’s very easy to think “it’s been said before, but it never happened, and probably never will,” or “newer jobs will always be created,” with all the past claims of complete automation of labour falling flat. In reality, we are at the point where human performance and machine performance are getting extremely close to one another, faster than ever. Considering that machines are performing better at an exponential rate, humans are generally getting better logarithmically—their marginal performance is diminishing, for you microeconomics students. This whole situation leaves two questions to ask: Is my job safe? Is anybody’s job safe? For the first question, it is likely best explained by the example of Luddites. The Luddites was a group of English textile workers who violently destroyed power looms because they ‘feared’ that these machines, operated by unskilled workers, would take their skilled jobs. As per the Luddites, the term ‘Luddite fallacy’ is used to describe people’s concerns about long-term unemployment resulted by technological advancements—as they don’t account for the ‘compensation effect,’ they commit a fallacy. It is usually used by people who oppose their idea, and believe that in the end the unemployment effect is nonexistent and wages will increase with the overall increase in welfare due to progress. Unfortunately, the bad news is that it’s not just the Luddites who are worried anymore, and it is less and less like a fallacy now. So, no, if you’re reading this, your job is probably not as safe as you think it is. Although, keep in mind that smashing the computer-who-took-your-job isn’t going to save your job, as it didn’t save the Luddites’. For the second question, it gets a bit more interesting. Of course, there are a lot of jobs that are safe from robotic automation, but then most of those are subject to high competition at an international level. It’s probably a very long time until robots start programming other robots, so you need software engineers to work on developing the robots that automate work; but then those engineers’ problem is that unlike barbers, they are competing with people across the globe for their job. Regardless, I’ll be focusing on one occupational field that hasn’t gotten much mainstream attention regarding the technological developments: agriculture. Interestingly enough, the immense complexity of the variables involved in farming makes it very difficult to automate it successfully. Problems with full automation begin with the level of attention non-staple crops require when growing them. Cereals are particularly easy to harvest because the variables your robots have to take into account are not difficult to automate the control of. However, if you want high density, and sustainable fruits and vegetables production, you need to pay extremely close attention to your soil and crops. As best told by these figures from a United States Department of Agriculture review, “Wages, salaries, and contract labor expenses represent roughly 17 percent of total variable farm costs, and as much as 40 percent of costs in labor-intensive crops such as fruits, vegetables, and nursery products,” it is significantly more difficult to work with these crops than cereals, and currently it requires a lot of human intervention and labour. Farming is unlikely to be automated to the extent of other mass-production industries also because of the low return-on-investment of automation. Compared to the impeccably well-optimised manufacturing lines of the mega-factories you see of Ford and Intel, there are simply way too many low-hanging fruits that increase yields very significantly. For example, an Indian province was able to improve their rice yields by 45% by planting seedlings earlier in a grid pattern while keeping the soil much drier. Even though we’ve been farming crops since the beginning of human civilisation, we are still surprisingly bad at achieving efficiency in growing these crops. Of course, comparing factories and farms is analogous to comparing laboratory experiments and battlefields. Unfortunately, Mother Nature is always going to be against your attempts at automation with the incredible levels of uncertainty she brings to your carefully-tuned processes. For strong automation, your robot needs to know about agronomy, pests, soil science, weather predictions, machinery, stock markets, and much more. Machine learning backed artificial intelligence is getting pretty good at certain stuff where it is comparable to humans, but until it is able to identify blight on tomato leaves and treat the affected plant, it has little use. Not only that, but training robots takes a lot of data and time, and although you could have a robot that could make an educated guess on, for example, when to plant your crops, a small mistake could ruin the whole season for you. Right now, it simply looks like factories that only employ technicians becoming commonplace is much more likely than self-harvesting wheat fields or vineyards that only employ horticulturists becoming commonplace. What seems like is going to happen is robot-augmented farming, where highly specialised robots complete menial tasks like moving pots around or monitoring soil quality. Yet, this does not at all mean that people working at farms have job immunity from the merciless sickle-wielding Wheatmaster 2000… All in all, it is important to realise that although technological change usually brings higher economic welfare, but it is not necessarily a Pareto improvement. A great chunk of the population is going to face a small increase in their overall well-being, at the cost of some labourers facing dramatic decreases in their living standards while they search for new jobs. The real need here seems to be creating flexibility in the labour market, so that when jobs are lost to robots and new jobs are ‘created,’ people can switch between them faster. Despite the role of skill in here, certain government policies like Denmark’s flexible job security one can help a lot. Ultimately, whether or not you should worry just depends on a lot of things, and the best way to make sure you are never out of work is diversifying your skill set just like you would a portfolio. Or, you know, switch your major to horticulture—it doesn’t look like food is going out of fashion anytime soon.

The partnership between China and the United States, where each nation regards the other a potential adversary as well as a strategic partner, has been described by world leaders and academics as the world’s most important bilateral relationship of the century. Despite growing commercial ties, the bilateral economic relationship has become increasingly complex and often charged with tension. For example, on February 4th, 2017, China urged the United States to correct its “unfair decision to impose high anti-dumping and countervailing duties on imports of Chinese stainless steel sheet and strip”, according to a statement released by the Chinese Ministry of Commerce (MOC). This was a reaction to a statement made by The US Department of Commerce, a few days before, deciding that imports of Chinese stainless steel sheet and strip will be subject to anti-dumping duties from 63.86 percent to 76.64 percent, and anti-subsidy duties from 75.6 percent to 190.71 percent (dumping is a practice when firms sell products abroad with a price cheaper than the price of the exact same products in the home country, usually with the aim to gain market monopoly power in the foreign country). Scope of US-China Trade Relations and its Prospects with Trump in the White House Currently, the United States has the world’s largest economy and China has the second largest. This is when taking market exchange rates into account. However, IMF estimates that China’s economy has overtaken that of the United States in terms of GDP, adjusted to purchasing power parity. Both countries constitute more than 30% of world economy, which reflects the significance of the two countries and their bilateral relations to the rest of the world. U.S.-China economic ties have expanded substantially over the past three decades. Total U.S.-China trade (Current $ market value of Exports+Imports) rose from $2 billion in 1979 (when economic reforms began) to around $600 billion in 2016. In the same year, China was the United States’ second-largest trading partner (After Canada), its third-largest export market, and its largest source of imports. Many U.S. firms view participation in China’s market as critical to staying globally competitive. General Motors (GM), for example, which has invested heavily in China, sold more cars in China than in the United States each year from 2010 to 2015. In addition, U.S. imports of lower-cost goods from China greatly benefit U.S. consumers, and U.S. firms that use China as the final point of assembly for their products, or use Chinese-made inputs for production in the United States, are able to lower production costs. China is the second-largest foreign holder of U.S. Treasury securities ($1.1 trillion as of October 2016), and its purchases of U.S. government debt help keep U.S. interest rates low. Over the last eight years, Chinese President Xi Jinping (and his predecessor, Hu Jintao) along with U.S. President Barack Obama managed to strengthen trade ties, and increase the expansion of trade volume. However, under Trump administration, bilateral trade relations between China and the United States are likely to experience some disturbances, which exposes the fact that the ever-growing bilateral economic and trade relations lack a deserved institutional framework, and still can be dependent on personal views of political leaders on both sides. Trump believes that the expansion of economic ties between the US and China has costed many Americans their jobs, which have been outsourced to China over the past decades. One promise of his presidential campaign was to work on restoring American jobs, especially manufacturing jobs that were lost to competition to lower waged Chinese workers. However, the US as a member of the World Trade Organization is constrained in its scope of action. Within the WTO framework, the United States under Trump is expected to press China harder on trade cases, intellectual property rights infringement, and the exfiltration of commercially valuable proprietary data (aka, cyber-enabled economic espionage); and it may continue to make noise about China’s deliberately devalued currency that makes its imports more competitive. It is important to note that the current U.S. goods trade deficit with is around $1 Billion a day! After Trump’s recent move with the executive order withdrawing the US from Trans Pacific Partnership (TPP) (a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam), the new US administration seems to be taking the US economy from a period that has been characterized by a continual lowering of barriers and expansion of ties with trading partners, to the opposite direction. This direction will most likely affect the trade relations between the two world economic poles, the USA and the People’s Republic of China.

