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May 24, 2013

Technology Brings Choices and Control, Which Brings Happiness



(p. 78) For the past 30 years the conventional wisdom has been that once a person achieves a minimal standard of living, more money does not bring more happiness. If you live below a certain income threshold, increased money makes a difference, but after that, it doesn't buy happiness. That was the conclusion of a now-classic study by Richard Easterlin in 1974. However, recent research from the Wharton School at the University of Pennsylvania shows that worldwide, affluence brings increased satisfaction. Higher income earners are happier. Citizens in higher-earning countries tend to be more satisfied on average.

My interpretation of this newest research--which also matches our intuitive impressions--is that what money brings is increased choices, rather than merely increased stuff (although more stuff comes with the territory). We don't find happiness in more gadgets and experiences. We do find happiness in having some control of our time and work, a chance for real leisure, in the escape from the uncertainties of war, poverty, and corruption, and in a chance to pursue individual freedoms--all of which come with increased affluence.

I've been to many places in the world, the poorest and the richest spots, the oldest and the newest cities, the fastest and the slowest cultures, and it is my observation that when given a chance, people who walk will buy a bicycle, people who ride a bike will get a scooter, people riding a scooter will upgrade to a car, and those with a car dream of a plane. Farmers everywhere trade their ox plows for tractors, their gourd bowls for tin ones, their sandals for shoes. Always. Insignificantly few ever go back. The exceptions such as the well-known Amish are not so exceptional when examined closely, for even their communities adopt selected technology without retreat.



Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.

(Note: italics in original.)






May 23, 2013

Wealth from Innovation Is Nobler than Wealth from Litigation



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Source of book image: http://ww4.hdnux.com/photos/15/60/06/3604871/3/628x471.jpg




(p. C7) In business, Green routinely sued her competitors. . . .


. . .


It was precisely Green's vision of life as a zero-sum game, a match between enemies, that proved her flaw. She appreciated the idea that dollars compound, but she never seemed to grasp that the compounding of ideas, innovation, is just as important, that in certain, non-litigious, environments ideas "fructify," to use a period verb. Litigation like Green's prevented the kind of innovation in which she might have wanted to invest. Wealth is created when Apple beats Samsung, but more wealth is created when Apple comes up with a new phone.



For the full review, see:

AMITY SHLAES. "Quarrelsome Queen of the Gilded Age." The Wall Street Journal (Sat., September 29, 2012): C7.

(Note: ellipses added.)

(Note: the online version of the review has the date September 28, 2012.)



The book under review, is:

Wallach, Janet. The Richest Woman in America: Hetty Green in the Gilded Age. New York: Nan A. Talese, 2012.






May 20, 2013

"Lowest-Paid Burger Flipper" Is "Better Off than King Henry"



(p. 76) After going from room to room, skipping none except the garage (that would be a project in itself), we arrived at a total of 6,000 varieties of things in our house. Since we have multiple examples of some varieties, such as books, CDs, paper plates, spoons, socks, on so on, I estimate the total number of objects in our home, including the garage, to be close to 10,000.

Without trying very hard, our typical modern house holds a king's ransom. But in fact, we are wealthier than King Henry. In fact, the lowest-paid burger flipper working at McDonald's is in many respects (p. 77) better off than King Henry or any of the richest people living not too long ago. Although the burger flipper barely makes enough to pay the rent, he or she can afford many things that King Henry could not. King Henry's wealth--the entire treasure of England--could not have purchased an indoor flush toilet or air-conditioning or secured a comfortable ride for 500 kilometers. Any taxicab driver can afford these today. Only 100 years ago, John Rockefeller's vast fortune as the world's richest man could not have gotten him the cell phone that any untouchable street sweeper in Bombay now uses. In the first half of the 19th century Nathan Rothschild was the richest man in the world. His millions were not enough to buy an antibiotic. Rothschild died of an infected abscess that could have been cured with a three-dollar tube of neomycin today. Although King Henry had some fine clothes and a lot of servants, you could not pay people today to live as he did, without plumbing, in dark, drafty rooms, isolated from the world by impassable roads and few communication connections. A poor university student living in a dingy dorm room in Jakarta lives better in most ways than King Henry.



Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.






May 19, 2013

Cooking Allowed the Toothless to Live



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Source of book image: http://d.gr-assets.com/books/1344733081l/13587130.jpg




(p. C12) . . . the narrative, ragtag though it may be, is a good one and it starts with the single greatest achievement in cookware--the cooking pot. Originally made of clay, this simple invention allowed previously inedible foods to be cooked in water, a process that removed toxins, made them digestible and reduced the need for serious chewing, a deadly problem for the toothless. (Archaeologists find adult skeletons without teeth only at sites dating from after the invention of the cooking pot.)


. . .


When "Consider the Fork" turns to cultural history, Ms. Wilson's points sometimes contradict one another. On one hand, she slyly condemns the rich throughout history and their use of cheap cooking labor. Yet she also relates how the Lebanese writer Anissa Helou remembers kibbé being made in Beirut by her mother and grandmother: They pounded the lamb in a mortar and pestle for an hour, a process described in loving terms. So is cooking labor a bedrock of family values or class exploitation?



For the full review, see:

CHRISTOPHER KIMBALL. "The World on a Plate." The Wall Street Journal (Sat., October 6, 2012): C12.

(Note: ellipses added.)

(Note: the online version of the review has the date October 5, 2012.)



