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Why Facebook is Destroying Civil Society: In 218 Words

By   Shlomo Maital

Social media are destroying civil society.   Here is why, in 218 simple words. I base this blog on the brilliant words of a young Egyptian, whose Facebook posts initiated the massive 2011 protests that ousted Hosni Mubarak. He was interviewed on a recent BBC program.

              Facebook and all social media earn fortunes in profit. In 2018 Facebook had $55 billion in revenues and made $22 billion in net income (profit), a 40% net margin!

       Facebook earns money by advertising. Advertising is based on ‘eyeballs’ (number of viewers). So Facebook engineers build algorithms that maximize profit by maximizing ‘engagement’ (number of viewers).

       Engagement is maximized by hatred and negative messages. Why? Psychologically, negative messages gain more attention than positive ones.

       What role does truth play?   Virtually none. You can post almost anything. Like the fake video of House Speaker Nancy Pelosi ‘stumbling’ on her words (didn’t happen). Facebook refused to remove it.

       Result: Conventional media like newspapers are driven out of business by social media. The investigative journalism of newspapers is replaced by the vicious falsehoods propagated by social media, entirely to make short-term profit.

     Result: A sharp decline in public trust, in the institutions that govern us — legislatures, politicians, political leaders and even the courts.

     What can be done, when a lot of really bad people, like Russia’s “Fancy Bear” unit linked closely with GRU (KGB’s successor), use social media to screw up elections? What happens when economists pitch the idea that if you let greedy companies like Facebook maximize profits, everybody wins?   What happens when people don’t yet grasp the immense harm social media are doing, let alone press for action to constrain them? What happens when the evil asymmetry of ‘hate drives out love’ generates $22 billion a year in profit, when just a decade ago Facebook LOST $56 million?

       I have no idea.

How Everyone Can Be Better Than Average:

Why “No Child Left Behind” Leaves Kids Behind 

By   Shlomo Maital

   In Garrison Keillor’s wonderful radio program Prairie Home Companion, that aired live from 1974 to 2016 – an incredible 42 years! — Keillor did regular segments on “Lake Wobegone” where “all the children are above average”.

    He always ended the segment with these words: “Well, that’s the news from Lake Wobegon, where all the women are strong, all the men are good-looking, and all the children are above average.”

   Now, all the children cannot be above average, if you understand what an average is.

   But in fact – it turns out, in one sense, they CAN!! Let me explain.

   In his excellent New York Times Op-Ed (Tuesday June 18, international edition), Alfie Kohn asks, Why Can’t Everyone Get A’s?   he makes the distressing point that America’s educational system has for two decades been built on the wrong belief that “excellence is a zero-sum game”.


   When George W. Bush was elected President in 2000 (actually, he lost, but Florida’s Republican Supreme Court screwed Democrat candidate Al Gore), the first thing he did was initiate No Child Left Behind legislation. That law mandated widespread standardized testing in US schools. The idea, based on free-market economics, was – you promote excellence only by measuring it.

     But – how do you measure it?

     My wife Sharone, an experienced school psychologist, explained the two alternate ways of assessment: a) norm-reference tests, and b) criterion-reference tests. Please take a moment to understand the difference:

   Norm-referenced tests report whether test takers performed better or worse than a hypothetical average student, which is determined by comparing scores against the performance results of a statistically selected group of test takers, typically of the same age or grade level, who have already taken the exam.

   A criterion-referenced test is a style of test which uses test scores to generate a statement about the behavior that can be expected of a person with that score. Most tests and quizzes that are written by school teachers can be considered criterion-referenced tests.

     Let’s simplify. Norm reference tests are tests ‘on a curve’. There are always those who excel, and always those who flunk. It’s the nature of a curve. Zero sum.

     No Child Left Behind was based on norm reference tests. And as a result a great many kids were and are being left behind.

       There is a better way. Define a criterion for excellence, or anything else you want to measure. For instance: Answering 80% or more math questions correctly.

       Test kids. See how many meet the criterion.   The goal: Let every kid be ‘above average’, like in Lake Wobegone, where ‘average’ means ‘meeting the criterion’.  

       With norm reference tests, 20% of kids, for instance, will get A’s. No matter how hard the rest study, or learn, only 20% can get an A. It’s zero sum.

       With criterion reference tests, EVERYONE can potentially get an A.

       When schools report a high number of A’s, experts say, “grade inflation”. Why? Isn’t the goal of education to be inclusive, to help EVERYONE get an A, to make sure that truly, no child is left behind?  

           But norm reference tests BY DEFINITION leave 80%, say, behind.