As a Brazilian, I kind of always feel compelled to give an update about what is happening in my country. I’m sorry if these updates have been constant since I started writing for Rostra, but Brazil keeps giving me things to talk about, and unfortunately, not good ones. Since there are many similarities between our politics and any TV show that depicts a catastrophic political scenario, such as House of Cards and Designated Survivor, I believe it is only fair that I start this update with a small flashback of what happened last year. After a major corruption scandal in the national oil company Petrobras, an anti-corruption operation called Wash Off started, which resulted in the arrest of multiple politicians and businessmen. Not satisfied, the congress decided to point out the President, Roussef, for having cooked the country’s books, which ended up with her impeached. Oh, and this impeachment was articulated by no one different than the vice president itself. Told you it was worse than a TV series, didn’t I? But wait, it gets worse. The operation Wash Off is still in course. In fact, two weeks ago, a major breakthrough in the case occured, as one of the politicians snitched on the other ones, and not few, but precisely 42 politicians were cited in his deposition. Rumour says even the President, now Michel Temer, was quoted. But of course, as in any TV Show, when the good guys seem to get close to winning, there is a major plot twist. Judge Teori Kavaski was responsible for the deposition of all politicians arrested during operation Wash Off. He also had the names of all politicians cited during the depositions, and secretly worked on all of them with his team. On the week after the alleged citation of President Temer, Kavaski died in a plane accident. And now guess who delegates the case to a new judge? The president himself. I could say that I’m surprised, but unfortunately, I am not. Brazil has suffered from an intrinsic corruption for ages, and this is only the result of all of it. As we, Brazilians, keep blaming politicians for all of it, we forget that we are the ones to blame. Corruption is something generated by a country’s cultural and moral values and there was even one Brazilian sociologist who talked about this problem a few years ago, and called it ‘jeitinho brasileiro’. Segio Buarque depicted this problem in his book The Cordial Man. In it he explains how Brazilians are used to solving problems taking the easy way, even when it is illegal. In anthropological terms, the ‘jeitinho’ can be seen as the emotional character of any Brazilian. Buarque says that Brazilians have a historical propensity towards informal relationships, because Brazilian institutions were always conceived in a coercive and unilateral way, without any dialogue between governors and the people. Rio de Janeiro is a good example of what was described by Buarque. After all the constructions for the Olympics, such as new metro stations, reconstructions of roads, cycle ways, and so on, the state is unable to pay whoever is working for it. Public employees are not receiving their wages, and the state-owned university is even thinking about closing its doors due to lack of funding. This is all due to a huge network created during the previous governor’s, Sergio Cabral, mandate, involving his family and businessman. He made use of his position to enrich himself, his family and his friends. Thankfully he was arrested last week, because it was ‘discovered’ that he received a commission when a certain engineering company was chosen to be responsible for a construction project during the Olympics. It may seem like Brazil is a melting pot, but as I write this article from Rio, I can tell things pretty much look the same. And I don’t know if that makes me calmer of even more scared. Brazilians are also known for neglecting problems, and pretending everything is fine, which at this point of time does not seem to be a good option. In order for anything to change slightly, a political reform needs to be done, changing everything, from bottom to top in the way we see politics. I wish my conclusion would give a smart solution to all these problems, or even a hint of what we can do to fix all this mess that was created by ourselves. But at this point in time, the only thing I can do is hope. Hope that Brazilians will realize that corruption is not their problem, but that it is ours.

“We aim to foster independent minds with an impact on international business and society at large by offering research-based teaching that meets the highest international standards.” This might sound familiar. It is part of the Economics & Business department’s mission statement. During my graduate studies, I shared a flat with Richard Engelfriet. If ever I’ve met someone with an independent mind, it is Richard. In the past few years, Richard has become a best-selling author of several management books. He recently published a book about management theories. Richard’s message: The secret behind managerial success is… still a secret. In his book, Richard challenges a phenomenally large number of management theories: Simon Sinek’s golden circle, unique selling proposition, SMART targeting, disruptive innovation, customer intimacy, nudging, neuro-linguistic programming, influencers, Maslow’s pyramid, Kotter’s 8-step change model, lean and agile supply chains, insights discovery, Myers-Briggs Type Indicator, and De Caluwé’s color model and whatnot. You may have seen some of those theories discussed in your courses. According to Richard, a red ‘BULLSHIT!’ button should have started flashing in your independent mind when you first heard about those theories. His point is that those theories lack (1) a good theoretical foundation and (2) empirical support. An example: Simon Sinek’s golden circle. Sinek’s TED Talk “How great leaders inspire action” went viral with over 30 million views. Sinek argues that great and inspiring organizations start with the ‘why’ of their products (“we believe in challenging the status quo”) then communicate ‘how’ they do it (“we make our products beautifully designed and easy to use”) and only then their ‘what’ (“we sell great computers”). Sinek claims that his theory is founded in biology: Our neocortex, the outer layer of our brains, would correspond to the ‘what’ level and our midbrain areas would be responsible for ‘why’ and ‘how’. Is there any scientific evidence that supports this claim? No, according to neuroscientist Paul Middlebrooks: “This is another example of someone co-opting popular brain science to tell a story, without regard for accuracy. I have a neuroscience PhD and can tell you we do not understand brain systems anywhere close to the point to make a claim like that. It’s laughable.” For lack of theoretical underpinning, Richard searched for empirical evidence behind Sinek’s theory. He did not find any. He started with introspection: Why exactly did I buy the shoes I am currently wearing? Did the ‘why’ of the producers convince me? Or was it simply because the shoes fitted so well or looked so nice? Arguably, introspection is not hard empirical evidence (even though it may serve as quite a good bullshit detector). Sinek himself brings some empirical support to the fore, based on Apple. Apple is successful, says Sinek, because it starts with the ‘why.’ But does it really? Steve Jobs seems to claim something quite different: “Apple is a product company. We put the product ahead of anything else.” I tend to agree with Richard’s assessment of Sinek’s golden circle. At the same time, my independent mind is critical of Richard’s claim that the secret behind managerial success… is still a secret. Take the unique selling proposition (USP). USP does have a sound theoretical foundation that has empirical support. The theoretical underpinning comes from game theoretic models of product differentiation. I discuss such models in my textbook, Economics of Organizations and Markets, that you may have come across in my course. Here is a simple example of such a model. Imagine a beach full of sunlovers. Two ice cream vendors, Ben and Jerry, sell the exact same ice cream. At the start of the day, they decide where to locate their ice cream stands on the beach. After choosing their locations, they independently fix the price of the ice cream. Is Ben better off in a different location from Jerry (USP) than standing next to him (no USP)? The answer is ‘Yes!’ If Ben located next to Jerry, both would compete fiercely for the same consumers and gain little in profits. Ben is better off locating somewhere else (I will not bore you with the proof now – wait until you follow my course). The economics literature also presents empirical evidence that is consistent with the predictions of the theory. Driving schools charge higher prices when competitors are further away. High price-cost margins in the ready-to-eat cereal industry and in the beer market are to a large extent explained by product differentiation. Your independent mind might now be shouting that these empirical studies need not prove that a USP is a successful business strategy. Indeed, while my textbook has a USP (it is the first textbook to combine industrial organization and organizational economics), I hardly sell a copy outside our university (probably because most Econ programs treat industrial organization and organizational economics in separate courses). Moreover, a high price-cost margin need not imply large profits if the firms’ sales are low. And if USP and business success are related, does the first cause the second or is it merely correlation? All in all, I believe Richard provides a great service to the business community by scrutinizing popular management theories. (As an aside, my sister is a management trainer and a dedicated believer in insights discovery, Myers-Briggs Type Indicator, and De Caluwé’s color model. Richard’s book helped me develop a simple three-step procedure to retort to my sister saying things like “such an argument can only come from a ‘blue’ person”: 1. claim that her theory lacks underpinning; 2. ask for empirical support; 3. argue that the empirical evidence (if any) is unscientific because the suggested causal inference is based on invalid identifying assumptions.) More importantly, I hope this column has contributed to the independence of your mind in the way you think about management theories… so that I, in turn, have contributed to the department’s mission (even though Richard’s book makes me wonder whether the mission statement in and of itself contributes in any way to the department’s success).

