IFJ Summer 2017 by The IFJ

Joseph Kirby Belmonte

THE CURIOUS CASE OF THE CHINESE ART MARKET The Questionable Sustainability of Recent Growth

Amanda Chow STRONGER TOGETHER? The Debate Over Graduate Student Unionization

Hallie Wolff FRANCE, FEAR, AND FOREIGN POLICY

Can Today’s Populist Politicians Separate Xenophobia From Foreign Policy?

Neil Goh BAIT AND SWITCH: NINTENDO’S NEW GAME

Is It Finally Safe to Invest in Nintendo?

THE IFJ TEAM

DESIGN & LAYOUT

EXECUTIVE BOARD

CLAIRE SU, TIFFANY CHEN

CLAIRE SU PRESIDENT EMERITUS

PAUL MEUSER MANAGER

SOCIAL MEDIA & MARKETING EMILY WINSTON MANAGER ESTEBAN SAFRANCHIK ADVERTISING

JONATHAN GOMEZ MANAGER INTERCOLLEGIATE

JONATHAN GOMEZ MANAGER

AMANDA BEAUDOIN PRESIDENT EMERITUS MICHAEL JANIGIAN PRESIDENT

KATHARINE JESSIMAN-KETCHAM PRESIDENT DHEERAJ NAMBURU TREASURER MINGYI WU EVENTS MANAGER

PAUL MEUSER DESIGN & LAYOUT MANAGER

CASSIDY WALD INTERCOLLEGIATE MANAGER VANESSA ZHANG EXECUTIVE SECRETARY

EMILY WINSTON PROMOTIONS MANAGER

JONATHAN GOMEZ INTERCOLLEGIATE MANAGER

CASSIDY WALD MANAGER

EDITORIAL BOARD

THOMAS ANDREWS UNC CHAPEL HILL

GILLIAN LEE MARKETS EDITOR

YASH SANGHRAJKA UC BERKELEY

DELILAH MARTO UNIVERSITY OF CHICAGO

SUCHETA KINGER UNIVERSITY OF CHICAGO

JOSH GOLDMAN COLUMBIA UNIVERSITY DUSTIN CAI VANDERBILT UNIVERSITY

MICAELA QUE U OF THE PHILIPPINES DILIMAN SHUN HAGIWARA UCLA EVENTS

MINGYI WU MANAGER ALEC FUJII

TIFFANY CHEN EDITOR-IN-CHIEF BENJAMIN BOSIS TECHNOLOGY EDITOR

VARUN NARAYAN POLITICAL ECONOMY EDITOR BENJAMIN WINSTON ON CAMPUS EDITOR SENIOR STAFF WRITERS

BENJAMIN CHIACCHIA, EMILY WINSTON, JONATHAN SILIN, SPENCER

GREENE, TRAVIS FULLER, JAKE GOODMAN, VANESSA ZHANG, RYAN MA,

HALLIE WOLFF, JOSEPH KIRBY BELMONTE, NEIL GOH, PRIYAL GUPTA, ARVIND VELUVALI, WAYLON JIN, LIZZY DOYKAN, THEODORE ROSEN STAFF WRITERS

AMANDA CHOW, ARTHUR TRAN, CALVIN CHU, VIKAS RAJASEKARAN, SAMUEL CAI, SAANYA JAIN WEB

JORGE MARTINEZ MANAGER

TITLE PAGE IMAGE: ISTOCK.COM

BRENDAN WALSH MANAGER

TABLE OF CONTENTS Markets 5

Joseph Kirby Belmonte THE CURIOUS CASE OF THE CHINESE ART MARKET The Questionable Sustainability of Recent Growth

Jonathan Silin TROUBLE IN CHINA’S HOUSING BUBBLE Rising Prices, Government Policy and Overdependence on Real Estate Investment

Jake Goodman ANIMAL SPIRITS IN THE DRIVER SEAT How Optimism Can Drive the US Economy to New Heights

Priyal Gupta CURTAIL THE RETAIL Examining the Rise of Store-Closings in Retail

On Campus 14

Amanda Chow STRONGER TOGETHER? The Debate Over Graduate Student Unionization

Audrey McDermott ENTREPRENEURSHIP BREWED FROM THE DAILY GRIND Coffee, College, and Caffeinated Ventures

Sandra Aka BREAKING BARRIERS IN FASHION Time to Invest in the African Fashion Industry

19 Emily Winston SPOTLIGHT SHINES ON STRETCHING STUDIOS An Emerging Opportunity in the Fitness Industry

Political Economy 21

Hallie Wolff FRANCE, FEAR, AND FOREIGN POLICY Can Today’s Populist Politicians Separate Xenophobia From Foreign Policy?

Samuel Cai THE STATE OF WELFARE IN THE WELFARE STATE Welfare: The Popular, Political Conceptions and The Reality

Karnika Pombra INTERNATIONAL TRADE: IT’S NO BIG DEAL An Explanation of the State of Global Trade

Arvind Veluvali SAUDI ARABIA AND THE REBALANCE TO ASIA Why is Riyadh so Focused on Asia?

Technology 29 31

Neil Goh BAIT AND SWITCH: NINTENDO’S NEW GAME Is It Finally Safe to Invest in Nintendo? Ted Rosen A BUZZING NEW INDUSTRY The Rise of the Drone Market

32 Philip Squires 2050: A NEW SPACE ODYSSEY How Entrepreneurship is Changing Space Exploration 34

Shailen Sampath PAVING A ROAD TO THE FUTURE Building Smart Roads to Power America

Source: pinimg.com

Joseph Kirby Belmonte '19

THE CURIOUS CASE OF THE CHINESE ART MARKET

The Questionable Sustainability of Recent Growth

hile the global demand for art dwindled in the first half of 2016, the demand for Chinese art grew significantly – to the point where the Chinese art market has supplanted the U.S. art market as the largest in the world. However, due to issues with the largely unregulated Chinese art market in the past, questions over the legitimacy of this recent growth linger.

the New York and London art markets respectively. In addition, the overall uptick in high profile authenticity disputes, resulting in court actions and significant payouts, contributed to the art market slowdown. As the global art market declined, the Chinese market grew by 18 percent in the first half of 2016, overtaking the US art market as the world’s largest. Indeed, Chinese auction sales made up 35.5 percent of the global auction market versus 26.8 percent for US auction sales. As of August 17, 2016, four out of the top ten highest selling works of the year were created by Chinese artists, the highlight of which was painted by Zhang Daqian’s Peach Blossom Spring (1982), which sold for $34.7 million – more than four times its projected sale price. In total, the Chinese art and antiques market yielded revenue of nearly $12 billion.

A Shakeup in the Global Art Market Amidst uncertainty, the global art market experienced a slowdown in the first half of 2016 as overall market volume dropped by 30 percent. This decline was reflected in the relatively low art fair attendance numbers as well as the diminishing sales of the two biggest auction houses, Christie’s and Sotheby’s, with the latter netting $4.1 billion in 2016, down from $6 billion during the same period in 2015. According to Art Market Monitor’s Marion Maneker, the most significant reason for the decline in the market volume is the fact that the number of high-value works—those worth $10 million or more—trading hands decreased substantially from 2015, resulting in a considerable turnover contraction of 30 percent and 49 percent in

The Seeds of Growth At first glance, the recent growth in the Chinese art market may seem counterintuitive given the country’s well-documented economic slowdown. China’s GDP only grew by just 6.7 percent in 2016––its lowest growth rate since 1990. However, the heightened

volatility in the Chinese stock market coupled with lower interest rate bonds have led Chinese buyers to turn to investing in tangible assets, such as art. Indeed, Melanie Lum, a consultant on Chinese art, says “the majority of Chinese people do not trust the Chinese stock market...and are looking to art for investment.” Moreover, in 2016, the Chinese renminbi (RMB) depreciated by 6.5 percent, the largest depreciation since 1994. Unsurprisingly, the declining value of the RMB left Chinese buyers jittery as they sought out safe, non-monetary investments such as art. For the most part, Chinese buyers have been purchasing modern Chinese art done by artists born in the late 1800’s to early 1900’s. According to Anders Peterson, founder of ArtTactic, the recent growth in the Chinese art market can be attributed to the maturation of the market. From 2010 to 2015, sales of Western post-war and contemporary and modern and impressionist art grew by 273 percent, while Chinese art sales decreased by 15 percent. Peterson argues that what is currently happening is a readjustment, as Chinese buyers are again

“According to Anders Peterson, founder of ArtTactic, the recent growth in the Chinese art market can be attributed to the maturation of the market.”

“seeing opportunities” and regaining their faith in the Chinese art market which has “remained subdued for more than five years.” Overstated Demand The drastic growth in the Chinese economy in the early to mid 2000’s meant that more and more Chinese people could afford fine art, resulting in a boom in the Chinese art market. However, because the growth was so sudden, the Chinese art market expanded too quickly for regulators to keep up with, leading it to be largely unregulated. As a result, the market was inundated with forged works,

TOP 8 COUNTRIES’ FINE ART AUCTION TURNOVER (S1 2016) China U.S.

27% 21%

U.K. France Germany

5% 2% Source: Artprice.com

while corruption ran rampant, as “elegant bribery”, the gifting of luxury goods (i.e. fine art) to conceal a bribe, became a pressing concern among regulators. In essence, elegant bribery happens when a businessman gifts artwork to an official, who in turn gives it to a relative to auction off. The businessman then repurchases the artwork at an artificially-inflated price, while the official collects the payment. Because elegant bribery transactions made up a notable amount of Chinese art sales, the true demand for Chinese art and the size of the Chinese art market as a whole were both greatly overstated. Moreover, payment defaults on lot winners was another chief concern. In May 2011, Chinese artist Qi Baishi’s Eagle Standing on a Pine Tree (1946) sold for $65.4 million, a record price for a Chinese artist. However, doubting its authenticity, the buyer refused to pay. The problem of payment defaults due to authenticity concerns (as well as buyer’s remorse) was so significant that, following a six-month review, the New York Times concluded that “as much as a third of the country’s auction

Source: www.sothebys.com

revenue in recent years” were from sales that “did not actually take place”, implying that the size of the Chinese art market was grossly exaggerated. Indeed, Chinese auction houses often recorded works that had not been paid for in their revenues, raising prices and artificially propping up the value of the market. These very significant issues, in effect, left the Chinese art market in a precarious position, which is reflected in the 15 percent decrease in Chinese art sales from 2010 to 2015. Questions over the authenticity of Chinese art dampened its perceived value, while the risk of default on payments coupled with the stable presence of corruption (i.e. elegant bribery) effectively brought down confidence in the country’s art market and led to the diminished sales. Indeed, in 2013, Alexander Zacke, an Asian art expert who runs an online auction house said that “no one will take results in mainland China very seriously.” A More Mature Market As the demand for Chinese art continues to grow, questions over the

growth’s legitimacy continues to remain. However, because the Chinese art market is more regulated now than it was in the past, the recent growth seems to be relatively sustainable. Since becoming president in 2012, Xi Jinping has made cracking down on all forms of corruption a primary goal. Specifically, an amendment that was passed on August 29, 2015 placed harsher penalties on those engaging in elegant bribery while scrapping the requirement that a sentence term be dependent on the bribery, amount. The latter is particularly noteworthy, as the fluctuating, unstable nature of art prices made sentencing standards ambiguous. Since the crackdown, many top government officials have been arrested, while others have been dissuaded from entering the art market altogether. According to Week in China, between the years 2012 to 2013 alone, over 180,000 party members and at least 31 senior officials were prosecuted for elegant bribery. Although art advisor Todd Levin believes that the significant problem of non-payment on lot winners is still present, a report from Artprice concluded that the issue has since been

rectified by “an extremely strict legal framework” that has been in action for the last two years. The auction association now collects and publishes data regarding nonpayment in order to expose offenders, while prompting auction houses to blacklist buyers with a non-payment history and to require a substantial deposit from bidders. Overall, although the Chinese art market is not entirely stable, the fact that it is more regulated now than it has been in the past gives hope that the recent growth will continue to paint China in an economically successful light.

