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> removing people and organizational slack

You are spot on w.r.t every assertion you've made. When bean-counters took over the ecosystem they optimised immediate profitability over everything else. Which in turn means, in their mind, every part of the system needs to be firing at 100% all the time. There's no room for experimentation, repair, or anything else.

I've commented about lack of slack on several times here on HN because when I notice a broken system now a days, 90% of it is due to lack of slack in the system to absorb short term shocks.

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> Which in turn means, in their mind, every part of the system needs to be firing at 100% all the time

Not just that, you have to be always doing less for more gains. Real work is bad work. Shrinkflation good. I don't know what it is if it wasn't a pure scammer mindset.

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I think the bean counters get a bad rap for this a bit unfairly. The past century has seen more progress in knowledge and technology than the rest of human history combined. The world and business environment are changing too rapidly to make longtermist thinking practical.

Few care if you have a lifetime warranty and excellent service or replacement parts if the majority will upgrade in a few years! Mature technologies increasingly become cheaply available as services, eg. laundry, food, transportation. That further reduces demand on production, as many can get by with the bare minimum and don't need the highest quality, longest lasting appliances. Software is even more ephemeral and specialized.

Developing education and training pipelines is wasting money if the skills you need are constantly changing! There is plenty of "slack" in the workforce so this works just fine in most cases - somebody will learn what they need to get paid. There are very few fields where qualified worker shortages are a real problem.

R&D can be outsourced or bought and subsidized by the government in universities, so why do everything yourself? Open source software has even further muddied the waters. Applications have only a limited lifetime before being replicated and becoming free products (this has only been intensified by the introduction of AI), so companies develop services instead.

Technology and knowledge deepening and rapidly becoming more specialized makes the monolithic corporation much less practical, so companies also need to specialize in order to effectively compete. Going too far in the name of efficiency can destroy core competencies, but moving away from the old model was necessary and rational.

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> R&D can be outsourced or bought and subsidized by the government in universities, so why do everything yourself?

Because some problems that many companies in very specialized industries work on are so special that outside of this industry, nearly all people won't even have heard about them.

Additionally, many problems companies have where research would make sense are not the kind of problems that are a good fit for universities.

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I’ll note at the end of the last century I worked at IBM research which had a budget of 6 Billion dollars. Management was trying very hard to get better return on that investment. Even today IBM though often ridiculed in the tech space (sometimes they do deserve it) spends a lot on R&D.
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Lucent at the same time went through the same issue: how to monetise Bell Labs.

Bell Labs greatest work came out when AT&T was a monopoly. Once they were broken up (1984?) they started feeling the pain.

When the Lucent spinoff took place, the new entities had no Monopoly money to fund unconstrained research while management's behaviour never changed.

I don't know how BL fared under Alcatel and now Nokia, but haven't heard of anything interesting for years.

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I've been to the Holmdel office in the decline years. It was very sad. A fraction of the former staff was rattling around in what could've been used for a post apocalyptic sci-fi set. In its heyday it must've been magnificent. Imagine taking an entire great research university and putting it into a single architectural masterpiece. I've also been to Nokia HQ after Elop ruined the place. Also sad.
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Did anything come out from those billions?
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> Did anything come out from those billions?

Per wikipedia:

  IBM employees have garnered six Nobel Prizes, seven Turing Awards,
  20 inductees into the U.S. National Inventors Hall of Fame, 19 National Medals of Technology,
  five National Medals of Science and three Kavli Prizes. As of 2018,
  the company had generated more patents than any other business in each of 25 consecutive years.
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> the company had generated more patents than any other business in each of 25 consecutive years.

A couple things about those patents, from a former IBMer who has quite a few in his time there.

First, not all patents are created equal. Most of those IBM patents are software-related, and for pretty trivial stuff.

Second, most of those patents are generated by the rank and file employees, not research scientists. The IBM patent process is a well-oiled machine but they ain't exactly patenting transistor-level breakthroughs thousands of times a year.

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I also worked (briefly, as an intern) at IBM and IBM’s management also sometimes undermined the R&D that happened at the company.

I started at the tail of one research group’s mass exodus. It was like a bomb had gone off; the people left behind were trying to pick up the pieces. In essence, this group developed a sophisticated new technique, which the company urged them to commercialize. Pivoting to commercialization was a big effort, and not naturally within the expertise of this group, but they did it, largely at the expense of their own research productivity—for several years. They even hired programmers (ie, not people who are primarily computer scientists) and got it done. But just before launch, IBM pulled the plug.

This infuriated the researchers in the group. Keep in mind that career advancement in research is largely predicated on producing new research. In effect, IBM asked people to take a time out and then punished them for agreeing to do it. The whole group was extremely demoralized. Google was the largest beneficiary of this misstep.

I also had a similar, frustrating experience working for Microsoft, so it’s not just IBM, but the same dynamics were at work: bean counters asking researchers to commercialize something and then axing a project as it becomes deliverable.

If AI replaces any role in the company of the future, please let it be the managerial class.

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Why do you need to generate transistor-level breakthroughs multiple times a year? Those breakthroughs are hard to generate, but they're important and industry-spanning. The problem is we've mostly stopped generating them.
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I wasn't saying anything about that, I was just pointing out that yes, IBM produces a ton of patents, but they're mostly trivial junk that regular employees generate en masse in order to earn accomplishments and make up for the insultingly low bonuses.
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> they're mostly trivial junk that regular employees generate en masse in order to earn accomplishments and make up for the insultingly low bonuses

We did that at Meta and Amazon too (for polycarbonate puzzle pieces, with no monetary award at all!). Every now and then something meaningful came out of it

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Not even Lucite!
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I still have my “Get fucked, employee! Love, Jeff” puzzle pieces.
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The thing is, Nobel Prizes and other awards don't pay the bills.