On Friday, 27th of January 2017, the newly admitted President of USA, Donald Trump, has signed an executive order, titled “Protection Of The Nation From Foreign Terrorist Entry Into The United States”. With the power of the order he has banned travellers that are not legal permanent US residents and come from seven Muslim-majority countries, Iraq, Iran, Libya, Somalia, Sudan, Syria, and Yemen including the dual nationals, from entering the United States for duration of the following 90 days. The order has banned as well the admissions of all refugees for 120 days and admission of Syrian ones specifically for the indefinite period. Diplomat visas and the legal residents of the US are exempt according to the order. Trump claims that his “extreme vetting system will help to keep the radical Islamic terrorists out of the US”. Moreover, he stated that his policy “is similar to what President Obama did in 2011 when he banned visas for refugees from Iraq for six months’ and that ‘the seven countries named in the Executive Order are the same countries previously identified by the Obama administration as sources of terror”. However, even though the order gives the 9/11 attack as its rationale, the ban does not concern the nationalities of the hijackers, such as Saudi Arabia, the United Arab Emirates and Egypt. The ‘Muslim ban’, as the media named it, has by now caused a lot of emotions and turmoil already. The examplification can be the situation at JFK airport, where not only protesters have gathered in order to show their discontent and disagreement for the situation, but as well the lawyers trying to help the families of people stuck at the airports and not returned to their countries. On Saturday evening, a federal judge in Brooklyn issued an emergency stay, which ordered people stuck at the airports not be returned to their home countries, until their future is settled. Following video captures well the atmosphere prevailing at JFK on last Saturday. Even though Trump argues that the order is not a Muslim ban, it is not very different in its tendencies – it puts refugees, who are a religious minority in country of origin, therefore usually Christian in the Muslim majority countries, before the religious majority ones, Muslim. Aditionally, it even allows for consideration of admittance of non-muslim members of the states considered by the order. And it definitely is a foretaste of Trump’s ambition to ban Muslims from America, which he has repeatedly admitted to have. This argument can be supported with a fact that the total number of refugees admitted into the United States is going to be capped during the year 2017 from 110,000 to a number of 50,000. Source: Stephen Melkisethian There is as well a lot of legal doubts about the Trump’s order. According to the Immigration and Nationality Act of 1965, all discrimination against immigrants on the basis of national origin is banned. The order is therefore claimed to violate that Act. Moreover, it is claimed that the ban violates the right to due process guaranteed by the Fifth Amendment and one to the religious freedom granted by the First Amendment. However, The President of the United States has a right to “by proclamation, and for such period as he shall deem necessary, suspend the entry of all aliens or any class of aliens as immigrants or nonimmigrants, or impose on the entry of aliens any restrictions he may deem to be appropriate” if he “finds that the entry of any aliens or of any class of aliens into the United States would be detrimental to the interests of the United States”. According to Professor Spiro, no court has ever reversed a presidential order under this provision, however in terms of the number of prospective immigrants involved, this is the most significant use of that power by any American president. Source: Geoffs Livingstone Bewaren Bewaren

Business recap – by Nando Slijkerman A new year means new records and so the Dow Jones exceeded 20,000. A new all-time-high! Let’s see what that will bring us. Unemployment decreases, inflation is increasing, and real estate is rising again. All lights are on green, so let’s face some economic growth! Donald Trump announced that he would have a “fantastic” relationship with U.K. Prime Minister Theresa May, promising to work closely on trade and defense as her country exits the European Union. That might have a positive impact on several (American) investment banks based in London. Let’s have a look at the numbers. AEX rose modestly with a small 0,71% this month. S&P rose 2,0% and the Dow Jones 1,31%. American markets apparently reacted positively to Trump’s inauguration. Let’s see if he will keep his promises (which might be good for America’s economy). Our German neighbors (DAX) finished first by increasing 3,17%. If you compare the AEX with S&P and the Dow Jones, you see that AEX had a little underperformance this month in comparison to America’s greats. UvA recap – by Raffaele Di Carlo Well, a lot has been said and done about it, but the results of the famous Democratisering & Decentralisering (D&D) Referendum are possibly the most sensational news concerning our university for the month of January. The results were formally presented by the D&D Commission at CREA on the 25th of January. The turnout was fairly low among students (11.7%) and still unsatisfactory among staff (37.4%), however a quick inspection of the polls revealed the general sentiment of this sample: a vast majority is in favor of change under the form of a new-style Senate and a charter of core values. As far as the four governance models are concerned, students manifested a preference for the yellow model (33%), while staff preferred the blue model (34%). The D&D Referendum was an advisory referendum, meaning that its result would serve as a compass for the Executive Board of the University of Amsterdam for future policy making. So what do these results imply? To begin with, we can expect the senate to be reformed and the charter of values to be implemented soon. About the governance models, the preferences expressed by the voters suggest a need for larger external participation by students and workers councils; therefore, we can expect an expansion in the power of such councils. Economics recap – by Yana Chernysh British government expects future wage growth to return in 2017. This may happen because of the workers willing to quit their job without first finding a new place, as there are a lot of vacancies available (around 750,000). That is why employees want to keep their workers by raising their salaries. The chairman of the US Federal Reserve, Jannet Yellen, said that it is expected that Central bank will be rising interest rates a few times a year in the nearest future. This decision is made in order to stabilize economy, which is still recovering from 2008 crisis. However, rising interest rates too high and too fast may lead to another recession. Negotiations are happening around the free-trade agreement of the UK. While leaving the EU, UK is discussing new trade agreements with at least 12 new countries, trying to put itself in a position of a global free trade champion (as stated by the prime minister). Although these decisions are very controversial, as they may be breaking the EU laws, the UK is not fully tied with the EU boundaries anymore, so these negotiations may take place. The Courgette Crisis – by Artur Rymer Following the old proverbial wisdom – it never rains but it pours – the UK seems to be facing problem after problem after problem with no solution in sight. But however uncertain the situation might in the context of Brexit and UK’s post-EU path, it pales in comparison to the newest of catastrophes – the courgette crisis. Have you ever wondered how is it possible that during cold winter months in the northern part of Europe we still have access to cheap vegetables and fruits? The answer is: south of Europe, mainly Spain and Italy. Unfortunately, this winter, due to heavy rain and snowfalls as well as unusually low temperatures in the south of the continent (checkmate, global warming supporters!), the supply of courgettes, peppers, lettuce, tomatoes and celery dropped dramatically and so the prices surged up. The result? Empty vegetable shelves in Britain’s supermarkets and shattered dreams of those whose new year resolution was a healthy diet and those for whom courgettes are essential for a successful evening with friends. Like most of Britain’s problems, this one is not going to go away anytime soon and may persists for several months. Truly, it’s scary to think what will happen to the good people of Britain when there are both no courgettes and no access to the single market. World