           Everyone CAN get A’s.   Everyone can be above ‘average’, as in Lake Wobegone. America has sold a dangerous, false educational ideology to the world, including my country Israel.

           It’s time to rethink how we assess our kids.

St. Louis Blues Ain’t Blue No Mo’!

 By   Shlomo Maital  

    I grew up in Canada, dreamed of being a hockey goalie — and then went to live in Israel, where ice is what we put into our cups of water. But I still have a deep love for hockey – and so, celebrate the incredible Stanley Cup championship won yesterday (Wednesday) by the St. Louis Blues. This, despite my years of summers teaching in Boston, rooting for Boston’s exceptional sports teams, the Patriots (football), Red Sox (baseball) and Bruins (hockey), all of whom have won championships repeatedly and recently.

   Why was this win incredible?

     As late as early January, the St. Louis Blues were at the bottom of the league – not a great place for a championship bid.   The Blues won 30 of their last 49 games, made the playoffs – and beat Boston in the seventh game of a best-of-seven championship series.

     And they did it in Boston Garden, away from home, in an arena known for its incredibly loud partisan fans. They won the final game 4-1, scoring two goals in the first period, to zero for Boston. They did it despite being outshot 12 shots (Boston) to two (St. Louis) in the first period. Yes – those two shots were both goals. Credit St. Louis’ amazing goalie.   Jordan Binnington starred, stopping 32 shots in all. Nearly all Stanley Cup champions have a hot goalie like Binnington.

     St. Louis Blues have never won a Stanley Cup, in their 52-year history. This is their first.   Who would have believed it?

      Certainly the sports bettors didn’t!   One fan reportedly won $100,000 from a $250 bet at the start of the season, that St. Louis would win the Cup.   By my calculation that puts the initial odds at 400 to 1!

   How did St. Louis do it? They are a strong physical team, that won games by grinding out faith, forechecking and hard blue-collar work. Credit their coach for gluing this team together.  

   And as usual, there was a human interest story too. According to the BBC, “the Blues celebrated with Laila Anderson, an 11-year-old diagnosed with a life-threatening immune disease. A video of Laila bursting into tears after being told she had been cleared by her doctor to attend the most important fixture in her team’s history went viral on Wednesday.  Forward Alexander Steen had told Laila she was the team’s “lucky charm”, while defenseman Colton Parayko has been wearing a bracelet sporting the words “Laila strong”. “

   Blues were last in a Stanley Cup final in 1970 – 49 years ago. Do their faithful fans deserve it? You bet.






Saving 5,000 Children’s Hearts – and Lives

By   Shlomo Maital   

Fatma – at Wolfson Hospital, Holon, Israel

   Once every two weeks, I get to pretend I am a real person, rather than just an over-the-hill economics professor, and I get to interview interesting people for a column in a fortnightly magazine, Jerusalem Report. Today, my interview subjects were rather young – about a year old.  

True, they could not speak sentences, or even words, to me – but their eyes and their smiles spoke volumes.

   These are children from Wolfson Hospital’s Save a Child’s Heart program. They come to Israel from 59 countries, mainly Africa and Asia, and they all have life-threatening defects in their hearts that require surgery. Many undergo open-heart surgery lasting for hours, to repair faulty heart valves or gaping holes in their hearts. I will never forget the little ones I saw, and hugged, today. *

Babies born with heart defects are distressingly numerous. According to US data, “congenital heart defects (CHD) affect nearly 1% of―or about 40,000―births per year in the United States. The most common type of heart defect is a ventricular septal defect (VSD). About 25% of babies with a CHD have a critical CHD. Infants with critical CHDs generally need surgery or other procedures in their first year of life.”

In the US, Europe and Israel, babies born with heart defects generally get remedial surgery, or their births may be aborted if prenatal ultrasound reveals serious heart defects. Babies and children who contract rheumatic fever get antibiotics, which prevents rheumatic heart abscesses. But in poor countries in Africa and Asia, doctors can diagnose heart defects but often surgery to fix them is not available; and often, rheumatic fever is not treated with antibiotics, resulting in damaged hearts.

