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September 30, 2008

Confused and Fed Up With Contradictory "Green Noise"

GreenNoiseDrawing.jpg Source of drawing: online version of the NYT article quoted and cited below.

Maybe the point of much of the urgent, contradictory eco-crusades, is not so much to save the earth as to make us feel guilty about consuming, as a way to undermine the human progress that comes from capitalism?

(p. 1) DESPITE the expense and the occasional back strain, Mary Burnham, a public relations consultant in San Francisco, felt good about the decision she made a few years ago to buy milk -- organic, of course -- only in heavy, reusable glass bottles. For the sake of the environment, she dutifully lugged them back and forth from the grocery store every week. Cutting out disposable paper cartons, she reasoned, meant saving trees and reducing waste.

Or not. A friend, also a committed environmentalist, recently started questioning her good deed. "His argument was that paper cartons are compostable and lightweight and use less energy and water than the heavy bottles, which must be transported back to a plant to be cleaned and reused," she said. "I have no idea which is better, or how to find out."

Ms. Burnham, 35, recycles religiously, orders weekly from a community-supported farm, buys eco-friendly cleaning products and carries groceries in a canvas bag. But she admits to information overload on the environment -- from friends, advice columns, news media, even government-issued reports. Much of the advice is conflicting.

"To say that you are confused and a little fed up with the often contradictory messages out there on how to live lightly on the earth is definitely not cool," she said in an e-mail message. "But, heck, I'll come out and say it. I'm a little overwhelmed."

She is, in other words, a victim of "green noise" -- static caused by urgent, sometimes vexing or even contradictory information played at too high a volume for too long.

. . .

(p. 8) . . . , as Mr. Hawken said, "even people inside the movement have the same feeling -- burnout."

For the full story, see:

ALEX WILLIAMS. "That Buzz in Your Ear May Be Green Noise." The New York Times, SundayStyles Section (Sun., June 15, 2008): 1 & 8.

(Note: ellipses added.)

September 29, 2008

Schumpeter Claimed Entrepreneurial Gains Result in New Jobs

From McCraw's summary of an article entitled "The Function of Entrepreneurs and the Interest of the Worker" that Schumpeter published in 1927 in a labor magazine :

(p. 178) Schumpeter's key point here is one he hammered home many times: it is the insatiable pursuit of success, and of the towering premium it pays, that drives entrepreneurs and their investors to put so much of their time, effort, and money into some new project whose future is completely uncertain. High entrepreneurial returns are essential to generate gains not only for individuals but also for society, through the creation of new jobs.


McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

September 28, 2008

Innovation Can Occur Even in Ancient Technologies


"Making glass has long been energy-intensive, but soaring energy prices provide a strong incentive for that to change." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 4) Glassmaking is a based on old, stable technologies that require lots of materials and energy. The basic furnace, which melts sand into glass at extremely high temperatures, hasn't undergone a fundamental change since the 1850s. Furnace designers have long contented themselves with small improvements, such as using pure oxygen to improve energy efficiency.

Today, glassmaking faces a technological upheaval that offers a reminder that "it is a mistake to assume that older technologies are less dynamic than new ones," says David Edgerton, a historian at Imperial College in London and the author of "The Shock of the Old," a history of the evolution of pre-electronic technologies in the 20th century.

. . .

Mr. Greenman sees a new willingness to innovate among glassmakers who, until recently, usually shunned technological advances because savings in materials and energy didn't justify the costs of introducing new designs and processes.

"Many innovations were, frankly, thwarted by cost," says C. Philip Ross, a consultant in Laguna Niguel, Calif., who has studied technological options for the industry. "There's a lot of upside in revisiting old, discarded ideas."

Glassmakers are searching for both small and large advances on three fronts: designing more efficient furnaces; creating much stronger glass; and using heat better.

. . .

The potential revolution in glass-making suggests a new model for innovation: Creators go back to the future, spending almost as much time retrieving once-discarded inventions as they do creating new ones.

For the full story, see:

G. PASCAL ZACHARY. "Ping; Starting to Think Outside the Jar." The New York Times, SundayBusiness Section (Sun., June 15, 2008): 4.

(Note: ellipses added.)

September 27, 2008

EPA Mandates that Texas Keep Digging Ethanol Hole

ReeveEthanolPlant.jpg "At the Reeve plant near Garden City, Kan., grain is made into ethanol, and the byproducts are fed to cattle in the adjacent feedlot." Source of caption and photo: online version of the NYT article quoted and cited below.

Unfortunately, the EPA rejected Gov. Paley's request, discussed in the article quoted below:

(p. C1) The ethanol industry, until recently a golden child that got favorable treatment from Washington, is facing a critical decision on its future.

Gov. Rick Perry of Texas is asking the Environmental Protection Agency to temporarily waive regulations requiring the oil industry to blend ever-increasing amounts of ethanol into gasoline. A decision is expected in the next few weeks.

Mr. Perry says the billions of bushels of corn being used to produce all that mandated ethanol would be better suited as livestock feed than as fuel.

Feed prices have soared in the last two years as fuel has begun competing with food for cropland.

"When you find yourself in a hole, you have to quit digging," Mr. Perry said in an interview. "And we are in a hole."

His request for an emergency waiver cutting the ethanol mandate to 4.5 billion gallons, from the 9 billion gallons required this year and the 10.5 billion required in 2009, is backed by a coalition of food, livestock and environmental groups.