Economic Forum Conference in Davos – by Hải Đăng Vũ The presidential inauguration of Donald Trump might have foreshadowed the most important economic development of the past month. As usual, world leaders gathered together for the World Economic Forum (WEF) conference in Davos, Switzerland, for its annual meeting with regards not only into economic problems, but also other related issues such as politics and environment. The first day of the conference welcomed speeches from Chinese President Xi Jinping, who highlighted the significant importance of maintaining global trade liberalization. Also attending the conference was GB’s PM Theresa May, as she attempted to convince the world that Brexit campaign was beneficial for any party involved. However, the primary theme of the meeting centered on the overall economic impact caused by the development of robotics and industrial development. While businesses believed that more exploration should be focused on this arena, this presented massive threats to long-term unemployment, where the increasing degree of robotic automation is hurting white-collar jobs. Climate change, immigration, and terrorism were also amongst the most debated topics in the conference.Some interesting economic developments of 2016 were also highlighted, especially the Asian stock market crash during the summer and the unfavorable macroeconomic outlook of the Chinese economy. Politics Recap – by Leonie Ernst Concerning politics, a lot has happened this month. Most important is probably Donald Trump’s inauguration. During Trump’s first presidential speech he promised his people that from then onwards it would only be ‘America first’ – the Dutch satirical show ‘Zondag met Lubach’ suggested that ‘The Netherlands second’ would be a great idea too. Trump started to keep all the promises made concerning the TTP, abortions, the North Dakota pipelines, the wall on the U.S.-Mexican border, and he announced that the U.S. will stop granting visas to refugees for the coming four months. Nevertheless, Trump also announced to be willing to create safe zones in Syria, to help refugees over there. In African Gambia, president Yahya Jammeh declared the state of emergency in the country on  the 17th of January, since he believed there had been errors during the elections that he had lost in December. The Nigerian and Liberian presidents tried to come to a solution with Jammeh, but he was unwilling to negotiate. Jammeh most probably tried to extend his presidency that had already lasted for 22 years. The 19th of January, the new president Adama Barrow was appointed. Three days later, Jammeh eventually left the country. Furthermore, the politicians Geert Wilders (NL), Marine le Pen (FR), Frauke Petry (DE), and Matteo Salvini (IT) gathered in Koblenz to present themselves as ‘the leaders of the new Europe’. With this year’s upcoming elections, the right-wing, Eurosceptic populists tried to catch the attention of European voters. Whether their gathering will have had the desired outcome will be proven later this year. The Women’s Marches – by Tsz-Tian Lu On January 21, just a day after Trump’s inauguration, The Women’s Marches took place around the world. It all started with a Facebook post, with the message spreading like ripples which lead to an immense amount of people responding to the call. The organisers claim that there were roughly 600 demonstrations worldwide and more than 4.7 million protesters participated in this phenomenal event, with the amount of people in Washington reaching as much as 500,000, which is twice as many as the number of people who attended the inauguration. In the U.S., protesters wore “pussy hat” to ridicule and protest against Trump’s disrespectful opinions on women as well as the minorities in the society. The primary demands of the demonstrations focused on eliminating the inequality in the rights of women, people of colour, the LGBTQ community and religious groups like Muslims. People are desperate about the hate speech, discrimination and preconception that have already torn the society apart, and they are worried that Trump’s presidency will deteriorate the situation. Nonetheless, there are also opposing opinions claiming that those protesters simply did not exert enough effort to make their lives better so they just blame it on the government. Trump Withdraws US from TPP – By Omar Osman After decades of a trade policy of the United States that has been characterized by a continual lowering of barriers and expansion of ties with trading partners, the new administration under Mr. Trump presidency is taking steps in the opposite direction. On January 23rd, The US president, Donald Trump, has signed an executive order formally withdrawing the country from the Trans-Pacific Partnership (TPP) trade deal, following through on a promise from his presidential campaign. Trans-Pacific Partnership (TPP) is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The proposal was signed by Obama’s administration on February 4th, 2016, after seven years of negotiation, and it has been awaiting congress ratification. The former Obama administration claimed that the agreement aimed to “promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in the signatories’ countries; and promote transparency, good governance, and enhanced labor and environmental protections.” The TPP contains measures to lower both non-tariff and tariff barriers to trade, and establish an investor-state dispute settlement (ISDS) mechanism. The newly elected US president pulled out of the agreement claiming that the move is a “great thing for the American worker.”, referring to the American jobs loss due to US businesses’ outsourcing trend that has been a syndrome of such trade agreements. Dutch Politics – by Michael van Rhee With the general elections on March 15 in sight, tension in the Dutch political arena has been rising. January saw political parties gradually formulate their plans, carefully positioning themselves in the political spectrum. Initially, a total of 81 different parties signed up for this year’s elections, but it’s expected that tens of those will still drop off the list due to not collecting the required endorsements. For what it’s worth, Geert Wilders’ Party for Freedom (PVV) has been leading the polls for months, but their lead has shrunk considerably during that time. On top of that, more and more party leaders have started to rule out future cooperation with said party, so it remains to be seen how much of a role Wilders will be able to play after the elections. Even prime minister Mark Rutte’s party, the People’s Party for Freedom and Democracy (VVD), recently ruled out the PVV — or did he? It’s anyone’s guess, because even though Rutte stated that the odds of working with Wilders again are 0%, he has broken a promise or two in the past. In fact, I’m still waiting for the 1,000 euros he promised me a few years ago, and if you thought that was naive, Democrats 66 (D66) party leader Alexander Pechtold recently made the same mistake by promising everyone half that amount. Get your popcorn ready, because it’s promising to be another hard-fought campaign full of accusations… Je voudrais un Trump s’il vous plaît – by Brunno Fontanetti Trump’s election was taken as a joke in Europe. Most countries here proud themselves for their democratic and liberal tendencies, however, the French elections can show us that this might be far from the truth. In the recent pools, two candidates are taking the lead: Marine Le Pen and Francois Fillon. These results are a sign of where France is heading after the April 23rd elections. Both candidates represent a real change in French politics: for the first time in their history, the French might choose a president who is so far on the right wing of the political spectrum. I’m sure that until now, you must have heard about Le Pen’s speech: anti-immigration, nationalist and conservative. But I highly doubt that you saw any of Fillon’s ideals on your facebook timeline, or in the news headlines. Fillon is a right-wing conservative, who has the support of the Catholic Church and wishes to tighten the country’s relationship with the Russians. Nothing like Trump, am I right? And the scariest part of this history has yet to reach a resolution: Fillon was recently accused of paying his wife 400,000 euros for a position of parliament assistant. He stated in a recent rally that if this is proved to be true, he will drop out of the run, and analysts say that if that happens, his votes might swing towards Le Pen. If the country of liberty and fraternity is ready to choose such a candidate as their president, who knows which country is next? The Romanian