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April 30, 2007

"To Live Was to Be Not Dead Yet"


In the passage below, Johnson begins by noting the reality captured in a phrase of Charles Dickens in the following pasage from Bleak House:  "Jo lives---that is to say, Jo has not yet died---in a ruinous place . . ." 

 

(p. 85)  The phrasing captures the dark reality of urban poverty; to live in such a world was to live with the shadow of death hovering over your shoulder at every moment.  To live was to be not dead yet. 

From our vantage point, more than a century later, it is hard to tell how heavily that fear weighed upon the minds of individual Victorians.  As a matter of practical reality, the threat of sudden devastation---your entire extended family wiped out in a matter of days---was far more immediate than the terror threats of today.  At the height of a nineteenth-century cholera outbreak, a thousand Londoners would often die of the disease in a matter of weeks---out of a population that was a quarter the size of modern New York.  Imagine the terror and panic of a biological attack killed four thousand otherwise healthy New Yorkers over a twenty-day period.  Living amid cholera in 1854 was like living in a world where urban tragedies on that scale happened week after week, year after year.  A world where it was not at all out of the ordinary for an entire family to die in the space of forty-eight hours, children suffering alone in the arsenic-lit dark next to the corpses of their parents.

 

Source:

Johnson, Steven. The Ghost Map: The Story of London's Most Terrifying Epidemic - and How It Changed Science, Cities, and the Modern World. New York: Riverhead Books, 2006.

 




April 29, 2007

"Under the Spell of a Theory"


 

Johnson's wonderful book is part mystery, part history, part philosophy of science, and part musing on political philosophy.  The passage below warms the heart (and stimulates the brain) of the libertarian.  Against great odds, Dr. Snow persisted in presenting ever-more convincing evidence for his correct water-borne theory of cholera.  Meanwhile Chadwick, the main advocate of government public health activities, continued to direct policy on the basis of the mistaken theory that cholera was spread by foul vapors in the air. 

 

(p. 120) Herein lies the dominant irony of the state of British public health in the late 1840s.  Just as Snow was concocting his theory of cholera as a waterborne agent that had to be ingested to do harm, Chadwick was building an elaborate scheme that would deliver the cholera bacteria directly to the mouths of Londoners.  (A modern bioterrorist couldn't have come up with a more ingenious and far-reaching scheme.)  Sure enough, the cholera returned with a vengeance in 1848-1849, the rising death toll neatly following the Sewer Commission's cheerful data on the growing supply of waste deposited in the river.  By the end of the outbreak, nearly 15,000 Londoners would be dead.  The first defining act of a modern, centralized public-health authority was to poison an entire urban population.  (There is some precedent to Chadwick's folly, however.  During the plague years of 1665-1666, popular lore had it that the disease was being spread by dogs and cats.  The Lord Mayor promptly called for a mass extermination of the city's entire population of pets and strays, which was dutifully carried out by his minions.  Of course, the plague turned out to be (p. 121) transmitted via the rats, whose numbers grew exponentially after the sudden, state-sponsored demise of their only predators.)

Why would the authorities go to such lengths to destroy the Thames?  All the members of these various commissions were fully aware that the waste being flushed into the river was having disastrous effects on the quality of the water.  And they were equally aware that a significant percentage of the population was drinking the water.  Even without a waterborne theory of cholera's origin, it seems like madness to celebrate the ever-increasing tonnage of human excrement being flushed into the water supply.  And, indeed, it was a kind of madness, the madness that comes from being under the spell of a Theory.  If all smell was disease, if London's health crisis was entirely attributable to contaminated air, then any effort to rid the houses and streets of miasmatic vapors was worth the cost, even if it meant turning the Thames into a river of sewage.

 

Source: 

Johnson, Steven. The Ghost Map: The Story of London's Most Terrifying Epidemic - and How It Changed Science, Cities, and the Modern World. New York: Riverhead Books, 2006.

 




April 28, 2007

Why is Al Gore Afraid of Bjorn Lomborg's Questions?



GoreAlCartoon.gif   Al Gore.  Source of the image:  online version of the WSJ article quoted and cited below. 

 

(p. A16) The interview had been scheduled for months. Mr. Gore's agent yesterday thought Gore-meets-Lomborg would be great. Yet an hour later, he came back to tell us that Bjorn Lomborg should be excluded from the interview because he's been very critical of Mr. Gore's message about global warming and has questioned Mr. Gore's evenhandedness. According to the agent, Mr. Gore only wanted to have questions about his book and documentary, and only asked by a reporter. These conditions were immediately accepted by Jyllands-Posten. Yet an hour later we received an email from the agent saying that the interview was now cancelled. What happened?

. . .

Clearly we need to ask hard questions. Is Mr. Gore's world a worthwhile sacrifice? But it seems that critical questions are out of the question. It would have been great to ask him why he only talks about a sea-level rise of 20 feet. In his movie he shows scary sequences of 20-feet flooding Florida, San Francisco, New York, Holland, Calcutta, Beijing and Shanghai. But were realistic levels not dramatic enough? The U.N. climate panel expects only a foot of sea-level rise over this century. Moreover, sea levels actually climbed that much over the past 150 years. Does Mr. Gore find it balanced to exaggerate the best scientific knowledge available by a factor of 20?

Mr. Gore says that global warming will increase malaria and highlights Nairobi as his key case. According to him, Nairobi was founded right where it was too cold for malaria to occur. However, with global warming advancing, he tells us that malaria is now appearing in the city. Yet this is quite contrary to the World Health Organization's finding. Today Nairobi is considered free of malaria, but in the 1920s and '30s, when temperatures were lower than today, malaria epidemics occurred regularly. Mr. Gore's is a convenient story, but isn't it against the facts?

. . .

Al Gore is on a mission. If he has his way, we could end up choosing a future, based on dubious claims, that could cost us, according to a U.N. estimate, $553 trillion over this century. Getting answers to hard questions is not an unreasonable expectation before we take his project seriously. It is crucial that we make the right decisions posed by the challenge of global warming. These are best achieved through open debate, and we invite him to take the time to answer our questions: We are ready to interview you any time, Mr. Gore -- and anywhere.

 

For the full commentary, see:

FLEMMING ROSE and BJORN LOMBORG  "Will Al Gore Melt?"  The Wall Street Journal (Thurs., January 18, 2007):  A16. 

(Note:  ellipses added.) 

 




April 27, 2007

Aaron Brown Asks UNL Tough Questions on Students' Right to Defend Themselves


 

  Source of image is screen capture from KETV web page:  http://www.ketv.com/news/13120432/detail.html

 

Aaron Brown was an excellent student in my micro-principles course several years ago, and now he is a law student at UNL.  You may also remember him as a frequent contributor of comments to entries on this blog.