The book under review, is:

Wilson, Bee. Consider the Fork: A History of How We Cook and Eat. New York: Basic Books, 2012.






May 16, 2013

New Technology Gets Better, Cheaper and More Diverse



(p. 75) Devices not only get better, they also get cheaper while they get better. We turn around to peer through our window into the past and realize there wasn't window glass back then. The past also lacked machine-woven cloth, refrigerators, steel, photographs, and the entire warehouse of goods spilling into the aisles of our local superstore. We can trace this cornucopia back along a diminishing curve to the Neolithic era. Craft from ancient times can surprise us in its sophistication, but in sheer quantity, variety, and complexity, it pales against modern inventions. The proof of this is clear: We buy the new over the old. Given the choice between an old-fashioned tool and a new one, most people--in the past as well as now--would grab the newer one. A very few will collect old tools, but as big as eBay is, and flea markets anywhere in the world, they are dwarfed by the market of the new. But if the new is not really better, and we keep reaching for it, then we are consistently duped or consistently dumb. The more likely reason we seek the new is that new things do get better. And of course there are more new things to choose from.


Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.






May 15, 2013

Were Phone Phreaks Creative Incipient Entrepreneurs or Destructive "Sophomoric Savants"?



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Source of book image: http://img1.imagesbn.com/p/9780802120618_p0_v2_s260x420.JPG



(p. C6) Mr. Lapsley also describes John Draper, aka Captain Crunch, who was probably the most celebrated of the phreakers; his nickname derived from the fact that whistles that used to come in Cap'n Crunch cereal boxes happened to generate the key 2600-Hz tone used in long-distance switching. . . .

The phone-phreak netherworld was introduced to a mass audience by the October 1971 issue of Esquire magazine, which included what has to be (at least indirectly) one of the most influential articles ever written: Ron Rosenbaum's "Secrets of the Little Blue Box." Not only did it turn phreakers into folk heroes, but it inspired two young men, Steve Wozniak (who provided the foreword for this book) and Steve Jobs, to construct and sell blue boxes. Going door to door in Berkeley dorms, they managed to sell several dozen at $170 each. The "two Steves" savored this mix of clever engineering and entrepreneurial hustle: As Mr. Lapsley quotes Jobs saying: "If we hadn't made blue boxes, there would have been no Apple." (Mr. Rosenbaum's article also put the "phreak" into "phone phreak.")

. . .: By the 1980s, computerized phone systems and fiber-optic cables rendered many of the old phreaking modes obsolete. In addition, I can't help suspecting that the breakup of AT&T in 1984--the result of an antitrust lawsuit filed by the federal government--deeply discouraged the hard-core phreaks. Surreptitiously penetrating one of the shriveled new regional phone companies must have seemed a paltry caper compared with taking on mighty, majestic AT&T.


. . .


I must, however, take issue with one of Mr. Lapsley's conclusions. In reflecting on the phreaks' legacy, he writes: "The phone phreaks taught us that there is a societal benefit to tolerating, perhaps even nurturing (in the words of Apple) the crazy ones--the misfits, the rebels, the troublemakers." Is that truly what they taught us? . . .

Wilt Chamberlain supposedly once said that "nobody roots for Goliath." Perhaps. But the lesson to be learned from those waging guerrilla war against giants like the phone company and the Internet is that sophomoric savants who tamper with society's indispensable systems ultimately harm all too many innocent people.



For the full review, see:

HOWARD SCHNEIDER. "BOOKSHELF; Playing Tricks on Ma Bell." The Wall Street Journal (Sat., February 2, 2013): C6.

(Note: ellipses added.)

(Note: the online version of the review has the date February 1, 2013.)



The book under review, is:

Lapsley, Phil. Exploding the Phone: The Untold Story of the Teenagers and Outlaws Who Hacked Ma Bell. New York: Grove Press, 2013.






May 12, 2013

Knowledge Economy Migrating to Intangible Goods and Services



(p. 67) Our present economic migration from a material-based industry to a knowledge economy of intangible goods (such as software, design, and media products) is just the latest in a steady move toward the immaterial. (Not that material processing has let up, just that intangible processing is now more economically valuable.) Richard Fisher, president of the Federal Reserve Bank of Dallas, says, "Data from nearly all parts of the world show us that consumers tend to spend relatively less on goods and more on services as their incomes rise. . . . Once people have met their basic needs, they tend to want medical care, transportation and communication, information, recreation, entertainment, financial and legal advice, and the like." The disembodiment of value (more value, less mass) is a steady trend in the technium. In six years the average weight per dollar of U.S. exports (the most valuable things the U.S. produces) (p. 68) dropped by half. Today, 40 percent of U.S. exports are services (intangibles) rather than manufactured goods (atoms). We are steadily substituting intangible design, flexibility, innovation, and smartness for rigid, heavy atoms. In a very real sense our entry into a service- and idea-based economy is a continuation of a trend that began at the big bang.


Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.

(Note: ellipsis in original; a graph is omitted that appears in the middle of the paragraph quoted above.)






May 11, 2013

The Process of Picking a Pope



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Source of book image: http://yalepress.yale.edu/yupbooks/images/full13/9780300115970.jpg



(p. C3) The popes appointed by the German Holy Roman Emperor Henry III in the early 11th century were . . . unconventional but . . . edifying. Determined to purge the corruptions of Rome, Henry personally appointed four outstanding popes, reformers to a man, all of them Germans. The greatest of them, St. Leo IX (1049-1054), arrived in Rome as a barefoot pilgrim and was the first pope to travel widely through Europe, stirring local bishops to tackle corruption and undertake renewal.