Farmers and ethanol and other biofuel producers are lobbying to keep the existing mandates.

For the full story, see:

DAVID STREITFELD. "Uprising Against the Ethanol Mandate." The New York Times (Weds., July 23, 2008): C1 & C5.

September 26, 2008

Rent Control as a Form of "Hatred of the Bourgeois"

New York City is one of the few remaining cities that has rent control laws (aka "rent stabilization"). Economists view such laws as a version of price ceilings, and they generally argue that such laws reduce the incentives to build and maintain housing.

Libertarian philosophers would add that the laws also violate fundamental rights of property.

(p. 25) At its core, the fight involves a law allowing landlords to displace rent-stabilized tenants if the landlords will use the space as their primary residence. The Economakis family has prevailed, thus far, on the principle that the law applies even to a building this large. But the tenants continue to press the notion that given the scope of the proposed home -- which calls for seven bathrooms, a gym and a library -- the owners are just trying to clear them out so they can sell the building off to become so many market-rate condos.

Mr. Economakis insists his family would never have subjected itself to years of argument -- and tens of thousands in legal bills -- if they did not want to live there. He acknowledged that it is a lot of space, but said that having the place to themselves is also a matter of privacy. He said that the family long ago offered, as a halfway measure, to let the tenants in the five rear apartments stay, along with a couple on the first floor, and said he would happily sign a promise to turn over the profits to the existing tenants if he sold within 20 years.

"We really believe that, as owners, we have a right to live in the building," he said.

. . .

Last year, the tenants staged a rally outside the building and some 400 people showed up. Mostly, they lodge their silent protest daily on their doors. Mr. Pultz has his evil eye, while his first-floor neighbor, Laura Zambrano, has one poster giving the dictionary definition of the word hubris and another quoting Flaubert:

"Two things sustain me. Love of literature and hatred of the bourgeois."

For the full story, see:

MARC SANTORA. "Landlord's Dream Confronts Rent-Stabilized Lives." The New York Times, Section 1 (Sun., June 15, 2008): 25.

(Note: ellipsis added.)

Perhaps the most eloquent critique of rent control was penned in the only paper that Chicago Nobel Prize winners Milton Friedman and George Stigler ever wrote together (published as a pamphlet):

Friedman, Milton, and George J. Stigler. "Roofs or Ceilings? The Current Housing Problem." Irvington-on-Hudson, New York: Foundation for Economic Education, 1946.

September 25, 2008

"Schumpeter Has Courage"

McCraw quoting the diary of Schumpeter's former professor, Friedrich von Wieser:

(p. 101) "He is not misled by prevalent sentiment," the professor wrote in his diary. "Schumpeter has courage, an asset which cannot be over-praised."


McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

September 24, 2008

Higher Prices to Operate Cars, Increases Demand for Segways


Using a Segway to deliver pizza. Source of photo: online version of the WSJ article quoted and cited below.

(p. B2) With gasoline prices and global warming on their minds, more Americans are getting out of their cars and riding to work -- and riding on the job -- on the once-maligned Segway.

Scott Hervey of Yorba Linda, Calif., bought one of the electric scooters on June 7 and has put 150 miles on it commuting to his custodian's job at Disneyland, about 12 miles away. He had considered buying a Segway for four years, and gasoline prices finally drove him to do it. Now he "glides," as Segway enthusiasts say, to work. "I like passing gas stations," says the 54-year-old.

The two-wheeled Segway, a self-balancing vehicle that runs on a rechargeable battery, debuted amid massive hype in 2001. Tech icons like Steve Jobs, Apple Inc.'s chief executive officer, and Amazon.com Inc. CEO Jeff Bezos predicted it would change the way people lived. But critics panned the high-tech scooter for its $5,000 price tag and portrayed it as a toy for geeks and the rich. Some cities banned it from sidewalks because of safety concerns.

Today, the Segway is gaining converts. It plugs into a standard electrical outlet and can get up to 25 miles per charge.

Sales at the scooter's maker, Segway Inc., have risen to an all-time high, says CEO Jim Norrod. The closely held Manchester, N.H., company doesn't release detailed numbers. (A September 2006 recall showed the company had sold 23,500 Segways.) But Mr. Norrod says he expects sales this quarter to jump 50% from a year earlier, versus a 25% year-over-year increase in the first quarter.

For the full story, see:

STU WOO. "Segway Glides as Gasoline Jumps; Maligned Scooter Winning New Fans; $5,000 Price Tag." The Wall Street Journal (Mon., June 16, 2008): B2.

September 23, 2008

Montezuma Tried Appeasement with Cortes


Source of book image: http://images.barnesandnoble.com/images/26910000/26912572.jpg

(p. A 13) Cortés was a man of deep contradictions. A devout Catholic, he was horrified by the sights and sounds of Aztec worship: its human sacrifices and cannibalism, its skull racks, its idols draped with human body parts, its priests with their blood-clotted hair. But he was not above massacring his enemies or burning them at the stake. He was genuinely dazzled by his first sight of the Aztec capital, Tenochtitlán, with its tidy fields and gleaming stone causeways, a city of nearly a quarter-million people that was, he wrote in a letter to the Spanish king, more beautiful than any in Europe. Even so, he was ready to destroy it all to feed his desire for gold and to bend the Aztecs to his will.

