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February 28, 2011

Kappos Says Private Company Would Have Run Patent Office Better

KapposDavidPatent2011-02-27.jpg "David Kappos of the Patent Office, with an Edison bulb." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) "There is no company I know of that would have permitted its information technology to get into the state we're in," David J. Kappos, who 18 months ago became director of the Patent and Trademark Office and undersecretary of commerce for intellectual property, said in a recent interview. "If it had, the C.E.O. would have been fired, the board would have been thrown out, and you would have had shareholder lawsuits."

Once patent applications are in the system, they sit -- for years. The patent office's pipeline is so clogged it takes two years for an inventor to get an initial ruling, and an additional year or more before a patent is finally issued.

The delays and inefficiencies are more than a nuisance for inventors. Patentable ideas are the basis for many start-up companies and small businesses. Venture capitalists often require start-ups to have a patent before offering financing. That means that patent delays cost jobs, slow the economy and threaten the ability of American companies to compete with foreign businesses.

For the full story, see:

EDWARD WYATT. "U.S. Sets 21st-Century Goal: Building a Better Patent Office." The New York Times (Mon., February 21, 2011): A1 & A3.

(Note: the online version of the article is dated February 20, 2011.)

February 27, 2011

Patent Importance Survives the Results of Moser's Worlds Fairs Data Analysis

(p. 264) Petra Moser, now a professor at MIT's Sloan School of Management, spent four years examining more than 15,000 different inventions exhibited at nineteenth-century worlds fairs, and their equivalents, and discovered a fact that seems at first glance to discredit the idea that patent protection was essential for innovation: Nations without patent laws were in many cases just as inventive as those with them. Or even more inventive; some of the nations best represented at those industrial fairs actively discouraged the patenting of inventions.

The reason seems to be that whether or not they enforced a patent law, smaller nations or domains, such as the Netherlands and Switzerland, were vulnerable to the theft of their innovations by competitors in larger nations. The bargain of patent protection runs two ways: The state, in return for making an idea public, offers legal recourse to its creator should someone within the state steal the idea. Since making one's invention public in a nation with patent protection offered protection against theft only up to its own borders, only a large nation offered a large enough market to make the deal a good one, and (in Moser's words) the small nations "would have been silly to patent [their] innovations."

This logic inhibited investment in entire categories of innovation. Those nations that relied on secrecy rather than patent tended to specialize in the sort of inventions that cannot be easily reverse--engineered, such as chemicals or dyes.


Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

(Note: italics and bracketed word in original.)

February 26, 2011

How Bacardi Fought Predatory Taxation in Pre-Castro Cuba


Source of book image: http://www.nytimes.com/2008/09/21/business/21shelf.html?_r=1

(p. W6) When it comes to chronicling the Bacardi rum dynasty, the best model may be "Buddenbrooks" or some other novelistic attempt to capture the experience of a family business trying to survive across generations. Tom Gjelten's "Bacardi and the Long Fight for Cuba" -- though fact-driven history and far more upbeat that Thomas Mann's tale of dynastic decline -- feels very much in this literary tradition.

. . .

Perhaps the most fascinating figure in the Bacardi tale is José Bosch, called Pepín, a young businessman who also married into the Bacardi family and was an early opponent of Gerardo Machado's corrupt rule in the 1920s. Machado made Bacardi, one of Cuba's most successful companies, a target of predatory taxation, but a proposed rum tax was more than the distiller could stand. Bacardi opened new facilities in Mexico and threatened to move its operations there if the tax was enacted. The Cuban legislature dropped the idea -- and Bacardi soon found itself with a Mexican distillery it didn't need, trying to sell a liquor to tequila- quaffing public that didn't want it.

Bosch was dispatched in 1933 to shut down the Mexican facility, but instead he saved it. "Noticing that Mexicans drank a lot of Coca-Cola," Mr. Gjelten writes, Bosch urged the company to promote Bacardi-and-Coke cocktails. Observing the rich tradition of Mexican handicrafts, he also suggested that the locals would be more inclined to drink rum if it was sold in the sort of wicker-covered jugs often used for it in Cuba. Sales in 1934 doubled.

For the full review, see:

ALVARO VARGAS LLOSA. "The Family Spirit." The Wall Street Journal (Fri., September 12, 2008): W6.

(Note: ellipsis added.)

The book being reviewed, is:

Gjelten, Tom. Bacardi and the Long Fight for Cuba: The Biography of a Cause. New York: Viking Penguin, 2008.

February 25, 2011

Paul Romer Looking to Found a "Charter City"

Romer's idea of setting up a Charter City sounds like a more advanced version of a free trade zone. It might work if you could find a well-governed nation to serve as guarantor of the city's charter. That's a big "if."

Still, it's a more intriguing idea for advancing economic development than most of the default policies (like sending foreign aid to be stolen by corrupt dictators).