However, because the Chinese art market is more regulated now

than it was in the past, the recent growth

seems to be relatively sustainable.

Jonathan Silin '19

TROUBLE IN CHINA’S HOUSING BUBBLE Rising Prices, Government Policy and Overdependence on Real Estate Investment

‘F

rantic’ is a fitting way to characterize the current state of affairs in Chinese real estate, specifically the housing market, over the last several years. As the demand for housing grows, prices have grown as well. According to Beijing’s National Bureau of Statistics, in the 70 largest cities, home prices rose 9.2 percent on average year to year until 2016. In large cities like Shanghai and Xiamen, that overall increase is 31.2 percent and 43.8 percent, respectively. While GDP growth may be slowing down, beneficiaries of wealth accrued in the last decade are still in search of new homes in major cities. Credit rating agency Fitch forecasts that in order to meet this demand for new homes, China will need to build 800 million square meters of new housing every year until 2030. No Stranger to Bubbles China is no stranger to asset bubbles.

Most notable of these is the property bubble that began in 2005 and dwindled in 2011, which luckily for China, subsided relatively harmlessly. China was less lucky in the context of its stock market turbulence of 2015, which led to a disastrous 34 percent fall in value just over a year ago. Why then, is China so plagued by a bubble economy, and why is the bubble guiding the trajectory of its housing market today?

further than the mortgage market. In the summer of 2016, 80 percent of issued bank loans were mortgages, a telling sign of the extremely high demand for real estate among Chinese consumers. A national monthly mortgage payment to income ratio higher than that of the early 1990s in the midst of the Japanese property bubble indicates just how dangerous high Chinese housing prices have become.

Surplus liquidity in the Chinese economy, the “great ball of money”, has few places to go. Investors do not fully trust the stock and bond markets to yield steady returns and thus tend to gravitate toward putting their money in the consistently growing real estate market. Moreover, Beijing’s loose monetary policy, intended for sustainable growth, has exacerbated the problem. Home prices continue to rise in part from municipal governments profiting off the sale of land to property developers. Governments have become so reliant on land sales that in many cases, the accrued profits account for over half of their fiscal residents. This dependency has rendered artificially inflating property prices a subject of interest for local authorities.

Walking a Tightrope

For evidence of the imminent housing bubble, one needs to look no

Government policy played no small role in shaping today’s bubble-like situation. After China’s previous housing bubble of the mid-2000’s began to subside, the government started lowering interest rates and lending requirements. Today, the Chinese government is in a precarious situation: on the one hand, it recognizes that a continued surge in prices is unsustainable. However, last year’s 6.6 percent GDP growth marked China’s slowest since 1990. Deutsche Bank estimates that a 10 percent fall in housing prices would trigger $35 billion in losses for property developers. In this central government policy on reducing real estate, prices have been slow moving and cautious. However, Beijing has recently lowered capital

Investors do not fully trust the stock and bond markets to yield steady returns and thus tend to gravitate toward putting their money in the consistently growing real estate market. 8

Considering the property market currently corners one quarter of demand in China’s economy, the cost of failure is enormous.

CHINESE HOUSE PRICE, YUAN PER SQUARE METER 200

Proceed Carefully

Shenzhen 160

Beijing 120

Shanghai

100-City Weighted Average 80 2012

2013

2014

2015

2016

Source: The Economist

controls, meaning Chinese citizens will be able to move investments abroad, putting downward pressure on the domestic real estate sector. Local governments have also stepped up in an attempt to curb price increases. In recent months, many cities, including Beijing, Shenzhen, and Suzhou, have increased down payments for home purchases in an attempt to lower demand. In Chengdu, the municipal government has banned people from buying third properties in certain areas of the city. A Tale of Tiered Cities One noticeable facet of the recent

property boom is the situational discrepancy between first, second, and third tier cities. While the average prices for new homes rose by 28 percent in tier-one cities in 2016, average prices are only up by 2 percent in smaller, less wealthy metropoles. While the housing market in tier-one cities is in need of tightening to curb the excessive demand for property, in many lower tier cities, the opposite is needed. Indeed, in these smaller, less attractive cities, apartments outnumber the buyers, meaning relaxation on buying would alleviate some of these problems. Moreover, the

development capacity for lower-tier cities has yet to be fully realized. This makes for an abundance of land for new development coupled with shrinking populations as people flock to more developed urban areas. This imbalance adds a further dimension to China’s housing bubble. In this sense, the problem is not just one that will be solved with economic policy, but will require ingenuity in urban planning and even large-scale human resettlement and migration.

China’s housing market walks a relatively precarious line, where either a reduction in home prices or an inflating real estate bubble could have dangerous implications domestically and abroad. Considering the property market currently corners one quarter of demand in China’s economy, the cost of failure is enormous. If Chinese officials, particularly at the national level, fail to craft policy which can sustainably deal with an incessantly overheating property market, this risk will be a recurring fear. Asset price bubbles will continue to dominate the landscape of China’s economy until excess liquidity—that “great ball of money” – has somewhere to go. This means investors having sustainable alternatives to the real estate market. If the government can find a productive way to help create new investment channels, China’s future can be bubble-free.

Jake Goodman '19

ANIMAL SPIRITS IN THE DRIVER SEAT How Optimism Can Drive the US Economy to New Heights

n 1936, John Maynard Keynes, the prominent British economist, coined the term “animal spirits” in his magnum opus The General Theory of Employment, Interest, and Money to describe the instincts and emotions that guide human behavior, specifically consumer confidence. Keynes, writing just after the Great Depression, conjectured that spontaneous optimism rather than mathematical expectation drives human activity. While animal spirits are less often associated with rational thought, they should not be confused with irrational action. Keynes suggested that animal spirits represent a positive urge to take action in the face of uncertainty.

the economy’s newfound optimism and are speaking up: Jamie Dimon, the CEO of JP Morgan Chase & Co., said Trump’s victory over Hillary Clinton has “woken up the animal spirits” in the United States. Dimon cited recent surveys showing rises in consumer sentiment and business confidence as evidence that Trump’s promises to slash corporate taxes, invest in infrastructure, and decrease regulation will reinvigorate global growth. Dimon is not the only CEO to cite such optimism; billionaire investor David Tepper, head of Appaloosa Management, cited deregulation releasing animal spirits as a cause of an uptick in earnings. In a LinkedIn post, hedge fund billionaire Ray Dalio stated that Trump’s impact on the economy might extend beyond the taxing and spending policies. Dalio wrote that Trump’s economic policies could “ignite animal spirits”

and “attract productive capital,” allowing investors to move their cash to riskier investments. Trump himself has noticed the economic confidence generated by his potential policies, tweeting that CEOs are now at their “most optimistic since 2009.” Additionally, the Business Roundtable’s CEO Economic Outlook Index, which represents companies with more than $6 trillion in revenue and about 15 million employees, showed a dramatic jump. The most recent survey conducted between February and March pooled from 141 CEOs, with 52 percent believing tax reform would be the best policy to create the most progrowth environment for businesses. Jobs Jobs Jobs It’s no coincidence that animal spirits have become commonplace in discussing the current economic climate. But some investors are wondering:

Who Let the Optimism Out? The recent stock market rally has thrust the term “animal spirits” back into popular dialogue, and while investors are questioning how long this stock boom will last, the influence of animal spirits on the markets has relied on such optimism to sustain the surge in stock prices. Certain CEOs have noticed

Hope is a powerful human emotion, an encouraging spirit that propels economies to further heights, and its potential to allow the US economy to thrive should not be dismissed as merely flippant animal spirits. 10

where is the evidence? The February employment report provides initial insight into how the economy is faring under Trump. Nonfarm employers, namely goods, manufacturing, and construction companies, added 235,000 jobs, beating analyst expectations, and unemployment dropped 0.1 percent to 4.7 percent. Construction, mining, and finance—three industries that benefit from Trump’s policies—showed impressive gains in job growth. Trump was quick to seize upon the news, retweeting a Drudge Report headline and writing “GREAT AGAIN +235,000.” The Federal Reserve’s recent statements on the economy have also bolstered optimism in the economy. Markets largely rallied after the chair of the Federal Reserve’s announcement stuck to the December meeting’s proposed three rate hikes in 2017. The Fed raised interest rates on March 15th, the second time in three months. Janet Yellen, chair of the Federal Reserve, stated at her press conference that the Fed has “some confidence in the path the economy is on.” With inflation “close” to its 2 percent target and business investment “firmed somewhat,” the Fed’s economic outlook is nearing the central bank’s employment and inflation goals. However, much of the enthusiasm concerning the recent jobs report and interest rate rises relies upon Trump delivering on his core promises. Tax reform, healthcare reform, and infrastructure investments are all works in progress right now. While he has already passed several Consumer Review Act resolutions that have peeled back regulation on mining and financial regulation bills, Trump’s major overhauls have

It’s no coincidence that animal spirits have

become commonplace in discussing the current economic climate. But some investors are wondering: where is the evidence? S&P 500 INDEX 2016 2,400

2,350

2,300

2,250 January

February

March

April Source: Google Finance

yet to be fulfilled. Instead, employers, investors, and consumers are relying on the expectation of growth to justify present action. Such is the influence of animal spirits. Long Term Growth? That’s the Spirit! It’s difficult to imagine the complex ripple effects that Trump’s election has had on the global economy and the political landscape. While Trump’s protectionist trade positions have frightened some, his economic agenda largely has driven the notion that a pro-growth agenda reigns in Washington, unleashing the economy rather than restricting it. The interaction between pro-growth politics and bullish sentiment on Wall Street could be the ingredient missing in the Obama economy. As noted

by CEOs, change in D.C. was all that was needed to lift the economy to new heights. However, it’s hard to believe that optimism can sustain growth forever. Animal spirits are important for growth, but animal spirits must rely on a healthy cushion of economic data for justification in times of trouble. While a Trump bubble may or may not be on the way, a resurgence of hope in the American economy should not scare investors, consumers, and employers. Hope is a powerful human emotion, an encouraging spirit that propels economies to further heights, and its potential to allow the US economy to thrive should not be dismissed as merely flippant animal spirits. For once, it’s possible animal spirits are just what the economy and markets need.