And here, begins the story of one man – the late Dr. Ami Cohen. Very often, world-changing projects are born in the heart and mind of one passionate compassionate person. Dr. Cohen studied and practiced cardiac surgery in the US, in Washington DC. He served as a doctor with the US armed forces in Korea in 1988, where he joined a program that helped poor local children with heart disease. That planted the seed of an idea.    In 1992 he and his family emigrated to Israel. In 1996 a friend in Ethiopia asked if he could do surgery on a small child with a heart defect. Dr. Cohen brought three Ethiopian children to Israel for remedial heart surgery in 1996, and then established a network of professionals to scale up heart surgery for children from other countries, along with a supporting foundation. The program, called Save a Child’s Heart, was based at Israel’s Wolfson Hospital, in Holon, a southern suburb of Tel Aviv. The cost of treating each baby or child is $15,000, including flights, and hospital stays. Israeli cardiac surgeons volunteer their services. The Israeli government supports the program, both financially and indirectly. And donors support the Save a Child’s Heart Foundation.  

Recently, Save a Child’s Heart celebrated its 5,000th patient — a beautiful little one-year-old girl named Fatma, from Zanzibar (see photo). Fatma’s mother, Balkis, had been treated for the same heart defect by Dr. Cohen, and Save a Child’s Heart, in 1997, as a small child. Today I asked Balkis what her dream was, for her little girl.

   “She will be a doctor!” she said emphatically. “She will be a doctor.” And I believe she will. And then, perhaps little Fatma will return to Israel to do her cardiac surgery specialty, like other African doctors I met at Wolfson.

   To date, babies and children from 59 countries have been treated, and half of them were Palestinians, including many from Gaza.

Tragically, Dr. Cohen did not live to see the thriving Balkis and her little girl Fatma. On August 16, 2001, Dr. Cohen died while climbing Mt. Kilimanjaro, in Tanzania, with his daughter. He was only 47. The cause: Altitude sickness. He died as he lived – living his dreams.

   Kilimanjaro is 5,895 metres (19,341 ft) above sea level. I climbed it in 2008. Our guides took their time, spreading the climb over a full week to enable us to acclimatize to the lack of oxygen. And despite this, many in our group felt ill at the summit.   I know that other groups, with people who do not have a full week to spare, make the climb in 3 days….and this can result in severe illness or worse.    At sea level, the air is 20% oxygen.  At 19,348 feet, it is only 10% — half.  The result can be pulmonary edema (bleeding in the lungs) and cerebral edema (bleeding in the brain), which in extreme cases can be fatal.

On a plaque, in the building that houses recovering children and their mothers and fathers after surgery, are these words:   Our dear Dr. Ami Cohen, We love you very much. We will miss you, but never forget you as you will always play a special place in the new hearts you gave us. We pray that your dream will continue to grow and touch many more children all over the world. God bless and reward you for bringing joy to our families and countries.   Love from Save a Child’s Heart children.

   Why isn’t the story of saving children’s hearts and lives by Israeli surgeons known more widely? The answer is simple. The dominant media narrative is the Israel-Palestine conflict, featuring missiles, rockets, bombs and death. Other stories just don’t fit – even those about saving children’s lives, including Palestinians.

   Bad news drives out good news. I find this very sad.

 – – – – – –

From the Web: “ventricular septal defect (VSD), a hole in the heart, is a common heart defect that’s present at birth (congenital). The hole (defect) occurs in the wall (septum) that separates the heart’s lower chambers (ventricles) and allows blood to pass from the left to the right side of the heart. The oxygen-rich blood then gets pumped back to the lungs instead of out to the body, causing the heart to work harder.   A small ventricular septal defect may cause no problems, and many small VSDs close on their own. Medium or larger VSDs may need surgical repair early in life to prevent complications”.  

How We Economists Missed the Boat
By   Shlomo Maital   

As an economics student, many years ago, I was taught that production (both industrial and agricultural) was ruled by a Law. The Law of Diminishing Returns.  (See diagram). The more effort you invest in something, the less and less additional output you get. This law originated in agriculture. For a given plot of land, the output of food it produces rises by less than the labor and resources invested in it. Here is the proof: If there WERE increasing returns, you could grow all the world’s wheat in a flowerpot. The same “law” translated as well into industrial production.

   Some 23 years ago, in 1996, a brilliant and convention-breaking economists named W. Brian Arthur published an article in Harvard Business Review. The title: Increasing Returns and the New World of Business. I wish I had paid closer attention to it. Here in his words is why the ‘law’ of diminishing returns has been repealed forever.

     The powers of mind are everywhere ascendant over the brute force of things. As the economy shifts steadily away from the brute force of things into the powers of mind, from resource-based bulk processing into knowledge-based design and reproduction, so it is hsifting from a base of diminishing returns to one of increasing returns. A new economics – one very different from that in the textbooks – now applies, and nowhere is this more true than in high technology. Success will strongly favor those who understand this new way of thinking.