If Cortés was a man of contradictions, Montezuma was not. Studious and conscientious, he had been trained for Aztec priesthood before becoming emperor in 1503 -- the same year that Cortes set out from Spain for America. Montezuma believed in the rightness of his own convictions but also, it appears, in the importance of an open mind. As Mr. Levy shows, he always looked for ways to dispel a crisis by placating the feelings of all concerned. He would have made a fine college president. From his first meeting with Cortés in November 1519, though, he was desperately overmatched.

Montezuma hoped that, by giving Cortés magnificent gifts of gold and silver, he could make him go away. He made him want to stay instead. The Aztec ruler never quite shook off the suspicion that Cortés might be the Aztec god Quetzelcoatl returning home according to ancient prophesy -- a suspicion that led Montezuma to want to treat the intrusive Spaniards as guests rather than a threat.

Cortés exploited Montezuma's weakness without scruple, squeezing one concession after another out of him until, though outnumbered by more than 1,000-to-1, Cortés made him a hostage. When Montezuma had lost all credibility with his people and was no longer useful, Cortés cast him aside. Montezuma died a broken man -- although probably not, Mr. Levy argues, at Cortes's order. It is more likely that Montezuma died from wounds inflicted by his own subjects. When they saw him appear in chains and appeal for calm, they had bombarded him with stones and arrows. His weakness, they understood, had betrayed them to the Spanish.

For the full review, see:

ARTHUR HERMAN. "Bookshelf; Spain Says Hello." The Wall Street Journal (Thurs., July 10, 2008): A13.

The reference for the book, is:

Levy, Buddy. Conquistador. New York: Bantam Books, 2008.

September 22, 2008

More on Dyslexia and Entrepreneurship


Source of book image: http://www.paulorfalea.com/downloads/CopyThis_1.jpg

(p. R7) Some entrepreneurial titles are written -- and resonate with readers -- for more personal reasons.

Paul Orfalea, the founder of Kinko's, says he wrote his book, "Copy This!: Lessons from a Hyperactive Dyslexic Who Turned a Bright Idea Into One of America's Best Companies," because he wanted parents of kids with dyslexia to know that their children could succeed in life.

Workman Publishing, an independent publisher based in New York, initially printed 35,000 copies in 2005. Today, after two additional printings, there are 50,000 hardcovers in print. A paperback edition was published in March 2007, with a reworked title.

For the full story, see:

JEFFREY A. TRACHTENBERG. "Running the Show; Me, Me, Me; So many entrepreneurs are writing books about how they made it. Their books, though, aren't nearly as successful." The Wall Street Journal (Mon., June 16, 2008): R7.

September 21, 2008

Among Academic Economists Interest in Entrepreneurship is "A Quick Ticket Out of a Job"

From McCraw's discussion of Schumpeter's "legacy":

(p. 500) In the new world of academic economics, neither the Schumpeterian entrepreneur as an individual nor entrepreneurship as a phenomenon attracts much attention. For professors in economics departments at most major universities, particularly in the United States and Britain, a focus on these favorite issues of Schumpeter's has become a quick ticket out of a job. This development arose from a self-generated isolation of academic economics from history, sociology, and the other social sciences. It represented a trend that Schumpeter himself had glimpsed and lamented but that accelerated rapidly during the two generations after his death.


McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

September 20, 2008

Hospitals Lack Hospitality


Source of book image: http://www.simplenomics.com/wp-images/settingthetable-1.jpg

(p. R7) Most successful entrepreneurs like rattling on about how they did it.

The bookshelves have never been more crowded with such exploits from consultants, real-estate moguls and retailers. And publishers say there are more on the way. With layoffs and cutbacks dominating the headlines, demand for advice books based on true-life stories is peaking.

. . .

So what does it take to succeed?

"Pragmatic advice, [a book written by] somebody with a fairly high public profile, and a person who can hit the lecture circuit after the first rush of publicity and keep the book selling," says Grand Central's Mr. Wolff.

Those factors have contributed to the staying power of restaurateur Danny Meyer's book, "Setting the Table: The Transforming Power of Hospitality in Business."

News Corp.'s HarperCollins Publishers first published 30,000 copies in October 2006. (News Corp. also publishes The Wall Street Journal.) Mr. Meyer's work, chatty personal anecdotes wrapped around a core message that emphasizes hospitality as the key to creating satisfied customers, proved a hit.

. . .

"The most surprising thing was the interest from the hospital community," Mr. Meyer says. "That's an industry in turmoil based on the absence of hospitality. They over-focus on the metrics of stays and cure rates rather than how they make people feel."

For the full story, see:

JEFFREY A. TRACHTENBERG. "Running the Show; Me, Me, Me; So many entrepreneurs are writing books about how they made it. Their books, though, aren't nearly as successful." The Wall Street Journal (Mon., June 16, 2008): R7.

(Note: ellipses added.)

September 19, 2008

Obama Has Doubts About Justice of Current 'Affirmative Action' Laws

ObamaHarvardLaw.jpg "Barack Obama at Harvard, where he was the first black president of The Harvard Law Review." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) Mr. Obama, a Democrat, has continued to support race-based affirmative action, calling it "absolutely necessary" when he was a state senator in Illinois and criticizing the Supreme Court for curtailing it in his time in the United States Senate. But in his presidential campaign, he has unsettled some black supporters by focusing increasingly on class and suggesting that poor whites should at times be given preference over more privileged blacks.