Priyal Gupta '20

CURTAIL THE RETAIL Examining the Rise of Store-Closings in Retail

n the eve of 2017, many people made their resolutions. Some were jotted down in personal diaries, while others were posted on social media. A vast majority of these resolutions pertained to personal development goals and probably affected a small group of people. Unlike these resolutions, a major market player decided to make a New Year’s resolution that left a burning impact on many: Macy’s shut down 15 percent of its retail departmental stores. Soon after, the dominoes started falling; many renowned retailers, including big names like J.C. Penney, Sears, and Target, announced store-closings and worker layoffs. Customers of the Internet Age From the list above, it’s evident that the apparel industry is struggling. Among the remaining firms that have announced shutdowns, industries span from pharmaceutical companies to discount store retailers. A clear shift in consumer preferences for e-commerce websites over brick-and-mortar locations is on the horizon. Businesses following the traditional retail model are being sucker-punched by the

formidable e-commerce giant: Amazon. Since its founding in 1994, Amazon has climbed its way up the retail ladder and has amassed an army of loyal customers. With its unique Direct to Customer (D2C) business model, Amazon has revolutionized the traditional marketplace. Moreover, Amazon Prime, its loyalty program that promises free two-day shipping, exclusive access to TV shows and movies, and easy shipping of products from all over the world, has created a band of customers who shop 2.3 times more than the average Amazon shopper. Innovative services such as Amazon Locker pickup, oneclick delivery, and unbeatable seasonal deals persuade customers to move away from the stagnant physical stores. In the age of the internet, customers want more bang for their buck. In this pursuit, they want to tally all the available options through customer reviews, product images, accurate details, and prices with substitutes, without going between stores. In this respect, surveying all available options and getting the best product under 48 hours without having to move an inch seems like an unbeatable deal. The Trickle-Down Statistics reveal that while Amazon is a strong driving force, it is not the sole reason behind the retail downfall. Many analysts in the field point

to a lack of in-store innovation. They suggest that many of these stores do not have a differentiating factor in terms of design and customer service, leading to a bland customer experience. In addition, many retailers have an excess of square footage per sales thanks to the retail real estate boom. According to CoStar, retail stores have one billion square feet more than they need, and are thus “overstored.” The battle is not only simply retail versus Amazon, but also traditional retail versus contemporary retail. Furthermore, a lack of process innovation such as improvements in production or operation techniques for efficiency maximization or waste minimization has resulted in an inevitable decline in sales. The decline in sales coupled with excess inventory and unnecessary overhead costs such as rent from “overstoring” inexorably lead to firm-wide losses. Gradually, companies find themselves on the way to bankruptcy with these recurrent losses, which has already been predicted by industry analysts. Drowning in Losses Not all retailers have the same caustic taste of loss on their tongues. There are some fast-fashion retailers and discount store retailers who are still afloat. The mutual qualities behind both of these successes lie in the fact that the consumer of today is impatient and frugal. In the

Businesses following the traditional retail model are being sucker-punched by the formidable e-commerce giant: Amazon. 12

Customers have become forward-looking opportunists—they are more than willing to stock up cheaply in bulk today rather than purchase in a more expensive tomorrow. fast-fashion club, major players like Forever 21, Zara and H&M have recognized these qualities and tweaked their business models, and it is no surprise that their process innovation has paid off. Customers have become forward-looking opportunists—they are more than willing to stock up cheaply in bulk today rather than purchase in a more expensive tomorrow. Taking note, discount store retailers such as Target and Walmart have marketed promotional offers on bulk purchases and now offer matchless prices. They also mimic Amazon’s product portfolio in the sense that they provide the customer an A to Z shopping experience in which they can find all they need within one store. As a result, discount retailers are not too far behind in the race. Fighting for Wall Street’s Attention The endgame for these flailing retail outlets is not just to see a slimmer loss margin but also to maintain their share price by incentivizing

their shareholders not to sell away their shares. Therefore, store-closings and eliminating redundancies are taking place rampantly to cut-off unyielding investments and to send a signal to the investors that their resolve to increase profitability is underway. For most companies, data shows a strong correlation between a rise in stock prices and the number of store-closings announced. Retailers are looking into ways to generate liquidity from sales of empty stores in a market with surplus supply due to the market trend of store-closings. Thus, finding buyers to match a good price has been difficult. A widely observed move in the market has been reducing unsold inventory through shut-down clearance sales to increase liquidity. Downsizing, cost-cutting and creating additional streams of revenue are strategies to restore profits and shareholder confidence. The retailers are still fighting to be on Wall Street’s good side as they once were back in the day.

360 Degree Transformation to a 360 Degree Experience With successive store closings, the retail landscape will definitely change as retailers are willing to enhance their “quality of service” and advance into a more technical format. Quality branding has been a notable strategic move for JC Penney. In its retail outlets, JC Penney has introduced Nike shops with treadmills to give customers a tangible 360-degree experience as they test their shoes on it. As many firms, like Walmart, try to create their digital presence while reducing their retail footprints, an inevitable restructuring of the retail industry might affect the retail job market. There might be a consequent surge in demand for technically qualified/certified and highly personable staff. Keeping a constant eye on consumer psychographics in addition to demographics, retailers are vigilant in hopes of recognizing favorable market gaps and consumer trends. Nonetheless, most firms have intercepted the market signal. More than ever before, companies are proactively pushing to transform the industry: to appease the customer, to please the investor, and to seize profits.

Amanda Chow '20

STRONGER TOGETHER? The Debate Over Graduate Student Unionization

n universities across the country, graduate students are engaged in crucial work. Some teach undergraduates and play an essential role as educators, while others are research assistants involved in groundbreaking, new discoveries. However, despite their immense contributions to their universities, graduate students have only recently become recognized as workers at private institutions.

unions. The decision to unionize has been far from unanimous. While Columbia, NYU, Harvard, and the University of Chicago are amongst colleges in favor of unionizing, Cornell does not have the same level of institutional support. United We Stand Those in support of unionization emphasize that a union would lead to better working conditions and a more extensive support network. Through the power of collective bargaining, graduate students can advocate for wage increases without funding cuts, benefits such as paid vacation, personal leave, and sick leave, and possibly health care coverage. A union can also improve grievance procedures for TAs and RAs as well as policies dealing with workplace harassment, hostility, and discrimination based on gender, race, sexuality, or nationality.

The Student vs. Employee Debate In August 2016, the National Labor Relations Board (NLRB) finally ruled that graduate students who serve as teaching or research assistants at private colleges and universities are employees with the right to decide whether or not to unionize. This landmark decision reversed the ruling in the 2004 case brought forth by Brown University students, in which the NLRB barred graduate students from Brown and other private universities from collective bargaining. Following the 2004 decision, graduate students and teaching assistants were denied the right to collective bargaining on the grounds that they are primarily considered students and their relationships to universities are academic rather than economic in nature. However, since then, several states, including California, Illinois, Michigan and Connecticut, have ruled that graduate students at public universities have the right to unionize and are protected under labor laws. Since the NLRB decision, graduate students at several private colleges have already formed

Studies also show that unionized graduate students report more personal and professional support from advisors as well as higher wages. Currently, it is still unclear whether or not stipends would fall under the jurisdiction of a union, since stipends are part of the universityâ&#x20AC;&#x2122;s financial aid package, but a union would have the power to negotiate student fees as well. One example of successful negotiation by a graduate student union can be seen at NYU, where the graduate student union negotiated a contract that included significant pay increases, free dental insurance, and childcare funding.

One Size Fits None? Those who are opposed to unionization are concerned with the lack of choice graduate students have. If a union negotiates a contract with the University, all students will be required to abide by it regardless of whether or not that student wishes to join the union. Contract terms could include paying mandatory union fees. A union could become a monolith that does not adequately represent minority views within the graduate student community. Critics of the union movement characterize it as a “one size fits none” solution that limits students’ freedom. Another argument against student unionization is that a union would be detrimental to the cooperative relationship between graduate students and professors. However, in a 2013 comparison between students at unionized and nonunionized colleges, students who were part of a union reported higher satisfaction and greater respect for differing opinions at their universities. Views on Unionization at Brown University Historically, the University has argued against unionization. Before the NLRB decision, the University, along with eight other research universities, filed a brief urging the NLRB to rule against granting graduate assistants status as employees. However, after the ruling, the University issued a neutral statement, affirming that it “will comply with this decision and support graduate students as they consider whether or not it is in their best interest to choose, or not, to form a union and bargain collectively.” By law, the University’s administration cannot interfere with the unionization process.

Currently, the Graduate Student Council at Brown, a body that represents all graduate students, has taken an impartial stance. Graduate students at Brown in favor of unionization have formed the advocacy group Stand Up for Graduate Student Employees (SUGSE). From March 19th-21st, Brown graduate students decided on unionization through an online vote, but the result has yet to be announced. After the NLRB decision, graduate students at several schools have decided to unionize and soon, graduate students at Brown may choose to join them as well. The decision to unionize is not an easy one, as there are compelling cases to be made for both sides of the argument. Regardless of whether graduate students at Brown ultimately decide to form a union, it is crucial for the University to realize the essential role of graduate students at Brown and reach a solution that justly recognizes their importance not only as students but also as employees.

Audrey McDermott '20

ENTREPRENEURSHIP

BREWED FROM THE DAILY GRIND Coffee, College, and Caffeinated Ventures

he best kept secret on Brown University’s campus can be found in the basement of the Stephen Robert’s Campus Center. Behind a dark wooden bar stands a wall lined with mirrors and a smiling Brown undergrad peddling coffee. Tables dotted around the room are filled with students doing homework, catching up, and peacefully existing. Welcome to The Underground.

A union could become a monolith that does not adequately represent minority views within the graduate student community.