   What does this mean for us ordinary people, in simple language? Mainly, this. If you live in a world of increasing returns, then follow what a brilliant Israeli manager once decreed: first to imagine, first to move, first to scale. Think of a great idea. Get it rolling. And then scale it up fast! Because – winner takes all. The farther ahead you are of competitors, the more efficient and more profitable you become. And in the end, you, the winner, rule the market and can eliminate or buy up all your competitors.  And basically, do whatever you want to make piles of profit.  Including —   hire armies of lobbyists.

     Does this sound familiar?   Apple? Google? Facebook?  Amazon?

     Problem is, our political and regulatory systems still do not fully understand this. Only now are government bodies beginning to investigate the monopolistic practices of Facebook and Google.   These huge winner-take-all operations operate globally, so checking their power locally, in individual countries, is very difficult.

       The dominant economic idea of free markets and open competition does not hold when the law of diminishing returns has been repealed and replaced by increasing returns. In this new world, little fish grow bigger, swallow the smaller fish and become predatory whales.   Despite Arthur’s seminar article written in 1996, I believe it has not fully dawned on us that the old economics is gone forever. 

     We need to rethink how we regulate economies dominated by predatory whales rather than vigorous little minnows.


Why Economists (Don’t) Tell (True) Stories

by Shlomo Maital

   After decades of researching and teaching economics, I became increasingly troubled by my discipline. I did not find truth in the math and numbers economists love. Instead, in teaching managers and future entrepreneurs, I found truth in what economists largely despire – N ≤ 1, that is, stories about real people. Often, when I tried to make my seminar talks interesting and meaningful with narratives, I got the devastating criticism: Stories! A word worse than Nazi, Fascist, or pedophile, for economists.

       This is why I was so delighted to read the article by Carmine Gallo in Forbes, published way back in January. Gallo reported a speech by Nobel Economics Laureate Robert Shiller at the World Economic Forum, in Davos. Shiller is a behavioral economist who writes wonderful insightful books about how people behave. Here is an excerpt of what he said in Davos, according to Gallo.  Warning – it’s rather long, but I think worth the time.

   “This week at the World Economic Forum in Davos, Shiller banged the drum on a topic that’s near to my heart — the power of narrative to drive human behavior. Shiller didn’t mince words.   “Most people think in narratives, but economists are terrible with narrative,” he said. In a follow-up interview on CNBC, Shiller said, “Last year I chastised the [economics] profession for neglecting what you media people know. Narratives drive human behavior.” To study narrative is to examine ourselves. We think in story, process our world through the lens of story, and use storytelling to communicate ideas. One prominent economist believes that stories are the heart of human behavior. He says to understand the power of narrative is to understand financial booms and busts — and to prevent crises from getting worse.

   Robert Shiller is a Nobel prize-winning economist at Yale. He’s written books and papers warning of bubbles in the stock and housing markets before they happened. “The human brain has always been highly tuned towards narratives, whether factual or not, to justify ongoing actions, even such basic actions as spending and investing,” Shiller said in his speech. “Narratives ‘go viral’ and spread far, even worldwide, with economic impact.” Shiller says that the same epidemic models that trace how disease or viruses spread can be used to describe the word-of-mouth transmission of an idea. Stories spread ideas like a contagion—infecting one person and another, and another. Some ideas, of course, are great ones and should catch on. But some stories—once they go viral—can have a damaging impact on world economies.

   Stories continue to impact our economies today. Shiller says the financial crisis of 2007-2009 also followed “a narrative-based chronology.” Financial busts are “driven by a cadence of stories.” Stock market and housing bubbles are formed when people hear stories of easy money being made. Panics make declines worse as stories of losses go viral.”

   Another narrative that Shiller and several other economists brought up in their panel at Davos is today’s prevailing storyline that humans will be replaced by machines. “

   For decades, we have heard, every 15 years or so, the story of how very soon machines will replace humans. They never have, and never will.   Economists preached the story how unbridled uncontrolled greed would make human society happy healthy and wise. It didn’t.  So – economists DO use stories, they weave stories based on numbers – and very often, distressingly often, get it wrong. But no matter—people believe the stories, and economists continue to build false ones.  

   There is hope. Modern economics is dominated, among the young, by the effort to understand and research human behavior. And this work, pioneered by, for instance, Dan Ariely, is based on great narratives built on real people and real dilemmas.  One day, mainstream economics will be as behavioral as anthropology or psychology.

   Alas. I was born too soon.







Blog entries written by Prof. Shlomo Maital

Shlomo Maital
June 2019