(p. A2) For the past couple of years, economist Paul Romer has been hopscotching the globe looking for a country desperate enough to try his audacious notion: Start a new "charter city," an enclave free of old laws and practices, as William Penn did in Pennsylvania. (Think "charter school," a school free of union contracts and school bureaucracy.)

. . .

About a decade ago, he walked away from academia, started an online teaching company, sold it and then turned to his next big idea: To create jobs to lift millions out of poverty, take an uninhabited 1,000 square-kilometer tract (386 square miles), about the size of Hong Kong, preferably government-owned. Write a charter: the all-important rules. Allow anyone to move in or out. Invite foreign investors to build infrastructure for profit. And sign a treaty with a well-governed country, say Norway or Canada, to serve as "guarantor" to assure investors and residents that the charter will be respected, much as the British once did for Hong Kong, and--. . . .

For the full story, see:

DAVID WESSEL. "CAPITAL; The Quest for a 'Charter City'." The Wall Street Journal (Thurs., FEBRUARY 3, 2011): A2.

(Note: ellipses added.)

February 24, 2011

Grammar Mavens Are "Guilty of Turning Superstitions into Rules"


Source of book image: http://static.letsbuyit.com/filer/images/uk/products/original/132/76/the-lexicographer-s-dilemma-the-evolution-of-proper-english-from-shakespeare-to-south-park-13276063.jpeg

(p. C29) It's getting harder to make a living as an editor of the printed word, what with newspapers and other publications cutting staff. And it will be harder still now that Jack Lynch has published "The Lexicographer's Dilemma," an entertaining tour of the English language in which he shows that many of the rules that editors and other grammatical zealots wave about like cudgels are arbitrary and destined to be swept aside as words and usage evolve.

. . .

"Too often," he writes, "the mavens and pundits are talking through their hats. They're guilty of turning superstitions into rules, and often their proclamations are nothing more than prejudice representing itself as principle."

And, as he notes in his final chapter, the grammatical doomsayers had better find themselves some chill pills fast, because the crimes-against-the-language rate is going to skyrocket here in the electronic age. There is already much whining about the goofy truncated vocabulary of e-mail and text messaging (a phenomenon Mr. Lynch sees as good news, not bad; to mangle the rules of grammar, you first have to know the rules). And the Internet means that English is increasingly a global language.

For the full review, see:

JANET MASLIN. "Books of The Times; This Is English, Rules Are Optional." The New York Times (Mon., May 4, 2009): C4.

(Note: ellipsis added.)

(Note: the online version of the article is dated May 3, 2009.)

The book being reviewed, is:

Lynch, Jack W. The Lexicographer's Dilemma: The Evolution of 'Proper' English, from Shakespeare to South Park. New York: Walker & Company, 2009.

February 23, 2011

Chinese Encyclopedia Was Burned to Protect Monopolies Granted by Emperor

(p. 262) As with Tudor England, government monopoly of patronage meant control. Virtually all copies of the seventeenth--century Chinese encyclopedia, the T'ien Kung K'ai-wu or Exploitation of the Works of Nature, which included illustrations of everything from hydraulics to metallurgy, were destroyed because, according to Joseph Needham, much of the material touched on industries that had been granted monopoly status by the Qing emperors: "The absence of political competition did not mean that technological progress could not take place, but it did mean that one decision-(p. 263)maker [i.e. the Emperor] could deal it a mortal blow." It is therefore no surprise that a high percentage of both the inventions and inventors we associate with China from the time of the Han Dynasty to the Qings were government sponsored and employed.

Another liability of a strong central government is that it is, well, strong. Europe's fragmented system of sovereign states made it possible for innovative minds such as Paracelsus, Leibniz. Rousseau, and Voltaire to "shop" for more congenial places whenever they skated too close to heretical or otherwise challenging notions; in China, one had to travel a thousand miles to a place where the empire's writ ran not.


Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

(Note: italics and bracketed words in original.)

February 22, 2011

Luther Burbank's Income Suffered Because His Inventions Could Not Be Patented


"Luther Burbank pollinating poppies in Santa Rosa, Calif." Source of book image: online version of the NYT review quoted and cited below.

(p. C4) There is a particular type of potato at the heart of Jane S. Smith's book about Luther Burbank, a man who described himself as an "evoluter of new plants." Ms. Smith nicknames that potato "the lucky spud." That turn of phrase is one of many reasons to appreciate "The Garden of Invention," her colorful, far-reaching book about the genetic, agricultural, economic and legal issues raised by Burbank's life and legend.

. . .

This book takes more than a passing interest in Burbank's income, insofar as it reflected his legal ability to protect his scientific advances. In his early professional years he grappled with the doctrine that held that while a gold mine was real property and a machine to extract gold was intellectual property, the actual mineral belonged to anyone who could find it; ditto with potatoes. Throughout his career, even as he developed friendships with tycoons like Ford and Thomas Edison, Burbank lived under constant financial pressure to keep creating new plant products. "His income was entirely dependent on his latest marvel," Ms. Smith writes


For the full review, see:

JANET MASLIN. "Books of The Times; The Curious Man Lucky Enough to Create 'the Lucky Spud'." The New York Times (Mon., May 4, 2009): C4.

