Microeconomics joke of the day

From the FT letters page:

Sir, The recent takeover of the manufacturers of Durex by the manufacturers of Nurofen has to be one of the better examples of vertical integration we have seen for some while.

Duncan Moir,

London SW6, UK

Dubai Country Club to re-open!

I have just stumbled across this:

The Dubai Country Club, the family-oriented, not-for-profit members club, will reopen in Dubailand directly behind the Arabian Ranches. The club is offering value pre-opening memberships.

In the years since its closure to make way for a private development, the Dubai Country Club Committee has been busy securing a new home for what is set to become the biggest and best value sports, leisure and social club in the UAE.

“The Dubai Country Club has always been known for its value for money ethos and its membership offers access to all facilities for the whole family,” said Dubai Country Club Chairman Andy Staines.

“The Dubai Country Club has certainly come a very long way since its inception some 40 years ago. Our vision is to carry on providing the residents of Dubai with the best value, contemporary sporting, recreation and family-focused all-in-one leisure destination they can find,” Staines said.

The resort-style club features a 1,700 square metre swimming pool with a small beach leading into lush green parkland.

In addition, the club has a state-of-the-art health and fitness facility, 12 tennis courts, three squash courts, a football field, an indoor sports hall and modern skating park.

The club will also feature an adults-only sanctuary with a 20-metre private pool with a swim-up bar, an 18-suite boutique hotel and a day spa.

It also offers a dedicated children’s centre with a fully supervised creche and children’s club. Teenagers can also enjoy their own chill-out space, which will include their own café and activity zone, with all the latest games and a variety of attractions.

Khalid Al Malek, Group CEO, Dubai Properties Group, said: “This extraordinary new facility is the ideal complement to Dubailand’s attractions.”

There is also a website.

I have been in Dubai long enough to not believe things like this until I see them actually materialise, but if this is true it is extremely welcome news and a sign that perhaps some sanity and perspective may be returning to the city after the madness of the real estate boom. The old Country Club was a delightfully functional, straightforward and laid-back place that was an affordable antidote to Dubai bling: it was a great shame when it was closed to make way for the vast albino pachyderm that is Meydan. Along with CBV, it was one of those hubs of the expat community that got bull-dozed in the haste to build bigger, grander and taller. From the sounds of it the new incarnation will not be as down-to-earth and as the original, but hopefully it will retain something of the old approach.

Hats off to Andy Staines for even getting to this point. I am sure it must not have been an easy process and that some of the bureaucracy would have been excruciating.

Is anyone out there involved in this project or does anyone know more about it?

There is Dubai 103.8 interview about this here.

Photo of the day from The National

Ayman Kamel Ibrahim, a security officer with the Health Authority–Abu Dhabi, and Sami Zayed al Monzeui, a community police officer, walks through a replica colon at Abu Dhabi Health Authority.

Some general thoughts on the nature of incompetence

At first glance, incompetence would not seems a particularly fruitful area of discussion. If incompetence is simply the absence of the more intriguing attributes of skill, knowledge and ability, then it would seem to be something of a void. Yet the history of humanity is as much shaped by incompetence as brilliance, and the manifestations of incompetence are actually quite diverse. For incompetence is highly contextual: a competent individual in one role can reach giddying heights of incompetence if placed in another; and can be the result of a very subtle disconnect between the requirements of the situation and the attributes of the person. Practically, incompetence is a relative term that ranges as follows, according to the Neaufort-Schelling scale:

Slight (0.1 – 1)

This is extremely common and forms the general background noise and ennui of modern life in most highly developed nations.

Mild (1.1 – 3)

Mild incompetence is the default setting in most UAE customer service interactions.

Noticeable (3.1 – 5)

Incompetence at this level in a customer service context is normally sufficient to cause only frustrated and deep sighs of impatience, apart from those with anger management issues, in which case mild invective and muttered profanity may be engaged.

Glaring (5.1 – 6.5)

This is also known as the ‘awkward’ level of incompetence as by this point it is normally obvious to the large majority of people and hence becomes a source of great tension in an organisational context.

Utter (6.6 – 8.5)

Incompetence at this level can rarely persist for long periods of time outside of government, politics, heavily unionised industries, large bureaucracies, middle management, senior management and Dubai real estate developers. It is therefore worryingly common.

Staggering (8.6 – 10)

At this point the ship is not simply drifting towards the rocks but is being navigated towards them at full speed as the life boats are chopped into kindling to stoke the engines; the passengers are locked below decks for their own safety; and the life jackets are thrown overboard to make space for the Captain’s new cocktail bar. To be classified as Staggeringly Incompetent requires a succession of profound blunders and an uncanny ability to continually choose the worst possible course of action.