He's gotten some attention today (4/26/07) by speaking out for the right of college students to defend themselves by bearing arms.

For the KETV (Omaha ABC channel 7) story, see:  http://www.ketv.com/news/13120432/detail.html

For the KOLN (Omaha Fox channel 10) story, see:  http://www.kolnkgin.com/news/headlines/7209236.html

 




April 26, 2007

Concrete Used in Pyramids



T.W. Schultz used to emphasize that the level of technology in an economy depended more on the incentives and institutions for adoption and diffusion, and less on the invention of the technology, which he thought was a shorter hurdle than usually thought.  The Antikythera Mechanism is one historical technology that dramatically supports Schultz's view.  If it survives scrutiny, the following article would provide an additional example supporting Schultz. 


(p. A18) Reporting the results of his study, Michel W. Barsoum, a professor of materials engineering at Drexel University in Philadelphia, concluded that the use of limestone concrete could explain in part how the Egyptians were able to complete such massive monuments, beginning around 2550 B.C. They used concrete blocks, he said, on the outer and inner casings and probably on the upper levels, where it would have been difficult to hoist carved stone.

''The sophistication and endurance of this ancient concrete technology is simply astounding,'' Dr. Barsoum wrote in a report in the December issue of The Journal of the American Ceramic Society.

Dr. Barsoum and his co-workers, Adrish Ganguly of Drexel and Gilles Hug of the National Center for Scientific Research in France, analyzed the mineralogy of samples from several parts of the Khufu pyramid, and said they found mineral ratios that did not exist in any known limestone sources. From the geochemical mix of lime, sand and clay, they concluded, ''the simplest explanation'' is that it was cast concrete.


For the full story, see: 

JOHN NOBLE WILFORD.  "Study Says That Egypt's Pyramids May Include Early Use of Concrete."  The New York Times  (Fri., December 1, 2006):  A18.





April 25, 2007

Self-Proclaimed Advocate for Poor, Gets Two $400 Haircuts: Looking Good in Council Bluffs


 

EdwardsHair.jpg   "John Edwards appearing at a public forum in Council Bluffs, Iowa, on March 9, two days after one of his $400 haircuts."  Source of caption and photo:  online version of the NYT article cited below. 

 

John Edwards, the North Carolina Democrat, announced on Thursday that he was reimbursing his campaign $800 to cover what his aides said was the cost of two haircuts — yes, you read that correctly — by a Beverly Hills barber, though, perhaps, the word stylist is more applicable.

. . .  

Mr. Edwards has presented himself in the Democratic field as an advocate of working-class Americans, lamenting the nation’s growing economic disparity.

Mr. Edwards was disparaged as “the Breck Girl” by Republicans when he ran for president in 2004. More recently, he was captured on camera, waiting for an interview to begin and presumably unaware that he was being taped, fussing with his hair for nearly two minutes.

That clip found its way to You Tube, with the song “I Feel Pretty” playing in the background. Posted on Nov. 8, 2006, it was viewed 289,288 times as of Thursday evening.

 

For the full story, see: 

ADAM NAGOURNEY.  "In the Beverly Hills Style: Candidate’s $400 Coiffure."  The New York Times (Fri., April 20, 2007):  A19.

(Note:  ellipsis added.)

 

As of 4/21/07, the "John Edwards Feeling Pretty" video clip, can be found on YouTube at:

http://www.youtube.com/watch?v=2AE847UXu3Q

 




April 24, 2007

The Case Against Gun Control


 

   Venus Ramey shows how she balanced her pistol on her walker to shoot out the tires of an intruder on her farm.  Source of photo:  screen capture from CNN clip "Granny's Packing Heat" as viewed on 4/23/07.

 

In the wake of the Virginia Tech killings, there have been some renewed calls for more gun control (see the WSJ and NYT articles cited way below).  But we should not forget that a gun can also be a leveler; it gives the ordinary citizen a fighting chance against the thief and the murderer.

There was a great scene in the first Indiana Jones movie (Indiana Jones and the Temple of Doom, 1984) where Indy is being chased by a huge bad guy armed with swords.  The crowd clears, and the the huge man confidently and ominously twirls his swords.  Indy looks at him quizzically for a couple of seconds, pulls out a pistol, and shoots him. 

When I first saw that scene, the theater erupted in laughter and applause.

Laughter and applause are also appropriate responses to the story of 82 year old, former Miss America, Venus Ramey: 

 

Miss America 1944 has a talent that likely has never appeared on a beauty pageant stage: She fired a handgun to shoot out a vehicle's tires and stop an intruder. Venus Ramey, 82, confronted a man on her farm in south-central Kentucky last week after she saw her dog run into a storage building where thieves had previously made off with old farm equipment.

Ramey said the man told her he would leave. "I said, 'Oh, no you won't,' and I shot their tires so they couldn't leave," Ramey said.

She had to balance on her walker as she pulled out a snub-nosed .38-caliber handgun.

"I didn't even think twice. I just went and did it," she said. "If they'd even dared come close to me, they'd be 6 feet under by now."

 

For the full story, see: 

Associated Press.   "Armed Miss America 1944 Stops Intruder."  Forbes.com Posted 04.21.07, 5:00 AM ET Downloaded on 4/23/07 from http://www.forbes.com/feeds/ap/2007/04/21/ap3637737.html

 

CNN has a great clip on this story, under the heading "Granny's Packing Heat."

 

The WSJ article mentioned above, is:

VANESSA O'CONNELL, GARY FIELDS and DEAN TREFTZ.  "Next Debate: Should Colleges Ban Firearms? The Wall Street Journal  (Weds., April 18, 2007):  B1 & B10. 

 

The NYT article mentioned above, is:

LESLIE EATON and MICHAEL LUO.  "Shooting Rekindles Issues of Gun Rights and Restrictions." The New York Times (Weds., April 18, 2007):  A19.

 




April 23, 2007

"Solitude Serves as a Refreshing Balm"


The WSJ summarizes an April 2007 Psychology Today article.  The study that is discussed sounds relevant to the one-sided push for more collaboration and team production in business, and co-authorship in academics.  The benefits of collaboration should not blind us to the costs.

 

Amanda Guyer, a psychologist at the U.S. National Institutes of Health in Bethesda, Md., has found that individuals who withdraw from other people's company are more sensitive than extroverts to a wide range of positive emotional cues. Situations rife with emotional triggers, such as parties, can be wearying for such people, while solitude serves as a refreshing balm.

 

For the full story, see:

"Informed Reader; PSYCHOLOGY; Loners May Not Fear Others, They Just Need Some Solitude."  The Wall Street Journal  (Thurs., March 1, 2007):  B7.