#GRADRIGHTS

The Underground: The Pathway to Success Katie Murphy (‘16) and Yousef Hilmy (‘16), two transfer students, founded The Underground in 2015 to bring high quality coffee to Brown students at reasonable prices. This vision, and a behind-thescenes look at the founding of The Underground was revealed to me by now-alum Viktor Gavrielov (’15). Gavrielov was in charge of setting up the business side of The Underground. He humbly admits to not being the visionary

The catalyst for creating this student haven was simple: a need for a student-run coffee shop on Brown’s campus. behind The Underground. For Gavrielov, the catalyst for creating this student haven was simple: a need for a student-run coffee shop on Brown’s campus. Murphy and Hilmy came from universities that had popular student run coffee shops. After benefitting from the existence of this space on their respective old campuses, it’s absence on Brown’s campus was stark. Their response to the absence of such a coffee shop? Create one. When starting this entrepreneurial venture, Gavrielov relied almost exclusively on the experience and education that he received on Brown’s campus. He gained confidence and important business skills in Danny Warshay’s The Entrepreneurial Process: Innovation in Practice. Gavrielov cited this class as a fundamental contributor to his skill set which helped him make The Undergound a reality. Also fundamental to the creation of The Underground was the support of Brown University’s staff. Gavrielov praised the way that Murphy and Hilmy began the process. Their first step was to approach President Paxson and ask for her support in opening a student-run coffee shop on Brown’s campus. After securing her enthusiastic endorsement, the support of all other Brown administration and staff inevitably followed. So how exactly did Brown University help? Gavrielov praised Brown Student Agencies (BSA) and Brown’s staff as

The Underground’s “rock.” BSA gave The Underground interest free loans and administrative support in exchange to be recognized at The Underground. Gavrielov met with the Brown dining services manager who connected the Underground with Brown’s delivery network. Through this network, The Underground was able to purchase supplies such as cups, wooden stirrers and sweeteners at wholesale prices because they were a part of Brown Dining Services’ orders. The Brown Dining Services manager went so far as to directly request payment directly from The Underground’s funder, the BSA. The coordinated and supportive networks of Brown University simplified and streamlined the entrepreneurial experience for Gavrielov on the business side. Brew Bike: A Refreshing (and Accessible) Option A year later and halfway across the country, founders Brammy Geduld and Lucas Philips brought Brew Bike to Northwestern’s campus. This mobile cold-brew coffee shop is the brainchild of two hesitant entrepreneurs and delivers quality, tailored drinks to students at convenient campus locations.

Coffee, Entrepreneurship, Students, College

Geduld remarks, “The food was all run by this massive company called Sodexo that didn’t really take into consideration what the students wanted. By extension there wasn’t really a place on campus that reflected a space that was created by students for students.” At first, Geduld and Philips were hesitant to become entrepreneurs and start a business while in college. However, Geduld ultimately viewed their undergraduate status as a plus. He stated, “I along with my cofounder Lucas Phillips… decided that because we saw this problem, being college students was the perfect opportunity to create something to improve our campus because at the end of the day if it failed we would still be living in a dorm and getting a great education so we saw it more as a learning experience without having to risk as much as if we tried something after we graduated. It ended up being the perfect time to start our business,” Geduld said. Along with the benefits of starting a company as an undergraduate came an obstacle: Sodexo’s monopoly of food in certain locations. Geduld explains, “In the beginning we actually wanted to open up a brick and mortar coffeeshop and because the company I mentioned Sodexo has a contract with the school so anywhere where Sodexo is served, no outside food can be served in the same building. So in that sense, we were hit with a roadblock, but once we pivoted our idea to find a loophole for that problem, the University was really helpful and has been behind us every step of the way.” For Students, by Students Brew Bike’s mission, to create a place on campus that was run for students by students, permeates its every decision. The entire staff of Brew Bike is made up of

undergraduates as part of an intentional effort to maximize student input. Furthermore, the entire menu was designed as a response to the preferences of the student body. Geduld remarks, “The coffee is entirely chosen by the students, so we’re really serving what students want to be drinking.” After hosting a tasting last spring, Brew Bike chose its signature blend by selecting the most popular flavor on the tasting menu. Both The Underground at Brown University and Brew Bike at Northwestern provide quality, student-run coffee to college students on campus. These businesses, founded amidst a dearth of student-run food organizations and an acute craving for caffeine, symbolize the significance and impact accompanied with entrepreneurship.

Sandra Aka '19

BREAKING BARRIERS IN FASHION Time to Invest in the African Fashion Industry

frica has become a hub for designers unafraid to create fashion statements embellished in colors as bold as the continent’s sunsets and in prints as culturally rich as its people. Their designs are catwalking

across runways both at home and around the world from New York to London to Tokyo. Despite its budding international fame, the African fashion industry has long ways to walk before “made in Lagos” rings the same as “made in Paris.” In the meantime, the paucity of internal and external investment is a barrier to moving forward. You Are What You Wear In recent times, African fashion has not just dipped its toes, but fully plunged into the world’s fashion scene. Anisa Mpungew, Tanzanian designer and creator of Loin Cloth & Ashes, says “[Africa] is not afraid of patterns and colors, that’s the one thing we do in our sleep, so we use it to be louder amongst our foreign friends.” Indeed, African designers are making bold fashion statements through the complex patterns and colors they dare to work with. African fashion tells a story – patches of identity are interwoven into the fabrics used and the designs created. According to Bethlehem Alemu, owner of an Ethiopian shoe company soleRebels, “The global consumer today is hyper-aware. They want authentic and innovative ideas delivered from the authors of those ideas.” These consumers want the designs to be creations of the African mind and hands and not replicas produced by Western clothing chains. High profiled brands in the likes of J. Crew, Burberry, and Michael Kors oftentimes look to Africa for inspiration and ideas. Nevertheless, the masks, zebra stripes, and leopard spots feed into Western stereotypes of Africa, not Africa’s authentic story.

Funding Low, Fashion High With designers and clothes in high demand, the African fashion industry is ripe to reach its full potential. However, a lack of internal patronage stands in the way. Lexy Moyo-Eyes, founder of Nigerian Fashion Week, acknowledges that “the fashion industry can become a big business in Africa … even more with government support.” For example, according to the African Development Bank, the Rwandan government established a “foundation to establish garment factories and boost the textile and fashion industries.” As governments across the continent follow Rwanda’s steps and begin to esteem the fashion industry, they need to invest in the skills and qualifications of their people. Fashion programs such as LISOF School of Fashion in South Africa and Vogue Style School of Fashion and Design in Ghana need to be in abundant supply, not scarce, across Africa. Furthermore, governments across the African continent should set quotas on the import of secondhand clothing from the West. The goal would be to stop relying on the West and boost local manufacturing and development instead. The East African Community (EAC), composed of Kenya, Uganda, Tanzania and Rwanda, has gone as far as to propose a ban by 2019. For the meantime, African designers, seamstresses, tailors and retailers are competing with Western clothes ranging from printed shirts to blouses to leather jackets to sport jerseys. Sylvia Owori, a designer based in Uganda, says that “[about] 90 percent of the clothing people are buying in the whole country are second-hand clothes—so as a small fish,

how are you going to start to compete with that?” These clothes have appeal because they are priced cheaply and allow Africans to emerge themselves in Western culture by dressing the part. A pair of jeans could be sold for as little as $1.50. Closed Off from Clothes At first glance, bundles of our worn clothes might seem like benevolent gifts from the West, but they are actually hindering the progress of the African fashion industry and economy. Andrew Brooks, professor of Geography at King’s College London, explains that “[Western] t-shirts may be quite cheap for someone to buy, but it would be better if that person could buy a locally manufactured t-shirt, so the money stays within the [country]” instead of circulating overseas. As the proverb goes, “charity begins at home.” Africans need to put on the clothes made by their fellow citizens as a showcase of support and home pride. Not only will they be contributing to the success of homegrown designers but to their respective economy as a whole. According to Ventures Africa, “If there is any time to invest in the [African fashion] industry, it is now.” Those who invest first will likely be the biggest beneficiaries of them all. According to Euromonitor Internations, “the combined apparel and footwear market in sub-Saharan Africa [alone] is estimated to be worth US $31 billion.” Deola Sagoe, a Nigerian designer in the industry for the past 25 years says that this is only a small fraction of what the fashion industry is capable of. It is time to turn this visionary potential into tangible prospects. Omoyemi Akerele,

"Africa has always been home to the creative hands and minds but it is just recently that the world began to knock at its door."

founder of Lagos Fashion and Design Week, realizes that investing in Africa does not come without its risks; you only need to to read, watch or listen to the news to be reminded of that. But he urges people to take a leap of faith and look beyond the rhetoric of corruption and images of war. He emphasizes that “he who observes the wind and waits for all conditions to be favorable will not sow, and he who regards the clouds will not reap.” A Fabric is Worth A Thousand Words Beyond the glamour of clothes and runways, the fashion industry is a business that has the potential to play its part in efforts to create jobs especially among young people. Compared to its counterparts, the African continent is home to the world’s youngest population. According to the International Labor Office, “youth make up as much as 36 percent of the total working-age population and three in five of Africa’s unemployed are youths.” Furthermore, UNICEF projects that by 2050, African children will make up close to 40 percent of children worldwide. The fashion industry has the potential to create secured jobs for the African youths of today and tomorrow. NGOs and fashion organizations like the ITC Ethical Fashion Initiative, AFI's Fastrack and Next

Gen, and the LFDW Fashion Focus are already adding jobs across the continent. Africa’s youthful population is more of an asset than it is a risk. Alemu says that the emerging African youths will bring “immense amount of energy and talent” to the fashion industry. Africa has always been home to the creative hands and minds but it is just recently that the world began to knock at its door. African fashion allows for the opportunity to make fashion statements that dispel stereotypes and myths about the continent. It is a medium through which to spread African culture, from its authentic source, to the rest of the world as well as create jobs for the upcoming youth back at home. The industry needs both internal and external investment to reach its full potential. The time is now.