(Note: ellipsis added.)

(Note: the online version of the article is dated May 3, 2009.)

The book being reviewed, is:

Smith, Jane S. The Garden of Invention: Luther Burbank and the Business of Breeding Plants. New York: The Penguin Press, 2009.

February 21, 2011

The Story of Spielberg's "World-Changing Movies" Deserves "a Detailed, Impassioned and Insightful Telling"

(p. 20) . . . , LaPorte combines tabloid celebrity worship with an older oddity: the incongruous fact that a free market also produces resentment, especially when a competitor like Spielberg demonstrates leadership, superior achievement and undeniable success. He's one of the few filmmakers still committed to exploring the human condition -- and in popular terms. This is what sets him apart and makes him admired, envied and even inscrutable to those who think only in craven terms of business and royalty.

. . .

So it's a tabloid book. We can only hope it doesn't become the historical record. LaPorte undermines her research with a headachy repetition of anonymous informants ("one insider," "one former executive," "one source"). She concludes that "inherent in all of it was hubris." But a story this significant, about world-changing movies, doesn't need homilies. It needs a detailed, impassioned and insightful telling, one that would help us better appreciate a frequently misunderstood, underinterpreted pop artist whose work connects with the public, defines the complexities of human experience and dwarfs most of contemporary Hollywood's output. DreamWorks calls for a sensitive sociologist -- a Tom Wolfe or a Norman Mailer or a Pauline Kael -- who can discern the deep, divided heart of Hollywood.

For the full review, see:

ARMOND WHITE. "The Big Picture." The New York Times Book Review (Sun., July 11, 2010): 20.

(Note: ellipses added.)

(Note: the online version of the review is dated July 9, 2010.)

The book White credibly pans is:

LaPorte, Nicole. The Men Who Would Be King; an Almost Epic Tale of Moguls, Movies, and a Company Called Dreamworks. New York: Houghton Mifflin Harcourt, 2010.

February 20, 2011

Did Bell, or Gray, Invent the Telephone?


Source of book image: http://www.xconomy.com/wordpress/wp-content/images/2008/01/telephone-gambit.jpg

A great and important debate is occurring about the desirability of the patent system. Should it be abolished, or reformed? If The Telephone Gambit book is right, one of the spectacular failures of the system is in the awarding of a patent to Bell for the telephone.

That's a big "if": some of the reviewers on Amazon give reasons for doubting Shulman's story.

I hope to have time to look into this further.

(p. D10) It was a brilliant concept. But was it Bell's? What had happened during his trip to Washington that allowed Bell to abandon the blind alleys he had been exploring and to suddenly, not incrementally, find the technological solution?

The answer to that question is a tale involving high-powered Washington lawyers, political influence, a patent clerk with a booze problem, and improper access to Elisha Gray's patent filing, where Bell found the secret to making the telephone work. Mr. Shulman lays out the evidence -- documentary, scientific, chronological and psychological -- piece by damning piece. He shows most impressively how Bell's subsequent behavior and actions are entirely in keeping with those of a decent and honorable man having to live most of his long life (Bell died in 1924) with the knowledge that behind his fortune and his fame lay a single instance of brazen dishonesty, of intellectual theft.

"The Telephone Gambit" is solid history, and Seth Shulman makes it as much fun to read as an Agatha Christie whodunit by using the techniques of historiography the way Hercule Poirot used his "little gray cells." That's no small accomplishment.

For the full review, see:

JOHN STEELE GORDON. "False Claim, Future Fortune." The Wall Street Journal (Fri., JANUARY 16, 2008): D10.

(Note: ellipsis added.)

The book being reviewed, is:

Shulman, Seth. The Telephone Gambit: Chasing Alexander Graham Bell's Secret. hardback ed. New York: W. W. Norton & Company, 2008.

February 19, 2011

"A Great Artisan Can Make a Family Prosperous; A Great Inventor Can Enrich an Entire Nation"

(p. 247) We feel real poignancy when we recall the bucolic life (even if we do so through the soft focus of nostalgia) of a country weaver happy in his work skills and content with his life. But those skills, like those of a medieval goldsmith or an ancient carpenter, could not, by their very nature, reproduce themselves outside the closed community of the initiates. One lesson of the Luddite rebellion specifically, and the Industrial Revolution generally, is that maintaining the prosperity of those closed communities--their pride in workmanship as well as their economic well-being----can only be paid for by those outside the communities: by society at large. A great artisan can make a family prosperous; a great inventor can enrich an entire nation.


Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

February 18, 2011

Bloggers See Bad Conditions for Entrepreneurs


The chart above and the one below are from the recently-released results of the First Quarter 2011 influential blogger survey conducted by the Kauffman Foundation. (Tim Kane gave permission to put the charts on my blog.) artdiamondblog.com is one of the blogs included in the survey.