 




April 22, 2007

Dilbert's New Product Leapfrogs the iPod


 

  Source:  scanned from Omaha World-Herald (Fri., April 20, 2007):  7E.

 

Today's entry is part of my continuing effort to document the concept of "leapfrog" competition, which I take to be Schumpeterian in spirit, though I have never found anywhere that Schumpeter himself used it.

 




April 21, 2007

Castro's Legacy of "Death, Tears and Blood"


Like thousands of other Cubans, I was arrested in the middle of the night. Fidel Castro's police raided my parents' home, stuck a machine gun in my face and took me away. It was 1960 and I was 22 years old.

The news that the Cuban dictator is gravely ill floods my mind with memories of my years spent in captivity. I believe that those of us who were political prisoners know his legacy better than anyone. For 22 years, I was an inmate in his vast prison system, mostly confined to an island gulag, for crimes I did not commit.

. . .

The legacy of Castro for Cuba will be much like that of Stalin in Russia, Pol Pot and Ieng Sari in Cambodia and Hitler in Germany. It will be the memories of the unknown numbers of victims, of concentration camps, torture, murder, exile, families torn apart, death, tears and blood. Castro will go down in history as one of the cruelest of all dictators -- a man who tormented his own people.

But his poisonous legacy will also include the double standard by foreign governments, intellectuals and journalists who fought ferociously against the unspeakable violations of human rights by right-wing dictatorships, yet applauded Castro. To this day many of these intellectuals serve as apologists and accomplices in the subjugation of the Cuban people. Rafael Correa, the recently inaugurated president of Ecuador, has declared that in Cuba there is no dictatorship. Evo Morales, president of Bolivia, considers Castro his mentor and has already shown that he is willing to silence his own critics at the point of a gun. Venezuela, once a democracy, is the new Cuba, replete with a growing population of political prisoners.

 

For the full commentary, see: 

ARMANDO VALLADARES.  "Castro's Gulag." The Wall Street Journal  (Mon., March 5, 2007):  A16.

 




April 20, 2007

Obama Should Support School Vouchers Experiment


 

There's something about our nation's capital that converts many leading Democrats to school choice. Perhaps it's the glimpse that Washington, D.C. affords into inner-city public schools.

But in most cases this appreciation of school choice extends only to their own children -- and not to the millions of children in failing public schools. Indeed, a nearly perfect correlation exists among Democratic presidential candidates who have exercised school choice for their own children and those who would deny such choices to the parents of other children.

. . .

The mystery man is Sen. Barack Obama, who sends his child to a private school in Chicago yet once referred to school vouchers as "social Darwinism." Still, he says that on education reform, "I think a good place to start would be for both Democrats and Republicans to say . . . we are willing to experiment and invest in anything that works."

Well, school choice works. Every study that compares children who applied for school choice scholarships and received them with those who applied but did not shows improved academic performance. More important, every study that has examined the effect of school choice competition has found significantly improved performance by public schools.

Given their track records it is doubtful how many candidates will agree with Sen. Obama's professed openness to experiment. But as he might say, we can always have the audacity to hope.

 

For the full commentary, see:

CLINT BOLICK.  "Selective School Choice."  The Wall Street Journal  (Fri., March 2, 2007):  A11.

(Note:  ellipsis between paragraphs was added; ellipsis within Obama quote was in the original.)

 

 




April 19, 2007

Advice from Charles Koch: A Successful Business Schumpeterian


   Source of book image:  http://media.wiley.com/product_data/coverImage300/89/04701398/0470139889.jpg

 

When Charles Koch became the chief executive of Rock Island Oil & Refining after the death of his father in 1967, the company was a moderately successful enterprise based in Wichita, Kan. He renamed it Koch Industries in honor of his father -- and over the next 40 years proceeded to transform Fred Koch's legacy into the world's largest private company. Koch Industries -- now a commodity and financial conglomerate that includes brands such as Stainmaster, Lycra and Dixie cups -- has 80,000 employees in 60 countries. Its revenue last year was $90 billion. In one generation, the book value of Koch Industries has increased 2,000-fold. That's an 18% compounded annual return -- comparable with the long-term track record of Warren Buffett's Berkshire Hathaway.

. . .

At age 71, Mr. Koch clearly feels that the time has come to pass along the business formula that has served him so well. In "The Science of Success," he describes a technique, called Market-Based Management (MBM), that he says evolved from his reading, early in his career, in history, political science, economics and other disciplines. He arrived at an understanding of what allows a free society to prosper, Mr. Koch says, and decided to apply those principles to business.

. . .

. . .   He is especially fond of the "Austrian school" of economists, such as Ludwig von Mises and Joseph Schumpeter, who emphasized production processes, technology and the dynamic competitive models of "creative destruction." 

 

For the full review, see: 

MARK SKOUSEN.  "BOOKS; A Short Course in Long-Term Value."   The Wall Street Journal  (Weds., March 7, 2007):  D8. 

(Note:  ellipses added.)

 




April 18, 2007

Another Effort to Explore the Black-Box of Innovation


 

(p. 210)  Schumpeter argues that innovation can happen endogenously and that its main source is the creative entrepreneur.  Schumpeterian innovation is still black-boxed, however, because it is the product of the ingenuity of entrepreneurs and cannot be reproduced systematically.

. . .

The reconstructionist view takes off where the new growth theory left off.  Building on the new growth theory, the reconstructionist view suggests how knowledge and ideas are deployed in the process of creation to produce endogenous growth for the firm.  In particular, it proposes that such a process of creation can occur in any organization at any time by the cognitive reconstruction of existing data and market elements in a fundamentally new way.

 

Source:

Kim, W. Chan, and Renée Mauborgne. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. Boston: Harvard Business School Press, 2005.

 




April 17, 2007

Anti-Wal-Mart is Anti-Free-Choice


     Source of logo/header:  http://www.muddycup.com/mudlane/img/header.jpg

 

The article excerpted below reveals the soul of much of the anti-Wal-Mart movement.  It is not anti-big; it is anti-competition and anti-free-choice.

 

How in the world did a guy who started his first coffee shop on Staten Island six years ago and now runs five others in far-flung Hudson Valley towns become the moral equivalent of Wal-Mart and Starbucks? “Well, it’s now official,” he announced last month on the Web site that promotes his Muddy Cup coffeehouses. “I am now head of the evil empire.”

. . .

And now the talk of New Paltz has to do with something far more important than mere marriage — coffee. More specifically it’s whether Mr. Svetz is plotting an act of entrepreneurial imperialism by presuming to open one of his Muddy Cup coffeehouses next door to the ultimate green icon in town, the funky 60 Main coffee shop operated in conjunction with the nonprofit New Paltz Cultural Collective.

. . .