Emily Winston '20

SPOTLIGHT SHINES ON STRETCHING STUDIOS An Emerging Opportunity in the Fitness Industry

xercise classes are prevalent in the fitness market, engaging different muscles and body parts. Barre classes provide isometric training by focusing on balance and coordination via a ballet barre, CrossFit improves strength and the cardiovascular system through intervals and external loading, SoulCycle incorporates light free weights and upper body exercises into an indoor cycling workout, and Zumba classes combine dance and aerobic fitness to strengthen the core and improve coordination and balance. Stretching classes have entered the scene and the spotlight shines upon this exercise opportunity. Personalized stretching classes, such as those offered at Power Stretch Studios,

help participants maintain physical health and prevent injuries through the KIKA method of stretching. However, existing competition may cause stretching classes to blaze but later fade into obscurity when overshadowed by the more popular pilates or yoga classes. Will stretching classes turn out to be just another exercise fad or the new SoulCycle? Stretching for One’s Health Classes devoted to stretching offer health benefits unattainable from traditional exercise classes that omit stretching or incorporate minimal stretching at the beginning or end of a workout. Though stretching provides a less intensive workout than cardio, strength training, weightlifting or interval training, it is essential for releasing pressure and muscle tightness that otherwise cause backaches and injuries. In addition, stretching promotes good posture, lengthens back muscles, and straightens the spine’s alignment. Stretching can help increase flexibility, which in turn improves balance and coordination, and it also reduces muscle soreness by increasing blood flow and nutrient supply to muscles. Power Stretch Studios, founded in 2011 by former actor and dancer Hakika V. DuBose has locations in Manhattan, Delray Beach, Florida, and three New Jersey cities. It promotes the KIKA Method of

Classes devoted to stretching offer health benefits unattainable from traditional exercise classes that omit stretching or incorporate minimal stretching at the beginning or end of a workout.

stretching, which synthesizes music, breath, and positive thinking. Sessions with Power Stretch Studios are customized to individual needs and are typically done on a one-onone basis with professionals. Some of the stretches performed include the High Five Stretch, which aims to prevent carpal tunnel syndrome and remove tension between the fingers, and the Neck Peddle, meant to reduce shoulder pain. Though Power Stretch Studios is a pioneer in its industry, it is not alone. StretchLab, Flexible Strength, StretchOut Studios, and Stretch Zone are amongst many others that offer stretching services in various American cities. Flexible Strength and Stretch Zone have instructive websites in addition to physical studios. Cycling, Not Stretching, for the Soul Exercise classes and programs permeated the 20th century and offered an alternative to individual workouts. Personalized trainers and instructional leaders became this generation’s source of motivation for both eager fitness fanatics and less motivated amateurs. Participating in classes, whether personalized or in a group, is a unique experience and often seen as a way of life rather than a forced exercise routine. This rings true for attendants of SoulCycle classes. SoulCycle has expanded beyond the gym walls and into the public eye through social media and celebrities like Oprah and Lena Dunham. Though it has existed for over a decade, it continues to dominate the exercise industry with its indoor cycling classes.

Merchandise, particularly through apparel, has influenced the mindset of consumers, as loyal SoulCyclers are undeterred by $52 tank tops and $100 leggings. It is likely the entertainment and motivation SoulCycle instructors provide, the redeeming end result of losing weight that the program promulgates, and the strong brand loyalty, are responsible for high return rates of SoulCyclers. Stretching classes, in contrast, lack large followings, as they are seen as slow-paced and donâ&#x20AC;&#x2122;t promise the same apparent physical results. Participants in exercise classes who wish to lose weight, strengthen their cores, or remain in shape place little value on attending stretching classes that lack the intense atmosphere and apparent physical results.

choose to attend the more familiar yoga or pilates classes instead. Yoga classes, however, do not offer the same assisted, personalized stretching classes that studios like Power Stretch Studios provide. Yoga classes often contribute to muscle tension that stretching classes help reduce. The emergence of stretching studios is a refreshing alternative to pervasive exercise trends like SoulCycle. Though stretching studios fill a market niche, they lack the financial flexibility of widespread exercise programs that are well entrenched in the industry.

How Flexible is the Stretching Industry? Though stretching fills a niche market, it is overshadowed by the fast-paced environment of popular high-intensive exercise workouts like SoulCycle that have garnered large followings. Devoted SoulCyclers who attend 15 classes a month and spend upwards of $100 for a few classes are likely to dismiss stretching classes as supplemental to their workouts. Exercisers who crave intensive workouts often reserve a minute or two to stretching at the end of their strenuous workout, an insufficient amount of time to properly work their muscles. Many exercisers forgo stretching classes, viewing them as a useful but not pertinent aspect of their workouts. If they do opt for a less intensive workout than cardio or cycling, they might

Hallie Wolff '19

FRANCE, FEAR, AND FOREIGN POLICY Can Today’s Populist Politicians Separate Xenophobia from Foreign Policy?

rance’s presidential election is set to take place from April to May of this year and the four frontrunners have each faced various obstacles in their bid for the presidency. Exogenous factors such as Brexit and the election of Donald Trump have added further chaos to an already tumultuous election season. Among the four leading candidates, possibly the most controversial is Marine Le Pen of France’s far-right political party, the Front National. Her anti-immigration, anti-Muslim, anti-elite, anti-establishment, anti-globalization, and pro-protectionism platform echoes many of the sentiments felt and expressed worldwide. Her radical propositions and nationalistic tendencies have left domestic constituents and foreign onlookers wondering what the global economy might look like with Le Pen in control in France.

candidacy. She has proposed reforms to France’s EU participation conditions. She has made plans to lead the country away from the euro. She has vowed to reject international trade treaties and specific trade agreements, as well as establish a three percent tax on imports, a move that would further underscore the Front National’s commitment to protectionist policies. Le Pen has made it extremely clear that she intends to put the people of France first, emphasizing the threat that globalization poses to the domestic economy and the financial well-being of the French “everyman.” The official slogan of the party reads, “Au nom du peuple,” meaning “In the name of the people.” An article on the Front National’s official website details the United States’ current struggle to balance an embrace of “economic patriotism” in the auto industry with the more controversial idea of protectionism. It points to the United States’ temporary nationalization of General Motors after its near-bankruptcy as an example of economic patriotism. The article argues that this idea must be coupled with

Promises Here, Promises There Le Pen has made a number of extreme promises concerning global trade and immigration during her

“intelligent protectionism”, another term coined by the Front National, meaning measured and calculated protectionist policies, in order for a country to receive the full benefits of both. While much of the ideology behind the Front National’s political propositions is primarily economic, it is also evident from Le Pen’s overt resistance and hostility toward immigrants and foreigners that there is another underlying reason for the promotion of these isolationist policies. Fearful and Furious In the wake of several fairly recent terrorist attacks on French soil, many citizens are fearful and uncertain about the future of the nation. Marine Le Pen has capitalized on this vulnerability by using anti-Muslim and anti-immigrant rhetoric. The populist candidate has created an image of France being taken over by outsiders, stripped of its identity as a member of the EU, and susceptible to continued attack from proponents of Islamic fundamentalism. In her February speech at the start of her campaign, Le Pen painted a picture of a crumbling and unrecognizable

country, asking if the generations to come will even speak the country’s native language. Her message rings loud and clear to the people of France who have watched their nation become a target for terrorists and their financial welfare wane with the spread of globalization. As she spoke to her supporters in February, a loud chant could be heard from the masses: “On est chez nous” or, “This is our country.” Americans are watching a similar story unfold on their own soil. President Donald Trump’s rejection of the TPP, attempts at an immigration ban, and xenophobic rhetoric demonstrate the proliferation of nationalist ideals in countries beyond France. While both President Trump and Marine Le Pen have attempted to draw a clean line separating their economic goals from their shared stance on immigration, it is clear that their market and foreign policy stances are intrinsically related. Suspicion of outsiders is one building block of nationalist and isolationist strategies. More specifically, fear of Islamic fundamentalism very clearly shapes the way in which

As she spoke to her supporters in February, a loud chant could be heard from the masses: “On est chez nous” or, “This is our country.” 22

leaders approach foreign policy. The assertion that xenophobia plays a role in foreign relations today cannot easily be contested. The presence of this fear and hatred, however, often undermines the validity and potency of arguments for protectionism. The question remains: when bigotry is at the heart of decision-making, can the people of a nation trust that their economic welfare is being prioritized?

Samuel Cai '20

THE STATE OF WELFARE IN THE WELFARE STATE Welfare: the Popular, Political Conceptions and the Reality

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elfareâ&#x20AC;&#x2122; is a term that seems so present in our daily discourse, yet it has also been curiously absent as of late. There was not a single mention of the term 'welfare' in any of the presidential debates; even the prolific Twitter account of Donald Trump has been silent on the issue since 2013. The debate over welfare seems to have nearly vanished from current political discourse, yet misconceptions within the popular conception continue to run rampant, all while conventional dogma suppresses welfare recipients' voices. Conventional Wisdom: Fierce Words In the absence of active dialogue on welfare, conventional wisdom on the issue has hardened into steadfast beliefs. When interviewed for their opinions on welfare, common citizens mostly criticize welfare for its

[Republicans] emphasize the need for welfare to lift people out of poverty, rather than focusing on helping those who are born or fall into poverty. inefficiency; welfare, they claim, is subject to abuse by 'welfare queens', women who fake papers to collect exceeding amounts of welfare, and other forms of fraud within the system. Another common sentiment is that welfare recipients remain on welfare for too long. All criticisms boil down to a fundamental belief that the safety net of welfare has become a hammock for undeserving individuals. These are particularly fierce words, considering that welfare is a complex, multifaceted issue that most people donâ&#x20AC;&#x2122;t understand extensively. Most people do not understand the nuanced distinction between Temporary Assistance for Needy Families (TANF) and Women, Infants and Children (WIC), and they are unlikely able to make a thoughtful statement that captures the reality of the situation.

The Republican Platform: Dependence to Independence Part of the reason the layperson understands so little about the state of welfare is because all mention of it has nearly evaporated from political discourse. The current stances of the Democratic and Republican parties on welfare are buried in their party platforms in the form of dense, byzantine documents that few are willing to read. The Republican party continues to maintain the ideology that led to the

passage of welfare reform in 1996: they tout their belief in "the dynamic compassion of work requirements in a growing economy, where opportunity takes the place of a hand-out, where true self-esteem can grow from the satisfaction of a job well done." This translates into emphasizing focusing efforts of welfare to have those on it being able to support themselves, rather than focusing on helping those who are born or fall into poverty. They propose judging the merits of the roughly 80 poverty program "by whether it actually reduces poverty and increases the personal independence of its participants," focusing on the macroscopic scale rather than contending with individual participants in the larger system. Their system is supposedly designed to empower welfare recipients, "making welfare a benefit instead of an entitlement [and putting] millions of recipients on a transition from dependence to independence." However, it neglects to account for the realities of persons in the situation from which they cannot escape without government assistance. The Democratic Platform: Giving to Those in Need The Democratic view of welfare presents a starkly different narrative on the role of government in welfare. The Democratic platform focuses on specific issues within the larger scope of welfare. The plan to address the issue of families who have lost their homes; Democrats promise to

Brenda Casa, who grew up on welfare with only the support of her grandfather, worked tirelessly to improve her situation and resented the reputation of welfare, explaining "we were not drug addicts living the high lifeâ&#x20AC;&#x201D;we were just poor." "help those who are working toward a path of financial stability and [to] put sustainable home ownership into the reach of more families."

original welfare queen melded the narrative of three different women, providing an exaggerated facade for the the story of welfare.