Fight Against Corruption – by Ioana Nicolau After the tragedy from November 2015, where 64 people died in a fire at night club Colectiv, the Social Democrats (PSD) had to leave office due to massive protests over corruption. However, Romanians re-elected PSD during the parliamentary elections from December 2016, the party winning close to 46% of the votes. As the party is tainted by corruption, so was its first proposed PM, Liviu Dragnea, who is carrying a two-year suspended jail sentence for attempting to rig a referendum in 2012. Just weeks after the party came to power, PSD made a priority for passing, in secret, an emergency ordinance that would pardon thousands of prisoners, suggesting that this would ease the problem of overcrowded prisons. Their intentions were blocked when the president unexpectedly attended the government meeting in which the ordinance was about to be passed. The population felt that the underlying reason for passing this ordinance was, in short, saving a gang of corrupt politicians from being sentenced to prison. This would include Liviu Dragnea and “his crew”. Thus, massive protests took place across the country and in the diaspora, with an estimated number of 30-40.000 people participating. The biggest surprise came when the Romanian president joined the protest in Bucharest on the evening of the 22nd of January, showing his firm support for the fight against corruption. The Western Union Wire Fraud – by Evrim Öztamur The world’s biggest money transferring company Western Union agreed to pay 586 million USD after admitting to turning a blind eye to the criminal use of the service, for purposes such as fraud and money laundering. US Department of Justice and the Federal Trade Commission authorities reported this Thursday that Western Union, which processes transactions all over the world in over half a million access points, was letting its agents help fraudsters to process transactions and avoid detection. Western Union agents allowed Chinese immigrants to use the service to send hundreds of millions of dollars to pay human smugglers, by sending the amounts in smaller increments to avoid transfer reporting requirements. Scammers offering job offers and fake prizes also were able to process transactions, mainly by giving the agents a share of the earnings from their scams. These statements go to show that the problem is not exactly due to Western Union enabling fraudulent transactions, but rather not preventing agents and certain higher-ups in the organisation from committing to these actions. The reports note that it was not the case that Western Union accidentally overlooked these issues, but did not act upon them even while realising they are present in the organisation.

Nowadays it has become very fashionable and popular to judge and describe us – millennials – as if we were a homogeneous group in which everyone has the exact same world view, adheres to the same opinions and leads the same lifestyle. Recently a video even went viral in which the speaker in only 15 minutes is able to reduce a whole generation to an outcome of failed parenting. Discussing and studying different generations can be very interesting but one must be careful not to forget that a generation is comprised of a diverse group of people for whom the only thing they have truly in common is the times they were born in. However, it is also undeniable that the times we are born in and their characteristics can considerably influence us, albeit – and this crucial – with different outcomes. And it is one of such influences that I will focus on in this article – gaming. Most of us have grown up with access to computers and, later on, the Internet. And this gave us a new type of entertainment, one in which you can immerse yourself in a completely different, digital world. Whether you played Pokémon, The Sims, Mario, World of Warcraft, FIFA, Skyrim or just had to listen to your friends talk about it, games probably have had a powerful impact on your childhood. For example, with more and more research on the consequences of gaming on our brains, it seems that gaming can have positive effects (other than a lot of fun) such as better learning abilities or better memory and reasoning. Of course, this area of research is still relatively young and we need to observe new developments very closely, but gaming probably isn’t as bad as our parents tried to make us believe. What about the gaming industry? How big is it? It is difficult to answers these questions because discerning game development from technological development in general is not an easy task and because, with the ever-growing possibilities that the Internet provides, big corporations are no longer the only players. In fact, the sheer amount of games released every day would warrant writing a book on the topic, a book that would become obsolete a month later. Therefore, instead of overflowing you with data and information, I will summarise only some of the players. In 2016, the global revenues in the gaming industry were estimated at $91 billion, of which $35.8 billion goes to PC gaming and $6.6 billion to consoles. However, mobile games were responsible for $40.6 billion, meaning that they are the biggest single contributor to the global revenues and have almost surpassed PC and console games combined. This is a sign of a revolution that is taking place right now – gaming industry is no longer based solely on the traditional video games and games like Pokémon Go, whether short-lived or not, are becoming the main drivers in the business. When talking about the gaming industry, it is impossible to ignore the existence of consoles and, when talking about consoles, 3 companies immediately come to mind: Microsoft, Nintendo and Sony. XBox, Game Boy, Nintendo Wii, PlayStation; you’ve probably heard those names before. These used to be the biggest contributors to gaming in general, while computer games, at least in the beginning, remained on the fringes of the industry. Now, the roles seem to have reversed with PC gaming revenues almost 6 times as big as consoles. This is in part due to the fact that the consoles often cannot keep up with the rate of technological advancement. Nowadays what was a novelty at the beginning of the year is old news 12 months later and this applies to computers and games. However, when you get a console, you do not expect to buy a new every year to make sure that graphics and game engines are always at the best available level. And here lies the advantage of your PC or laptop – you probably have one already and get a new one every now and then. As mentioned before, there are many players in the gaming industry, but several come to mind, particularly the traditional ones such as EA Games, Activision Blizzard or Ubisoft. If you’re interested in their market data, you can look for yourself. Here, I will talk more about a platform that has revolutionised gaming. Steam is the biggest digital platform where you can buy games, a sort of digital gaming market. In 2016, their total revenues were at $3.5 billion, which, when compared with the numbers mentioned above, means that they control about 10% of the global PC gaming market. Steam’s main advantage is the fact that you can buy games at any time and anywhere as long as you have internet access. This means, gamers are no longer constrained by distance to the nearest shop or by closing hours. Furthermore, the amount of titles availables surpasses anything you can find in any physical shop – 13.000! From big hits to low-budget indie games of every genre, you will probably find something that suits your tastes. Finally, the question that many gamers have asked themselves is whether you can actually make money by playing games. Well, you can and the esports industry generated almost $1 billion in revenues. If you want more details on how to start your career as a professional player, check out Hải Đăng Vũ’s article about business and profitability of e-sports. So what is this all about? Well, with the continuing digitalisation of our world and a greater access to technology and the Internet, the gaming industry will continue to grow exponentially. Especially with new, revolutionary technologies such as VR, games of today might soon be put on the same shelf as Monopoly or Scrabble. It is exciting to see how fast things are changing right in front of us – think about how amazing you thought graphics was 10 years ago and how now you can’t look at decade-old games anymore. Esports are already starting to resemble big sports championships and very soon professional gaming might be a very profitable profession. And hey, since it makes your brain better, why not do it?