Little did he know. As word filtered out he began receiving a blizzard of e-mail messages from 60 Main proponents, reacting to an urgent appeal from the collective. The messages threatened a boycott and told him to stay home. “If we can stop Wal-Mart we can stop you,” said one.

“We do not want to become yet another small town taken over by huge corporations,” read another.

. . .

Mr. Svetz is still stunned by the whole thing, particularly his sudden status as a giant corporation. He says that just as lots of bars coexist in town, several coffee shops can too. Maybe he’s right. Maybe he’s not. He’s not Wal-Mart, but maybe it’s fair to ask how many artist-friendly coffeehouses the village can support. But it’s hard to argue when he says that even in New Paltz, businesses generally have to compete to survive, not find a way to build a Berlin Wall around town.

“When a community starts building walls and saying you don’t belong here or you don’t think like we do, that can’t be a good thing,” he said.

 

For the full story, see: 

PETER APPLEBOME.  "Coffee Puts Laid-Back Town on Edge."  The New York Times, Section 1  (Sun., March 4, 2007):  21. 

(Note:  ellipses added.)

 




April 16, 2007

Leapfrog the Elevator Competition into a Blue Ocean


 

(p. 178)  They wanted to cut waste, freeing people to produce higher-quality elevators faster at lower cost to leapfrog the competition.  But plant employees could not have known that.

 

Source: 

Kim, W. Chan, and Renée Mauborgne. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. Boston: Harvard Business School Press, 2005.

 




April 15, 2007

More on Creative Destruction in Science Fiction


On April 11, 2007 I posted an entry noting a new science fiction book with the title Creative Destruction.  Not having read the book, I wondered aloud whether the book contained any reference to Schumpeter.

Yesterday (4/13/07), I was delighted to receive an email from the author of the book, answering my question.  With his permission, I reproduce his email below:

 

Dr. Diamond,

I noticed your blog entry about Creative Destruction, my computer-themed SF collection.  You asked:  Does Schumpeter get a mention?

Absolutely.  Here are the opening lines of the foreword:

     If the Internet bubble had a patron saint, he was an obscure economist named Joseph Schumpeter.

     Schumpeter owes his posthumous celebrity to two words: creative destruction.  In 1942, he wrote of the "... Process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.

     "Creative destruction," he said, "is the essential fact about capitalism."  Every dotcom, of course, claimed its new technology would sweep out the old in a frenzy of creative destruction. Occasionally -- think Yahoo! and Amazon -- they were even correct.

The stories in the collection are most definitely science fiction -- I have degrees in physics and computer science -- but I also have an MBA from the University of Chicago.

Best regards,

- Ed Lerner

 

(Note:  I have changed the format of the email, a little.  The ellipsis was in the original.)

 




April 14, 2007

Give People Something Better than What They Say They Want


(p. 205)  The picture palaces were a commercial success.  Between 1914 and 1922, four thousand new Palace Theaters opened in the United States.  Movie-going became an increasingly important entertainment event for Americans of all economic levels.  As Roxy pointed out, "Giving the people what they want is fundamentally and disastrously wrong.  The people don't know what they want . . . [Give] them something better."  Palace Theaters effectively combined the viewing environment of opera houses with the viewing contents of nickelodeons---films---to unlock a new blue ocean in the cinema industry and attract a whole new mass of moviegoers:  the upper and middle classes. 

 

Source: 

Kim, W. Chan, and Renée Mauborgne. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. Boston: Harvard Business School Press, 2005.




April 13, 2007

Wal-Mart Improves Life in Mexico


   Source of graphic:  online version of the WSJ article cited below.

 

(p. A1)  JUCHITÁN, Mexico -- For as long as anyone can remember, shopping for many items in this Zapotec Indian town meant lousy selection and high prices. Most families live on less than $4,000 a year. Little wonder that this provincial corner of Oaxaca, historically famous for keeping outsiders at bay, welcomed the arrival of Wal-Mart.

Back home in the U.S., Wal-Mart Stores Inc. is known not only for its relentless focus on low prices but also for its many critics, who assail it for everything from the wages it pays to its role in homogenizing American culture. But while its growth in the U.S. is slowing, Wal-Mart is striking gold south of the border, largely free from all the criticism. Like Wal-Mart fans in less affluent parts of America, most shoppers in developing countries are much more concerned about the cost of medicine and microwaves than the cultural incursions of a multinational corporation.

That fact is making Wal-Mart a dominant force in Latin America. Wal-Mart de México SAB, a publicly traded subsidiary, is not only the biggest private employer in Mexico -- it's the biggest single retailer in Latin America. Sales at Wal-Mex, as the Mexican unit is called, are forecast to rise 16% to $21 billion this year, representing a quarter of Wal-Mart's foreign revenue. International revenue soared 30% to $77.1 billion, accounting for 22% of Wal-Mart's sales, in the fiscal year ended Jan. 31. Wal-Mex profits are forecast to grow 20% to $1.3 billion this year.

. . .

(p. A14)  In Mexico, Wal-Mart has been a counterweight to the powers that control commerce. One of the most closed economies in the world until the late 1980s, Mexico was dominated for decades by a handful of big grocers and retailers. All were members of a national retailing association called ANTAD, and cutthroat competition was taboo. At the local level, towns are still hostage to local bosses, known here as caciques, the Indian word for local strongmen who control politics and commerce.

. . .

In recent months, as rising prices for U.S. corn pushed up the price of Mexico's corn tortilla, a staple for millions of poor, Wal-Mart could keep tortilla prices largely steady because of its long-term contracts with corn-flour suppliers. The crisis turned into free advertising for Wal-Mart, as new shoppers lined up for the cheaper tortillas.

Wal-Mart also overcame a Juchitán cacique, or local boss: Héctor Matus, a trained doctor who goes by La Garnacha, the name for a fried tortilla snack popular in town. Dr. Matus, 55, owns six pharmacies, stationery stores and general stores. He has also held an array of political posts, including Juchitán mayor and state health minister. As town mayor from 2002 to 2004, he says he blocked a national medical-testing chain from opening in town because it meant low-price competition to local businessmen doing blood work.

But Dr. Matus couldn't persuade local and state officials to block Wal-Mart, and he is feeling the pinch. Sales are off 15% at his stores since Wal-Mart arrived, and he is now lowering prices in response. Even so, he's still more expensive. A box of Losec stomach medicine costs 80 pesos ($7.30) at one of Dr. Matus's stores, marked down from 86 pesos. The price at Wal-Mart is 77 pesos ($7.20).

Dr. Matus isn't happy about the competition. "I could still kick them out of town, because I know how to mobilize people," he said, sitting in his living room surrounded by pictures of him with leading Mexican politicians dating back to the 1970s. Despite his bravado, town officials say Wal-Mart is staying. "The ones who have benefited the most [from Wal-Mart] are the poorest," says Feliciano Santiago, the deputy mayor. "I hope another one comes."