Patents do, but in most cases it's trivial patents or patents for a "mutually assured destruction" portfolio (aka, you keep them in hand should someone ever decide to sue you).

That's a fundamental problem with how the Western sphere prioritizes and funds R&D. Either it has direct and massive ROI promises (that's how most pharma R&D works), some sort of government backing (that's how we got mRNA - pharma corps weren't interested, or how we got the Internet, lasers, radar and microwaves) or some uber wealthy billionaire (that's how we got Tesla and SpaceX, although government aids certainly helped).

All while we are cutting back government R&D funding in the pursuit of "austerity", China just floods the system with money. And they are winning the war.

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Every year they grant prizes. If hardly anyone is doing core R&D because of cost cutting, there is a higher chance those doing the smallest amount of R&D get the prizes.

A Nobel in 2026 doesnt carry the same weight as a Nobel in 1955.

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> When bean-counters took over the ecosystem [...] in their mind, every part of the system needs to be firing at 100% all the time.

This is only fair, because they themselves are firing at 100% all the time IYKWIM ;)

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They also took out all the quality, though in pure business terms one can argue that's a kind of "slack" by itself.

The beancounters have cut all the corners on physical products that they could find. Now even design and manufacturing is outsourced to the lowest bidder, a bunch of monkeys paid peanuts to do a job they're woefully unqualified for.

And the end result is just a market for lemons. Nobody trusts products to be good anymore, so they just buy the cheapest garbage.

Which, inevitably, is the stuff sold directly by Chinese manufacturers. And so the beancounters are hoisted by their own petard.

We've seen it happen to small electronics and general goods.

We're seeing it happen right now to cars. Manufacturers clinging on to combustion engines and cutting corners. Why spend twice the money on a western brand when their quality is rapidly declining to meet BYD models half the price.

---

And we're seeing it happen to software. It was already kind of happening before AI; So much of software was enshittifying rapidly. But AI is just taking a sledgehammer to quality. (Setting aside whether this is an AI problem or a "beancounters push everyone into vibecoding" problem)

E.g. Desktop Linux has always been kind of a joke. It hasn't gotten better, the problems are all still there. Windows is just going down in flames. People are jumping ship now.

SaaS is quickly going that way as well. If it's all garbage, why pay for it. Either stop using it or just slop something together yourself.

---

And in the background of this something ominous: Companies can't just pivot back to higher quality after they've destroyed all their inhouse knowledge. So much manufacturing knowledge is just gone, starting a new manufacturing firm in the west is a staffing nightmare. Same story with cars, China has the EV knowledge. And software's going the same way. These beancounters are all chomping at the bit to fire all their devs and replace them with teenagers in the developing world spitting out prompts. They can't move back upmarket after that's done.

Even when the knowledge still lives, when the people with the skills requires have simply moved to other industries and jobs, who's going to come back? Why leave your established job for the former field, when all it takes is the management or executive in charge being replaced by another dipshit beancounter for everyone to be laid off again.

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> And in the background of this something ominous: Companies can't just pivot back to higher quality after they've destroyed all their inhouse knowledge. (...) They can't move back upmarket after that's done.

The knowledge isn't the problem. It can be quickly regained, and progress of science and technology often offer new paths to even better quality, which limits the need for recovering details of old process.

The actual problem is, there is no market to go up to anymore. Once everyone is used to garbage being the only thing on offer, and adjust to cope with it, you cannot compete on quality anymore. Customers won't be able to tell whether you're honest, or just trying to charge suckers for the same garbage with a nicer finish, like every other brand that promises quality. It would take years of effort and low sales to convince the customers to start believing you're the real deal, which (as beancounters will happily tell you) you cannot afford. And even if you could, how are you going to convince people you're not going to start cutting corners again a few years down the line? In fact, how do you convince yourself? If it happened once, if it keeps happening everywhere around across all economy, it's bound to happen to your business too.

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> E.g. Desktop Linux has always been kind of a joke. It hasn't gotten better, the problems are all still there.

Desktop Linux has gotten better, though much of the improvement happened decades ago. I believe the first person to prematurely declare "the year of Linux on the desktop" was Dirk Hohndel in 1999: https://www.linux.com/news/23-years-terrible-linux-predictio...

And speaking as someone who was running desktop Linux in 1999, I remember just how bad it was. Xfce, XFree86 config files, and endless messing around with everything. The most impressive Linux video game of 2000 was Tux Racer.

But over the next 10 years, Gnome and KDE matured, X learned how to auto-detect most hardware, and more-and-more installs started working out of the box.

By the mid-2010s, I could go to Dell's Ubuntu Linux page and buy a Linux laptop that Just Worked, and that came with next day on-site support. I went through a couple of those machines, and they were nearly hassle free over their entire operational life. (I think one needed an afternoon of work after an Ubuntu LTS upgrade.)

The big recent improvement has been largely thanks to Valve, and especially the Steam Deck. Valve has been pushing Proton, and they're encouraging Steam Deck support. So the big change in recent years is that more and more new game releases Just Work on Linux.

Is it perfect? No. Desktop Linux is still kind of shit. For examples, Chrome sometimes loses the ability to use hardware acceleration for WebGPU-style features. But I also have a Mac sitting on my desk, and that Mac also has plenty of weird interactions with Chrome, ones where audio or video just stops working. The Mac is slightly less shit, but not magically so.

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For some reference back in Ubuntu 6 days around 2005 I switched. It took me 2 weeks to get X Org to run with my nvidia card at the time. 2 weeks of messing with config files. I only persisted because I was so sick of windows.
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> E.g. Desktop Linux has always been kind of a joke

And yet I run it every day, and it's by FAR the most enjoyable platform and tooling to use (for me).

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> The core problem is that decision-makers—often far removed from actual engineering work — believe that tacit knowledge can be replaced with documentation, tools, and processes. [It] cannot.