His ruminations about shifting the balance between race and class in some affirmative action programs raise the possibility that, if elected in November, he might foster a deeper national (p. 16) conversation about an issue that has been fiercely debated for decades. He declined to comment for this article.

"We have to think about affirmative action and craft it in such a way where some of our children who are advantaged aren't getting more favorable treatment than a poor white kid who has struggled more," Mr. Obama said last week in a question-and-answer session at a convention of minority journalists in Chicago.

During a presidential debate in April, Mr. Obama said his two daughters, Malia, 10, and Sasha, 7, "who have had a pretty good deal" in life, should not benefit from affirmative action when they apply to college, particularly if they were competing for admission with poor white students.

. . .

Ward Connerly, a crusader against affirmative action, said he believed that Mr. Obama's remarks would buoy support for his ballot initiatives in Arizona, Colorado and Nebraska in November that would ban preferential treatment on the basis of race, ethnicity and sex in government hiring and public education.

Last week, Mr. Obama's Republican rival, Senator John McCain, announced his support for those measures. . . .

Mr. Obama opposes the ballot initiatives, saying they would derail efforts to break down barriers for women and members of minorities. But Mr. Connerly said Mr. Obama had already helped the cause. "He's advanced the debate," Mr. Connerly said. "He's brought it to a new level."

. . .

A federal judge once asked a friend of Mr. Obama's whether he had been "elected on the merits" as law review president, Mr. Obama told The Journal of Blacks in Higher Education in 2001. He said the question came up again when he applied for a job as a professor at the University of Chicago Law School.

Mr. Obama has not described how he felt then. But as a state senator, he spoke with empathy about accomplished minority students at elite universities who sometimes lived "under a cloud they could not erase."

Over the past few years, Mr. Obama has also voiced sympathy for whites who feel resentful of race-based affirmative action and questioned how long such programs need to continue.

Even as he argued that timetables for minority hiring may be necessary where there is evidence of systemic discrimination, he also warned in his second book, "The Audacity of Hope," that "white guilt has largely exhausted itself in America."

It was 2006 then, and Mr. Obama was a wealthy senator considering a bid for the presidency. He worried that race-based preferences, while necessary, might undermine efforts at building cross-racial coalitions.

Presaging his recent focus on class, Mr. Obama argued that whites were more likely to join blacks in supporting programs that were not racially based.

"An emphasis on universal, as opposed to race-specific programs isn't just good policy," Mr. Obama said in his book. "It's good politics."

For the full story, see:

RACHEL L. SWARNS. "Obama's Path on Preferences, Race and Class ." The New York Times, Section 1 (Sun., August 3, 2008): 1 & 16.

(Note: ellipses added.)

(Note: the online version has minor differences with the print version; the online version is quoted here, except for the article title. The online article title was: "If Elected ... Delicate Obama Path on Class and Race Preferences." The ellipisis in the online title was in the original.)

September 18, 2008

Medicare Pays $110 for Walker that Wal-Mart Sells for $60

MedicareSavingsFromEquipmentBids.jpg Source of table: online version of the NYT article quoted and cited below.

(p. C1) On Wal-Mart's Web site, you can buy a walker for $59.92. It is called the Carex Explorer, and it's a typical walker: a few feet high, with four metal poles extending to the ground. The Explorer is one of the walkers covered by Medicare.

But Medicare and its beneficiaries aren't paying $59.92 for the Explorer or any similar walker. In fact, they're not paying anything close to it. They are paying about $110.

. . .

(p. C5) In the abstract, fixing the health care system sounds perfectly unobjectionable: it's about reducing costs (and then being able to cover the uninsured) by getting rid of inefficiency and waste. In reality, though, almost every bit of waste benefits someone.

Doctors who perform spinal fusion surgeries, despite decidedly mixed evidence that they're effective, are making a nice living. Hospitals that order $1,000 diagnostic tests, even when a cheaper one would work just as well, are helping their bottom line. Medical equipment makers selling walkers for $110, while Wal-Mart sells them for $60, are fattening their profits.

The current fight to protect those profits is a microcosm of what you can expect to see if a larger effort to rein in health costs ever gets going. The defenders of the status quo won't say that they are protecting themselves. Instead, they'll use the same arguments that the medical equipment makers are using -- that a change will destroy jobs, bankrupt small businesses and, above all, harm patients.

. . .

But this is a case in which the market can clearly do a better job than a government-mandated fee schedule. Just look at Wal-Mart's Web site or, for that matter, the bids that Medicare has already received.

By standing in the way of this competition, Congress is really standing up for higher health care costs.

For the full commentary, see:

DAVID LEONHARDT. "ECONOMIC SCENE; High Medicare Costs, Courtesy of Congress." The New York Times (Weds., June 25, 2008): C1 & C5.

(Note: ellipses added.)

September 17, 2008

Schumpeter's Name Forever Linked to Entrepreneurship

From McCraw's discussion of Schumpeter's "legacy":

(p. 496) Because of the importance of entrepreneurship, and because Schumpeter wrote about it with such insight and verve, his name will be forever linked to the idea.


McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

September 16, 2008

When Embracing Science is a Matter of Life and Death


Source of graph: online version of the WSJ article quoted and cited below.