. . .

Gisela López, the 31-year-old head of billing at the Juchitán store, benefited from the retailer's system of promoting from within. Raised by her uneducated, Zapotec-speaking grandparents, Ms. López earned a computer degree at Juchitán's small technical college and then left for the booming northern city of Monterrey in search of opportunity.

Lacking connections, she couldn't find the office job she dreamed about, and took a job at one of Wal-Mart's stores. After three months, Ms. López made cashier supervisor, and later moved over to the billing department. When Wal-Mart opened a store in Juchitán, Ms. López jumped at the chance to move home -- and was promoted to billing chief in the process.

"It's a very different place to work, because you can succeed by your own effort," says Ms. López, whose $12,000-a-year salary now puts her in Mexico's middle class.

Ms. López's story of economic mobility is a rare one. Most of her childhood friends don't have steady jobs, she said. The success stories are friends who inherited jobs from their parents at the state oil company's big refinery in Salina Cruz, about an hour away.

 

For the full story, see:

JOHN LYONS.  "SOUTHERN HOSPITALITY; In Mexico, Wal-Mart Is Defying Its Critics; Low Prices Boost Its Sales and Popularity In Developing Markets."   The Wall Street Journal  (Mon., March 5, 2007):  A1 & A14. 

(Note:  ellipses added.)

 

WalMartJuchitanMap.gif MatusHector.gif LopezGisela.gif Source of map and images:  online version of the WSJ article cited above.

 




April 12, 2007

We Need Caffeine


MohinderAndSylar.jpg   Mohinder on left; Sylar on right.  Source of photo:  http://www.nbc.com/Heroes/images/photos/scet/645/NUP_104904_0252.jpg

 

In the hit series "Heroes" episode "Parasites" Sylar (pretending to be someone else) unctuously thanks Mohinder Suresh for giving him hope.  I loved Mohinder's response:

Hope is great; we need caffeine.

 

(The "Parasites" episode was first broadcast on NBC on 3/5/07)

 




April 11, 2007

Creative Destruction in Science Fiction


Source of book image: http://ec1.images-amazon.com/images/P/0809557487.01._SS500_SCLZZZZZZZ_V38973347_.jpg

 

There's a new collection of science fiction stories entitled Creative Destruction (after one of the main stories in the collection that is also entitled "Creative Destruction").  I have not read the book, but used to enjoy reading science fiction, and hope to have a look before too long.

I welcome comments from anyone who has read the book.  Does Schumpeter get a mention? 

 

The reference to the book is:

Lerner, Edward M. Creative Destruction. Rockville, MD: Wildside Press, 2006.

 




April 10, 2007

Rockefeller Clan's "Tradition of Philanthropy"


   Swan Lake is part of the Rockefeller State Park Preserve created and donated by the Rockefellers.  Source of photo:  online version of the NYT article cited below.

 

(p. D1)  THE tranquil hamlet of Pocantico Hills, N.Y., has been bound up with the Rockefellers for more than a century. The family’s imprint is everywhere: In the thousands of acres of nearby pastures, woodlands and lakes that John D. Rockefeller Sr. began acquiring as he created his family’s estate in the 1890s. In the august stone walls enclosing a collection of even more august mansions. And in the stunning stained-glass windows by Matisse and Chagall that grace a simple stone church.

The Rockefellers are still an active presence — David Rockefeller, who at 91 is the last of the “brothers” from the illustrious third generation, spends weekends at his farm, Hudson Pines, and still rides in his horse-drawn carriage over the graceful carriage roads designed by his father and grandfather. A number of other Rockefellers — including Happy, the widow of David’s brother Nelson, the former governor and vice president — have houses on the family land as well.

Much of the Rockefeller family’s business and pleasure in and around Pocantico Hills is, not surprisingly, out of view. But the tradition of philanthropy that has defined the clan as much as its vast fortune also operates there. The result is a sense of shared bounty.

The public has long been allowed to enjoy the Rockefellers’ 55 miles of carriage roads, which also function as hiking trails, and the opportunity to experience Rockefeller country grew with the creation of the Rockefeller State Park Preserve. Its 1,384 acres are used for hiking, horseback riding and carriage driving.   . . . 

. . .

(p. D5)  A visitor can hike quiet trails evoking the family’s legacy, with names like Peggy’s Way and Brothers’ Path, and then have lunch in a smartly rustic cafe at Stone Barns — or an elegant dinner at Blue Hill. And while tours of Union Church of Pocantico Hills, with its Chagall and Matisse windows, will not resume until early April, anyone can attend Sunday morning services at 9 and 11. (But be discreet: the pastor, the Rev. Dr. F. Paul DeHoff, noted on the phone that services were for worship, not window viewing.)

. . .

The rose window over the altar was dedicated on Mother’s Day 1956 in memory of Abby Aldrich Rockefeller, John D. Jr.’s wife. Mrs. Rockefeller, a co-founder of the Museum of Modern Art, collected contemporary art, including works by Matisse. The head of the museum at the time suggested Matisse, then in his 80s, for the memorial window, and approached the artist on the family’s behalf.

Matisse accepted the commission, which turned out to be his last. The paper cutouts he used to design the blue, green and yellow window were in his bedroom when he died.

A much larger window at the rear of the church, by Marc Chagall, celebrates the life of John D. Rockefeller Jr., who died in 1960. The window tells the biblical story of the good Samaritan in brilliant blues and greens, echoing Matisse’s window.

Unlike Matisse, Chagall traveled to Pocantico Hills to see the church. At the dedication, Chagall broached the subject of the lackluster nave windows. He received a commission to redo all eight, including one in memory of Nelson Rockefeller’s son, Michael, who died in New Guinea in 1961.

If the memorial windows represent an extraordinary gift of culture in an unlikely nook of Westchester, the family’s present of the state park preserve was equally significant — a chunk of green space one and a half times the size of Central Park.

A good winter hike in the preserve is along Eagle Hill Trail, a steep ascent that offers panoramic views of the Hudson, farmland and Kykuit. Another scenic walk is on Brothers’ Path, which runs next to Swan Lake near the visitors’ center. Brothers’ Path connects to Brook Trail, which crosses a half-frozen stream: water bubbles beneath thin sheets of ice and the dazzling snow frames dark pools of water.

 

For the full story, see: 

LISA W. FODERARO. "Spending a Day at the Rockefellers’."  The New York Times  (Fri., February 23, 2007):  D1 & D6.

(Note:  ellipses added.)

 

RockefellerCountryRoad.jpg ChagallUnionChurch.jpg   RockefellerCountryMap.jpg  Upper left is a carriage road in Rockefeller country; upper right is a Marck Chagall window in Union Church; lower left is a map of Rockefeller country.  Source of photos and map:  online version of the NYT article cited above.