Henry III's German popes ended the tradition that the Bishop of Rome had to be a local man, and medieval conclaves chose popes from the small but international College of Cardinals. Exceptions to this rule were seldom a success.

The most notorious case was St. Celestine V (1294), an 85-year-old hermit and visionary from Naples chosen in the hope that an "angelic Pope" would free the papacy from its financial and political entanglements. But the old man was hopelessly incompetent and easily swayed by forceful politicians. After only six months, he was badgered into resigning by Cardinal Benedetto Caetani, who succeeded him as Boniface VIII and promptly imprisoned him.

The experiment of electing a non-cardinal was tried again in 1378. After a run of seven French popes based in Avignon, the Roman mob demanded an Italian. Sixteen terrified cardinals obliged by electing Urban VI. A distinguished administrator as Archbishop of Bari, Urban VI was unhinged by his elevation. Aggressively paranoid, he alienated all supporters and appears to have murdered five of his cardinals. The French cardinals elected a rival pope, who returned to Avignon, starting a schism that would last a generation.



For the full commentary, see:

EAMON DUFFY. "When Picking A Pope Was A Perilous Affair." The Wall Street Journal (Sat., February 16, 2013): C3.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date February 15, 2013.)



Duffy's related book, is:

Duffy, Eamon. Saints and Sinners: A History of the Popes. Third ed., Yale Nota Bene. New Haven, CT: Yale University Press, 2006.






May 8, 2013

You Can Buy a New Flint Knife or Stone Ax



(p. 55) Let's take the oldest technology of all: a flint knife or stone ax. Well, it turns out you can buy a brand-new flint knife, flaked by hand and carefully attached to an antler-horn handle by tightly wound leather straps. In every respect it is precisely the same technology as a flint knife made 30,000 years ago. It's yours for fifty dollars, available from more than one website. In the highlands of New Guinea, tribesmen were making stone axes for their own use until the 1960s. They still make stone axes the same way for tourists now. And stone-ax aficionados study them. There is an unbroken chain of knowledge that has kept this Stone Age technology alive. Today, in the United States alone, there are 5,000 amateurs who knap fresh arrowhead points by hand. They meet on weekends, exchange tips in flint-knapping clubs, and sell their points to souvenir brokers. John Whittaker, a professional archaeologist and flint knapper himself, has studied these amateurs and estimates that they produce over one million brand-new spear and arrow points per year. These new points are indistinguishable, even to experts like Whittaker, from authentic ancient ones.


Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.






May 7, 2013

Imagining Oscar Wilde's 1882 Visit to Omaha



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Source of image: http://images.amazon.com/images/P/1451617585.01.LZZZZZZZ.jpg



(p. 10) Hansen's first collection, "Nebraska," which appeared in 1989, was a work that in its wrought realism, its ways of culling grim beauty from the often harsh history of his native place, achieved a memorable intensity. "She Loves Me Not" republishes seven of those stories, but to suggest that he's recycling would miss the larger point. Instead, he has used this early work as the basis for what becomes a very different, exploded, view of a place. In these pages, Nebraska -- Omaha in particular -- is both rendered and reappropriated, registered and riffed on through a range of tonalities.

The first story, "Wilde in Omaha," is, as its title suggests, a playful reimagining of Oscar Wilde's actual visit to that city in March of 1882. Recounted by a bumbling, fame-besotted journalist, the British writer's short stay among the arts-avid, cornfed Nebraska bourgeoisie becomes a delightful anthology of some of this famed raconteur's best bits. For Wilde will make no conversational response to any question that isn't an epigram, as often as not a well-known one. Hansen's setup lines can be almost groaningly obvious. When a Mr. Rosewater of The Daily Bee asks him, apropos of nothing, "Are you a hunter?" Wilde gets to deliver one of his celebrated bons mots: "Are you asking if I gallop after foxes in the shires? Indeed not. I consider that the unspeakable in pursuit of the uneatable." Didn't Monty Python run a similar shtick some years before? They did. But Hansen isn't pretending otherwise.

"Wilde in Omaha" is followed by a string of stories from the "Nebraska" collection, and what a shift it is to go from that highly arch patter to the cruel horror of the blizzard of 1888 -- a mere six years, but in terms of the circuit of human experience the very antipodes. "Wickedness" consists of a series of episodic encounters of farm people and townspeople with the completely unexpected -- and unprecedented -- storm. It's mainly a catalog of last hours and final moments, but the detailing, the staging, is unsurpassed. Every moment is fully imagined. "A tin water pail rang in a skipping roll to the horse path." A wife who has gone out to look for her husband is found "standing up in her muskrat coat and black bandanna, her scarf-wrapped hands tightly clenching the top strand of rabbit wire that was keeping her upright, her blue eyes still open but cloudily bottled by a half inch of ice, her jaw unhinged as though she'd died yelling out a name."




For the full review, see:

SVEN BIRKERTS. "Odes to Omaha." The New York Times Book Review (Sun., November 11, 2012): 10.

(Note: the online version of the review has the date November 9, 2012.)