The results above show a perception that conditions are currently tough for entrepreneurs. The chart below displays one of the main reasons: the current economy is perceived as uncertain and fragile. There are many reasons for the uncertainty, but one of them is surely that the bloggers have doubts about the depth of support in government for the institutions and policies upon which entrepreneurship depends (like private property, restrained regulations, and low taxes).

For a full PDF report on the 2011 Q1 survey results, see:



February 17, 2011

Insider Training Increases the Efficiency of Markets

(p. W2) As argued forcefully by Henry Manne in his 1966 book "Insider Trading and the Stock Market," prohibitions on insider trading prevent asset prices from adjusting in this way. Mr. Manne, dean emeritus at George Mason University School of Law, pointed out that when insiders trade on their nonpublic, nonproprietary information, they cause asset prices to reflect that information sooner than otherwise and therefore prompt other market participants to make better decisions.

This achievement can have ramifications beyond a few percentage-point increases in productivity growth.

According to Mr. Manne, corporate scandals such as Enron and Global Crossing would occur much less frequently and impose fewer costs if the government didn't prohibit insider trading. As Mr. Manne said a few years ago in a radio interview, "I don't think the scandals would ever have erupted if we had allowed insider trading because there would be plenty of people in those companies who would know exactly what was going on, and who couldn't resist the temptation to get rich by trading on the information, and the stock market would have reflected those problems months and months earlier than they did under this cockamamie regulatory system we have."

Another potential benefit of lifting the ban on insider trading is explained by Harvard University economist Jeffrey Miron: "In a world with no ban, small investors might fear to trade individual stocks and would face a greater incentive to diversify; that is also a good thing."

For the full commentary, see:

DONALD J. BOUDREAUX. "Learning to Love Insider Trading; Here's a hot tip: Want to keep companies honest, make the markets work more efficiently and encourage investors to diversify? Let insiders buy and sell, argues Donald J. Boudreaux." The Wall Street Journal (Sat., OCTOBER 24, 2009): W1-W2.

The book mentioned is:

Manne, Henry. Insider Trading and the Stock Market. New York: The Free Press, 1966.

February 16, 2011

UFT "Trying to Deny Poor Parents Choice for Their Children"


Madeleine Sackler. Source of image: online version of the WSJ article quoted and cited below.

(p. A13) 'What's funny," says Madeleine Sackler, "is that I'm not really a political person." Yet the petite 27-year-old is the force behind "The Lottery"--an explosive new documentary about the battle over the future of public education opening nationwide this Tuesday.

In the spring of 2008, Ms. Sackler, then a freelance film editor, caught a segment on the local news about New York's biggest lottery. It wasn't the Powerball. It was a chance for 475 lucky kids to get into one of the city's best charter schools (publicly funded schools that aren't subject to union rules).

"I was blown away by the number of parents that were there," Ms. Sackler tells me over coffee on Manhattan's Upper West Side, recalling the thousands of people packed into the Harlem Armory that day for the drawing. "I wanted to know why so many parents were entering their kids into the lottery and what it would mean for them." And so Ms. Sackler did what any aspiring filmmaker would do: She grabbed her camera.

. . .

But on the way to making the film she imagined, she "stumbled on this political mayhem--really like a turf war about the future of public education." Or more accurately, she happened upon a raucous protest outside of a failing public school in which Harlem Success, already filled to capacity, had requested space.

"We drove by that protest," Ms. Sackler recalls. "We were on our way to another interview and we jumped out of the van and started filming." There she discovered that the majority of those protesting the proliferation of charter schools were not even from the neighborhood. They'd come from the Bronx and Queens.

"They all said 'We're not allowed to talk to you. We're just here to support the parents.'" But there were only two parents there, says Ms. Sackler, and both were members of Acorn. And so, "after not a lot of digging," she discovered that the United Federation of Teachers (UFT) had paid Acorn, the controversial community organizing group, "half a million dollars for the year." (It cost less to make the film.)

Finding out that the teachers union had hired a rent-a-mob to protest on its behalf was "the turn for us in the process." That story--of self-interested adults trying to deny poor parents choice for their children--provided an answer to Ms. Sackler's fundamental question: "If there are these high-performing schools that are closing the achievement gap, why aren't there more of them?"

For the full interview, see:

BARI WEISS. "THE WEEKEND INTERVIEW; Storming the School Barricades; A new documentary by a 27-year-old filmmaker could change the national debate about public education." The Wall Street Journal (Sat., JUNE 5, 2010): A13.

(Note: ellipsis added.)

(Note: the first paragraph quoted above has slightly different wording in the online version than the print version; the second paragraph quoted is the same in both.)

February 15, 2011

Luddism in 1811 England

(p. 243) The stockingers began in the town of Arnold, where weaving frames were being used to make cut-ups and, even worse, were being operated by weavers who had not yet completed the seven-year apprenticeship that the law required. They moved next to Nottingham and the weaver-heavy villages surrounding it, attacking virtually every night for weeks, a few dozen men carrying torches and using prybars and hammers to turn wooden frames--and any doors, walls, or windows that surrounded them--into kindling. None of the perpetrators were arrested, much less convicted and punished.