 




April 9, 2007

Leutze Got Right, What Was Important About Washington Crossing the Delaware


   Emmanuel Gottlieb Leutze's 1851 "George Washington Crossing the Delaware."  Source of the photo:  http://www.metmuseum.org/explore/gw/art_gw/ap97.341.jpg

 

Besides Fischer's book, there was a modest, but quite good, movie made by the History Channel a few years ago called "The Crossing" and starring Jeff Daniels as George Washington.  From Daniels' comedy roles, I was surprised that he could portray Washington with such understated intelligence and humanity.

 

(p. B5)  The painting, with its life-size figures, “is one of the most frequently reproduced images in American culture,” said David Hackett Fischer, Warren professor of history at Brandeis University and author of the 2005 Pulitzer Prize-winning book, “Washington’s Crossing.” Leutze’s highly romanticized rendition captures a desperate effort, a turning point in American history, when on Christmas night in 1776 George Washington crossed the Delaware River with 2,500 troops in a surprise attack on Hessian soldiers.

“The crossing was a pivot point in a crucial campaign that rescued the revolution from failure,” Professor Fischer said, adding that it burnished not only Washington’s reputation as a leader, but also brought foreign support for the rebels’ cause.

Through the centuries the painting has been criticized aesthetically and for historical shortcomings. (The design of the fluttering American flag, for example, was not yet in use.) “You can add one inaccuracy to another, but Leutze understood the air of desperation, the small scale of the event and the very large meaning,” Professor Fischer said. “He got all of that right.”

 

For the full story, see: 

GLENN COLLINS.  "What Surrounds a Legend? A 3,000-Pound Gilt Frame."  The New York Times  (Mon., February 19, 2007):  B1 & B5.

 

The reference for the Fischer book is:

Fischer, David Hackett. Washington's Crossing, Pivotal Moments in American History. New York: Oxford University Press, 2004.

 

   Source of book image:  http://images.barnesandnoble.com/images/10670000/10672110.jpg

 




April 8, 2007

Kodak Tries to Survive Creative Destruction


   A Kodak digital production printer.  Source of photo:  online version of the NYT article cited below. 

 

Digital photography replacing film technology is an example of Schumpeter's process of creative destruction, and maybe also of the gradual growth of a disruptive technology.  Leading incumbent firms frequently have trouble prospering, or even surviving, during such a change.  Both the Wall Street Journal and the New York Times had articles on the latest news from Kodak.  Here is an excerpt from the New York Times version:  

 

On Tuesday, as the Eastman Kodak Company unveiled its long-anticipated consumer inkjet printer in New York, the mood at the company’s Rochester headquarters could not have been more positive.

“People know we are back on the offensive,” said Frank Sklarsky, Kodak’s chief financial officer.  “And that’s making them a lot more charged up about coming to work.”

But yesterday, Kodak gave them reason again to feel depressed.  The company said it would cut 3,000 more jobs this year, on top of the 25,000 to 27,000 it had already said would be gone by the end of 2007.  At that rate, Kodak will end the year with about 30,000 employees, half the number of just three years ago and a fraction of the 145,000 people it employed in 1988, when its brand was synonymous with photography.

Kodak executives insist that the new cuts do not indicate any snags in the continuing struggle to transform itself from a film-based company into a major competitor in digital imagery.  And analysts, too, say the cuts are inevitable, and probably healthy.

 

For the full NYT story, see: 

CLAUDIA H. DEUTSCH.  "Shrinking Pains at Kodak."  The New York Times   (Fri., February 9, 2007): C1 & C4.

 

For the related WSJ story, see: 

WILLIAM M. BULKELEY and ANGELA PRUITT.  "Kodak Sees More Job Cuts, Higher Restructuring Costs."  The Wall Street Journal  (Fri., February 9, 2007):  B4.

 

 

 KodakJobsBarGraph.gif KodakJobsGraph.gif PrinterMarketSharePieChart.gif   Source of the first and third graphic:  the WSJ article cited above.  Source of the second graphic:  the NYT article cited above.

 




April 7, 2007

Woodrow Wilson: The Automobile is "a Picture of the Arrogance of Wealth"


It is the common characteristic of new products from creative destruction that new products are first so expensive that only the rich can afford them, but then fairly soon, usually within a few years at most, the price falls to the level that ordinary people can afford.  At that point, what the rich gets are added features, at a high premium, but the basic product is widely available.  Consider the automobile:

 

(p. 193)  The autos of the time were a luxurious novelty.  One model even offered electric curlers in the back seat for on-the-go primping.  They were unreliable and expensive, costing around $1,500, twice the average annual family income.  And they were enormously unpopular.  Anticar activists tore up roads, ringed parked cars with barbed wire, and organized boycotts of car-driving businessmen and politicians.  Public resentment of the automobile was so great that even future president Woodrow Wilson weighed in, saying, "Nothing has spread socialistic feeling more than the automobile . . . a picture of the arrogance of wealth."  Literary Digest suggested, "The ordinary 'horseless carriage' is at present a luxury for the wealthy; and although its price will probably fall in the future, it will never, of course, come into as common use as the bicycle."

 

Source:

Kim, W. Chan, and Renée Mauborgne. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. Boston: Harvard Business School Press, 2005.

(Note:  ellipsis in original.  Also, the book provides sources for each quote in the passage above.)

 




April 6, 2007

Morales Slaughters Snow-White Llama to Celebrate Nationalization of Tin Smelter


   A snow-white llama that has not yet been symbolically sacrificed by Bolivian President Evo Morales.  Source of the photo:  http://www.staff.stir.ac.uk/f.r.wheater/images/25%20Llama%205_8_04.JPG

 

Picture it, in President Evo Morales' Bolivia:  a peaceful, innocent-looking, snow-white llama slaughtered in homage to a barbaric mystical ritual, and in celebration of the slaughter, through nationalization, of private property and economic growth.  And afterwards, one imagines the visitng French brass band played on. 

 

VINTO, Bolivia: The ritual sacrifice of a snow-white llama provided a symbolic completion Friday to President Evo Morales' nationalization of Bolivia's lone operating tin smelter.

Swiss mining giant Glencore International AG owned the plant until last week and has threatened to seek compensation through international arbitration. Morales still says his government will not compensate Glencore for the Feb. 9 nationalization of the Vinto plant, located on a high Andean plain 180 kilometers (110 miles) southeast of the capital of La Paz.

. . .

After the ceremony, Morales hosted plant workers, a troupe of Andean pipers and a visiting French brass band to an outdoor supper of fried chicken and chuno, a traditional Bolivian dish of dehydrated potatoes.