May 4, 2013

Steam-Powered Cars Show that Old Technologies Rarely Totally Disappear



(p. 53) In my own travels around the world I was struck by how resilient ancient technologies were, how they were often first choices where power and modern resources were scarce. It seemed to me as if no technologies ever disappeared. I was challenged on this conclusion by a highly regarded historian of technology who told me without thinking, "Look, they don't make steam-powered automobiles anymore." Well, within a few clicks on Google I very quickly located folks who are making brand-new parts for Stanley steam-powered cars. Nice shiny copper valves, pistons, whatever you need. With enough money you could put together an entirely new steam-powered car. And of course, thousand of hobbyists are still bolting together steam-powered vehicles, and hundreds more are keeping old ones running. Steam power is very much an intact, though uncommon, species of technology.


Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.

(Note: italics in original.)






April 30, 2013

Increased CO2 "Kept a New Ice Age at Bay"



(p. 38) . . . the repeated inventions and spread of agriculture around the planet affected not only the surface of the Earth, but its 100-kilometer-wide (60-mile-wide) atmosphere as well. Farming disturbed the soil and increased CO2. Some climatologists believe that this early anthropogenic warming, starting 8,000 years ago, kept a new ice age at bay. Widespread adoption of farming disrupted a natural climate cycle that ordinarily would have refrozen the northernmost portions of the planet by now.


Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.

(Note: ellipsis added.)






April 29, 2013

David Kay Johnston Defends Entrepreneurial Capitalism Against Crony Capitalism



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Source of book image: http://media.npr.org/assets/bakertaylor/covers/manually-added/fineprint_custom-c26eb6a3f6c4d9bc09220769911f3cbeaa900b7f-s6-c10.jpg



I saw an informative C-SPAN interview with David Cay Johnston a while back. I had known from Johnston's previous books and reporting, that he was devoted to exposing the outrages of crony capitalism. What the interview revealed to me was that Johnston was not opposed to capitalism in general, and in fact viewed himself as friendly to entrepreneurial capitalism.

I believe that big companies are not bad when they got and stay big by honestly earning big profits from willing and delighted consumers. But big companies are bad when, as often happens, they use their size to get the government to suppress start-up competitors or to take money from taxpayers to subsidize their activities.

I have not yet read Johnston's latest book on the big and bad, but I expect it to present sad, but useful, examples.




Book discussed:

Johnston, David Cay. The Fine Print: How Big Companies Use "Plain English" to Rob You Blind. New York: Portfolio, 2012.






April 28, 2013

Reinhart Rogoff Result Robust: High Debt Lowers Growth Rate from 3.5 to 2.3 Percent



(p. A29) CAMBRIDGE, Mass. In May 2010, we published an academic paper, "Growth in a Time of Debt." Its main finding, drawing on data from 44 countries over 200 years, was that in both rich and developing countries, high levels of government debt -- specifically, gross public debt equaling 90 percent or more of the nation's annual economic output -- was associated with notably lower rates of growth.


. . .


Last week, three economists at the University of Massachusetts, Amherst, released a paper criticizing our findings. They correctly identified a spreadsheet coding error that led us to miscalculate the growth rates of highly indebted countries since World War II. But they also accused us of "serious errors" stemming from "selective exclusion" of relevant data and "unconventional weighting" of statistics -- charges that we vehemently dispute.


. . .


Our 2010 paper found that, over the long term, growth is about 1 percentage point lower when debt is 90 percent or more of gross domestic product. The University of Massachusetts researchers do not overturn this fundamental finding, which several researchers have elaborated upon.


. . .


There were just 26 cases where the ratio of debt to G.D.P. exceeded 90 percent for five years or more; the average high-debt spell was 23 years. In 23 of the 26 cases, average growth was slower during the high-debt period than in periods of lower debt levels. Indeed, economies grew at an average annual rate of roughly 3.5 percent, when the ratio was under 90 percent, but at only a 2.3 percent rate, on average, at higher relative debt levels.


. . .


The fact that high-debt episodes last so long suggests that they are not, as some liberal economists contend, simply a matter of downturns in the business cycle.

In "This Time Is Different," our 2009 history of financial crises over eight centuries, we found that when sovereign debt reached unsustainable levels, so did the cost of borrowing, if it was even possible at all. The current situation confronting Italy and Greece, whose debts date from the early 1990s, long before the 2007-8 global financial crisis, support this view.



For the full commentary, see:

CARMEN M. REINHART and KENNETH S. ROGOFF. "Debt, Growth and the Austerity Debate." The New York Times (Fri., April 26, 2013): A29.

(Note: ellipses added.)

(Note: the online version of the commentary has the date April 25, 2013.)


The full reference to the authors' book is:

Reinhart, Carmen M., and Kenneth Rogoff. This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, 2009.






April 26, 2013

Longer Life Spans "Allowed More Time to Invent New Tools"



(p. 33) The primary long-term consequence of . . . slightly better nutrition was a steady increase in longevity. Anthropologist Rachel Caspari studied the dental fossils of 768 hominin individuals in Europe, Asia, and Africa, dated from 5 million years ago until the great leap. She determined that a "dramatic increase in longevity in the modern humans" began about 50,000 years ago. Increasing longevity allowed grandparenting, creating what is called the grandmother effect: In a virtuous circle, via the communication of grandparents, ever more powerful innovations carried forward were able to lengthen life spans further, which allowed more time to invent new tools, which increased population. Not only that: Increased longevity "provide[d] a selective advantage promoting further population increase," because a higher density of humans increased the rate and influence of innovations, which contributed to increased populations. Caspari claims that the most fundamental biological factor that underlies the behavioral innovations of modernity maybe the increase in adult survivorship. It is no coincidence that increased longevity is the most measurable consequence of the acquisition of technology. It is also the most consequential.


Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.

(Note: ellipsis added; bracketed "d" in Kelly's original.)






April 25, 2013

The Costs of Green Jobs Policies



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Source of book image: http://javelindc.com/home/wp-content/uploads/2012/11/regulating_to_disaster.jpg



I caught part of a C-SPAN presentation on the Regulating to Disaster book. It sounded plausible and intriguing---consistent with other evidence I have seen that "green" jobs have been over-hyped and under-delivered.

Perhaps more important, there are the high opportunity costs of the tax dollars devoted to the "green" jobs, in terms of the non-green jobs that would have been created by entrepreneurs if less of their income had been taxed away.

I hope to look at the book in the near future.


Book discussed:

Furchtgott-Roth, Diana. Regulating to Disaster: How Green Jobs Policies Are Damaging America's Economy. New York: Encounter Books, 2012.






April 22, 2013

Hunter-Gatherers Had High Child Mortality and Died Before Age 40



(p. 31) Child mortality in foraging tribes was severe. A survey of 25 hunter-gatherer tribes in historical times from various continents revealed that, on average, 25 percent of children died before they were 1, and 37 percent died before they were 15. In one traditional hunter-gatherer tribe, child mortality was found to be 60 percent. Most historical tribes had a population growth rate of approximately zero. This stagnation is evident, says Robert Kelly in his survey of hunting-gathering peoples, because "when formerly mobile people become sedentary, the rate of population growth increases." All things being equal, the constancy of farmed food breeds more people.

While many children died young, older hunter-gatherers did not have (p. 32) it much better. It was a tough life. Based on an analysis of bone stress and cuts, one archaeologist said the distribution of injuries on the bodies of Neanderthals was similar to that found on rodeo professionals--lots of head, trunk, and arm injuries like the ones you might get from close encounters with large, angry animals. There are no known remains of an early hominin who lived to be older than 40. Because extremely high child mortality rates depress average life expectancy, if the oldest outlier is only 40, the median age was almost certainly less than 20.



Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.






April 21, 2013

Analytical Solutions Require Unrealistic Assumptions that Make Models Useless for Policy



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Source of book image: http://www.anderson.ucla.edu/faculty/edward.leamer/images/COVER%209120_jkt_Rev1.jpg



(p. 190) When I was a younger man, I and all of my cohort were apprehensive if we saw Ed Leamer in the audience when we were presenting a paper. His comments were blunt, incisive, and often negative. But what truly terrified us was that he was almost always right. . . .

Leamer has produced a highly original little book, with big insights and lessons for us all. He explores the tension between economics that is mathematically sophisticated and complex but often vacuous, versus economics that may be vague but which is useful and carries a message. It is frankly a remarkable work, full of insights and persuasive arguments that need to be read, debated, and taken seriously.


. . .


(p. 191) But this is no rant of an old guy. Leamer gets very specific about his notions of usefulness versus rigor. A good drum to bang on is Samuelson, an important "mathematizer." I would strongly encourage all young trade economists and perhaps all graduate students who have been subjected to a traditional international trade course at any level, to read the section on factor-price equalization. This is beautifully done and even exciting and funny at times. As told by Leamer, the young Samuelson excoriates Ohlin for largely dismissing the possibility of factor-price equalization and then presents his (Samuelson's) "proof" of factor-price equalization. The latter, of course, is a theorem that is mathematically correct given the assumptions, but Ohlin is talking about its usefulness in understanding the world and constructing policy. The factor-price-equalization theorem is indeed a prime example of something that is valid but not useful.


. . .


Yet at the same time, I have thought long and hard about exactly what message should be given to graduate students and assistant professors without much success. The journal publishing business puts a huge premium on rigor over usefulness and few referees or editors are inclined to take the chance inherent in accepting papers that are a bit loose in their analytical or econometric structures, no matter how exciting they might be. If you accept that, then the profession as a whole has to rethink our view of what is an important scientific contribution: I cannot simply tell graduate students to think more broadly and worry less about elegance. Some will of course deny that there is any tension, but I side with Leamer. Over and over again, I hear, read, and/or referee papers (p. 192) where, in order to get an analytical solution to a model, the author has to assume away almost every interesting feature of the problem to the point that the remaining model is uninteresting and uninformative. But that at least qualifies the paper for possible publication in Econometrica, RESTud, or JET.



For the full review, see:

Markusen, James R. "Book Review of Ed Leamer's the Craft of Economics." Journal of Economic Literature 51, no. 1 (2013): 190-92.

(Note: ellipses added; italics in original.)


The book under review is:

Leamer, Edward E. The Craft of Economics, Ohlin Lectures. Cambridge, MA: The MIT Press, 2012.






April 18, 2013

Hunter-Gatherers Complained of Hunger and Food Monotony



(p. 30) Based on numerous historical encounters with aboriginal tribes, we know [hunter-gatherers] often, if not regularly, complained about being hungry. Famed anthropologist Colin Turnbull noted that although the Mbuti frequently sang to the goodness of the forest, they often complained of hunger. Often the com-(p. 31)plaints of hunter-gathers were about the monotony of a carbohydrate staple, such as mongongo nuts, for every meal; when they spoke of shortages, or even hunger, they meant a shortage of meat, and a hunger for fat, and a distaste for periods of hunger. Their small amount of technology gave them sufficiency for most of the time, but not abundance.


Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.

(Note: "hunter-gathers" substituted for "they" by AMD.)






April 17, 2013

Chagnon Enraged Cultural Anthropologists By Showing Tribal Violence



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Source of book image: http://media.npr.org/assets/bakertaylor/covers/n/noble-savages/9780684855103_custom-4deac679a847f1d6e7d64424b01d0be54b54e3a7-s6-c10.jpg



(p. C) In the 1960s, cultural anthropologists led by Marvin Harris argued that conflict among prestate people was mostly over access to scarce protein. Dr. Chagnon disputed this, arguing that Yanomamo Indians' chief motive for raiding and fighting--which they did a great deal--seemed to be to abduct, recover or avenge the abduction of women. He even claimed that Indian men who had killed people ("unokais") had more wives and more children than men who had not killed, thus gaining a Darwinian advantage.

Such claims could not have been more calculated to enrage the presiding high priests of cultural anthropology, slaughtering as it did at least three sacred cows of the discipline: that uncontacted tribal people were peaceful, that Darwinism had nothing to say about human behavior and culture, and that material resources were the cause of conflict.


. . .


Meanwhile the science has been going Dr. Chagnon's way. Recent studies have confirmed that mortality from violence is very common in small-scale societies today and in the past. Almost one-third of such people die in raids and fights, and the death rate is twice as high among men as among women. This is a far higher death rate than experienced even in countries worst hit by World War II. Thomas Hobbes's "war of each against all" looks more accurate for humanity in a state of nature than Jean-Jacques Rousseau's "noble savage," though anthropologists today prefer to see a continuum between these extremes.



For the full commentary, see:

MATT RIDLEY. "MIND & MATTER; Farewell to the Myth of the Noble Savage." The Wall Street Journal (Sat., January 26, 2013): C4.

(Note: the online version of the review has the date January 25, 2013.)

(Note: ellipsis added.)


The Chagnon book that Ridley is discussing:

Chagnon, Napoleon. Noble Savages: My Life among Two Dangerous Tribes -- the Yanomamo and the Anthropologists. New York: Simon & Schuster, 2013.






April 14, 2013

Hunter-Gatherers Lived "in the Ultimate Disposable Culture"



(p. 30) In a very curious way, foragers live in the ultimate disposable culture. The best tools, artifacts, and technology are all disposable. Even elaborate handcrafted shelters are considered temporary. When a clan or family travels, they might erect a home (a bamboo hut or snow igloo, for example) for only a night and then abandon it the next morning. Larger multifamily lodges might be abandoned after a few years rather than maintained. The same goes for food patches, which are abandoned after harvesting.


Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.






April 13, 2013

Academia Rejected Maslow's Humanistic Psychology



EncounteringAmericaBK2013-04-05.jpg
















Source of book image: http://www.harpercollins.com/harperimages/isbn/large/9/9780061834769.jpg


(p. 23) Abraham Maslow, humanistic psychology's founding father, rejected the atomistic approaches of psychoanalysis and behaviorism that dominated the first half of the 20th century. He strove to develop a psychology that provided "a fuller, though still scientific, treatment of the individual" and understood the potential for growth as innate. His ideas got their most welcome reception from industrial management, to which Maslow retreated when academia failed to roll out the red carpet. But Grogan eloquently insists that humanistic psychology subtly revolutionized Americans' conception of the self and the role of therapy, and asserts that current trends in the field, like positive psychology, owe the theory a debt they have been reluctant to pay.


For the full review, see:

MEGAN BUSKEY. "Nonfiction Chronicle." The New York Times Book Review (Sun., March 31, 2013): 23.

(Note: the online version of the review has the date March 29, 2013.)


The book under review:

Grogan, Jessica. Encountering America: Humanistic Psychology, Sixties Culture, and the Shaping of the Modern Self. New York: Harper Perennial, 2012.






April 10, 2013

At Least By 100,000 Years Ago, Humans Looked Just Like Us



(p. 22) The exact time . . . protohumans became fully modern humans is of course debated. Some say 200,000 years ago, but the undisputed latest date is 100,000 years ago. By 100,000 years ago, humans had crossed the threshold where they were outwardly indistinguishable from us. We would not notice anything amiss if one of them were to stroll alongside us on the beach. However, their tools and most of their behavior were indistinguishable from those of their relatives the Neanderthals in Europe and Erectus in Asia.


Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.

(Note: ellipsis added.)






April 9, 2013

Marx's Contradictions Due to His Being a Reactive Journalist Instead of a Philosopher



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Source of book image: http://s-usih.org/wp-content/uploads/2013/04/marx.jpg



(p. 14) Plenty of scholars sweated through the 20th century trying to reconcile inconsistencies across the great sweep of Marx's writing, seeking to shape a coherent Marxism out of Marx. Sperber's approach is more pragmatic. He accepts that Marx was not a body of ideas, but a human being responding to events. In this context, it's telling that Marx's prime vocation was not as an academic but as a campaigning journalist: Sperber suggests Marx's two stints at the helm of a radical paper in Cologne represented his greatest periods of professional fulfillment. Accordingly, much of what the scholars have tried to brand as Marxist philosophy was instead contemporary commentary, reactive and therefore full of contradiction.


For the full review, see:

JONATHAN FREEDLAND. "A Man of His Time." The New York Times Book Review (Sun., March 31, 2013): 14.