I am not so certain:

For example, I think that a lot of my knowledge about the system that I work on could be documented, and based on this documentation someone new could take over the system.

The problem rather is: the volume of documentation that I would have to write would be insane; I'd consider ten thousands of dense DIN A4 pages to be realistic - and this is a rather small system.

So, a new person who could take over this system would have to cram and understand basically all the details of this documentation insanely well.

This insane effort (write the documentation; new workers on the project then have to cram and understand every detail of this incredibly bulky documentation) is something that no employer wants to spend money on: this is in my experience the real reason why it isn't done.

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There are certain things that are too obvious to some person at a given time. Hence they would not consider it's worth documenting. Some of those things are important bits and pieces of the theory[1] of the program.

[1] https://pages.cs.wisc.edu/~remzi/Naur.pdf

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<< [belief that] knowledge can be replaced with documentation, tools, and processes. [It] cannot. << volume of documentation that I would have to write would be insane

I am not sure those are mutually exclusive. We all know if situations where a person knows of tiny and typically undocumented system quirks. We even have a corporate name for it: institutional knowledge. The issue is that executives think it can ALL somehow be done, when even cursory real life project lift will quickly teach one how insane average gap between documented and undocumented tends to be. Add to that near constant changes to API, versions, systems, people and I can't help but wonder at executives, who really do think this way.

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It’s way easier (for this type of scenarios) and far more effective to learn by doing than to learn by reading (even tens of thousands of pages of) documentation, that is the crust of it.
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> It’s way easier (for this type of scenarios) and far more effective to learn by doing than to learn by reading

I don't think so: the problem is that there exist lots of parts in the system that are quite complicated but which one very rarely has to touch - except in the rare (but happening) case that something deep in such a part goes wrong a for requirement for this part pops up.

If you "learned by doing" instead of reading, you are suddenly confronted with a very subtle and complicated subsystem.

In other words: there mostly exist two kinds of tasks:

- easy, regular adjustments

- deep changes that require a really good understanding of the system

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I tend to document some tricky non-obvious pieces of knowledge directly above the relevant code. "We have to do X below instead of obvious-first-idea-Y because Z".

Any time a refactoring comes up which moves code around, AI (or my coworkers) remove those comments without thinking twice, and I need to tell them "hey this is still valid".

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It's kind of a learning JIT. It's no use to go through and memorize something you don't need in the short term. It's hard to memorize well and by the time you need to draw on the knowledge it's already hazy. This is why you can think of such documentation more as a reference manual and not just plain documentation.

In any case, AI is great for traversing a codebase and producing at least a draft of such documentation.

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crust (edge/border) -> crux (heart/essence)
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>. In many domains, productivity is already sufficient. What’s being sold is workforce reduction.

This is a blindspot to many. People working on entrepreneurial projects need to build a lot. They start with nothing. They need (for example) features. There's a lot to do.

Most firms are not that. Visa, Salesforce, LinkedIn or whatnot. They have a product. They have features. They have been at it for a while. They also have resources. They are very often in a position of finding nails for a "write more software" hammer.

It's unintuitive because they all have big wishlist and to do lists and and a/b testing system for pouring software into but...

If there were known "make more software, make more money" opportunities available, they would have already done them.

Actual growth and new demand needs to come from arenas outside of this. Eg companies that suck at software(either making or acquiring) might be able to get the job done.

The Problem, bringing this back to the article, is fungibility. A lot of this "human capital" stuff cannot be easily repackaged. It's a "living" thing. Talent and skills pipelines can be cut off, and vanish.

A danger in Ai coding (and other fields) is that it leverages preexisting human capital and doesn't generate any for later.

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> doesn't generate any for later.

"any" is quite an assumption.

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> If there were known "make more software, make more money" opportunities available, they would have already done them.

Sometimes they're available, but not palatable, when the opportunity could threaten their existing investments or patterns. That might mean "self-cannibalism", or changing the ecology so that the main product niche is threatened.

Then those opportunities are ignored, or actively worked-against via lobbying, embrace-extend-extinguish, etc.

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Ok... but this just generalizes into the "known things" type.

Whether the reason of strategic (like your example), internal politics, insufficient knowledge.... The point is that there is a local equilibrium, and most mature firms are at this equilibrium.

More resources via Ai, at first order, goes after that diminishing returns part of the curve... which is a cliff especially for highly resourced firms topping the S&P500.

A lot of Ai-optimist:s " mental model" of the economy do not account for this stuff at all.

"Save time/money" outcomes are not similar at all to "make more stuff" outcomes. Firing employees does freeze up labour... but reutilizing this labour is non-trivial... as this article demonstrates quite well.

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This shows Western government system is broken.

In ideal world (where we don't live):

* Corporation - optimizes for mid-to-short term profits (remove slack, run everything thin)

* Government - optimizes for long term profits (introduce regulations to keep the slack time, keep and attract the talent so state gets better)

* Individual - optimizes for their life time (career, family and tries to leverage market conditions to learn skills and get more opportunities from existing pool)

In the west, government is optimizing for "loads and loads of moooney", because of lobby groups and MBAs controlling the corporations which are pushing these ideas through lobbies

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> In the west, government is optimizing for "loads and loads of moooney"

More appropriately, government is optimizing for 4 year electoral terms. No one cares about longer timescales necessary to tackle hard problems.

This is where autocracies like China, or monarchies for example, win over democracies.

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> This is where autocracies like China, or monarchies for example, win over democracies.