While the nationalization retained all but a handful of smelter employees, workers remained divided over the change in management. Some rushed to greet "Companero Evo" as he toured the plant; others hung back and wondered about the future.

"Anywhere in the world they'll tell you the government can't be a good administrator," said plant employee Oscar Leyton. "But we'll just have to wait and see how they do it. If they screw up here, they'll screw up the whole country."

 

For the full story, see: 

"In Bolivia, llama sacrifice completes Morales' tin smelter nationalization."  International Herald Tribune  February 16, 2007.

(Note:  ellipsis added.) 

 




April 5, 2007

Jim Collins on How Boeing Leapfrogged McDonnell Douglas


(p. 202)  Wisely, through the 1940s, Boeing had stayed away from the commercial sphere, an arena in which McDonnell Douglas had vastly superior abilities in the smaller, propeller-driven planes that composed the commercial fleet.  In the early 1950s, however, Boeing saw an opportunity to leapfrog McDonnell Douglas by marrying its experience with large air-(p. 203)craft to its understanding of jet engines. 

 

Source:

Collins, Jim. Good to Great: Why Some Companies Make the Leap. And Others Don't. New York: HarperCollins Publishers, Inc., 2001.

 




April 4, 2007

Preventing Creative Destruction Slows Economic Growth


 

GrowthRatesUS-Eur-JapanGraphic.jpg   Source of graphic:  online version of the NYT article cited below. 

 

It would be interesting to explore why the gap in growth rates was smaller last year than previously.  Was it a statistical fluke?  Or did the U.S. labor market become somewhat less flexible?  Or maybe the job market in Europe and Japan became somewhat more flexible? 

 

FOR more than a decade, many American economists have pointed to Europe and Japan as prima facie evidence that layoffs in the United States are a good thing. The economies in those countries were not nearly as robust as this country’s. And the reason? Too much job security in Europe and Japan, the economists said.

American employers, in sharp contrast, have operated with much more “flexibility.” Hiring and firing at will, they shift labor from where it is not needed to where it is needed. If Eastman Kodak is struggling to establish itself in digital photography, then Kodak downsizes and labor moves to industries and companies that are thriving — software, for example, or health care, or Wal-Mart Stores or Caterpillar.

This shuffling out of one job and into another shows up in the statistics as nearly full employment. Never mind that the shuffling does not work as efficiently as the description implies or that many of the laid-off workers find themselves earning less in their next jobs, an income roller coaster that is absent in Europe and Japan. A dynamic economy leaves no alternative, or so the reasoning goes among mainstream economists.

“Trying to prevent this creative destruction from happening is a recipe for less economic growth and less productivity,” said Barry Eichengreen, an international economist at the University of California, Berkeley.

 

For the full commentary, see: 

LOUIS UCHITELLE.  "ECONOMIC VIEW; Job Security, Too, May Have a Happy Medium."  The New York Times, Section 3 (Sun., February 25, 2007):  5.

 




April 3, 2007

For Better Jobs, Immigrants Voluntarily Line Up to Learn English



          In Mount Vernon, New York, Maria de Oliveira (center) waited three months for an opening in this English class.  Source of photo:  online version of the NYT article quoted and cited below.

 

In the United States, other things equal, those who speak English earn more than those who do not.  So there is a substantial incentive for immigrants to learn English, even in the absence of the much-debated proposed laws to mandate English in various ways.  Consider the evidence in the article excerpted below: 

 

(p. A1)  MOUNT VERNON, N.Y. — Two weeks after she moved here from her native Brazil, Maria de Oliveira signed up for free English classes at a squat storefront in this working-class suburb, figuring that with an associate’s degree and three years as an administrative assistant, she could find a good job in America so long as she spoke the language.

The woman who runs the classes at Mount Vernon’s Workforce and Career Preparation Center added Ms. Oliveira’s name to her pink binder, at the bottom of a 90-person waiting list that stretched across seven pages. That was in October. Ms. Oliveira, 26, finally got a seat in the class on Jan. 16.

“I keep wondering how much more I’d know if I hadn’t had to wait so long,” she said in Portuguese.

. . .

Luis Sanchez, 47, a Peruvian truck driver for a beer distributor in New Brunswick, has been in this country (p. C14) 10 years — and on the waiting list for English classes in Perth Amboy five months. “You live from day to day, waiting to get the call that you can come to class,” Mr. Sanchez said in Spanish, explaining that he knew a little English but wanted to improve his writing skills so he could apply for better jobs. “I keep on waiting.”

. . .

In Newburgh, N.Y., an Orange County town where one in five of the 29,000 residents are immigrants, Blanca Saravia has amassed an impressive portfolio of odd jobs since arriving from Honduras in 2004: gas station attendant, office janitor, cook’s helper, and, for the last 14 months, packager at a local nail-polish factory. Speaking in her native Spanish, Ms. Saravia said that she has been able to get by with co-workers’ translating, but that “when the boss gives orders, I don’t understand.”

. . .

. . .   Ahmed Al Saidi, 49, who works at a gas station and moved from Yemen in 1994, said in halting English that he wants to learn the language “for better work and to talk to people when I go to the store.”

Ms. Oliveira, the immigrant from Brazil, said she still knows too little English to venture into the marketplace; her husband, who is American born and supports the couple financially, encouraged her to enroll in the classes, held five mornings a week.

“I hope that when I’m speaking a little better, I’ll be able to find a job where I can use the English I learned here and the skills I have from back home,” she said in Portuguese. “When I was on the waiting list, there were times I thought this time would never come.” 

 

For the full story, see: 

FERNANDA SANTOS.  "Demand for English Lessons Outstrips Supply."  The New York Times  (Tues., February 27, 2007):  A1 & C14.

(Note:  ellipses added.)

 

  Source of graphic:  online version of the NYT article quoted and cited above.





April 2, 2007

"You Have to Keep On Trying New Things"


   Stewart Brand with his prototype for a computer-clock that he hopes will continue to tell time for 10,000 years.  Source of photo:  online version of the NYT article cited below.

 

Decades ago, I really enjoyed the spirit, and sometimes the usefulness, of Stewart Brand's refreshing, libertarian, over-the-top Whole Earth Catalog.  From the article excerpted below, I learned that Brand, and his spirit, are still alive:

 

(p. D1)  Stewart Brand has become a heretic to environmentalism, a movement he helped found, but he doesn’t plan to be isolated for long. He expects that environmentalists will soon share his affection for nuclear power. They’ll lose their fear of population growth and start appreciating sprawling megacities. They’ll stop worrying about “frankenfoods” and embrace genetic engineering.

He predicts that all this will happen in the next decade, which sounds rather improbable — or at least it would if anyone else had made the prediction. But when it comes to anticipating the zeitgeist, never underestimate Stewart Brand.