(Note: the online version of the review has the date March 29, 2013.)


The book under review:

Sperber, Jonathan. Karl Marx: A Nineteenth-Century Life. New York: Liveright Publishing Corp., 2013.






April 6, 2013

In Later Middle Ages Machines Replaced Slaves and Coolies



(p. 7) By the European Middle Ages, craftiness manifested itself most significantly in a new use of energy. An efficient horse collar had disseminated throughout society, drastically increasing farm acreage, while water mills and windmills were improved, increasing the flow of lumber and flour and improving drainage. And all this plentitude came without slavery. As Lynn White, historian of technology, wrote, "The chief glory (p. 8) of the later Middle Ages was not its cathedrals or its epics or its scholasticism: it was the building for the first time in history of a complex civilization which rested not on the backs of sweating slaves or coolies but primarily on non-human power." Machines were becoming our coolies.


Source:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.






April 5, 2013

"Before British Settlement" American Indians Lived Lives of "Violence, Terror and Stoic Suffering"



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Source of book image: http://2.bp.blogspot.com/-Mfln_Fc2NF4/ULE7koH_h7I/AAAAAAAAD1Y/4AOrpodtoac/s1600/9780394515700.jpg



(p. C8) Mr. Bailyn opens with an account of the Indians of eastern North America in the years before English settlement. He reviews their economy, technology, religion and much else, drawing examples from the Powhatan, the Pequot and other tribes. He emphasizes the violence, terror and stoic suffering in their lives rather more than the contemporary specialists in the subject would, but brutality--on just about everyone's part--is a major theme throughout this book.


For the full review, see:

J.R. MCNEILL. "BOOKSHELF; Before Plymouth Rock, and After." The Wall Street Journal (Sat., November 17, 2012): C8.

(Note: the online version of the review has the date November 16, 2012.)



Book under review:

Bailyn, Bernard. The Barbarous Years: The Peopling of British North America: The Conflict of Civilizations, 1600-1675. New York: Alfred A. Knopf, 2012.






April 1, 2013

Kevin Kelly Explains and Criticizes Amish Attitude toward Technology



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Source of book image: http://thesocietypages.org/cyborgology/files/2012/02/kevin-kelly-book_rdax_620x349-300x285.jpg



Kevin Kelly's book has received a lot of attention, sometimes in conjunction with Steven Johnson's Where Good Ideas Come From, with which it shares some themes. I found the Kelly book valuable, but frustrating.

The valuable part includes the discussion of the benefits of technology, and the chapter detailing Amish attitudes and practices related to technology. On the latter, for instance, I learned that the Amish do not categorically reject new technology, but believe that it should be adopted more slowly, after long community deliberation.

What frustrated me most about the book is that it argues that technology has a life of its own and that technological progress is predetermined and inevitable. (I believe that technological progress depends on enlightened government policies and active entrepreneurial initiative, neither of which is inevitable.)

In the next several weeks, I will be quoting some of the more important or thought-provoking passages in the book.


The reference for Kelly's book, is:

Kelly, Kevin. What Technology Wants. New York: Viking Adult, 2010.



The Johnson book mentioned above, is:

Johnson, Steven. Where Good Ideas Come From: The Natural History of Innovation. New York: Riverhead Books, 2010.






March 30, 2013

Chinese Communists Starved 45 Million in Mao's Famine



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Source of book image: http://reviews.libraryjournal.com/wp-content/uploads/2012/08/xun.jpg




(p. C5) It is difficult to look dispassionately at some 45 million dead. It was not war that produced this shocking number, nor natural disaster. It was a man. It was politics and one man's vanity. The cause was famine and violence across rural China, a result of Mao Zedong's unchecked drive to turn his country rapidly into a communist utopia and a leading industrial nation.


. . .


(p. C6) . . . important pieces of evidence are being covered up . . . : Some originals transcribed in Zhou Xun's chastening documentary history, "The Great Famine in China, 1958-1962" ( . . . ) have since been reclassified by the Beijing authorities and vanished once more into closed files.

In 2010, Frank Dikötter produced "Mao's Great Famine," an authoritative account of the catastrophe, written with a bravura seldom seen in Western writing on modern China. Impassioned and outraged, Mr. Dikötter detailed the destruction, the suffering and the cruelty or hubris of China's leaders. Sorting through forgotten and hidden documents with great intellectual honesty, Mr. Dikötter ended his journey pointing his finger directly at Mao, who notoriously said, as he called for higher grain deliveries from the countryside at the height of the famine: "It is better to let half the people die so that the other half can eat their fill."


. . .


As a teenager in 1959, Mr. Yang watched his father die of starvation. Years later, while working in a senior editorial post at Xinhua, China's state-controlled news agency, he began his own search for the truth behind the famine. The author spent 20 years tracking down survivors across China and using his authority as a respected Communist cadre to access provincial archives. It was, in part, expiation for his shame in not questioning his father's death.


. . .


There is no memorial anywhere in China to the victims of the famine, no public monument, no remembrance day. Graves are not marked and mass burial grounds have disappeared into the landscape. The famine's very existence has been denied. The Communist Party will only admit to "food shortages" and "some difficulties" during the Great Leap Forward. They claim that these setbacks were a result of natural disasters.

Mr. Yang set about writing his book as a tombstone for his father and for every victim who had died from starvation. He was also erecting a tombstone for the system that brought about the Great Famine. First published in Hong Kong in 2008, Mr. Yang's work is banned in China. The reason is clear: The book challenges the very foundation of the Communist Party's authority.