This is the wrong characterization, and in fact it's where monarchies lost out to democracies. Without an organized system of replacement in response to poor performance, autocracies with a poor leader are stuck with that poor leader for life. Ask North Korea how that's going. The upside is that if you have a brilliant leader, then you also get the benefit of that brilliant leader for life. The variance in an autocracy is absolutely huge, and that's their weakness in the long term. Democracies take the edge off, and are intentionally designed to have both less upside and less downside, trading performance for stability. Xi Jinping looks good comparatively because we have gormless losers like Trump and Biden to compare to him to, but he makes plenty of his own mistakes as well (the whole Taiwan situation is a unforced error driven by his own ego, similar to Putin with Ukraine), and we've seen historically what China looks like when it's stuck with a shit leader for decades (Great Leap Forward, anyone?).

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I wonder what longer cycles with easier recall methods might yield.
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Western democracy is very interesting.

Corporations promote people to Principal or distinguished engineer only when they prove their worth by running long running large scale projects.

But when it comes to governing the whole country: lobby, marketing and boom, you are a president for next 4 years, which is anyway not enough to deliver anything big and see the impact. (Except the destruction, destruction is easy to cause)

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It's also where autocracies fail spectacularly and lead to decades of misery for their citizens.
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I think of the four year cycle as one year to whine about the previous (if different) government you took over from, two years of governing and the last as a ”get ready for election”. So in the most optimal scenario you get three ”peaceful” years. It’s very few things that can be done well in three years at ”ruling a country”-scale.
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I feel like it’s something more fundamental and broad than that. We slowly remove excuses to talk to other people.

The thought crossed my mind the other day — if I’m asking the AI a question, that’s replacing a human interaction I would have had with a coworker.

It’s not just in coding, it’s everything. With ChatGPT always available in your pocket, what social interactions is it replacing?

The thing that gets me is, we are meant to fundamentally be social creatures, yet we have come to streamline away socialisation any chance we get.

I’m guilty of this too — I much prefer Doordash to having to call up the restaurant like in the old days, for example.

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We see this in our open-source community. We've had a community channel for over two decades, where community members help newcomers and each other solve problems and answer questions.

Increasingly we have people join who tell us they've been struggling with a problem "for days". Per routine, we ask for their configuration, and it turns out they've been asking ChatGPT, Claude or some other LLM for assistance and their configuration is a total mess.

Something about this feels really broken, when a channel full of domain experts are willing to lend a hand (within reason) for free. But instead, people increasingly turn to the machines which are well-known to hallucinate. They just don't think it will hallucinate for them.

In fact I see this pattern a lot. People use LLMs for stuff within their domain of expertise, or just ask them questions about washing cars, and they laugh at how incompetent and illogical they are. Then, hours later, they will happily query ChatGPT for mortgage advice, or whatever. If they don't have the knowledge to verify it themselves then they seem more willing to believe it is accurate, where in fact they should be even more careful.

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Personally this type of behavior played a large part in why I left 2 oss communities.

A lot of the passerbys nowadays feel like trolls. They come in copy pasting chatgpt responses spamming they need help instead of chit chatting asking questions. We fix their problems, they don't trust us or understand at all. Or worse we tell them their situation is unreasonably bad and they should start over, they scream at us about how some unimaginably bad code passes tests and compiles just fine and how we are dumb.

They tell us we don't need to exist anymore in one way or another. They try to show off terrible code we try to offer real suggestions to improve it, they don't care. Then they leave the community once their vibe/agentic coding leaves that part of their code base. Complete waste of time, they learned nothing, contribute nothing, no fun was had, no ah-hahs, just grimey interactions.

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I’m subscribed to a couple of mailing list and follow the archive of a few others. I wonder if the friction associated with the medium is why I haven’t seen those shenanigans?
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I should look into mailing lists. That would be a great filter for the "I need it now at any cost" interactions. Thank you for the indirect advice.
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> if I’m asking the AI a question, that’s replacing a human interaction I would have had with a coworker.

Importantly, you're removing a signal: If I'm not asked things anymore, I don't know which aspects of our domain are causing the most confusion/misunderstandings and would as such benefit most from simplifying the boundaries of.

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There is a lot of wisdom in this.

At the end of the day chatgpt won't be there to hold our hands in the hospital, have a laugh over failing to pick up a date, get invited to a bbq, groan over the state of the code in utils.c, or recommend us for our next job/promotion. They say software is social for a different reason than most of these examples.

It's good to be efficient, whatever that means, but there are no metrics on the gains that get made by talking to people. In a lot of ways those gains are what life is about.

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> At the end of the day chatgpt won't be there

Are you sure it won't?

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Yes. 100%. Chatgpt can't get drunk with you share personal experiences grill food for you or network with humans for you. At some point certain people have to choose to live a life otherwise why have one anyways.
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I think you are right, but it also makes sense. Human communication is inherently inefficient. Points of view, miscommunication, interpretation... It's the obvious point to automate. Not defending it, just my thoughts
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i see what you did there :)
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That 'real issue' is the lack of formal effective communications training across the board in the United States, and probably all of Western Culture.

The Problem is wider than management, it is understanding the extended ramifications of action, understanding the larger systems one is a member and then identifying with them, protecting them, because you and all your peers understand their extended foundational need.

That type of critical analysis and secondary considerations tacit knowledge is developed through effective communications training, which is an entire perspective, a way of seeing the world. This can be gained by reading a wide diversity of literature, of the Nobel Literature quality; the reason being such literature is first person accounts of institutions crushing individuals, and individuals finding the power within themselves to defeat the institutions. That personal transformation is practically a Nobel Trope, but it teaches the reader how to have such insight and perseverance. Read a half dozen or more such novels, and you are materially a different person. A better, deeper considering person with a longer perspective horizon. We need this civilization wide.

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Why would anyone have a sight longer than a quarter? I mean how does long term thinking help the execs get their compensation this quarter? Sheesh..worst case scenario is that the work done now will benefit someone else when they've already left.

