Davos in a Nutshell (Non-Economics Sessions)

Perhaps the most illuminating sessions in Davos were ones unrelated to economics, and thus gave me insights into topics that I would not normally get the chance to learn about. Here is a short summary.

While these sessions were on quite different topics, one common theme to many was the "neuroplasticity" of the brain. The brain is not fully formed after childhood, but you can keep developing it, e.g. through meditation, mindfulness (paying attention rather than being distracted).

Meditation

A Buddhist monk led a session on "compassionate" meditation, which is quite different from standard meditation:

• Picture a loved one in suffering, and being relieved of this suffering. Then, move to acquaintances, strangers, enemies, and dictators. This simple practice helps us show compassion in our everyday life
• A little bit of meditation every day is better than 8 hours once a week. You water plants every day rather than throwing a bucket once a week.

Exploring Our Limits: Workshop on Creativity

• Jeremy Balkin (Karma Capital, Give While You Live, 5x marathon runner)
• Modern society tells kids to conform, to color within the lines, but we need risk
• For each of us, there's one thing we haven't done because we're scared. Think what this is, and do it
• We're all born as naked vulnerable beings, and we'll all die as naked vulnerable beings. What matters is what we do in between. And we don't know at what point death will come
• We're told that running 26 miles is physiologically dangerous. But, humans used to run to get food. And technology is evolving (e.g. better shoes) to help us. The world has changed a lot in the past 5 years, even in the past year. There's almost nothing we can't do
• Lewis Pugh (first person to swim across the North Pole)
• Jeremy Clarkson doesn't get his ideas for Top Gear by sitting in the BBC studio, but going to the pub, having a few beers and allow his imagination to get wild
• Lewis himself decided to swim the North Pole and Everest in creative moments, on a whim
• Creativity and imagination never takes place in the office, but with friends. You don't make a wild decision based on an economic cost-benefit analysis, but on a whim
• Use the "4am test". If a crazy idea makes sense to you at 4am in the morning, it's probably a good idea
• Bobby Ghosh (TIME magazine World Editor)
• 10 years from now, you'd like to think "I'm proud I did this wild and dangerous thing", but also "I'm proud I did not do this wild and dangerous thing". We often extol the virtues of being wild and crazy, but judgement is also required. Sometimes not doing something wild is the boldest decision
• Ask yourself: "When is the last time you did something for the first time?" Hopefully, the answer is "recently"
• Celine Cousteau (granddaughter of Jacques Cousteau)
• You need a team of people to help you - you can't do it alone. We like to promote the "self-made millionaire". No-one is self-made. Entrepreneurs have customers, employees
• Must connect with the hearts and guts with everyone in your team. This principle also guides you on choosing your team-mates: are they in?
• You need to give yourself space for creativity to happen. We're obsessed with doing things. Don't do, just be
• Tina Seelig (Stanford, moderator)
• Privilege.  If you're an MBA student (or professor) at a top business school, you're privileged, There are others who should be here who aren't here
• Platform. We are lucky to have a platform - use it to help those in need
• Perseverance. Nothing comes for free
• In baseball, if you hit 0.300, you're a great hitter. Encourage people to make mistakes when stakes are low: don't be a perfectionist on small things

Making Better Decisions

This was the session that I served as a discussion leader (on behavioral finance). Sendhil Mullainathan of Harvard was one of the co-facilitators (with Eldar Shafir of Princeton, his coauthor on a book called "Scarcity"). He talked about two topics: bandwidth and scarcity:

Bandwidth

• We talk a lot about time management, but what's more important is "bandwidth" management. You only have a limited capacity for difficult tasks
• The biggest predictor of a plane crash is whether the pilot is in a bad relationship
• Tools to manage bandwidth
• Delegate unimportant decisions to others
• Manage expectations. If others know that you may not reply to email instantly, this removes the mental burden of having to constantly check email
• Don't pack every item in your schedule. You can't go from one meeting on a hard topic to another meeting on a hard topic. Your mind will wander and you will lose focus. You need to build in "bandwidth breaks" during a day, else you'll be ineffective
• Respect other people's bandwidth. We think it's unacceptable to charge kids $100 to apply for a scholarship, but it's OK to make them fill in a 40-page form
• Listen to hear the other person, rather than to prepare your reply to the other person. You can't do both, as you have limited bandwidth