Early 1970s competitions were founded back in the with the upsurge of arcade gaming, but tournament quality at the time was amateurish and tournaments were usually considered a supplementary feature of a larger exhibition. In the United States and in some Western European countries, one can even be granted a visa for joining an e-Sports team/franchise.  When choosing gaming as a profession nowadays, you could earn millions of dollars every year. Although it has been in existence for almost two decades now, no one could have anticipated how would the industry actually turn out to be: a potential commercial and profitable business. A life-changing story Soren Bjerg, or more commonly known by his in-game identity as “Bjergsen”, was born and raised in Denmark. As a teenager, he used to join local football teams but later withdrew owing to his severe health issues. He later turned to video gaming and that was when his gifted talent was discovered. His skills and dominance were presented throughout regional tournaments that caught the eyes of professional teams. He was individually impressive during his tenure with European teams but failed to win tournaments with any of them. Fortunately, his talent did not go unnoticed. At 17, he was determined to pursue a career in professional gaming when he left his hometown for the United States, joining Team SoloMid (TSM) and was immediately  inserted into the official starting roster. Little did anyone expect that the Danish prodigy would transform into the most renowned Western player, widely idolized by the League community. Not only has Bjergsen brought four silverwares for TSM, he also pocketed three individual achievements for winning the award for the best player in North America. So, how does professional gamers usually get their income? In Bjergsen’s case, his permanent income will be added from his salary from the team (which is currently undisclosed) and his fixed income from participating in the three-month-long seasonal championship provided by the league organizer (up to summer 2016, this amount is accounted to $12,500 per player each season). The majority of his monthly earnings, however, is taken from a rather unstable source: streaming. Basically, these activities could be split into three minor parts: advertising revenue, subscription/donation, and associated sales. Advertising revenue of gamers is similar to that of a YouTuber, where one will be compensated on the basis of a number of distinct adverts shown. In an ideal world, this amount should be equivalent to the number of views. However, since many Internet users utilize their ad-block features, on average, streamers are reported to lose about 50 percent from what they should have earned. Fortunately, Bjergsen also receives money from users’ monthly subscription and direct donations: the split between the streaming website and the streamer himself from subscription and donation will be discussed privately, but usually it is at 50/50. Finally, associated sales could be seen as the adverts that the streamer promote live on his stream or attaches them to an on-screen frame of the video. Gaming competitions Riot Games, founded in 2006, was the birthplace of League of Legends. With sensible marketing strategy, the game quickly gained global recognition and it only took the game less than three years for League to organize its inaugural Riot-held World Championship (Worlds) annual event. In the early stages of League competitive gaming, most tournaments were mainly held independently and were mostly sponsored by companies with a specialized division in gaming equipment. Since 2013, however, recognizing the long-lasting appetite of the global audience for League competitive gaming, Riot Games decided to establish a league format to their competitions in Europe and North America (dubbed EULCS and NALCS), with its extended administration in other significant regional competitions (i.e. China and South Korea). Their increasing influence and supervision on these competitions, consequently, attracted one of the most popularized household names in the entire world, Coca-Cola, for its coverage of their fourth edition of World Championship. However, despite the increasing viewership of Worlds every year, many commentators and analysts of League, have been mainly critical of how tournaments are financially operated. Firstly, there exists an inequity in terms of the magnitude of the prize pool for teams. They pointed out how the prize pool had remained unchanged for years, while the audience increased by more than tenfold during that span. The concern was partly addressed as Riot announced to include a portion of in-game purchases accounted to the total prize pool in the latest Worlds edition, but the increase of it is much less equivalent if compared to the increase in reputation of the tournament. Similar concerns frustrated team owners in the Riot league system where teams had received little monetary support from the league organizer. Strangely enough, despite the lack of one organization’s income, gaming organizations are disallowed to feature their individual sponsorship on on-stage Riot competitions, a questionable strategy that is accused of damaging team’s ability to be financially viable, especially because of increased players’ salaries. The general scene of eSports, however, is definitely not as daunting. Other titles such as CS: GO or DotA 2 are presenting much more of an exciting outlook of competitive gaming. Most competitions are still formatted as tournaments in a short period (usually a matter of days) and are usually independently organized. The largest offline tournament, DotA 2’s The International (TI), attracted as much as 20 million unique viewers. In contrast to League, its prize pool is largely contributed by the community, by which a separated funding event is created prior to the initiation of the tournament. The accumulated prize pool that the tournament received last year exceeded as much as four times compared to Worlds, which provided lucrative earnings for any participating team. The advertising regulations are also more lenient as well in these tournaments since competing teams have the freedom to select any sponsors that they would prefer. The only requirement that teams need to adhere to is that these adverts should not present any inappropriate content to viewing audience. Successful franchises and their stories Evil Geniuses (EG) and Fnatic could be considered two of the most popular franchises in the history of eSports. While EG tops the earnings chart for its accumulated earnings from eSports competitions, Fnatic is considered to be the most successful organization because of the number of silverwares that they have achieved throughout the years. Fnatic guarantees their success on the international stage by paying attention to little detail – and taking great care of their players. For example, in their League personnel, besides the players, the organization also recruited multiple strategic coaches and analysts. The 12-people personnel is directed by a manager who is responsible for ensuring a “healthy environment” in the team. This criterion is ensured by the manager’s ability to coordinate business operations including handling sponsorships, press relations and branding, along with other in-game aspects such as executing rosters changes and publication of game-related information to the public. As a diversified organization with its involvement in various eSports titles, Fnatic’s top management team is constructed upon the foundation of gaming with some of the unique positions that undertake the most pivotal role in the organization. Streaming is a distinctive feature of gaming operations – this is virtually the only mean of communication that the players can interact with the targeted audience outside of competitions; therefore, a managerial team in charge of streaming activities is highly essential in maintaining its relationships with hardcore supporters. Other two primary operations of Fnatic resembles other models of professional sports teams: a chief gaming officer who handles other business and players’ negotiations, and an e-commerce manager who is devoted to retail and distribution of merchandises. Although not as well-decorated as Fnatic, EG has found themselves in the position of the wealthiest gaming organization, mostly coming out of its prize pool from its team’s winnings at The International in 2015. Technically speaking, their success has little to do with the organization structure, as in the case of Fnatic. However, it’s important to highlight the success story of the moment of decisiveness of the organization. Only two months before the tournament, two long-standing members of the roster departed the team. This forced the organization to complete two abrupt acquisitions of inexperienced talents, which turned out to be one of the most successful decisions in the history of eSports. Their profoundly established scouting department played an essential role in driving the team’s success in the tournament. EG gambled with their choices and ultimately earned their paycheck. The uprising of eSports industry has caught the eyes of various investors and there is no surprise that new eSports organizations are now receiving a lot of attention from venture capital funds. This trend is the most evident in League, where 5 out of 10 teams are (partly) financed by NBA teams. These teams, despite receiving substantial cash injection, have not yet outperformed the established franchises, such as TSM. South Korean eSports The public attention of competitive gaming in Korea began when the Korean eSports Players’ Association (KeSPA) was founded in 2000, under the approval of the Minister of Culture and Sports. The existence of this organization means that eSports in South Korea being equally recognized and fairly treated among other household events such as the K-League (football) or KBO League (baseball). The appropriate response to answer why eSports had such a head start in Korea compared to other countries remained debatable, but one interpretation is particularly interesting. Dating back to the 1990s, as Korea found itself under the continental financial crisis, a significant portion of the workforce was unemployed. While desperately trying to look for a job, many people, especially the youth (young workforce), looked out for something that could interest them during their leisure time. That was when gaming transformed to be one of the common activities and slowly became popularized among these demographics. Furthermore, technological infrastructure and telecommunications across the southern region of Korean Peninsula continued to improve significantly with