Child Tax Credit in 2013, people whose livelihoods depended on the structure provided by welfare programs.

Specifically, they intend to combat rising rent costs, by "expanding incentives to ease local barriers to building new, affordable rental housing developments in areas of economic opportunity," with a particular emphasis on those who struggle the most to find affordable housing: the disabled, veterans, the elderly, and low-income families. They intend to tackle the issue by increasing funding for the National Housing Trust Fund. An area that Democrats have historically struggled with in gaining the support of working class families. Their platform offers sparse support of working class families in vague terms that differ from the detailed policy plans that characterize the rest of their platform. Their stance on welfare has not expanded to those who make up working class America in their financial support and economic policy.

The negative connotations of welfare have built a powerful stigma, bringing a sense of shame of individuals who have been forced into a situation of requiring government assistance, individuals who already face fairly stringent screening. Madeleine Burbank, who was forced to accept help from welfare after she was put into the surprise position of raising three children alone, remembers enduring probing personal questions from TANF screening officials to ensure eligibility and compliance with the time limit and work requirements of the program. Ashley Murphy, who was unable to secure sufficient work to support her two children, searched for any way out of welfare; she despised the long lines to get to the office and the indignity she felt when describing her situation to others. Brenda Casa, who grew up on welfare with only the support of her grandfather, worked tirelessly to improve her situation and resented the reputation of welfare, explaining, "we were not drug addicts living the high lifeâ&#x20AC;&#x201D;we were just poor." These are the stories of people on welfare, the stories of the 4.8 million people helped by food stamps and the 8 million families supported by the Earned Income Tax Credit and the

When it comes to issues as welfare, it is easy to build an 'us vs. them' dichotomy, to exclude welfare recipients as an 'other' or to dismiss them as lazy frauds, unwilling to move from their comfortable welfare hammock. But welfare recipients are not different from everyone else. When talking about welfare, whether in a popular or political context, it is easy to generalize its purpose in a battering context, but it is harder to imagine these people complexly and dynamically, and to realize the consequences of the negative colloquial stigma against welfare and the accompanying political ideology.

Reality: We Were Just Poor The factual reality of welfare doesn't match the popular or currently leading political understandings of the situation. The welfare queen, as she was first introduced by Ronald Reagan, does not speak for millions of Americans currently on welfare. The

The Republican platform fails to address the plight of those truly in need, and while the Democrats favor sweeping changes to protect those in need, they fail to listen to and specifically address the real issues of people in need. To change this narrative, we need to consider poverty in grounded terms, understand the plight of welfare recipients through sympathetic means, and focus on enacting concrete, targeted attempts at policy reform to relieve the pressure of those within the welfare system.

Karnika Pombra '19

INTERNATIONAL

TRADE: IT’S NO BIG DEAL An Explanation of the State of Global Trade

o the everyday reader, international trade feels like an overwhelming combination of complex agreements, confusing alliances and arbitrary numbers. Trade is an integral part of modern day international affairs. Yet in contemporary news articles trade events are explained without clear background context, leaving readers confused regarding the significance of certain terms and treaties. So what does all this “trade speak” really mean? Coming to “Terms” You read in the news that the United States is importing much more than it is exporting in relation to Country X. Or maybe you see that the United States has an enormous trade deficit with Country Y. Another bold headline reads that some trade alliance, that you remember a brief sentence about in your high school history textbook, is nearing its end. But what do all these arbitrary trade happenings really mean? In essence, international trade is the constant import and export of goods and services

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between the United States and other countries. Global trade gives rise to a world economy, featuring markets, factors of production, and policies that are much more complex and multifaceted than those of domestic trade. Trade balances, or the difference between imports and exports, are often meticulously monitored and tariffs and quotas may be put into place to adjust such balances.

There are a variety of common misperceptions associated with international trade. Perhaps the most familiar one is that a trade deficit is unfavorable and a result of an underperforming economy. Essentially, we often think that importing more than we export is a result of unfavorable commercial policy. The United States is the largest exporter and second largest importer of goods and services. Yet, in terms of trade balance, the United States has been running a pretty steady trade deficit since 1976 due to large oil and consumer product imports. Trade deficits, however, are actually hard to label as entirely positive or negative. On the “good” side, a trade deficit means that a country’s commercial economy is attractive to foreign investors. When foreign companies import goods and services into the United States, they usually invest the dollars they earn into American exports or assets. Although it may seem surprising, this explains why trade deficits actually cyclically increase in times of economic prosperity. On the somewhat “bad” side, while trade deficits could technically go on inevitably, many economists do not know if such a lopsided trade

balance is viable in the long-term. Unlike the current state of trade itself, perhaps the best perspective to have on trade deficits is a balanced one. The Social (Trade) Network The United States has trade relations with over 75 countries worldwide. Currently, the United States’ top five trading partners are China, Canada, Mexico, Japan, and Germany. Interestingly enough, these countries also happen to have some of the world’s strongest economies, in terms of gross domestic product, signaling the robustness of trade relations between the United States and these specific countries. The United States’ most popular imports are no real surprise: electronics, automobiles, and mineral fuels. Surprisingly, it is actually furniture imports that have seen the fastest growth in popularity in the past five years, while oil imports are beginning to lag. Export-wise, electronics and mineral fuels also top the list. Trade relations seem to directly follow increasing electronic innovation. While exports and imports follow the path of contemporary innovation, many trade agreements and treaties have foundations in the past. The United States has free trade agreements with 20 countries. Of the aforementioned top five trading partners, the United States has free trade agreements with Canada and Mexico, which has been secured by the famous North American Free Trade Agreement since 1992. Until recently, another significant trade agreement was the Trans-Pacific

Partnership, which was mainly focused on tariff reduction, and involved countries in the Americas, Southeast Asia, and Australia. A Future Forecast Right now, common perception is that the future of US trade does not look bright. But what is really at stake? Forecasting the future of the United States’ role in the Trans-Pacific Partnership is easy: it is nonexistent. The United States formally withdrew from the partnership on January 23rd of this year. For now, some economists and politicians predict a similar path for the North American Free Trade Agreement and the American federal government has stated that it will renegotiate the agreement. Of course, trade is not an one-sided affair: the perspectives of all involved countries must come into play, causing uncertainty in the agreement’s future prospects, along with trade relations between the 20 other countries the United States has free trade agreements with.

“While exports and imports follow the path of contemporary innovation, many trade agreements and treaties have foundations in the past.”

Arvind Veluvali '20

SAUDI ARABIA AND THE REBALANCE TO ASIA Why is Riyadh So Focused on Asia?

sia is on the rise. Its markets continue to expand, while those of the United States and Europe have lagged. It’s no surprise, then, that Asia is an object of interest—perhaps the object of most interest—to Saudi Arabia. In the face of plummeting oil prices, Saudi Arabia, like many of its neighbors in the Gulf States, is scrambling to find new markets for its energy exports; Asia seems to be the most likely answer. Indeed, Saudi Arabia’s economic involvement in the region has increased manifold in recent years. From 2007 to 2012, Saudi Arabia’s exports to China rose from $17 billion to $55 billion; it is China’s biggest supplier of oil. In January of 2017, however, Russia overtook Saudi Arabia as the leading supplier, a worrying prospect for Riyadh. In order to ensure supremacy in the region, and hedge its bets against

Saudi Arabia is investing so heavily in Asian markets simply because it has few other options. further-falling oil prices, Saudi Arabia will continue to increase its ties with, and investments in, Asia. Why Asia? In late February, King Salman of Saudi Arabia embarked on a monthlong tour of six Southeast Asian countries, his first trip from the Middle East since 2015. These stops represent Saudi Arabia’s increasing interests in the region, and Saudi Arabia’s plans for future economic expansion there. Saudi Arabia is investing so heavily in Asian markets simply because it has few other options. Rising protectionist and nationalist policies in the United States and Europe, such as the United States’ pursuit of renewable energy and oil in Alaska and the Dakotas, have caused an inward focus for Saudi Arabia’s largest trading partners. On the other hand, Saudi Arabia is facing increased pressure to lessen its dependence on oil, due in no small part to the tumultuous fall in oil prices. This has forced the Saudis to contemplate selling five percent of Saudi Aramco, in the hopes that the $100 billion yield can be used to fill the coffers of the Saudi Public Investment Fund. Obviously, such drastic measures are unsustainable for Riyadh; this is why Saudi Arabia seeks financial opportunities in Asia, a region ripe for such investment.

Saudi Arabia, Indonesia and Malaysia: Alliance or Rift? Perhaps the two likeliest trading partners for Saudi Arabia are Indonesia and Malaysia, mostly due to the fact that all three are Sunni-dominated Muslim countries. Saudi Arabia’s current ties with both nations have drawn heavily upon religious affinities, and such sensibilities will no doubt influence Saudi Arabia’s interactions with the two in coming years. For instance, the Asian countries expressed hopes that Saudi Arabia would expand the number of visas allotted to each country for the annual hajj. However, religious concerns are secondary for Riyadh; economic issues take precedence. Under that framework, there is bound to be some friction. Indonesia and Malaysia have traditionally been exporters of energy, making them competitors to Saudi Arabia. However, in recent years, both Asian economies have diversified, and are now at the forefront of Southeast Asia’s manufacturing and financial sectors, particularly Islamic finance. While these industries are burgeoning, Saudi Arabia will likely stick to its specialty, energy. Saudi Aramco will invest $7 billion with its Malaysian counterpart, Petronas, and $6 billion with Pertamina, its analog in Indonesia. These investments will by and large be used to build out refineries, as more refined products are in higher demand in Asia.

China and Japan: Going Both Ways While Indonesia and Malaysia are ideal candidates for investment, China and Japan constitute a different situation. China is the destination for most of Saudi Arabia’s crude oil exports, and the site of several energy-related investments. Both China and Japan also offer opportunity for Saudi Arabia to invest in the technology sphere; for example, Saudi Arabia has agreed to invest $45 billion into the Japanese corporation

SoftBank. In this way, Riyadh sees opportunity for diversification in Asia. However, the Saudis aren’t just seeking to invest; they’re looking for investors. As mentioned previously, Riyadh is considering selling five percent of Saudi Aramco. While Riyadh has focused on stock exchanges in New York and London for the IPO, it is nonetheless discussing Chinese investment in the first round, regardless of where it debuts. Although this would be unusual as

the Chinese government strictly controls capital outflow into equities, Beijing has an incentive to allow the investment to go through since Saudi Aramco is China’s largest supplier of crude oil. Immaterial of the deals that emerge from Salman’s visit to Asia, the sojourn represents Asia’s expanding role in Saudi Arabia’s economy. Surely, the kingdom will continue to cultivate ties with the region.