Also when companies grow big enough "business" becomes the main business of the company. By that I mean everything unrelated to the actual original domain, such as playing in the financial markets, doing stock buybacks, lobbying, cheating etc. When your CEO is an MBA and your real market is Wall Street any actual product RD and support is a real annoying cost that just cuts into the profits and thus into the exec compensation.

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> Why would anyone have a sight longer than a quarter? I mean how does long term thinking help the execs get their compensation this quarter?

Vesting schedules, conditional grants, contractual equity ownership requirements

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>Vesting schedules, conditional grants, contractual equity ownership requirements

In those filthy low margin industries that HN loves to regulated across the oceans out of sight out of mind capital investments have service lives measured in decades.

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Would be interesting to get a law that says that all positions supposed to take long-term decision should be paid with X% of their salary in (non-redeemable until Y years?) stocks.
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> ...any actual product RD and support is a real annoying cost that just cuts into the profits...

Worse, it might not generate a return. If you have enough profits, you just buy anyone who successfully produced something innovative. Let them take the risks. As Cisco used to say, "Silicon Valley is our R&D lab."

It is a very difficult mindset to argue against.

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china is run by engineers, America is run by bankers.

the consequences are significant

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Surely run by lawyers?
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> The problem is a management pattern .... Short-term cost cutting

Absolutely agree with this. Most MBAs are taught to optimize and reduce the slack.

It works fine with machinery and materials, but not with humans.

When machinery is optimized and run thin, when one of them breaks, you can get exact same in couple days (you usually prepare for it earlier), but with humans, they train their brain and next person is different from the first person.

Humans also break in different ways:

* They stop caring - you wouldn't notice it immediately, they will close tickets, but give bare minimum thought

* Communal brain will not be trained when there is not enough room for experiments and learning - which reduces the innovation eventually

This is exactly the reason it is difficult for US companies to compete with Chinese companies in manufacturing, because their communal brain have already trained and produced very good talent.

Next is the knowledge, more you outsource, more you lose it

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There’s even a management tutorial game which demonstrates the dangers of removing too much slack from systems.

It’s called The Beer Game[1].

One of the funny things about it is even people that have played and discussed it before _still_ make the same fundamental mistakes next time.

Short-termism is the death of companies.

https://en.wikipedia.org/wiki/Beer_distribution_game

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Wut?

The point of the beer game is that buffering in the supply chain makes the bullwhip effect worse.

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If "winning" the beer game means not overreacting to short-term signals, then you can view that as a form of slack. You're sometimes paying a bit extra to hold onto something that you have no immediate short-term use for.
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I'm not sure it's the same kind of buffering. I would assume the "winning" strategy for the case when the known final demand is fixed is to maintain fixed the upstream orders, and buffer outcome, and for non-fixed final demand is to model that demand as good as possible and keep upstream orders accordingly to maintain outcome matching the demand model. Large penalties for buffering may make this approach not working, I guess...
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This sounds all true to me, but I think there is more. It is not just decisions by management, it is also the wider economic context. Low interest rates and, for the US, having the world reserve currency as your own currency both seem to make many of these changes attractive or even inevitable. Low interest rates lead to 'innovation' which I put in scare quotes because besides real innovation it can also mean something that passes as innovation but in the end just turns out to be a bubble of stuff that was not valuable enough. The 'innovation' then crowds out investments in more boring sectors like manufacturing. This is also not good for the population in general because fewer jobs are left for people who are not suited for working in highly 'innovative' sectors.
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This behavior is strongly incentivized by the fact that recruitment and on boarding and training costs don't show up in the quarter, or maybe even the fiscal year, where layoffs are made. You can also hide a bit of age and wage discrimination in layoffs and intentionally dumb down your organization to goose up the quarter a bit more.

Quarterly financial reporting is an obvious target for a rethink. Managers get instantaneous readings from dashboards, but they also like the room for shenanigans that quarterly reporting to shareholders enables. It's going to be hard to get management to give up information asymmetry.

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I came to comment EXACTLY about this issue. Management lives in a world where they have absolutely no expertise on what they are supposed to manage. So they try to objectify their decisions, with generic KPIs based on efficiency or cost or whatever. And miss MANY additional decision axis very focused on WHAT they are supposed to build. That is a MASSIVE issue, in my opinion.
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> But documentation is not the same as field experience.

Even if it were, creating good documentation or assessing its quality requires experience in using good and bad documentation. And how would juniors build up that experience if they are using AI for everything.

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Seems to me that - optimistically - this would shift the job of a software engineer into a more formal engineering role, and that the actual implementation is done by AI. In the same way in other areas, engineering and implementation differ and implementation can be (and is) automated.

No idea how this should take form, though, and if it’s even realistic. But it seems like due to AI, formal specs and all kinds of “old school” techniques are having a renaissance while we figure out how to distribute load between people and AI.

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That sounds right, but it can be superbly wrong because that presupposes that you can debug what the AI gets very confidently wrong.

There are three legs to the stool: specification, implementation, and verification. Implementation and verification both take low-level knowledge and sophisticated knowledge of how things break.

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Indeed, even if were possible for someone to create any program most of the time just by directing a team of AI agents, when something does not work one needs the ability to zoom in through the abstraction levels and understand exactly the program that is executed, so only knowing to generate prompts becomes insufficient.

This is the same with compilers. Most of the time a programmer needs to know only the high-level language that is used for writing the program. Nevertheless, when there is a subtle bug or just the desired performance cannot be reached, a programmer who also understands the machine language of the processor has a great advantage by being able to solve the bug or the performance problem, which without such knowledge would be solved in much more time or never.

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I don't think compilers are a good example. The economics of software development has won a long time ago. For example in Gamedev with well known soft real-time requirements people (mostly) stopped doing that machine code dance many hardware generations ago. Like it happened with memory optimizations: people measure memory in GB now not in KB =)

I am sure programmers cherish every case when they can do micro optimization but in the retrospect the high level cuts is what made the system fit the perf or memory budget.