(p. C1) The salad days of organic salad are wilting in favor of high-tech tomatoes.

As global food shortages threaten to ignite social and economic instability from Nigeria to India, the popular aversion to genetically modified foods is turning into more of a luxury for the wealthy than a practical option for the masses.

This trend is evident in the share price and earnings growth of Monsanto, the world leader in agricultural biotechnology by market share. Its stock has soared 22% this year, trading at a breathless 37 times estimated 2008 per-share earnings.

For the full story, see:

KAREN RICHARDSON. "AHEAD OF THE TAPE; Food Shortage Recasts Image of 'Organic'." The Wall Street Journal (Weds., June 25, 2008): C1.

September 15, 2008

Supporters of Racial Discrimination Fear Allowing People to Vote

(p. A9) A total of 24 states allow voters to change laws on their own by collecting signatures and putting initiatives on the ballot. It's healthy that the entrenched political class should face some real legislative competition from initiative-toting citizens. Unfortunately, some special interests have declared war on the initiative process, using tactics ranging from restrictive laws to outright thuggery.

The initiative is a reform born out of the Progressive Era, when there was general agreement that powerful interests had too much influence over legislators. It was adopted by most states in the Midwest and West, including Ohio and California. It was largely rejected by Eastern states, which were dominated by political machines, and in the South, where Jim Crow legislators feared giving more power to ordinary people.

But more power to ordinary people remains unpopular in some quarters, and nothing illustrates the war on the initiative more than the reaction to Ward Connerly's measures to ban racial quotas and preferences. The former University of California regent has convinced three liberal states -- California, Washington and Michigan -- to approve race-neutral government policies in public hiring, contracting and university admissions. He also prodded Florida lawmakers into passing such a law. This year his American Civil Rights Institute (ACRI) aimed to make the ballot in five more states. But thanks to strong-arm tactics, the initiative has only made the ballot in Arizona, Colorado and Nebraska.

"The key to defeating the initiative is to keep it off the ballot in the first place," says Donna Stern, Midwest director for the Detroit-based By Any Means Necessary (BAMN). "That's the only way we're going to win." Her group's name certainly describes the tactics that are being used to thwart Mr. Connerly.

Aggressive legal challenges have bordered on the absurd, going so far as to claim that a blank line on one petition was a "duplicate" of another blank line on another petition and thus evidence of fraud. In Missouri, Secretary of State Robin Carnahan completely rewrote the initiative's ballot summary to portray it in a negative light. By the time courts ruled she had overstepped her authority, there wasn't enough time to collect sufficient signatures.

Those who did circulate petitions faced bizarre obstacles. In Kansas City, a petitioner was arrested for collecting signatures outside of a public library. Officials finally allowed petitioners a table inside the library but forbade them to talk. In Nebraska, a group in favor of racial preferences ran a radio ad that warned that those who signed the "deceptive" petition "could be at risk for identity theft, robbery, and much worse."

Mr. Connerly says that it's ironic that those who claim to believe in "people power" want to keep people from voting on his proposal: "Their tactics challenge the legitimacy of our system."

For the full commentary, see:

JOHN FUND. "The Far Left's War on Direct Democracy." The Wall Street Journal (Sat., July 26, 2008): A9.

September 14, 2008

Cubans Skeptical of Their Government

CubanCellPhone.jpg "Cubans used a cellphone to take photos in Havana recently after Cuba's government lifted some restrictions on consumer items." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A16) MEXICO CITY -- A rare study conducted surreptitiously in Cuba found that more than half of those interviewed considered their economic woes to be their chief concern while less than 10 percent listed lack of political freedom as the main problem facing the country.

"Almost every poll you ever see, even those in the U.S., goes to bread-and-butter issues," said Alex Sutton, director of Latin American and Caribbean programs at the International Republican Institute, which conducted the study. "Everybody everywhere is interested in their purchasing power."

The results showed deep anxiety about the state of the country, with 35 percent of respondents saying things were "so-so" and 47 percent saying they were going "badly" or "very badly." As for the government's ability to turn things around, Cubans were skeptical, with 70 percent of those interviewed saying they did not believe that the authorities would resolve the country's biggest problem in the next few years.

The study, to be released on Thursday, was conducted from March 14 to April 12, after Raúl Castro officially took over the presidency.

For the full story, see:

MARC LACEY. "In Rare Study, Cubans Put Money Worries First." The New York Times (Thurs., June 5, 2008): A16.

(Note: the order of some of the article content differed in the print and online versions; the version above is consistent with the print version.)

September 13, 2008

Do Not Apologize for Your Pursuit of Happiness

(p. A17) There is a whiff of hypocrisy here. Mr. Obama, who made $4.2 million last year and lives in a $1.65 million house bought with the help of the indicted Tony Rezko - and whose "elegant suits" and "impeccable ties" made him one of Esquire's Best-Dressed Men in the World - disdains college students who might want to "chase after the big house and the nice suits." Mr. McCain, who with his wife earned more than $6 million last year and who owns at least seven homes, ridicules Mr. Romney for having built businesses.

But hypocrisy is not the biggest issue. The real issue is that Messrs. Obama and McCain are telling us Americans that our normal lives are not good enough, that pursuing our own happiness is "self-indulgence," that building a business is "chasing after our money culture," that working to provide a better life for our families is a "narrow concern."