The attacks continued throughout the spring of' 1811, and after a brief summertime lull started up again in the fall, by which time nearly one thousand weaving frames had been destroyed (out of the 25.000 to 29,000 then in Nottingham, Leicestershire, and Derbyshire), resulting in damages of between £6,000 and £10.000. That November, a commander using the nom de sabotage of Ned Ludd (sometimes Lud)--the name was supposedly derived from an apprentice to a Leicester stockinger named Ned Ludham whose reaction to a reprimand was to hammer the nearest stocking frame to splinters--led a series of increasingly daring attacks throughout the Midlands. On November 13, a letter to the Home Office demanded action against the "2000 men, many of them armed, [who] were riotously traversing the County of Nottingham."

By December 1811, rioters appeared in the cotton manufacturing capital of Manchester, where Luddites smashed both weaving and spinning machinery. Because Manchester was further down the path to industrialization, and therefore housed such machines in large factories as opposed to small shops, the destruction demanded larger, and better organized, mobs.


Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

(Note: italics and bracketed word in original.)

February 14, 2011

Salesforce.com Needed More than New Economy Cockiness to Succeed


Source of book image: online version of the WSJ review quoted and cited below.

(p. A25) Mr. Benioff tells the story of his success in "Behind the Cloud," a triumphalist memoir and business self-help manual. He makes it clear that, when he was starting out, he followed the standard dot-com playbook: Get some high-profile tech-industry backers and mentors--Mr. Benioff's former boss, Oracle chief executive Larry Ellison, was one--create buzz and let the revenues flow in. Salesforce.com might have been launched with New Economy cockiness, but success followed for solid, old-fashioned reasons: The company's products filled a market gap.

For the full review, see:

JESSICA HODGSON. "Selling and Software; How a start-up found a new way to deliver computer products to salespeople." The Wall Street Journal (Thurs., DECEMBER 17, 2009): A25.

(Note: the online version of the article is dated DECEMBER 16, 2009.)

The book being reviewed, is:

Benioff, Marc. Behind the Cloud: The Untold Story of How Salesforce.Com Went from Idea to Billion-Dollar Company-and Revolutionized an Industry. San Francisco, CA: Jossey-Bass, 2009.

February 13, 2011

Internet Enabled Creative Destruction

(p. R4) To understand the challenges that faced businesses the past 10 years, consider the household names that didn't make it through the decade: Anheuser-Busch, Compaq, Gillette, Enron, Lehman Brothers, Merrill Lynch, WorldCom.

. . .

As the decade rolled on, the Internet came to be known for destroying businesses. It upended decades-old business models in fields such as media, advertising, travel and entertainment, as consumers and advertisers migrated to the digital world.

But that same shift created opportunity. No one epitomized that better than Google Inc. A mere 15 months old at the beginning of the decade, it morphed from a startup technology company into an advertising and media powerhouse and is now plotting a move into communications. There, it will clash with Apple Inc., which was reborn following the return of co-founder Steve Jobs in 1997. Apple's iPod and iTunes reshaped the music industry; its iPhone revolutionized communications by opening itself to independent innovators.

"This is what [Austrian economist Joseph] Schumpeter had in mind with his term 'creative destruction,'" says Paul David, an economic historian at Stanford University. Industrial collapse is a "messy, messy process," Mr. David says. "It's a great drama, and watching it play out in this decade has been very interesting."

For the full story, see:

SCOTT THURM. "Creativity, Meet Destruction; The Decade Rewrote the Corporate Handbook, Thanks to the Web, Globalization and the Collapse of Two Bubbles." The Wall Street Journal (Mon., DECEMBER 21, 2009): R4.

(Note: ellipsis added.)

(Note: the online version of the article is dated DECEMBER 22, 2009.)

February 12, 2011

"Powerful Pressure for Scientists to Conform"


Source of book image: online version of the WSJ review quoted and cited below.

(p. A13) In "Hyping Health Risks," Geoffrey Kabat, an epidemiologist himself, shows how activists, regulators and scientists distort or magnify minuscule environmental risks. He duly notes the accomplishments of epidemiology, such as uncovering the risks of tobacco smoking and the dangers of exposure to vinyl chloride and asbestos. And he acknowledges that industry has attempted to manipulate science. But he is concerned about a less reported problem: "The highly charged climate surrounding environmental health risks can create powerful pressure for scientists to conform and to fall into line with a particular position."

Mr. Kabat looks at four claims -- those trying to link cancer to man-made chemicals, electromagnetic fields and radon and to link cancer and heart disease to passive smoking. In each, he finds more bias than biology -- until further research, years later, corrects exaggeration or error.

. . .

