1/27

The discussion about whether outsourcing business is a national security risk was interesting because one's opinion is closely tied to their ideas about what a nation-state is. One could argue, as I do here, that at a society, in the very basic sense, is merely a collection of business transactions. Business transactions are merely a way of the market distributing resources. Also, a society is merely a collection of people that use resources in a way that everyone is better off than each individual trying to go out and find resources on their own. Out of a society, a nation will be formed to protect the production and use of these resources from other groups of people. Therefore, in a way, the only threat to national security that exists is outsourcing business processes. Granted, it really depends on how one defines everything that goes into these thoughts. This is not to say that I disagree with outsourcing. In fact, under this line of thought, outsourcing actually combines both "societies" into one. However, the problem is with how the nations have formed because the national interests may conflict with how the resources move between the citizens of differing nations. I could go on forever with some of these topics.

The next topic is the online law services. I am obviously bias to this issue as I will soon become a lawyer and charge for my services. However, this raises some points that I think are related to outsourcing and the use of technology to solve business issues. I think that the professor was probably fine in setting up his LLC with the online service because it did not seem to be a very complicated or extensive business. However, the thought purchasing legal services online seems like an extremely risky thing to do because things can be so much more complicated than most people think. My point is not about law, but more about how people need to be conscious about what the consequences are when they use technology or outsource. There are certain things that should never be outsourced because the consequences of getting something wrong is too great.

1/22

In my study of law, I find the study of enforcement mechanisms very interesting. There are three levels of enforcement: first person, second person, and third person. There have been studies in law and economics that certain behaviors can change based on what kind of enforcement mechanism is in place. A few comments in class were made about the "creepy" aspects of online behavior and this made me think of what exists to enforce either the societal norms or legal norms online. For example, people do and say things online that they would never do or say directly to other people and the third party enforcement is not very established online. Therefore, the only enforcement is through the first person or relying on each individual to just decide what to do themselves. I don't really know where to go with this other than saying I think it would be interesting to study enforcement mechanisms and behavior online as compared to the studies that have already been done.

The second thought is that trust will become more important as technology allows more "trickery" against other players in the economy. I think that trust has always been important, but with very simple business transactions the possibility of tricking the other person is limited certain factors. For example, the simplest transaction trading one apple for one banana only requires that each party has quality fruit. There is not much more uncertainty. However, as the business transactions involve larger time components (buying stock) or greater level of complexity (buying a super computer), the parties need to have more trust between them in order to complete the business. In other words, as the amount of information increases in the world, the asymmetry of that information makes it much easier for people to commit fraud and then walk away. Therefore, trusting that the other party will not try to take advantage is the key to a continuing business relationship.

1/20

I know this was not the point of the class ,but the first thought I had while the class was answering the quesiton "why are you cool" was that we are becoming less "cool" individually because of the availability of a worldwide labor supply. Before technology allowed a company from Minnesota to reach talent in China, India, or anywhere that has electricity, the company would hire based on the limited skill sets available to it within a limited geographic area. Now, a company can basically hire any skill set they need, regardless of geography. For example, if a company in Minnesota needed someone who spoke Chinese a hundred years ago for some reason, they would probably have a hard time finding someone locally and that person could require a higher wage. Now, the Minnesota company would have billions of people as possible applicants, which means that skill sets become more of a commodity as more people around the world are "the competition."

The second thought was regarding the economic cycle changing as a result of technological innovation. I have heard of a generational phenomenon that the economic cycle works in a series of three generations. (Though I do not remember where I read this and cannot name a source) However, the two ideas greatly coincide. The idea is that generation one comes up with an idea or innovation in either product or process and then grows very quickly in developing the business or economy as a whole. The second generation has grown up with the innovation making it efficient in use or implementation and has been able to learn from their parents how to conduct the business activity effectively. However, the third generation actually decreases productivity because of a "spoiled child" behavior by riding off the previous accomplishments and also finds the innovation old or outdated to their needs. I believe this phenomenon can be seen at a family business level as well as a macroeconomic level. I think that this and the innovation cycle we talked about in class might be very similar ideas.