They're wrong. Every human life counts. Your life counts. You have a right to live it as you choose, to follow your bliss. You have a right to seek satisfaction in accomplishment. And if you chase after the almighty dollar, you just might find that you are led, as if by an invisible hand, to do things that improve the lives of others.

For the full commentary, see:

DAVID BOAZ. "Our Collectivist Candidates." The Wall Street Journal (Weds., May 28, 2008): A17.

September 12, 2008

Keynes Was Relying on the Invisible Hand of the Market in 1946


Source of book image:

(p. B7) As Mr. Kynaston sets his scene, what immediately becomes clear is that the recent past is not so recent. "Britain in 1945. No supermarkets, no motorways, no teabags, no sliced bread, no frozen food. ... No launderettes, no automatic washing machines, wash day every Monday, clothes boiled in a tub, scrubbed on the draining board. ...Abortion illegal, homosexual relationships illegal, suicide illegal, capital punishment legal. White faces everywhere." And with all those white faces was the single overwhelming, blanketing fact of deprivation, a bare-bones existence. Britain had just prevailed in a struggle for its very survival, but victory never looked so grim.

. . .

The Labor Party won the 1945 election in a landslide on a promise of national planning. The debate now was how far to take socialism, with the Laborites divided between the hell-bent nationalizers and the more market-oriented Keynesians. In 1946 Keynes himself admitted (though privately) that "I find myself more and more relying for a solution of our problems on the invisible hand" of the market, "which I tried to eject from economic thinking 20 years ago."

. . .

Almost invisible in Mr. Kynaston's sparkling panorama is a sign of what was to come. One Conservative politician was out of step not only with Labor's policies but even with the prevailing views of her own party. Margaret Roberts was just about alone in condemning the welfare state as "pernicious," destructive of the national character. In 1951, a year after Labor's second postwar electoral victory, she got married. Her husband's name was Thatcher.

For the full review, see:

Barry Gewen. "Books of The Times - In Postwar Britain, the Grim Face of Victory." The New York Times (Thurs., June 12, 2008): B7.

(Note: ellipses within the Kynaston quote are in the original; ellipses between paragraphs are added.)

September 11, 2008

Juanita Brown Buys Gun for Self-Defense

BrownJuanitaBuysGun2008-09-09.jpg Source of image: screen capture from the web posting of the WOWT report.

Justin Joseph had a nice "Crime Beat" report on WOWT Tuesday night (9/9/08), in which he documented 61 year-old Juanita Brown's purchase of a gun for self-defense.

View the report at:


September 10, 2008

Americans Happy with Work if Advancement is Possible


Source of book image: http://www.arthurbrooks.net/images/book-2.gif

(p. A13) In "Gross National Happiness," Mr. Brooks has assembled an array of statistics to measure the mood of America's citizens and to discover the reasons they feel as they do. Most often he cites polls that ask for self-described happiness levels, matching up the answers with various beliefs, habits, life choices or experiences.

And what exactly is happiness? Who knows? The term might refer joy or contentment or moral self-approval or material well-being or appetitive pleasure - or some combination of them all. Mr. Brooks is aware of the problem. He says that Potter Stewart, the Supreme Court justice, could have been describing happiness when he said, of pornography, "I know it when I see it."

. . .

He challenges those partial to tales about long-suffering Wal-Mart workers and surly burger flippers to rethink their victimology creed. The woe is not nearly as widespread as rumored: 89% of Americans who work more than 10 hours a week are very satisfied or somewhat satisfied with their jobs while only 11% are not very satisfied or not at all satisfied. Most surprisingly, Mr. Brooks writes, there "is no difference at all in job satisfaction between those with below-average and above-average incomes."

What really makes Americans hate their jobs is a perception that advancement is impossible. And while Mr. Brooks agrees that the nation's income gap is growing, the national happiness level is steady. Just under one-third of American adults say that they are "very happy"; up to 15% are not too happy; and everyone else is somewhere in the middle. Those numbers have been roughly true since the early 1970s. More government spending doesn't seem to raise happiness levels, though direct government assistance may diminish it. Charitable giving, Mr. Brooks adds, generally lifts the spirits; Americans do a lot of it.

For the full review, see:

DAVE SHIFLETT. "Bookshelf; How to Be of Good Cheer." The Wall Street Journal (Mon., May 12, 2008): A13.

(Note: ellipsis added.)

September 9, 2008

McCraw Identifies Schumpeter's "Signature Legacy"

McCraw is correct in identifying Schumpeter's "signature legacy":

(p. 495) Schumpeter's signature legacy is his insight that innovation in the form of creative destruction is the driving force not only of capitalism but of material progress in general.


McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

(Note: italics in original.)

September 8, 2008

New Entrepreneurs Are Encouraged by Good Examples


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

(p. B7) One day during Trip Adler's sophomore year at Harvard University, he saw fellow undergraduates Mark Zuckerberg and Dustin Moskovitz outside their dormitory with suitcases and boxes. When Mr. Adler asked what the two -- who happened to be Facebook Inc.'s co-founders -- were doing, Mr. Moskovitz lightly replied that they were moving from Cambridge, Mass., to Silicon Valley "to make Facebook big."

"I was so jealous," recalls Mr.Adler, now 23 years old. "I thought, 'I've got to find an idea and drop out of Harvard.'"