I know whereof Mr. Kabat speaks. In 1992, as the producer of a PBS program, I interviewed an epidemiologist who was on the EPA's passive-smoking scientific advisory board. He admitted to me that the EPA had put its thumb on the evidentiary scales to come to its conclusion. He had lent his name to this process because, he said, he wanted "to remain relevant to the policy process." Naturally, he didn't want to appear on TV contradicting the EPA.

For the full review, see:

RONALD BAILEY. "Bookshelf; Scared Senseless." The Wall Street Journal (Mon., AUGUST 11, 2008): A13.

(Note: ellipsis added.)

(Note: the first paragraph quoted above has slightly different wording in the online version than the print version; the second paragraph quoted is the same in both.)

The book under review is:

Kabat, Geoffrey C. Hyping Health Risks: Environmental Hazards in Daily Life and the Science of Epidemiology. New York: Columbia University Press, 2008.

February 11, 2011

Luddism in France

(p. 240) Not only was Richard Hargreaves's original spinningjenny destroyed in 1767, but so also was his new and improved version in 1769.

Nor was the phenomenon exclusively British. Machine breaking in France was at least as frequent. and probably even more consequential, though it can be hard to tease out whether the phenomenon contributed to, or was a symptom of, some of the uglier aspects of the French Revolution. Normandy in particular, which was not only close to England but the most "English" region of France, was the site of dozens of incidents in 1789 alone. In July, hundreds of spinnigjennys were destroyed, along with a French version of Arkwright's water frame. In October, an attorney in Rouen applauded the destruction of "the machines used in cotton-spinning that have deprived many workers of their jobs." In Troyes, spinners rioted, killing the mayor and mutilating his body because he had favored machines." The carders of Lille destroyed machines in 1790; in 1791, the spinning jennies of Roanne were hacked up and burned. By 1796, administrators in the Department of the Somme were complaining, it turns out presciently, that the prejudice against machinery has led the commercial classes . . . to abandon their interest in the cotton industry.


Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

(Note: ellipsis in original.)

February 10, 2011

Mackey Reduced Role in Whole Foods after Being "Drained" by Antitrust Battle


"Higher existing-store sales powered Whole Foods earnings. Above, co-founder John Mackey juggles apples in a New York store last November." Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B6) Whole Foods Market Inc. reported Wednesday that fiscal second-quarter profits had more than doubled and raised its full-year earnings forecast. The company also shook up its management team, naming a co-chief executive, though current CEO and co-founder John Mackey said he expects to work "for another decade or so."

. . .

Mr. Mackey in December resigned as Whole Foods' chairman after a year of controversy. Last summer, he wrote a controversial opinion article for The Wall Street Journal on his views of health care reform that led to boycotts of the natural grocer by some of his most loyal shoppers. Last spring, the Fair Trade Commission ordered the sale of 37 former Wild Oats Markets Inc. stores, a multi-year battle that Mr. Mackey says left him drained and influenced his decision to appoint Mr. Robb as co-CEO.

For the full story, see:

TIMOTHY W. MARTIN. "Profit Soars at Whole Foods; Grocery Chain Forecasts Sharply Higher Profit, Promotes Two Veteran Executives." The Wall Street Journal (Thurs., MAY 13, 2010): B6.

(Note: ellipsis added.)

(Note: the first paragraph quoted above has slightly different wording in the online version than the print version; the second paragraph quoted is the same in both.)

February 9, 2011

Informal Sector Responded Quicker to Quake than Established Companies

HaitianCoalVendors2011-02-02.jpg "In Port-au-Prince . . . , Haitian vendors peddled small bags of coal." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A10) PORT-AU-PRINCE, Haiti -- The price of candles in the teeming La Saline market here has climbed 60 percent since last week's earthquake. A box of matches is up 50 percent. A package of Perdue Chicken Franks has gone up 30 percent.

. . .

Haiti's huge informal sector reacted faster to the quake than did established companies and banks. Outdoor markets like La Saline are already filled with goods from the countryside, including salt, cornmeal, fruits like mangoes and used clothing from the United States.

. . .

"People want candles because they have no electricity or fuel for their generators," said Manouchka Wendiwou, 21, a vendor in La Saline who raised her candle prices by 60 percent and made no apology for charging what the market would bear.

For the full story, see:

SIMON ROMERO. "Economy in Shock Struggles to Restart." The New York Times (Fri., January 22, 2010): A10.

(Note: ellipses added.)

(Note: the online version of the article is dated January 21, 2010.)

February 8, 2011

Socialism Cut Venezuelan GDP, So Chavez Rejected GDP


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

(p. A15) President Hugo Chávez wasn't pleased with data . . . that showed the Venezuelan economy tumbling into a recession. So the populist leader came up with a solution: Forget traditional measures of economic growth, and find a new, "Socialist-friendly" gauge.

"We simply can't permit that they continue calculating GDP with the old capitalist method," President Chávez said in a televised speech before members of his Socialist party . . . . "It's harmful."