Incompetence is very egalitarian: Staggering levels can be attained by the humblest service industry employee and the mightiest captain of industry – it only in the scale of their impact that they differ (Impact = Incompetence x Power).  In addition, incompetence is highly social and cannot exist in isolation: the continuing existence of one incompetent individual in an organisation demonstrates that there is enough background incompetence to allow this to persist. Indeed, incompetence is only noticed in an organisation if it is sufficiently in excess of normal background levels.

Another factor that must be considered when discussing the phenomenon of incompetence is its intricate relationship with confidence. Intuitively one would imagine that the relationship between competence and confidence in a particular area would have a strong positive correlation i.e. higher competence equates to proportionally higher confidence and vice versa. However, if this was the case, incompetence would be unlikely to persist in its more extreme forms: one would expect that the crisis of confidence suffered by the individuals concerned would lead them to either withdraw from those responsibilities; be paralysed by uncertainty into abstaining from action or decision-making; or be brushed aside by more confident (and therefore more competent) colleagues or associates. This clearly is not what happens in real life.

The real relationship between confidence and competence is elucidated by the research behind the Dunning-Kruger effect:

(…) a cognitive bias in which an unskilled person makes poor decisions and reaches erroneous conclusions, but their incompetence denies them the metacognitive ability to realize their mistakes. The unskilled therefore suffer from illusory superiority, rating their own ability as above average, much higher than it actually is, while the highly skilled underrate their abilities, suffering from illusory inferiority. This leads to the perverse situation in which less competent people rate their own ability higher than more competent people. It also explains why actual competence may weaken self-confidence: because competent individuals falsely assume that others have an equivalent understanding. “Thus, the miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others.”

In the various tests conducted by Dunning and Kruger, the correlation between actual competence and perceived competence proved only weakly positive, due to the most incompetent grossly overestimating their ability and the most competent underestimating theirs: the gap in perceived ability between the top and bottom competence quartiles was minimal.

This weak relationship between competence and confidence is troubling, given the power of overt confidence to win arguments and gain both influence and responsibility in organisational and social settings. As Nietzsche said, “men believe in the truth of that which is plainly strongly believed”. We intuitively perceive confidence as a clear signifier for competence when the reality is more complex. Indeed, the overt self-confidence of the incompetent could be greater than that of the competent. The confidence of the latter is not just rooted in the self but is at least partly derived externally from the exercise of their actual ability; however, the confidence of the incompetent is simply erroneous self-belief. In addition, while the competent will possess the necessary perspective to recognise the complexity of their field and thus experience some self-doubt, the incompetent will find themselves happily cocooned in certainty. This unjustified confidence can simply be described as arrogance: the faithful ally of incompetence that allows it to persist and indeed become self-reinforcing. Arrogance acts as a force-field for the incompetent against the outcomes of their actions, staving off self-awareness by deflecting blame onto others or the vicissitudes of fate.

What are the implications of all this? Should we reverse the current pedagogical trend and let loose volley after volley of blistering criticism on today’s youth before the shutters of certainty come crashing down around their minds? Should we seize upon every opportunity to crush a child’s nascent arrogance lest we create a generation of deluded incompetents? Such a strategy, while beguilingly simple, would founder on the fact that it in turn would rely on a minimum level of competence to be properly implemented, and that misapplication would create new problems while failing to solve the original one. It would fail because without the necessary competence, one cannot readily distinguish between confidence and arrogance.

A final thought is provided by a recent quote from Boris Johnson:

Lurking in the childhood of anyone ambitious there is always the memory of some humiliation that sets them on the path of self-improvement. Show me a billionaire, and I will show you someone who was beaten up for his lunch money. Many is the megalomaniac who first had to overcome a case of acne or puppy fat or being forced by his mother to wear a flowery tie to a friend’s birthday party.

It is worth considering that although incompetence is infuriating to those on the receiving end, it is not necessarily an unpleasant state of being for the individual concerned. The self-aware and self-critical mindset that is usually required in order to achieve competence is not always conducive to happiness and contentment: indeed, it can be argued that contentment is antithetical to the highest levels of competence, the achievement of which requires an impulse to continually improve and a dissatisfaction with the status quo. Perhaps the conclusion is that for concerned parents there is a positive spin to whatever motivational approach they adopt: they will either raise contented and self-assured incompetents or insecure and driven high-achievers.