Mr. Adler didn't leave school, but after graduating in 2006, he did start an online document-sharing company. San Francisco-based Scribd Inc., employs 12 people and attracts 11.1 million monthly visitors, according to Web-tracking company comScore Inc. It has raised nearly $3.9 million from Redpoint Ventures and other venture-capital and individual investors.

Mr. Adler is just one of the Harvard students who have caught start-up fever since Facebook, founded when Mr. Zuckerberg was at Harvard in 2004, exploded in popularity. Other recent Harvard-born start-ups include Internet companies Kirkland North Inc., Drop.io Inc. and Labmeeting Inc. And Facebook has become a model for these start-ups on many fronts, from the look of company Web sites to their corporate strategies.

For the full story, see:

VAUHINI VARA. "ENTERPRISE; Facebook Ignites Entrepreneurial Spirit at Harvard Students, Graduates Start Firms, Using The Site as a Model." The Wall Street Journal (Tues., May 20, 2008): B7.

September 7, 2008

Venter's Use of ESTs "Leapfrogged" his X-Chromosome Proposal

(p. 82) Venter dubbed the fragments "expressed sequence tags," or ESTs for short.

. . .

Venter was ecstatic. He had veered wildly off course from his approved plan of research, but the risk had paid off. While the Human Genome Project grant committee was still dragging its feet over his X-chromosome proposal, he had already leapfrogged ahead of that idea and found a way to go forward even faster, using his ESTs. Venter wrote Watson to let him know what he was up to, hoping to win his approval and some funding to continue the EST project.

Reference to book:

Shreeve, James. The Genome War: How Craig Venter Tried to Capture the Code of Life and Save the World. 1st ed. New York: Alfred A. Knopf, 2004.

(Note: ellipsis added.)

September 6, 2008

At Pixar, "Storytelling is More Important Than Graphics"


Source of book image:

(p. A19) One of Mr. Catmull's other inspirations was to hire computer animator John Lasseter after he was fired by Walt Disney Co. in 1983. (He had apparently stepped on one too many toes in the company's sprawling management structure.) Then again, as Mr. Price reports, in the world of computer animators, workplace comings and goings seemed to be part of the job. Mr. Lasseter himself had already quit Disney and then returned before being fired. In the creative ferment of computer animation in the late 1970s and early 1980s, what mattered most was the work itself: Never mind who signs the paychecks - what project are you working on now?

. . .

One of Pixar's first projects revealed a truth that would point the way to success: Storytelling is more important than graphics firepower. The company created a short film, directed by Mr. Lasseter, called "Tin Toy," about a mechanical one-man band fleeing the terrors of a baby who wants to play with it. "Tin Toy" made audiences laugh in part because it turned established themes on their heads. The story was told from the toy's-eye view, close to the floor. The baby, doing what babies do, seemed like a gigantic, capricious monster. "Tin Toy" won the 1988 Academy Award for animated short film.

The upside-down "Tin Toy" point of view seems to fit much of what happened at Pixar afterward. The company made a deal with Disney in 1991: The little animation outfit would produce three movies, and the entertainment behemoth would distribute and market them. With the outsize success of the first movie in the deal, "Toy Story" - it grossed $355 million world-wide - Pixar and Disney were perhaps on an inevitable collision course over control and profits. Mr. Price adroitly depicts the clashes between Mr. Jobs and his nemesis at Disney, chief executive Michael Eisner, and captures the sweet vindication of Mr. Lasseter as the projects he guides outstrip the animation efforts of his former employer.

The sweetest moment in the Pixar saga came two years ago, when Disney bought the company for $7.4 billion in an all-stock deal - one that gave Pixar executives enormous power at their new home. Mr. Jobs sits on the Disney board and is the company's largest shareholder. (Mr. Eisner left in 2005.) And Mr. Lasseter became the chief creative officer for the combined Disney and Pixar animation studios, where Mr. Catmull serves as president.

The day after the sale was announced, Mr. Lasseter and Mr. Catmull flew to Burbank, Calif., to address a crowd of about 500 animation staffers on a Disney soundstage. "Applause built as they made their way to the front," Mr. Price reports, "and then erupted again in force" when the two men were introduced. "Lasseter was welcomed as a rescuer of the studio from which he had been fired some twenty-two years before." In one of their first moves, Mr. Price says, Messrs. Lasseter and Catmull "brought back a handful of Disney animation standouts who had only recently been laid off." Redemption, after all, is essential to any story well told.

For the full review, see:

PAUL BOUTIN. "Bookshelf, An Industry Gets Animated." The Wall Street Journal (Weds., May 14, 2008): A19.

(Note: ellipsis added.)

September 5, 2008

Schumpeter's Final Thoughts on the Importance of the Individual Entrepreneur

Here is McCraw discussing and quoting Schumpeter's notes for the Walgreen Lectures that he was preparing to deliver just before he died.

(p. 475) In notes he prepared in 1949 for the prestigious Walgreen Lectures, Schumpeter headed one entire section "The Personal Element and the Element of Chance: A Principle of Indeterminateness." Here, he wrote that the time had come for economists to face a problem they had long tried to dodge:

the problem of the influence that may be exerted by exceptional individuals, a problem that has hardly ever been treated without the most blatant preconceptions. Without committing ourselves either to hero worship or to its hardly less absurd opposite, we have got to realize that, since the emergence of exceptional indi-(p. 476)viduals does not lend itself to scientific generalization, there is here an element that, together with the element of random occurrences with which it may be amalgamated, seriously limits our ability to forecast the future. That is what is meant here by "a principle of indeterminateness." To put it somewhat differently: social determinism, where it is nonoperational, is a creed like any other and entirely unscientific.


McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

September 4, 2008

McCain Proposes Prize to "Leapfrog" Battery Technology

McCainBatteryPrize.jpg "Campaigning Monday in Fresno, Calif., Senator John McCain said, if elected, he would offer $300 million to anyone who could build a more efficient car battery." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A15) FRESNO, Calif. -- In the 18th century the British offered a £20,000 prize to anyone who figured out how to calculate longitude. More recently, Netflix offered a million dollars for improving movie recommendations on its Web site. Now Senator John McCain is suggesting a new national prize: He said here Monday that if elected president he would offer $300 million to anyone who could build a better car battery.

. . .

"I further propose we inspire the ingenuity and resolve of the American people," Mr. McCain said, "by offering a $300 million prize for the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars."

He said the winner should deliver power at 30 percent of current costs. "That's one dollar, one dollar, for every man, woman and child in the U.S. -- a small price to pay for helping to break the back of our oil dependency," he said.

For the full story, see:

MICHAEL COOPER. "McCain Proposes a $300 Million Prize for a Next-Generation Car Battery." The New York Times (Tues., June 24, 2008): A15 & A20

(Note: ellipsis added.)

September 3, 2008

"Leapfrog-type Competition"

Below is the abstract of a paper that mentions "leapfrog-type competition." Appendix 2 of the paper (pp. 143-144) attempts to set down a mathematical model of leapfrog competition.

(p. 135) This paper examines competition patterns and competitive strategies when technology changes continually. It first discusses optimal behavior for investment in technology. It is argued that although technological innovations supersede existing technologies, there are economically justifiable barriers to investing in the new technologies. These economic barriers, coupled with continuous technological change, have implications for certain aspects of strategy, such as entry by means of new technologies, timing of entry, leapfrog-type competition, vertical integration, the productivity dilemma, and escalating commitment. Finally, the industrial transformation of the steel industry is used as an example to illustrate these implications.

The reference for the paper is:

Tang, Ming-Je, and S. Zannetos Zenon. "Competition under Continuous Technological Change." Managerial and Decision Economics 13, no. 2 (Mar.-Apr. 1992): 135-48.

September 2, 2008

Harvard Professor Doriot Used Venture Capital to Finance the Digital Equipment Corporation


Source of book image: http://creativecapital.wordpress.com/category/how-to-buy-creative-capital/

Doriot taught at Harvard during the whole time that Joseph Schumpeter taught at Harvard. Given that their interests apparently overlapped, it is surprising that there are no references to Schumpeter or to "creative destruction" in Ante's book.

There are also no references to Doriot in McCraw's recent comprehensive intellectual biography of Schumpeter.

(Scherer in his essay "An Accidental Schumpeterian" mentions taking a useful course from Doriot, but does not illuminate the relationship, if any, between Doriot and Schumpeter.)

(p. A17) Before Sand Hill Road near Stanford University became the center of the venture-capital universe - before Google and Pets.com - the modern market for financing risky startup companies took shape far from Silicon Valley in the years after World War II.

ARD was the first to raise what was then known as "risk capital" from outsiders at a time when investors' wounds were still fresh from the stock-market crash of 1929 and the Depression of the 1930s. The high failure rate of start-ups had generally precluded raising money from average investors. And so ARD's chief competitors in the postwar years were the Rockefellers and another old-money operation, J.H. Whitney & Co.

. . .

The company would hardly merit attention except for its one grand slam, Digital Equipment Corp., which helped establish the East Coast high-tech stronghold along Route 128 outside Boston.

Digital, a minicomputer maker co-founded by former Massachusetts Institute of Technology engineer Ken Olsen, received $70,000 from ARD in 1957 in return for a 70% stake, which eventually grew in value to hundreds of millions of dollars. Mr. Ante calculates the investment's return at 70,000%.

. . .

Doriot, who taught at Harvard for 40 years, beginning in 1926, offered a popular class that was ostensibly about manufacturing but was more a seminar in his business philosophy. "He stressed common sense themes such as self-improvement, teamwork, and contributing to society," Mr. Ante writes. Doriot was known for "spicing up his philosophy with practical and pithy words of advice." Among them: "Always remember that someone somewhere is making a product that will make your product obsolete."

For the full review, see:

RANDALL SMITH. "Bookshelf; Money to Make Things New." The Wall Street Journal (Weds., May 21, 2008): A17.

(Note: ellipses added.)

Reference to the biography of Doriot:

Ante, Spencer E. Creative Capital: Georges Doriot and the Birth of Venture Capital. Boston: Harvard Business School Press, 2008.

September 1, 2008

Schumpeter Saw that the "Demand for Teaching Produces Teaching and Not Necessarily Scientific Achievement"

From McCraw's summary of Schumpeter's History of Economic Analysis:

(p. 453) During the mid-nineteenth century, universities were beginning to teach economics, but "the demand for courses and textbooks produced courses and textbooks and not much else. Does this not show that there is something to one of the theses of this book, namely, that need is not the necessary and sufficient condition of analytic advance and that demand for teaching produces teaching and not necessarily scientific achievement?"


McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.



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