financial assistance from the government. These massive investment packages indirectly spurred the development of eSports all over the country. Gaming started to get competitive among the youths as the number of gamers increased. From PC Bangs, local tournaments quickly evolved into national competitions. The growing popularity of tournaments also encouraged the existence of TV programs/new stations that actually devoted their coverage to eSports programs. Currently, Korea is the only geographical region in the world that is successful in bringing gaming content to mainstream media. Korean eSports industry has grown so much that large corporations actually recruited players to play competitively under their brand. This is also the striking difference of Korean eSports organizations compared to Western ones, which usually operates independently. Since the players are supported by financially stable entities, they are usually paid relatively much more compared to Western players, but at the cost of losing most of their personal freedom. Typically, eSports players in Korea usually have to devote 12 to 14 hours per day for practice. That’s why Korean teams are considered the powerhouses of the industry that any other team would want to dethrone. The future of eSports The discussion of how eSports will evolve in the future remains a question mark. With regards to South Korea, the most developed eSports nation, it is highly unlikely that the scene would massive differs from the current situation, as players are quite satisfied with the position they are in right now. However, in other regions, teams and franchises are operating with consideration to business factors, so it is to be expected that these teams will be more flexible in terms of coping with their owners’ needs, especially with new venture-capital teams. Not every game title is as sustained as what DotA or League has accomplished for its competitive gaming progress (historically one should last from three to five years), but with the increasing frequency of audience reach, it is safe to say that the longevity of an eSports title is increasing. This development would promise a more solid career choice for anyone who aspires to follow professional gaming. Gaming has travelled a long way to be in the position where it is now. Back in the days, you could see established teams starting with zero capital. Now, it is almost impossible to do so. Personally, I believe that eSports has only stayed in the expansion phase of the business cycle, so there is definitely a lot of room for improvement. I don’t have any doubt that if eSports is growing as it is now, we might be seeing it been featured in the Olympics very, very soon.

If you are like me, who enjoy purchasing almost all the apparel from fast fashion brands like Zara, Topshop and H&M… etc.; have you ever wondered what are the costs behind the fashionable but magically inexpensive clothes? It might seem like a win-win for both the consumers and the fast fashion brands as it make fashion more affordable to the mass public, and at the same, time its unique business model bring those companies a considerable amount of profit . However, the truth is that its business model is environmentally unsustainable and often involved unethical treatment of labours. To begin with, let’s define what is fast fashion. The term “fast fashion” is used by the fashion retailers to express the ideas which the designs on catwalk and the most recent fashion trends are captured quickly, and then the magics take place within their supply chain systems —the designed products are quickly manufactured at extremely low costs, and delivered to the retail stores to enable the mainstream consumers to buy them at a low price. While it is true that fast fashion has brought considerable consumption that prospers the fashion industry, and that its low prices allow people to satisfy their desire of shopping and owning trendy items even when they are on a budget; the downsides of the industry are horrendous and too big to ignore. Environmental Impacts Fast fashion leaves a pollution footprint, with each step of the clothing life cycle generating potential environmental and occupational hazards.The industry’s major negative impacts include environmental damages and the violation of human rights in developing countries, as more than 97% of the items are outsourced to countries like Bangladesh, Cambodia and China. According to Greenpeace, the global apparel industry is the second most polluting industry in the world, second only to oil. First of all, one of the most common sources of textile is cotton, which is the most toxic and water-intensive crop on Earth according to the Organic Consumer Association in the United States. It takes 20,000 litres of water to produce one kilogramme of cotton, and using more than 25 percent of insecticides in the world, making cotton a very environmentally unsustainable source. For example, the irrigation needed for giant cotton plantation in Uzbekistan and Kazakhstan are one of the culprits of the desertification in central Asia. Another cheap and widely-used synthetic fabric in fast fashion is polyester, which has an energy-intensive manufacturing process that required a large amount of crude oil. What’s more, the emission of noxious gases and volatile organic compounds releasing during its producing process can cause severe diseases. These textile manufacturers are therefore considered to be hazardous waste generators, yet this is only the start of the clothing life cycle. As most artificial fabrics are non-bio-degradable, it is essential that these clothing are recycled properly, or else the waste can take more than 200 years to decompose. Violation of Human Rights As the fast fashion industry is a very labor-dependent industry, human capital is a fundamental part of the supply chain, namely the most costly part of the production process. The global fashion industry is now a nearly 3 trillion industry, and most of these fast fashion brands are becoming enormous with continuous global expansion and keeping the production cost as low as possible. They tactically benefiting from the use of cheaper labours by signing contracts with the factories which are able to manufacture at a comparatively low cost, and switch to another when the new alternatives provided an even more tempting offer. Since these companies do not directly hire those labour, they can sidestep the responsibility of the protection of the workers’ basic human rights — a fair living wage, a safe working condition and a reasonable working hour. As above mentioned, the fast fashion industry is influential when it comes to supporting their partnered factories to safeguard their workers. However, in recent year, there are numerous large-scale labour protests alleged that these factories are sweatshops and only care about their profitability and being cost-effective regardless of the working condition of their employees. Many garment factories workers in Bangladesh earned roughly only two dollars a day, and it is claimed by the factories owner that the low wages are necessary to keep the business in the country. In 2013, the collapse of Savar building in Dhaka, Bangladesh shed lights of the dirty shadows of the fast fashion industry. With a death toll of 1129, it is the deadliest garment-factory accident in the history. Human negligence is involved in this fatal incident, as the investigation revealed that the owner of the building was well aware of the potential danger that the building would collapse but still insisted his employees return to work. The factory was constructed without authorised permit. Several well-known European retailers including Mango and Primark are found sourcing from the factories that were functioning in the collapsed building. Besides, this is merely one example of how some of the high street brands are not exerting their effort to take responsibility for the profit margin they earned. Overconsumption Since the business model of fast fashion is based on the consumers’ desire to shop for new items, the companies have to brainwash the shoppers into believing that if the clothing goes out of fashion, they should keep buying new ones to replace them even though the old ones are still wearable. It is done by advertising and campaigning since they are the best way to convey their message across as well as improve the reputations, which are linked to the profitability of the brands. That is, for example, the advertisements will tie the purchases with messages like “once you own these products you will be content and loved”; or some of the H&M campaigns like Conscious collection and the World Recycle Week which make the consumers into believing that fast fashion can be sustainable while it is not. When people are making a buying decision, they used to think more thoroughly regarding the practicability and the quality of the clothes before the fast fashion became the mainstream; but ever since the clothes become cheaper and the fashion cycle decreased steadily, clothes develop into something that is disposable. When fashion becomes fast, cheap and disposable, the only winners are the owners of those fast fashion brands. As the customer’s buying cycle has shortened drastically, the increase of demand are implications of more environment damage and more unnecessary purchase decision as more clothes are ended up in the landfill while they are still wearable. What’s next? There are advocates against fast fashion calling for a fashion revolution stating that the fundamental problems of the entire industry are its business model. Values such as materialism which has been promoting by the retailers are unsustainable. In practical, contrasting to fast fashion, the “slow fashion” movement is supporting practices that are sustainable and ethical. Firstly, slowing the rate of fashion consumption — people do not normally need to buy new clothes biweekly or frequently replacing “less trendy” items even they are still in good condition. Secondly, it is important to educate yourself about what is behind the finished product and its price tag. We are often too disconnected with the impacts of our buying decisions, that is, what kind of actions we are supporting by buying the product. And the quote that “every time you spend money, you are casting a vote for the kind of world you want” precisely captured how influential your decision is. Choosing clothes with sustainable or recycled fabrics that are produced by brands that cared about their workers involved in the supply chain, and only purchase the items that you will certainly wear more than a few times. Next time when you go shopping, think twice before you buy; your choices matter!