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1) luckily, nowadays compiler's bugs surface very rarely, as the average programmer does not have capability to solve such issues

2) unfortunately, LLM's, by their very nature (not having a model of what they do, are prone to introducing subtle bugs, i.e. it is like programming in high-level language whose compiler likes to wing it

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> this would shift the job of a software engineer into a more formal engineering role

If only you knew how the civil engineering sausage was made.

The amount of yolo'ing stuff based on vibes goes up when testing is expensive/impractical. They just paper over it all with disclaimers of the sort that would get laughed at for being non-starters in the software industry.

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"McKinsey comes to town".

Basically same shaped taylorism-derived industrial management has imposed itself as the "default dogma" in private and public administration.

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And the next level of this is, that even companies that realize this, mostly go ahead acting like this anyway, because they think someone else can train the juniors. Some other company will appear to do that, but nimby! Over time the lack of good judgement will lead to a decline in their products' quality, which will be difficult to recover from.
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Most workforce reductions are using AI as a cover up for greedy short term bonuses.

Any exec using AI to pay fewer people lacks imagination.

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In the case of the military I'd say the real reason is political. After the fall of the Berlin wall, Europe collectively agreed (knowingly or not) that war is now a thing of the past and the goal should be the complete dismantling of militaries worldwide, starting with Europe. Lead by example, etc.
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It's subtler than that. Europe was just constantly reminded by its big brother not to duplicate NATO structures, which are dependent on the US.
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This.

Plus, of course, each European country has to support their own defense industry, so each one of them needs to have their own howitzer/tank/whatever and they can't agree on common approach that would actually allow for the economy of scale.

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They agreed that war was a thing of the past, but still continued to push for NATO to allow new members anyway, ironically causing Russia (and China and everyone who is NOT in NATO) to suspect that war was NOT a thing of the past and therefore never quite abandoning their military completely. Unpopular opinion: the West should either NEVER have abandoned its military production (so as to maintain NATO actual preparedness for war, given that's the only reason for its existence) OR it should just have dismantled NATO and announced to the world that it strongly believes war is a thing of the past, and that other countries are advised to follow suit. But we actually chose the easy, halfway path: keep NATO, keep our militaries "looking strong" (which gives the signal our rivals should also do the same, obviously), but not actually be ready for any sort of major war and as the article points out, even lose actual capacity to become ready for war within any realistic timeframe. The worst possible outcome :(.
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It could be matching theory for outcome though. The unpopular opinion may still be wrong too. Russia was quite different in 1999, or better in 1992, to the point of joining NATO, and China was nowhere the threat of today, and it could be different reasons- not keeping NATO - which caused today's standup. So, basically, the situation seem to be more complex.
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USA had no part in that push?
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Perhaps but the US was pushing NATO to invest more in war for years suggesting they didn't believe war was in the past
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Correction: The US was pushing NATO to invest more in US gear.
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That was the hope but nothing stopped the EU from making their own stuff.
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Nothing, only the gentle hand of US influence over their internal affairs, and the typical nationalistic bickering among themselves.
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Those are impediments for sure, but they are not blockers, and if they had the will, they would have overcome that. Most, probably all NATO countries do have their own military industrial complex of some sort and the US is buying from them. Although, it certainly is the case that the US is the largest supplier of military equipment and so, yes, the US would benefit most from efforts to increase military spending.
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I agree, the will was never there.

We will see whether the new realities of the war in Ukraine and Trump's approach to Europe will substantially change that.

The whole economic and societal tensions in the west make things tougher...

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That's because they have more to gain from that.
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> The problem is a management pattern: removing people and organizational slack because they don’t generate immediate profit, and then expecting the knowledge to still be there when it’s needed.

It's always seemed to me that the problem is corporate profit and personal profit above all. 'Management' is a subset of this, and so is pretty much everything else, including the current drive for AI.

It's the Western, perhaps American, approach to business and emphasived by MBAs and the media. Lowering costs, driving share price, dividends and corporate profit.

This race over the few decades has hollowed out most Western companies.

Listen to any entrepreneur podcast, or read any website, and it's all about 'how quickly can I get to exit', i.e. personal profit.

Capitalism is the worst form of economic system, apart from all the rest.

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I have worked for companies in different countries.

I think the striking thing is how US companies tend to have no idea how to be wealthy. Record profits, so the ceos use all of their tricks to get rich quick? They are already rich! Don't fix what isn't broken. Not every company needs to expand into 10 new markets, or have 5% lay offs or double in revenue. Some of this is investor pressure, but often it's not. Some guy who made it to the top is bored, doesn't feel like he is obviously doing enough, so he keeps making decisions to justify his position.

This isn't to insight flames but the European companies I worked for knew how to be wealthy! The market took a down turn from COVID, they ate the cost to keep their people. Some flashy new vertical is trending. They decided it's not for them, they have a brand and customers that they should focus on while everyone else works out the kinks. The company decides, why go public at all, we are successful and don't need anyone else's influence over us.

People say "you cannot project beyond 1 quarter". This is true in terms of catastrophe or gambler success. But its not true, if you act in q1 like there will be a q2 or even 5 years from now or heaven forbid a second or third generation you make different moves. You value different things.

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> But documentation is not the same as field experience. Automation is not the same as judgment. Without people who have actually worked with the system, you end up with a loss of tacit knowledge—and eventually, declining productivity.

This tracks the experience throughout my carreer, in all sorts of companies. From established body-shop consulting, to minor early-stage startup, to FAANG, and everything in between.

Essentially everywhere I worked, you would benefit to switch jobs. Companies would at times do quite an effort to hire you, but wouldn't try anything to keep you around.

This always sounded bonkers to me, but as I directly benefited with a rapidly increasing salary when I job-hopped, my response was a vague shrug. "Those who care don't know and those who know don't care".