Mr. Chávez's comments came shortly after data showed Venezuela's gross domestic product -- a broad measure of annual economic output -- fell 4.5% in the third quarter from the year-earlier period. It was the second consecutive quarterly decline, and observers have questioned how Mr. Chávez will be able to generate growth without high oil prices.

. . .

"It's hard to say if [Mr. Chávez] is serious or not," said Robert Bottome of publisher VenEconomía. "They've already tampered with the way they compute unemployment and how they determine how much oil [state oil company] PdVSA exports. So why not tamper with the economy figures as well."

For the full story, see:

DAN MOLINSKI and DAVID LUHNOW. "Chávez Discounts Accuracy of GDP." The Wall Street Journal (Fri., NOVEMBER 20, 2009): A15.

(Note: ellipses added.)

February 7, 2011

After a Series of Anonymous Threats, Cartwright Power Looms Were Burned Down

(p. 239) Cartwright constructed twenty looms using his design and put them to work in a weaving "shed" in Doncaster. He further agreed to license the design to a cotton manufacturer named Robert Grimshaw, who started building five hundred Cartwright looms at a new mill in Manchester in the spring of 1792. By summertime, only a few dozen had been built and installed, but that was enough to provoke Manchester's weavers, who accurately saw the threat they represented. Whether their anger flamed hot enough to burn down Grimshaw's mill remains unknown, but something certainly did: In March 1792, after a series of anonymous threats, the mill was destroyed.

Cartwright's power looms were not the first textile machines to be attacked, and they would not be the last.


Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

February 6, 2011

Ronald Reagan Would Be 100 Today; He Got the Job Done

A couple of years ago, I read a collection of recollections of Ronald Reagan by some of those who had known him. I jotted down a few notes on what was important in the collection:

Mike Wallace's entry is a good one.  He has a telling exchange with Reagan where Reagan says he is not a politician.  Wallace is flabbergasted.  He says to the effect:  Mr. Reagan, how can you say you are not a politician when you are planning to run for the highest political office in the land?

Reagan's response is that he's not seeking the office for glory or self-aggrandizement; rather he's seeking it because there's a job that needs to get done.

In a later entry, someone (Cap Weinberger, maybe?) recounts an episode while Governor where someone warns Reagan that if he vetoes a certain bill (on teacher pay, maybe?) he will not get re-elected. Reagan's response was: 'I didn't come here to get re-elected.'

Years ago I remember reading in a newspaper somewhere that an ordinary citizen saw Reagan in a park, at a time well after his announcement about having Alzheimer's.  The citizen went up to Reagan and thanked him for what he had done to preserve freedom.  Reagan smiled and responded 'that is my job.'

The book of recollections is:

Hannaford, Peter, ed. Recollections of Reagan: A Portrait of Ronald Reagan: William Morrow & Company, 1997.

February 5, 2011

Polar Bears Can Survive Global Warming

(p. 3A) ANCHORAGE, Alaska (AP) -- . . .

A study report published Wednesday rejects the often­ used concept of a "tipping point," or point of no return, when it comes to sea ice and the big bear that has become the symbol of climate change woes. . . .

Another research group proj­ects that even if global warming doesn't slow, a thin, icy refuge for the bears would still remain between Greenland and Canada.

. . .

A . . . study was to be pre­sented Thursday at the Ameri­can Geophysical Union confer­ence in San Francisco. That research considers a future in which global warming continues at the same pace.

And it shows that a belt from the northern archipelago of Canada to the northern tip of Greenland will likely still have ice because of various winds and currents.

The sea ice forms off Siberia in an area that's called "the ice factory" and is blown to this belt, which is like an "ice cube tray," said Robert Newton of the Lamont-Doherty Earth Observa­tory at Columbia University.

That "sea ice refuge" will be good for polar bears and should continue for decades to come, maybe even into the next cen­tury, he said.

For the full story, see:

AP. "Scientists: It's Not Too Late for Polar Bears After All." Omaha World-Herald (Thurs., December 16, 2010): 3A.

(Note: ellipses added.)

The first article mentioned is:

Amstrup, Steven C., Eric T. DeWeaver, David C. Douglas, Bruce G. Marcot, George M. Durner, Cecilia M. Bitz, and David A. Bailey. "Greenhouse Gas Mitigation Can Reduce Sea-Ice Loss and Increase Polar Bear Persistence." Nature 468, no. 7326 (December 16, 2010): 955-58.

A poster on an earlier version of the second paper can be found at:

Pfirman, Stephanie, Bruno Tremblay, Charles Fowler, and Robert Newton. "The Arctic Sea Ice Refuge." March 2010.

The reference to the second paper is:

Pfirman, Stephanie, Robert Newton, Bruno Tremblay, and Brenden P. Kelly. "The Last Arctic Sea-Ice Refuge?" In Presented at meetings of American Geophysical Union, December 2010.