Last November saw the final of the World Chess Championship — a match between the reigning world champion (Magnus Carlsen of Norway) and his latest challenger (Sergey Karjakin of Russia) to determine the World Chess Champion. Carlsen ended up winning the tie, but he could only make the difference after the match had gone to overtime, having drawn as many as 10 out of 12 ‘normal’ (i.e. afternoon-long) games. This isn’t an usually high number, but it’s still quite high, and we do see an increase in the amount of games played out to a draw at the very highest level. What’s the reason behind this? Can we still reverse the underlying mechanism? And if not, what are the implications? Welcome to the machine Early variants of chess arose in India well over 1,500 years ago, but its current rules were only established a few decades ago, when the so-called fifty-move rule — the rule that states that either player can claim a draw after fifty moves without any captures or pawn moves — was established. However, if you really thought that the nature of the game would never change again after that, you couldn’t have been more mistaken. It wasn’t so much a rule change that invoked it in recent years, but rather the advent of computer engines and their ability to evaluate board positions objectively — in other words, without the flaws that inevitably make us human. They do this by essentially constructing a large tree of all legal moves, then using increasingly complicated algorithms to evaluate the board positions, and finally picking the best continuation — i.e. the one that gives them the greatest possible advantage in the foreseeable future. The strength of engines, then, depends on what the word ‘foreseeable’ means to them; just how far can they see ahead? The same applies to us, but there’s one big difference: engines continue to improve at exponential speeds following Moore’s Law, while we — mere mortals — take many decades to achieve even a small bit of improvement. Garry Kasparov already fell victim to an engine when he lost a game against IBM’s chess computer Deep Blue in 1996, and he lost a full match the year after. The seemingly impossible had come true. Nowadays, playing engines is of little interest to us; we’ve long accepted that they’ve surpassed us. (Even Carlsen considers playing them to be “depressing”.) Instead, they’ve become an analysis tool, and an amazing one at that. Since engines simply plough through every legal move in a given position, their top move is usually considered to be the objective truth, especially in the latter stages of a game, when there are fewer pieces on the board — thus simplifying calculations. At this point in time, we have endgame tablebases of up to seven pieces (including both kings), which means that the outcome of every position of up to seven pieces is known (given perfect play from both sides). Now, if we could one day expand this to a 32-piece endgame tablebase, we would’ve solved chess, but Moore’s Law or not, it seems extremely unlikely that this’ll happen anytime soon — if ever. (Just consider the fact that the 7-piece one takes up as much as 130 TB, and you’ll understand why.) Eye-opener Even if engines won’t solve chess, they still have a huge effect on the way that chess is approached at the very highest level. Engines have opened our eyes to ideas that were previously invisible to us, and the depth of their analyses is simply mindblowing. While they might not have affected chess as a simple board game, there’s no doubt that they’ve changed chess immensely as a professional sport. This is because the insights that engines continue to provide us with create more of a level playing field among the best players in the world. They’re continuously expanding their opening repertoire, gradually ironing out mistakes. While you could argue that this improves the general level of play, the downside is that games become more monotonous. Nowadays, playing the first 10 moves of any game is basically just deciding on an opening, and if you make a mistake here, you’ve almost lost. Competitors are also no longer just nerds trying to outwit their opponent — their lifestyle is like that of any other sportsman, often engaging in physical activities and sometimes even following a strict diet. Endlessly staring at the board is no longer enough if you want to compete with the best! Long-term trends You get it — these players would totally smash us. However, how do they fare against each other? Do statistics reveal any interesting long-term trends? As it turns out, they do — or at least I think so. Since the early 20th century, theoreticians have feared that the over-analysis of chess will lead to a ‘draw death’. In this scenario, experts become so skilled at chess that it’ll be impossible to decisively win a game anymore. The first graph illustrates their fears; only 1 in 10 games ended in a draw in 1850, whereas 1 in 3 games ended in a draw in 2013. The small drop in draws since 1980 looks promising, but it could very well just be noise — a coincidence that’ll be overwritten as time passes. Logically, as draws are seen more and more frequently, checkmates are becoming a bit of a rarity. However, even if draws hadn’t become so common, we would still be seeing very few checkmates. The reason? Resignations. Players usually resign well before a checkmate is actually on the board, for the simple reason that they often see it coming long in advance. (It’s also a bit less humiliating.) However, most games are still hard-fought battles that go all the way until the bitter end; chess resembles a war, after all! This trend is reflected in the third graph, which illustrates that games have been getting longer since the 1970s. This is probably no coincidence, because this is exactly when people started getting their first PCs. Since engines teach us how to play more perfectly, defensive techniques have been getting more resilient, and so games have been getting longer — more draws being the inevitable result. Why? Because drawn endgames aren’t easy to convert at all. Having gotten that out of the way, we’re left with one obvious question: what’s the solution to this? The show must go on One solution could be to play more Fischer Random Chess in the future. In this variant, named after the great Bobby Fischer, the starting position is randomised by putting the pieces on the first and eighth rank on the board in random order — so long as the bishops still occupy opposite colours. By doing this, opening preparation is nullified, and games will once again be fresh — thus interesting. Former World Chess Champion José Raúl Capablanca proposed a more complex variant of chess to help prevent the draw death, but it never really seemed to catch on in tournaments. We’re now only left to see whether the computer-aided analysis of chess will push us ever-further into a sea of drawn games, but then again, we’ll undoubtedly always think of new ways to keep chess interesting. Many thanks to Randal S. Olson for his useful graphs.