The thing is, in every place, you typically is at your least useful when you just joined. It takes months, sometimes years, to learn the intricacies of the business, the knowledge that informs your skills so you can make better decisions, better designs, better implementation, better initiatives.

This is, of course, just one facet of a larger trend of how things are typically mismanaged. The article brushes on it when it talks about how governments in the US and Europe had to scramble to get 50-year old manufacturing going anywhere.

This is why I laugh whenever I hear someone talking about "governments should be administered like a business". Bitch, businesses are typically mismanaged due to terrible incentive loops, institutional blindness and corporate rot. That anything seemingly works is more a result of inertia and conformity than a sign that things are well managed.

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> The core problem is that decision-makers—often far removed from actual engineering work— believe that tacit knowledge can be replaced with documentation, tools, and processes.ti cannot.

my promotion packet at work always included how great of a document-er i am

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> The problem is a management pattern: removing people and organizational slack because they don’t generate immediate profit, and then expecting the knowledge to still be there when it’s needed.

I think that's still a symptom. The real problem is ideology: the monomaniacal focus on profit-making business, which infects our political leaders, down to capitalists and business leaders, down to the indoctrinated rank-and-file. Towards the end of the cold war, the last constraint on it were abolished, the the victory over the Soviet Union made it unquestioned.

The Chinese don't have that ideological problem. Their government appears to not give a shit about how much profit individual business make, they care about building out supply chains and a capabilities. They will bury the West, so long as the West remains in the thrall of libertarian business ideology.

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The US is stuck in this weird irony where they recognize that Soviet-style central planning is a disaster but can't recognize that it's what megacorps do when they're insulated from competition. Internal politics, perverse incentives and a system that can sustain massive inefficiencies right up until the point that it doesn't.

In general productive economic activity generates a surplus and that surplus allows for slack. Human beings intuitively understand this. Hobbies are frequently de facto training for things that aren't currently happening but might later. Family-owned and operated businesses are much less likely to try to outsource their core competency for the sake of quarterly profits.

But regulatory capture and market consolidation causes the surplus to go to the corporate bureaucracies capturing the regulators instead of human beings with self-determination and goals other than number go up, and then the system optimizes for capturing the government rather than satisfying the people. "When you legislate buying and selling the first things to be bought and sold are the legislators." You throw away the competitive market and subject yourselves to the unaccountable bureaucracy, and then try to pretend it's not the same thing because this time the central planners are wearing business suits.

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> megacorps do when they're insulated from competition. Internal politics, perverse incentives and a system that can sustain massive inefficiencies right up until the point that it doesn't.

You just described Lucent.

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That's the end stage. The bigger problem is the companies rotting from the inside even though they're still alive, because they use their resources to suppress your alternatives to them while they're slowly dying on top of you.
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Yes - ultimately it's the same system. Far from being daring and innovatory, it's backward-looking, unimaginative, and bureaucratic.

Vision for the future is limited to grandiose fantasies straight out of 1950s pulps and the "heroic" creation of narcissistic corporations that are cynically extractive and treat employees and customers with equal contempt.

The differences which used to provide a convincing cover story - no single Great Leader, a functional consumer economy, votes that appear to make a difference - are being dismantled now.

What's left are the same mechanisms of total monitoring (updated with modern tech) and reality-denying totalitarian oppression, run for the exclusive benefit of a tiny oligarchy which self-selects the very worst people in the system.

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Yes, many Americans and other Westerners believe that the so-called "socialist" economies, like those of the Soviet Union and of Eastern Europe were non-capitalist.

This is only an illusion created by the fact that the communists were careful to rename all important things, to fool the weaker minds that the renamed things are something else than what they really are.

In reality, the "socialist" economies were more capitalist than the capitalist economies of USA and Western Europe. They behaved exactly like the final stage of capitalism, where monopolies control every market and there is no longer any competition.

Unfortunately, after a huge sequence of mergers and acquisitions started in the late nineties of the last century, the economies of USA and of the EU states resemble more and more every year the former socialist economies, instead of resembling the US and W. European economies of a few decades ago.

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Everyone wants to tag the evil with their opposition's name. The evil is concentration of power. But no one wants to call it that because then they can't pretend that it's something different when they're doing it themselves.

Witness the people who keep proposing to solve market consolidation with higher taxes. Higher taxes go to the government, and therefore the interests that have captured the government. Are we going to solve it by taking money from Warren Buffet and giving it to Larry Ellison? Do we benefit from increased funding for Palantir? No, you have to break up the consolidated markets through some combination of antitrust enforcement and peeling back the regulatory capture that prevents new competitors from entering the market.

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> Higher taxes go to the government, and therefore the interests that have captured the government.

There is at least a chance for it to be redistributed, unlike private wealth.

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I'd argue we need both massive antitrust, and higher taxes on the wealthy to prevent them from amassing the power to prevent the antitrust.
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And change in laws regarding the legalized corruption (Citizens United, ...). And fight for real freedom of speech.

This is very complex problem that needs to be tackled from all sides simultaneously, the entrenched interests are already well setup to defend themselves.

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And to complete the reversal what is now referred to as the "golden age of capitalism" i.e the post WW2 USA was actually very socialist. Strong social movement and unions and social spending that created a wealth working/middle class with a bunch of spending power.

Inequality society producea inequal economy (and vice versa) which is the economy of any developing country. Few rich,. miniscule middle class and lots of poor people in slums snd poverty.

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West: We need profits and then we’ll try to build something useful.

China: We need to build this useful thing and then later let’s try to make profits, too.

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What do you think the war in the gulf is about, the US cannot compete with China so they are destroying the global system that enabled them. There is no plan to have a peace with Iran, only perpetual war and the destruction of the middle east, starvation in East Asia and poverty and nationalist wars in Europe, potentially with Russia taking over vast swathes of Eastern Europe again. Suddenly Russia is the one in charge of the China-Russia relationship. It's such a stupid plan for the US that you might think it was designed by Putin himself.
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You started well, but then the train got derailed...