Neil Goh ‘20

BAIT AND SWITCH: NINTENDO’S NEW GAME Is it Finally Safe to Invest in Nintendo?

ast November was the 10th birthday of the Nintendo Wii. Long gone are our days of scouring terrain for rare Pokemon on the Gameboy and whipping our joysticks in Wii Tennis.

charming familiarity, but also banality.

Nintendo has retained its status as the leading Japanese multinational home entertainment company through market capitalization and continuous release of new consoles, but this title doesn’t say very much about its success.

On March 3rd of this year, Nintendo released its newest console, the Nintendo Switch. Following the recent flop of the Nintendo U handheld console, which ceased production just five years after it was introduced, Nintendo seeks redemption in the Switch, which offers a wide versatility of physical gaming possibilities in one portable unit. While the Japanese video game economy has been sluggish, the new compact Switch unit could contribute to a revitalization in the market, as it is already one of Nintendo’s most rapidly selling consoles to date. Yet analysts and common consumers have had mixed reactions to the console’s introduction. Aware of the company’s extremely volatile history, prospective investors remain unsure about Nintendo (NTDOY) stock, which trades on the Tokyo Stock Exchange, despite its recent milestone of 1.5 million sold consoles. While it is well-recognized as a big gaming brand, Nintendo needs to make the correct managerial decisions that will raise the long run popularity of the Switch to abandon its reputation as the father of fleeting gaming fads and pop culture phenomena.

The Switch: Upgrading the Handheld Gaming Console

With a drawn-out history of short-lived successes throughout the last decade—from a myriad of mini Nintendo Wii games to its most recent Pokemon Go explosion in July 2016—the company rigidly stands on a marketing premise of enhancing versions of its previous successful games without really innovating in any way. This approach, coupled with a consistent tinge of classic Japanese digital culture, distinguishes Nintendo from the rest of its competitors in the global entertainment sector. Whether this quality is a benefit to the company, however, is difficult to tell. For all the Super Mario and Pokemon games out there, an attempt to bring new spins and features to pre-existing games can produce

As the seventh video game console officially released by Nintendo, the Switch allows users to enjoy the “Freedom to have fun, wherever, whenever.” Priced at $299.99, the compact 6.2-inch device delivers an impressive gaming

While it is still too early for any accurate long term predictions, the Switch’s unique compromise of home entertainment and portable gaming seems to be an appealing selling factor for Japanese consumers, since “physical space is a premium in Japanese homes, and home console units there have failed to sell as well as portable game consoles”, as Sam Byford from The Verge has pointed out. The Switch also runs completely on game downloads and doesn’t require a physical disk drive, a smart practical feature that keeps up with an increasingly relevant era of portable streaming. Successful Launch, Wary Investors Although Nintendo has announced partnership with large sponsors such as Activision and Ubisoft, and is expected to produce heavy hitting games beyond the likes of Doodle Jump or Angry Birds, the Switch’s primary selling installment is The Legend of Zelda Breath of the Wild, another classic franchise that Nintendo has intelligently focused its attention on. Already immensely successful, the new Zelda game is beginning to practically label itself with the console, posing a nascent detriment to the company. According to Paul Tassi of Forbes Magazine, the game has a near “91 percent attach rate to the Switch, which means it’s practically a pack-in game” and is becoming nearly synonymous with the console. Without

a quick plan in diversifying its games and disassociating itself from Zelda to prove its own merits, the Switch may fail to continue reaping in sales once the popularity of Zelda fades. While the Switch has experienced high launch numbers and overall sales strength, this success seems to be largely reminiscent of its former failed releases. Particularly in the video game console industry, a longterm linear trend in sales is a less misleading indication of success in a new gaming platform than an observed initial spike as we see in the Switch. Take the Wii U, for example. Its first quarter comprised about 23 percent of its entire lifetime sales by the time of its announced discontinuation. Likewise, both the PS4 and the Xbox One sold around a million units at their respective launches, but today there is a clear affinity for the PS4, which has double in overall sales figures over its counterpart. Investors and market spectators are unsure of how strong a push the Switch is going to have for Nintendo and the Japanese entertainment market. It is also important to note that when the vast majority of stocks in the major gaming hardware market had progressed, especially in the past five years, the Nintendo stock was a low outlier, trudging behind its rivals Sony (NYSE:SNE) and Microsoft (NASDAQ:MSFT). Even during its numerous hardware launch events showcasing various new products in the past year, there was no notable movement in its shares. Waiting and Wishing Although Nintendo already prides itself on the new record for highest

launch sales in its history, the fundamental problem with the Switch is that it seems to merely capture the attention of those who already have an affinity for Nintendo. Gamers already loyal to Nintendo’s unchanging style form the large majority of the Switch’s consumer base. This niche group of consumers value Nintendo’s model of unending improvement and consistent content, appreciating that Nintendo will always be Nintendo. But for now, it seems that the brand’s gimmicky platform of nominal innovation isn’t really inciting a new console war, as it fails to capture the reliability that most people desire. Their competitors, the Sony Playstation 4 and Microsoft Xbox One dominate current generation console sales, with a total of 55.3 million and 28.5 million, respectively. The obsolete Wii U lags behind with 13.9 million. What Nintendo needs is a full reorganization of its conservative managerial decision-making process. Even after a string of successes with previous handheld devices, the company has restrained itself by releasing another portable device. While Nintendo boasts $5.7 billion cash according to its last earnings report, it isn’t feeling safe by any means. Its discomfort is clear in its desperate strategies of quick monetization, such as setting a premium price for extra gaming hardware accessories and implementing paid subscription Switch gaming services. Fully aware of the pressure for effective innovation, Nintendo quickly needs to create a product that will ease nervous investors growing weary of waiting for a new game-changing product in the notoriously competitive gaming industry. Unfortunately, the Switch, in this regard, does not seem too promising in the long run.

https://nintendo.corednacdn.com/nintendo-switch/img/02-gallery/img-slider-04-pc_tab.jpg

experience both at home and on-the-go thanks to its nifty deconstructable design. With a sleek contrasting black and grey color scheme, the Switch initially takes the form of a convertible gaming tablet. By simply snapping off the left and right Joy‑Con controllers, however, the handheld chassis becomes a console for users to connect to a large TV or monitor for a comprehensive gaming experience.

Ted Rosen ‘20

A BUZZING NEW INDUSTRY The Rise of the Drone Market

ot even a decade ago, the prospect of tens of thousands of robots flying around the sky could have only existed as a figment of someone’s imagination, in a picture of a time that was centuries away. Even to those forward-thinkers who correctly predicted the increased use of drones in warfare, the idea of civilian drone applications was something that wouldn’t unfold for a long time. Yet, through heavy investments mostly made by investment firms and companies, drones are poised to revolutionize the work of retailers, farmers, law enforcement agents, scientists, and many others. This once unimaginable future has speedily arrived, and drones are on their way to becoming a ubiquitous part of millions of Americans’ daily lives. The Ins-and-Outs Since it is critical for an investor in a company to be knowledgeable about that company’s product, it is important to understand the technical characteristics of drones to really appreciate any broader

commentary about the overall drone market. In its most basic definition, a drone is an unmanned aircraft. People in the industry formally use UAV (unmanned air vehicle) to describe drones, whether they are remotely controlled or fly autonomously through software systems that utilize image sensors and GPS. Depending on the drone’s manufacturer and its work function, drones can also come in a variety of different sizes; some can fit in the palm of your hand, while military-grade drones can be as large as a truck. Drones also come in a host of different hardware makeups; most commercial drones are rotary blade type that run on two to eight battery-powered rotors, while others can fly for years at a time because of their solar-powered energy systems.

seeds into the soil from the sky, decreasing planting costs by 85 percent. Another application of drones that directly impacts the lives of consumers is delivery capability. Most notably, Amazon is working on Prime Air, a drone delivery system that can deliver customer orders in as little as 30 minutes. Continuing the trend of faster and more convenient access to goods and services (and perhaps in an attempt to address consumer laziness, Chipotle recently developed and ran trials for burrito delivery drones. Many photographers and real estate companies use camera drones to capture valuable images of property or scenery from the sky. Although there are a host of other uses that humans still have yet to discover, the ones mentioned describe a new industry that is uniquely positioning itself to change life as we know it.

Jack of all Trades

Sky-High Potential

Drones are being used for dozens of different jobs and their relevance to everyday people is rapidly growing. Until recently, drones were only used by defense departments of countries such as Israel and the US for enemy surveillance and for firing various weapons on ground targets. While the use of drones as weapons of war is still prevalent and is expected to grow, the more revolutionary aspect is that there are so many current and potential applications of drones for everyday consumers and businesses.

The economics of the drone industry map a narrative that is just as exciting for investors as the burrito drone delivery is for the most ardent burrito lovers. According to research by consulting firm PWC, the drone market could be worth as much as $127 billion by 2020, up from the market’s $2 billion size today. This enormous projected market growth implies a CAGR (compound annual growth rate) of over 180 percent, an infinitely more lucrative growth rate than that of other sectors. US financials, for instance, has a projected annual growth rate of around two to three percent - just above the growth expectations of the US GDP.