He divides environmentalists into romantics and scientists, the two cultures he’s been straddling and blending since the 1960s. He was with the Merry Pranksters and the Grateful Dead at their famous Trips Festival in San Francisco, directing a multimedia show called “America Needs Indians.” That’s somewhere in the neighborhood of romantic.

But he created the shows drawing on the cybernetic theories of Norbert Wiener, the M.I.T. mathematician who applied principles of machines and electrical networks to social institutions. Mr. Brand imagined replacing the old technocratic hierarchies with horizontal information networks — a scientific vision that seemed quaintly abstract until the Internet came along.

. . .

(p. D3)  Mr. Brand’s latest project, undertaken with fellow digerati, is to build the world’s slowest computer, a giant clock designed to run for 10,000 years inside a mountain in the Nevada desert, powered by changes in temperature. The clock is an effort to promote long-term thinking — what Mr. Brand calls the Long Now, a term he borrowed from the musician Brian Eno.

Mr. Brand is the first to admit his own futurism isn’t always prescient. In 1969, he was so worried by population growth that he organized the Hunger Show, a weeklong fast in a parking lot to dramatize the coming global famine predicted by Paul Ehrlich, one of his mentors at Stanford.

The famine never arrived, and Professor Ehrlich’s theories of the coming “age of scarcity” were subsequently challenged by the economist Julian Simon, who bet Mr. Ehrlich that the prices of natural resources would fall during the 1980s despite the growth in population. The prices fell, just as predicted by Professor Simon’s cornucopian theories.

Professor Ehrlich dismissed Professor Simon’s victory as a fluke, but Mr. Brand saw something his mentor didn’t. He considered the bet a useful lesson about the adaptability of humans — and the dangers of apocalyptic thinking.

“It is one of the great revelatory bets,” he now says. “Any time that people are forced to acknowledge publicly that they’re wrong, it’s really good for the commonweal. I love to be busted for apocalyptic proclamations that turned out to be 180 degrees wrong. In 1973 I thought the energy crisis was so intolerable that we’d have police on the streets by Christmas. The times I’ve been wrong is when I assume there’s a brittleness in a complex system that turns out to be way more resilient than I thought.”

He now looks at the rapidly growing megacities of the third world not as a crisis but as good news: as villagers move to town, they find new opportunities and leave behind farms that can revert to forests and nature preserves. Instead of worrying about population growth, he’s afraid birth rates are declining too quickly, leaving future societies with a shortage of young people.

Old-fashioned rural simplicity still has great appeal for romantic environmentalists. But when the romantics who disdain frankenfoods choose locally grown heirloom plants and livestock, they’re benefiting from technological advances made by past plant and animal breeders. Are the risks of genetically engineered breeds of wheat or cloned animals so great, or do they just ruin the romance?

Mr. Brand would rather take a few risks.

“I get bored easily — on purpose,” he said, recalling advice from the co-discoverer of DNA’s double helix. “Jim Watson said he looks for young scientists with low thresholds of boredom, because otherwise you get researchers who just keep on gilding their own lilies. You have to keep on trying new things.”

That’s a good strategy, whether you’re trying to build a sustainable career or a sustainable civilization. Ultimately, there’s no safety in clinging to a romanticized past or trying to plan a risk-free future. You have to keep looking for better tools and learning from mistakes. You have to keep on hacking.

 

For the full story, see:

JOHN TIERNEY.  "FINDINGS; An Early Environmentalist, Embracing New ‘Heresies’."  The New York Times  (Tues., February 27, 2007):  D1 & D3.

(Note: ellipsis added.)







April 1, 2007

Better than Socialism, but Not Free Market Enough: More on Why Africa is Poor


 

     Voters in line to vote for President in Senegal on 2/25/07.   Source of photo:  online version of the NYT article quoted and cited below.

 

My old Wabash professor Ben Rogge used to say that rulers liked to build pyramids to proclaim their glory.  He mentioned the Egyptian pyramids, and he mentioned the whole government-created capital city of "Brasilia" in Brazil. 

When rulers in a poor country invest a lot of tax money in infrastructure, such as roads, how much of that is due to their belief in mistaken economic theories, and how much to their wanting to build their own version of the pyramids? 

In either case, at least it can be said that the people probably benefit more from their taxes being used to build roads, than from their taxes being used to build pyramids.  At least the roads can be complementary to transporting goods, and to the mobility of labor. 

But the people would benefit even more if they could keep the tax money to use for their own purposes.

 

(p. A3) DAKAR, Senegal, Feb. 25 — Moudou Gueye was confident that Senegal’s presidential election on Sunday would turn around his fortunes, at least in the short term.

Seven years ago he voted for Abdoulaye Wade, a rabble-rousing professor who, after decades in opposition to Socialist Party rule, sailed into office buoyed by the votes of frustrated young people like Mr. Gueye, who is now 32. They hoped that Mr. Wade, a free-market liberal, would transform this impoverished nation’s economy, which had been stunted by generations of ineffective central planning.

. . .

. . .   Senegal has had relatively robust economic growth that has hovered at around 5 percent over several years (it was lower last year, owing in part to high fuel prices, according to government officials), compared with the 1 percent achieved during much of the Socialist era, and dozens of huge public works projects.

While in some ways the country is better off, economic growth and a building binge have not produced large numbers of jobs in a country struggling to make the transition from an agrarian society based largely on peanut farming to one that harnesses the wealth of a global economy.

. . .

Countering criticism that Mr. Wade is too old to serve another term — his official age is given as 80, but many people suspect he is older — his daughter, Sindiély, who has worked as a special assistant to the president, said he was as sharp and agile as ever.

“It is not a question of age,” Ms. Wade said as she waited to cast her vote in downtown Dakar. “It is a question of dynamism and ideas and what you have planned for your country.”

Along Dakar’s seaside roadway, young men marveled at the cars whizzing below a brand-new overpass, one of Mr. Wade’s long-anticipated public works projects.

Pap Ndiaye, an 18-year-old street vendor who sells baby clothes to people stalled in traffic, said the newly completed road was a sign that the country was moving in the right direction.

“Wade has done a lot for this country,” Mr. Ndiaye said. “Our hope is that he will stay and finish his work.”

Less than a mile away, the road abruptly ends with a bright yellow sign that says “déviation,” or detour. With a hard turn to the right, drivers pour off the broad new highway, and back into the tangled, chaotic streets of one of Dakar’s oldest and poorest neighborhoods.

 

For the full story, see: 

LYDIA POLGREEN.  "Senegalese Vote Hinges on Views of Economic Growth."  The New York Times  (Mon., February 26, 2007):  A3.

(Note:  ellipses added.)

 




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