February 4, 2011

Healthy Longevity Can Mean You "Get a Do-Over in Life"

PoolGidComic2011-02-02.jpg "Gid Pool performing at the Buford Variety Theater . . . " Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. R1) It's easy, these days, to think about later life and retirement as limiting. And with good reason: The economy remains fragile; nest eggs are smaller than they should be; and Social Security and Medicare are looking pale. Millions of people are delaying retirement and scaling back plans for the future.

And then there's Gid Pool.

Almost five years ago, on something of a lark, he enrolled in a class near his home in North Port, Fla., that taught stand-up comedy. He was 61 years old. Today, he performs in clubs, theaters, colleges and corporate settings throughout much of the South, playing at times to hundreds of people and clearing as much as $1,000 an evening. For good measure, he spends, on average, a week each month on cruise ships, where he teaches comedy classes.

. . .

"I was thinking last night about how lucky I am, at this stage in my life, to have something that really gets me up in the morning," he says. "I saw my grandfather, an engineer on the Illinois Central Railroad, turn my age with a body beaten down by his daily job. My father was a pilot in World War II and suffered all his adult life from an injury in a plane crash.

"Today I'm part of a generation that has literally been given a second chance to live a first life. People say you don't get a do-over in life. I beg to differ."

For the full story, see:

GLENN RUFFENACH. "Did You Hear the One About the Retired Real-Estate Agent? He became a stand-up comedian. And he has never been happier." The Wall Street Journal (Mon., December 20, 2010): R1 & R9.

(Note: ellipsis added.)

February 3, 2011

"Inventors Are Sometimes Beneficiaries of Their Own Ignorance"

William Rosen gives us a thought-provoking anecdote about Edmund Cartwright, the inventor of the first power loom:

(p. 238) He was also, apparently, convinced of the practicality of such a machine by the success of the "Mechanical Turk," a supposed chess-playing robot that had mystified all of Europe and which had not yet been revealed as one of the era's great hoaxes: a hollow figurine concealing a human operator. Inventors are sometimes beneficiaries of their own ignorance.


Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.

February 2, 2011

Suppliers Hold Back Some Supply When They Expect Prices to Rise in the Future

YuFengChineseCottonFarmer2011-02-01.jpg "Farmer Yu Feng tends his stockpile of roughly 7,700 pounds of cotton that he is storing in his home in Huji, China." Source of caption and photo: online version of the WSJ article quoted and cited below.

In my Micro Principles classes I explain some of the variables that shift demand curves and some of the variables that shift supply curves. Supply curves, for instance, can be shifted by a change in the expectations of future prices. So, if suppliers come to expect that prices will go up in the future, that will shift the supply curve today to the left.

When I saw the photo above, I thought it was a wonderful illustration of the point.

(p. B1) Yu Lianmin, a cotton farmer in Huji, China, harvested 6,600 pounds of cotton this year. Despite record cotton prices, he didn't sell any of it.

Instead, mounds of cotton are piled up in two empty rooms of Mr. Yu's home, and the homes of many of the farmers in his small township of Yujia, which is part of the bigger township of Huji in northern Shandong province, 220 miles southeast of Beijing.

. . .

"I think there's still hope for prices to go higher," he said.

. . .

Expectations that prices will rise are driving the apparent stockpiling, . . .

For the full story, see:

CAROLYN CUI. "Chinese Take a Cotton to Hoarding." The Wall Street Journal (Sat., January 29, 2011): B1 & B11.

(Note: ellipses added.)

February 1, 2011

Federal Regulations Hurt Small Toy Makers

(p. C12) The story begins in 2007, an unusually good year for Peapods Natural Toys and Baby Care, in St. Paul, Minn., and many similar mom-and-pop businesses. Frightened by news that toys made in China contained unsafe levels of lead, customers were looking for alternatives to the usual big-box offerings. Just as organic farmers gain market share whenever there's a food-safety panic, the lead scare boosted sales of artisanal children's goods. "People wanted made-in-USA products, and we were the only place in town that had them," says Dan Marshall, the owner of Peapods.

Vendors offering organic materials and a personal touch seemed poised to prosper. But the short-term boon soon turned into a long-term disaster. In response to the lead panic, Congress passed the Consumer Product Safety Improvement Act, or CPSIA, by an overwhelming majority. The law mandates third-party testing and detailed labels not only for toys but for every single product aimed at children 12 and under.

. . .

Although big companies like Mattel could spread the extra costs over millions of toys, Mr. Marshall's small-scale suppliers couldn't. Unable to afford thousands of dollars in testing per product, some went out of business. Others moved production to China to cut costs. Many slashed their product lines, reserving the expensive new tests for only their top sellers. The European companies that used to sell Peapods such specialty items as wooden swords and shields or beeswax-finished cherry-wood rattles simply abandoned the U.S. market. The survivors jacked up prices.

For the full commentary, see:

VIRGINIA POSTREL. "COMMERCE & CULTURE; Small Crafts vs. Big Government." The Wall Street Journal (Sat., January 29, 2011): C12.

(Note: ellipsis added.)


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