For example, drones are redefining agriculture by enabling more efficient and cheaper methods of soil and field analysis, planting, crop spraying, crop monitoring, and irrigation. One startup drone company has developed a drone system that shoots nutrient-rich

Even with the high price point of drone technology, unit sales are expected to be quite large. According

Money Flying into the Industry Per the drone market’s outstanding growth projections, Wall Street has predictably tried to get a piece of the action. According to venture capital databases, $1.9 billion of venture capital money has been deployed into drone startups, with an average investment size of $5.3 million. Outside of the venture capital world, large financial institutions have provided financing for the largest drone maker on the planet, DJI Technologies, at a private valuation of around $8 billion that is expected to rise through the next levels of financing. Public retail investors don’t have access to these large private equity and venture capital deals but they can still get exposure through Wall Street’s introduction of new ETF’s (Exchange Traded Funds) that hold dozens of drone manufacturers and developers. One example of this new and novel kind of ETF is the PureFunds Drone Economy Strategy ETF, which comprises over 40 companies that are in someway related to the drone industry. Bringing it Back to Earth However, as with any investment opportunity that presents a sizeable reward, there are concomitant risks that investors and even consumers must be diligent about when investing or flying these drones. The most serious risk at

the moment is the regulatory climate of the industry. Market expectations must be conservatively analyzed because FAA and other government regulations may restrain sales due to the safety concerns of drones. These concerns are not unfounded; from 2013 to 2015 there were 327 potentially catastrophic incidents of drones flying too close to piloted aircraft. As a result, the FAA has proposed new regulations that put restrictions on consumer drone capabilities, such as limiting the top speed of drones to under 100 miles per hour. Another instance of regulation potentially stifling sales is one which requires that owners register their drones with the FAA (Federal Aviation Authority), a time-consuming process that may not be worth it for many consumers. The regulatory framework for drones is still in its infancy because of the industry’s overall youth, but regulators tasked with making the skies safe undoubtedly already pose a potential threat to the growth of the industry. While it may take longer than expected because of regulations, the growth of the drone industry and its projected future have massive implications for our society and for investors. From burrito delivery to real estate sales, drones are on their way to becoming an integral part of the average American’s life. And as the billions of investment dollars being poured into drone companies show, Wall Street has definitely taken notice. While investors must still make a calculated decision based on the risk and reward, it is safe to say that over the coming years consumers will certainly see more drones flying throughout the sky as a new aerial age takes hold.

Phillip Squires ‘18

2050: A NEW SPACE ODYSSEY How Entrepreneurship is Changing Space Exploration

“S

pace: the final frontier…to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before – Captain James T. Kirk. Space has intrigued mankind since long before Star Trek was created. Nearly every major civilization throughout history has used outer space iconography or themes to indicate their spiritual fixation, and space has been the impetus for much of mankind’s advancement and innovation in science, technology, and exploration. Today, four decades after the last man stood on the moon, we are entering a new era of galactic exploration and increasing public interest, but this time it is a few space entrepreneurs and companies spearheading the push towards outer space. This interest by the commercial sector poses great benefits for humanity through pushing scientific

http://www.spacex.com/

to the FAA, seven million consumer and commercial drones could be sold in the US in 2020, up from 2.5 million in 2016. This projected sales increase comes from the increasing number of drone hobbyists and the increasing attention given to the value drones can provide. While it’s true that this phenomenal growth potential means that investors will have to pay a substantial premium for equity, the fundamental story of the drone market and its unworldly projected growth rates is still an amazing one.

boundaries, but it also poses serious risks of new conflict, as competing nations and companies look to space as their next big market. Many questions must be addressed; and perhaps a new universal galactic law is in order. Elon Musk This recent resurgence was borne out of the ‘internet technological revolution’ of the past two decades. Space, internet and tycoon Elon Musk, who founded PayPal and Tesla, helped revive the discussion of extraterrestrial activity when he launched the Space Exploration Technologies Corporation, popularly known as SpaceX. Musk’s aspirations for space are a CEO version of Captain Kirk’s—as the rockstar entrepreneur helps to create the first free market for galactic trade, he is certainly generating the most buzz. SpaceX SpaceX capitalized on NASA’s renewed interest in the moon by developing its space transport services, which can lift satellites, cargo, and humans into orbit for a fraction of the standard cost. Its unique reusable launch system allows the body of the rocket to return to

earth for continued use, after launching a detachable capsule to carry the cargo to its final destination. A study by NASA and the Air Force estimates that the development of SpaceX’s Falcon rocket was completed to the tune of $440 million, roughly a third of the cost of it would have been had NASA developed the project. Today, SpaceX offers Falcon 9 launches for $62 million, which can perform a geosynchronous transfer orbit (GTO) on cargo weighing up to 8,300 kilograms. This price advantage gives SpaceX a serious competitive edge over NASA and other space companies. SpaceX has also announced that it will begin to send paying customers around the moon on its larger Dragon rocket later next year. Musk’s dreams stretch much farther than simply being a space airline; he has previously expressed his main goal of establishing human presence on Mars. Obviously this vision has a long way to go, but one of the first steps is to bring terrestrial internet to space. Musk would like to achieve this by establishing an extensive satellite network—4,425, to be exact— orbiting 700 miles above the surface of the Earth. This con-

stellation of satellites would provide lightening fast internet at all points of the Earth with the end goal of transmitting data most effectively between Earth and Mars. Elon Musk is in the unique position of also owning the largest renewable energy company, Tesla, and he may very well be eyeing a market for solar energy capture in space. Blue Origin Enter Jeff Bezos, the founder and CEO of Amazon. Not wanting Musk to dominate the conversation, he is putting more time and resources into his aerospace and spaceflight firm, Blue Origin, to compete for NASA contracts. Similar to SpaceX, Blue Origin is starting in the space transport services, transporting cargo and equipment, but also has the explicit goal of eventually establishing a colony on the moon. Their first step is to launch a rover mission to the South Pole of the moon because of the ice preserved there by the shadows in deeper craters. The advantages of this ice comes in the form of oxygen and hydrogen, important ingredients for rocket fuel. If these colonies are to come to fruition, Amazon would be in a great position to become the main supplier of goods from earth. In the future, there is

potential for a monopoly of supply, resulting in a constant flow of Blue Origin rockets between earth and the moon transporting all the goods and equipment necessary to sustain life. To the Moon and Beyond What’s astonishing is that space colonies could be a reality as early as 2020. Bigelow Aerospace is a manufacturer of inflatable space habitats, and has laid out a plan to build a depot orbiting the moon within the next few years. Some have questioned the utility of the project, but this time, the goal is not merely to keep a presence on the moon, but rather use it as a base camp to Mars, and possibly further into space. Launching expeditions to Mars from the moon offers a serious advantage in terms of efficiency, frequency, and safety. The moon would serve as a giant space gas station. The hydrogen and oxygen from the ice offers lower fuel cost, and the shorter distance means less flight time and more frequent expeditions. Humans will undoubtedly continue exploring outer space in the centuries and millenniums to come. The prospects of space push scientific boundaries through groundbreaking innovations that provide endless utility to humans, on Earth and beyond. But a serious question our global society needs to ask is whether space should be treated as a universal entity. The quest for outer space can certainly bring nations together, but it could just as easily drive them apart.

Shailen Sampath ‘20

PAVING A ROAD TO THE FUTURE Building Smart Roads to Power America

n 1954 a group of scientists created the first photovoltaic cell. Since then solar power has become a primary renewable energy source around the world. However, while Americans tend to hype up renewable energy, it is rare for civil society to take any action regarding its application. In the United States only 0.5 percent of our energy comes directly from the sun. Now there is an opportunity to make a meaningful transfer to a more significant reliance on sustainable energy: solar roads. Shedding Light on Solar Roads Solar roads are made of individual hexagonal tiles of glass, harder and more durable than asphalt (with a hardness of 5.5 as opposed to 1.3), that are layered over solar panels. Each tile utilizes LED lights and pressure sensitivity to provide numerous driving advantages. These “smart streets” could signal drivers of pedestrians and hazards, adjust parking spaces accordingly, and light up the roads at night. In colder climates, the roads can be kept above freezing with minimal energy, so ice

and snow would never accumulate on the streets. Electric cars can also be charged through the roads while they drive. This would in turn encourage the use of electric over gas-powered cars, eliminating a massive portion of the country’s pollution. These roads would be self-sufficient and produce surplus electricity for public use. Scott and Julie Brusaw, the innovators of solar roads, founded the company Solar Roadways. They calculated that if all the roads in the United States were replaced with solar roads, they would passively generate three times the amount of energy we produce today.

The biggest issue is a lack of confidence in the promises of solar roads. Lighten the Load Asphalt costs three to 15 dollars per square foot to pave. By comparison, Solar Roadways estimates that a solar road tile would be 70 dollars per square foot. If every road in the United States were made into solar roads, it would cost around $56 trillion dollars. However, if we take into consideration that the United States spends around $950 billion dollars on transportation and residential energy a year, according to the Department of Energy, it is estimated that if solar energy replaced all energy in the United States, in around 60 years that $56 trillion dollars would be paid off. This is not even taking into consideration what could be

If all the roads in the United States were replaced with solar roads, they would passively generate three times the amount of energy we produce today.

done with the extra energy that is produced by these roads. The United States spends $2.3 billion dollars a year clearing ice and snow, and additional millions in maintenance. With $2.3 billion dollars the United States could make 460 kilometers of solar road at the current production cost, which could likely be reduced in mass production. The implementation of these roads could create thousands of manufacturing jobs and stimulate the nation’s economy. While it is important to keep in mind that nothing comes without a price, research suggests that in the long run, the benefits of solar roads would even outweigh the astronomical cost of the initial investment. Why is Everyone in the Dark? The biggest issue is a lack of confidence in the promises of solar roads, which in turn stems from a lack of penetration into public awareness. People don’t really know about solar roads. Currently, Solar Roadways is targeting public areas where the technology can be seen and used first-hand to increase the idea’s popularity. In particular the company has installed prototypes at highway rest stations and visitor parking lots. While placing the original solar roads in places of high traffic is a

good idea, using government and local public spaces may not be the most effective strategy at first in raising awareness for this technology. Though public highways and roads are the long-term goal, if companies such as Solar Roadways install solar roads on government property it may create something of a public uproar. Many citizens don’t believe in the need for renewable energy and those who do will complain about issues like the cost to taxpayers and the road’s safety, at least until solar roads can more convincingly prove their worth. Any issues the roads create could also lead to lawsuits that would threaten the young company. What is to be Done? For practical purposes, Solar Roadways should start by targeting private areas of high traffic and coverage in regions of intense sunlight. For example if Solar Roadways was able to introduce its product to Disneyland and Disneyworld, not only would the product be exposed to thousands of consumers’ worth of foot traffic, but it would also make the technology apparent to the world for those who come to Disney and those who read about it from home. Solar roads would then be associated with the family-friendly land of Disney. LegoLand, SeaWorld, and southern sports team stadium parking lots

are also potential possibilities. These various entertainment corporations would also be easier to negotiate with than the government or small businesses. Since private recreational locations are always looking for ways to try and differentiate themselves from their competition, solar roads would be the perfect opportunity for them to show uniqueness, establish technological superiority, and be environmentally friendly at the same time. If people can associate solar roads with comfort and fun, they will likely internalize the message that solar roads are sturdy and safe. In addition, the ability to internally power entertainment locations will show people nationwide how much potential solar roads have in creating an interactive road experience and generating electricity. It is crucial that the beachhead for this innovation be chosen very carefully since it may define the timeline and success the product will have. The private sector is where this incredible technology will have to be first implemented before it can expand. We have come a long way since the discovery of the photovoltaic cell in 1954, but now with the use of solar roads we can literally pave a brighter path into the future.

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