Scarcity

• If you're overcommitted, you may think you should drop everything from your schedule so that you have lots of time. But, then you'll take on unnecessary commitments
• A woman with lots of debt still keeps spending. She's a bad debtor of money, spending money she doesn't have
• We're often bad debtors of time, spending time we don't have
• The tagline of their book "Scarcity" is "Why having too little means so much". When we experience scarcity, we focus on the one thing to make ends meet right now
• Sometimes it works: we can be super-productive when you have a deadline
• But, long-term consequences: spending money you don't have involves taking payday loans
• Thus, there's an optimum amount of scarcity - not too much, nor too little

Mindfulness (Goldie Hawn)

• For further color, read the TIME Magazine article "The Mindful Revolution", http://sfinsight.org/MindfulRevolutionTIME.pdf.
• The more attentive you are, the more your brain circuits wire together and fire together. Mindfulness has been scientifically proven to change the neuroplasticity of the brain
• Mindfulness - focusing on one thing - teaches self-control, and ensures that you can control your emotions rather than being reactive
• Hot cognition: you make decisions based on emotion
• Cold cognition: you can distance emotion from decisions
• The "Stanford marshmallow experiment" showed that, whether kids were able to resist eating a marshmallow, was a significant predictor of future success
• Being distracted (e.g. checking phone during dinner, or doing urgent stuff over important stuff) is like eating a marshmallow or not controlling your hot cognition
• Psychology used to be about fixing broken things. Nowadays, positive psychology is about building on the good things in people. This involves attentiveness and focus

Mindfulness Dinner

• Otto Scharmer (MIT): the success of an intervention depends on the internal state of the interviewer 
• For someone to be a good leader or teacher, the people he's leading or teaching must be mindful
• Tania Singer (Max Planck Institute): mindfulness isn't just attention (like being a sniper). It doesn't just make you more efficient
• Mindfulness has an ethical dimension. Being present and aware of what it exists, and accepting what exists: compassion for others, self-acceptance for yourself
• Buddhist monk: mindfulness isn't just being aware of your thoughts, but also countering bad thoughts
• People are born with traits. However, by accumulating moods, you scientifically modify your traits by changing the neuroplasticity of the brain.
• Being a restless monkey all the time is bad. Be deeply aware of what's going on 
• The founder of Twitter mediates for 10 minutes a day, even though Twitter seems the opposite of mindfulness

Should Drugs Be Legalized?

• Governor Rick Perry (Texas): I'm the only one on this panel against the legalization of drugs, but I come to this debate with an open mind
• Kenneth Roth (Human Rights Watch): decriminalize drugs, so that we can regulate them like alcohol, tobacco
• Treatment is key, but treatment is undermined by criminalization, so victims run away from treatment
• Kofi Annan: drugs have destroyed many people, but government policies have destroyed many more. 
• The US spends more money on prisons than education
• We don't need to legalize drugs, but we should decriminalize them - there's an important difference. You can decriminalize possession, but still keep supply illegal (as in Colorado)
• Juan Manuel Santos (President of Columbia): drug policy is currently decided by law enforcement people, but it should be discussed by public health people
• Criminalization creates drug cartels and the potential for huge profits. This leads to murders - profits are so high that people are literally willing to kill for them
• Tobacco and alcohol firms make normal profits because these substances are legalized
• The Surgeon-General of the US said 8 million deaths have been prevented by the legalization of tobacco
• Roth: decriminalization doesn't mean throwing your hands up and giving carte blanche. Use education, drug substitutes
• Perry: I won't jump in front of the parade just because this is the way public opinion is going. Instead, science should lead us
• In the 5 years since decriminalization of drugs in Portugal, the murder rate has risen 40%
• Marijuana today is much more potent than in the past - it's genetically modified
• The fact that Texas is stricter than other states doesn't mean that Texas is too strict, or that the other states are too lax. The 10th Amendment was to give states authority to set laws, and then people can choose where to live. We shouldn't have the "one-size-fits-all" mentality that seems to come out of DC.
• Perry: something must certainly be done, but there are other steps we can take besides criminalization
• Go after the money. Crack down on banks who allow money laundering 
• Science can create drug substitutes. Decriminalization dissuades drug users from moving off drugs onto substitutes.
• Annan: decriminalize consumers, stay harsh on suppliers
• Audience question: does it apply to all drugs?
• Santos: we need a different approach for each different drug, since each drug is different
• Perry: the others on this panel have used economic arguments for legalizing drugs - that legalization will remove cartels. But, if so, the economic argument would apply to all drugs. This exposes the fallacy of a purely economic argument. Instead, we should look at the science of each drug. We should also think about the medical cost of sending the message that it's OK to smoke marijuana
• Roth: but we're not sending the message that tobacco is OK. Packets say "smoking kills"
• Perry: but that used to be the message. Films, celebrities portrayed the image of smoking being cool. We haven't spent enough since then to reverse this image. 

