Incongruous

Some things from the Sunday Times that caught my eye, generally making me laugh.

Motoko Rich's Remembrance of Things Unread:

YOU would have to crack open “The Landmark Herodotus” and get as far as Page 41 to discover this oo-la-la piece of a lecture given by the sage Sandanis to Croesus, the king of Lydia: “You are preparing for war against the sort of men who wear leather trousers and leather for all their other garments as well.”

William Hamilton's The Unmaking of a Technophobe:

Henry Petroski, a professor of civil engineering and history at Duke University and the author of “The Toothpick: Technology and Culture,” explained that the toothpick’s adoption was pure fashion.

“It became fashionable to stand in front of restaurants and chew on wooden toothpicks,” he said. “It was not function, but the fact that you had one. The best people of society were chewing on toothpicks, and women began to adopt the practice. Most people didn’t know what they were.”

Micahel J. de la Merced's A Conference Call That Backfired

With one conference call and one unprintable word, Sallie Mae’s chief executive learned a $3 billion lesson.

That’s how much market value the company, formally known as the SLM Corporation, lost last Wednesday after that call. It was scheduled by Albert L. Lord, who is also the chairman of Sallie Mae, the student lending giant, to reassure shareholders and analysts alarmed by the company’s deteriorating financial health.

Instead, Mr. Lord delivered one of the worst conference calls since the infamous attack by Jeffrey K. Skilling of Enron on an analyst — using another expletive — in 2001. Shares in Sallie Mae fell nearly 21 percent.

Here are some highlights from Mr. Lord’s performance.

When an analyst asked how Sallie Mae would regain its single-A credit rating: “You’re talking to the wrong guy,” he said. “I don’t know that answer.”

On announcing a shareholder meeting next month: “I would suggest maybe you get there early because I can assure you, you will be going through a metal detector.”

As the conference call operator was asking for further questions: “Steve, let’s go. There are no questions.” And then came the expletive.

Christopher Caldwell's Intimate Shopping:

The concept of “implicit contracts” was developed in a landmark 1988 paper by the economists Andrei Shleifer and Lawrence Summers. Their subject — hostile corporate takeovers — seems far from cyberprivacy, but it is not. Shleifer and Summers showed that increases in share price following takeovers were not due to gains in efficiency, as the defenders of those buyouts claimed. There often were such gains, but they were not the source of the profits. The profits came from reneging on implicit contracts — like the tradition of overpaying older workers who had been overworked when young on the understanding that things would even out later. These contracts, because implicit, were hard to defend in court. But the assets they protected were real. To profit from them, buyout artists had only to put someone in place who could, with a straight face and a clean conscience, say, “I didn’t promise nothin’!”

As commerce moves from Main Street to the Web, lots of businessmen are in that position. All bets are off, and entrepreneurs are seeking new ways to make money by trial and error. Sometimes they do so by adding value to the economy. Sometimes they do so by abrogating implicit contracts. Like managers newly seated after a hostile takeover a quarter-century ago, today’s online innovators are not always skilled at telling the difference: “Your friendships are your own business? Golly, I wasn’t here when they negotiated that.”

Beacon was a clumsy attempt to reset the default on the common-sense understanding of discretion and to profit off the resetting. As in the 1980s, technological sophistication, entrepreneurial genius and gains to efficiency are a part of this story — but a larger part was the attempt to monetize and sell a vulnerable implicit contract. Facebook was thwarted, as the corporate raiders of years past were not, because it aimed not at pension plans and seniority-based pay scales but at something considerably more valuable — the unwritten rules of privacy that make civilized human interaction possible.

Times photo of Julia Boorstin, Couper Samuelson and not-their-groomsment by Misha Erwitt.