Russia has no need for Eastern Europe (they have enough land and resources, why saddle yourself with hostile population?), as long as the said Easter Europe is not threatening them with NATO bases/missiles (US has repeatedly shown that they do not hesitate to use their muscle if they think they can get away with it, so Russia's paranoia is not entirely unfounded).

Even if Russia somehow took over Eastern Europe (most likely way: they learn from US how to do soft 'regime change'), they have no chance against China (China is just so much bigger and better organized; the population's mentality also matters a lot). China and Russia are rather complementary, there is not reason for confrontation between them.

But you are correct, what US is doing is really totally stupid ... although it seems designed by Netanyahu, not Putin.

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If China cannot get oil from the middle east what happens to China and China-Russia relations? I didn't say there would be hostilities just Russia would become potentially the more dominant partner.

If NATO expansion is the reason for the war in Ukraine (not imperialism) then why has the war not stopped now we know Ukraine will never join NATO?

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1) Russia will happily supply China with oil and other resources, and China will pay by industrial good and all other stuff they produce. China is working really hard on getting rid of dependence on foreign energy sources, any leverage Russia might get if it became the sole supplier of oil/gas to China is very temporary and Russia knows it. Furthermore, unlike USA, it has no delusion of ever dominating China - China already has them by the balls.

2) mostly face saving, but also: Ukraine will remain openly hostile, NATO or not, planning to have hostile (EU) forces on its territory as 'security guarantor'. Russians still believe Ukraine will collapse (those men will eventually run out/economy will collapse/EU will not send its children to die on the eastern front) and they will be able to have a friendly (or at least truly neutral) government there. Russia's paranoia about the west is really strong, well founded and well documented.

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  > Russia's paranoia about the west is really strong, well founded and well documented.
There's no such thing. It's an act, and everybody in Russia knows that it's an act. Acting this way gets the dumber kind of Western politicians to carefully tiptoe around Russia; that is the value this act provides.
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You seem to be extremely fond of Russian propaganda.
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That's the easy way out, isn't it? Why argue on merit of anything you don't like, just name it Russian propaganda.

Or, perchance, you want to provide a concrete argument why are my statements incorrect? (No, 'it fits Russian narrative' is not argument about correctness, it is an argument about the narrative.)

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> The real issue, in my view, is not AI itself

in shootings technically the guns are not the issue since they dont fire on their own.. they do enable the ability to shoot though

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Only in 2026 is AI the answer to everything and when the negative traits of our behaviour are amplified due to AI it clearly has nothing to do with AI even when the article exactly about that.
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The problem, in other words, is quarterly earnings in specific and shareholder capitalism in general.
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You can really reduce almost any problem to a “it’s a problem because of people”, so that adds very little to a discussion.
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A claim that fits every possible observation equally well isn’t an explanation. What does it help you predict, when everything falls under that label? How does it help you predict behavior of different institutions?
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Given a sufficiently long timeline all predictions breakdown (see prior comment on attenuation and entropy and Nostradamus)

And on shorter timescales you aren't really predicting anything of consequence. You're just assuring all that effort trying to predict Apple's next move (for example) keeps Apple itself alive in the public debate whether they do the thing or not; they'll have missteps but our 24/7 fetishizing of what they'll do next, overall, just distracts us from our own lives and boosting the lives of the mega rich

You really don't seem to have a grasp of how gamified and propagandized you are

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> just distracts us from our own lives and boosting the lives of the mega rich

So you’re saying we are being distracted from boosting the lives of the mega rich, which we should get back to doing

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If you find discussion forums pointless then why are you participating in one?
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> What AI is being sold as right now is not really productivity. In many domains, productivity is already sufficient. What’s being sold is workforce reduction.

And workforce reduction is a nobel goal. In fact, I think it's one of the most important things humanity should focus on. We should strive for a workforce of zero. Humans currently was an enormous amount of their life working instead of more worthwhile pursuits.

I despise the rhetoric around this, we didn't "lose jobs" over AI, we saved ourselves a lot of work. What it does do is highlight a problem in our current society: the link between labour and the access to resources (e.g. money).

I don't think that AI is the ultimate answer to the problem of work, but it can contribute to it.

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The time to solve that resource problem is before AI concentrates power, not after. It’s LESS likely to happen when a tiny elite increases their already huge amount of power.
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Jobless people normally can't feed themselves in a modern world.

And uh, healthcare. Among other things.

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You sound convincing, but it also reads very AI generated. A lot of people will stop reading half way.
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You're absolutely right. And the root cause is simple: the stock market / shareholders. The incentive is for quarterly returns, not long term. That's why CEOs look for that - that's the job they are assigned by shareholders and the board. For a shareholder what matter is the stock going up. Heck, you can make money even if it goes down, but you can't if it stands still.
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No. It’s pure greed dominating the world. My employer is owned by bigger private company and the shitshow is the same as in big megacorporation. There are hordes of colleagues to stab one for 100€ more salary a month. Disgusting.

The company is manufacturing special computers. The initial owner/founder ordered CPU modules and memory cards always looking at the price break. His question was always „how many to buy to get best price?“. So he ordered sometimes 200-300 parts more than needed immediately. Then the follow up order came and he emptied the storage. Now new manager always orders EXACT amount memory cards as ordered computers. Price is secondary thing, most important thing to work without warehouse and get things delivered just in time. What doesn’t work at all for the while already. The high prices buying small quantities is eating up the profit, so people are getting fired to save costs. It is pure greed dominating western world. Everything is done to look accounting nicely at every cost, get whole bonus despite ruining the company long term. I see this pattern recently very often.

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