Closing Address

• Pope Francis: humanity should be served by wealth, not ruled by it
• Jim Wallis: Hope is believing in spite of the evidence, and then seeing the evidence change
• When we return home, we will be confronted by the tyranny of the urgent - but we need to be mindful of what's morally urgent
• Think about: what's the one thing I will commit to right now to help support the World Economic Forum's mission to improve the state of the world?

Eradicating World Poverty: Inspiring a New Generation to Act

This is a summary of a Davos session on "The Post-2015 Goals: Inspiring a New Generation to Act" on the eradication of world poverty and the millennium development goals. It featured, among others, David Cameron, Bono, and Ngozi Okonjo-Iweala (the Nigerian Finance Minister and the most impressive person I heard at Davos):

• David Cameron: tackling poverty is a holistic issue. We can't tackle poverty without tackling climate change, governance, corruption, justice, democracy, gender equality. Many of these reasons are why North Korea is poor but South Korea is rich
• Growth is insufficient. It must be in areas that create jobs for poor people (e.g. agriculture, housing), and we must create a social safety net
• People want two things: a job, and a voice. Can't just focus on the former
• As a result, the Millennium Development Goals (established following the 2000 Millennium Summit of the United Nations) cover eight different areas:
• Eradicate extreme poverty and hunger
• Achieve universal primary education
• Promote gender equality and empowering women
• Reduce child mortality
• Improve maternal health
• Combat HIV/AIDS, malaria, other diseases
• Ensure environmental sustainability
• Develop a global partnership for development
• Bono: I write lyrics like I write poetry. But, goals must be the opposite: hard and precise.
• Bono: 
• We should get out of the way of poor people. Ask them what they want, rather than presuming that we know
• Capitalism can be a great creative force, but also a great destructive force. Even if it's not immoral, it's amoral
• Bono: to me, transparency is even more important than debt cancelation
• If a firm is registered on the NYSE, it must publish what it pays executives. But, declared and actual pay is different. 
• Companies always lobby against transparency. The American Petroleum Institute lobbied against the Extractive Industries Transparency Initiative, which requires oil, gas, and mining companies to disclose the payments they make to governments for extractive projects
• The government must also be open. The question shouldn't be "are we open for business?" but "are we open"?
• Ngozi Okonjo-Iweala (Nigerian Finance Minister):
• Nigeria is forward-thinking compared to the rest of Africa, but shouldn't try to be an oasis in a desert, because the desert always wins
• Africa needs to move beyond extracting resources and use them to create wealth and equality
• Nigeria's policies are targeted. Use conditional cash transfers to encourage kids to attend school. Don't just receive aid, but use it to leverage private sector resources better
• We write off whole countries when there's a bit of sectarian conflict. But, even in such countries, we can try to get kids into school. As peace is being brokered, the next generation can get an education
• Cameron: 
• I reallocated the aid budget from India and China to other countries. India and China have resources to help themselves
• Some of the fastest-growing countries in the world are in Africa. But, there's lots of red tape hindering trade between African countries. Thus, lots of infrastructure has been build to export goods out of Africa, rather than trade within Africa
• Ngozi: gender inequality isn't limited to developing countries. Only 15% of Davos is female. But, because Nigeria is poorer, we can least afford it. I have to take the bull by the horns
• Girls' literacy is key. With the UK's Department For International Development, we pioneered conditional cash transfers to get kids into school. Attendance rose 40%
• Ngozi: everyone agrees we should invest in developing countries
• But, we typically think of investment being in hard assets - building schools and infrastructure
• We need to invest in soft skills: training midwives, teaching a mother to give water to a baby with diarrhea
• An educated woman has 2.1 kids, an uneducated woman 8.9
• Cameron: the UN must agree on a set of specific, measurable, inspiring goals that apply to everyone. We shouldn't have separate goals for the rich and poor. Anti-corruption, justice, transparency are goals for all countries
• Jasmine Whitbread (CEO of Save the Children): goals are universal, but the strategy to achieve them may differ across countries. 
• Tidjane Thiam (CEO of Prudential): we don't want to talk about Africa changing. Africa is still the same - it's weather and resources are the same. Instead, we want to talk about Africans changing - a change in people's attitude
• Bono: next year will be the 30th year of Live Aid. I hope that Bob Geldof and I are just guests - that we won't need Live Aid any more