For the full review, see:

MICHAEL FATHERS. "BOOKSHELF; A Most Secret Tragedy; The Great Leap Forward aimed to make China an industrial giant--instead it killed 45 million." The Wall Street Journal (Sat., October 27, 2012): C5.

(Note: ellipses added.)

(Note: the online version of the review has the date October 26, 2012.)



Books under review:

Yang, Jisheng. Tombstone: The Great Chinese Famine, 1958-1962. New York: Farrar, Straus and Giroux, 2012.

Zhou, Xun, ed. The Great Famine in China, 1958-1962: A Documentary History. New Haven, CT: Yale University Press, 2012.


The Dikötter book mentioned, is:

Dikötter, Frank. Mao's Great Famine. New York: Bloomsbury Publishing, 2010.






March 27, 2013

Jobs' Protest Against Mortality: Omit the On-Off Switches on Apple Devices



(p. 571) . . . [Jobs] admitted that, as he faced death, he might be overestimating the odds out of a desire to believe in an afterlife. "I like to think that something survives after you die," he said. "It's strange to think that you accumulate all this experience, and maybe a little wisdom, and it just goes away. So I really want to believe that something survives, that maybe your consciousness endures."

He fell silent for a very long time. "But on the other hand, perhaps it's like an on-off switch," he said. "Click! And you're gone."

Then he paused again and smiled slightly. "Maybe that's why I never liked to put on-off switches on Apple devices."



Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: ellipsis and bracketed "Jobs" added; italics in original.)






March 26, 2013

New York Resisted Roosevelt's Enforcing "Stupid" Vice Laws



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Source of book image: http://media.npr.org/assets/bakertaylor/covers/i/island-of-vice/9780385519724_custom-e38a25fc66f104a049d4d24aa39dbe92d42fbd57-s6-c10.jpg



(p. C9) . . . as Richard Zacks's excellent "Island of Vice: Theodore Roosevelt's Doomed Quest to Clean Up Sin-Loving New York" ably shows, while we might like to believe that the stretch from 1970 to 1995 represents the city's nadir, it was just about business as usual in New York over the centuries.

From its time as a Dutch colonial outpost, the city has always been pretty bad. You'd almost think New Yorkers prefer it that way. Of course, we don't like fraud, robbery, assault, arson, rape or murder any more than anyone else does. But the deliberate injury of one's fellow citizen isn't the only way to break the law. There are also those crimes that fall under the broad category of "vice": things such as gambling, prostitution, indecent exposure and selling alcohol at a convenient time. Historically, the average New Yorker has not greeted these acts with the same immediate urge to suppress that many of his or her fellow Americans have had. You don't get a nickname like "The City That Never Sleeps" without having a certain amount of things worth staying up for.


. . .


In the end, Mr. Zacks's exhaustively researched yet lively story is a classic battle between an irresistible force, Roosevelt's ego, and an immovable object, the people of New York's unwillingness to follow laws they thought were stupid. In this case, the object won, and handily. Mr. Zacks's account of the way the city's saloonkeepers instantly turned their establishments into hotels to take advantage of a loophole in the law is particularly amusing. Eventually, the police department, not unsympathetic to the Sunday tippler, began finding ways to wriggle out from under the commissioner's thumb, and beer-friendly Tammany Hall, with the people solidly behind it, began peeling away his allies.



For the full review, see:

DAVID WONDRICH. "BOOKSHELF; Teddy's Rough Ride." The Wall Street Journal (Sat., March 17, 2012): C9.

(Note: ellipses added.)

(Note: the online version of the review has the date November 30, 2012.)



Book under review:

Zacks, Richard. Island of Vice: Theodore Roosevelt's Doomed Quest to Clean up Sin-Loving New York. New York: Doubleday, 2012.






March 23, 2013

"The Ante for Being in the Room" at Apple Was Brutal Honesty




The following passage is Steve Jobs speaking, as quoted by Walter Isaacson.


(p. 569) I don't think I run roughshod over people, but if something sucks, I tell people to their face. It's my job to be honest. I know what I'm talking about, and I usually turn out to be right. That's the culture I tried to create. We are brutally honest with each other, and anyone can tell me they think I am full of shit and I can tell them the same. And we've had some rip-roaring arguments, where we are yelling at each other, and it's some of the best times I've ever had. I feel totally comfortable saying "Ron, that store looks like shit" in front of everyone else. Or I might say "God, we really fucked up the engineering on this" in front of the person that's responsible. That's the ante for being in the room: You've got to be able to be super honest. Maybe there's a better way, a gentlemen's club where we all wear ties and speak in this Brahmin language and velvet codewords, but I don't know that way, because I am middle class from California.

I was hard on people sometimes, probably harder than I needed to be. I remember the time when Reed was six years old, coming home, and I had just fired somebody that day, and I imagined what it was like (p. 570) for that person to tell his family and his young son that he had lost his job. It was hard. But somebody's got to do it. I figured that it was always my job to make sure that the team was excellent, and if I didn't do it, nobody was going to do it.



Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






March 22, 2013

Adolphus Busch Was First to Pasteurize Beer



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Source of book image: https://encrypted-tbn1.gstatic.com/images?q=tbn:ANd9GcTAFP9Hrx5IMUu1VH2WgoGcF43prrX2QiZx1J770DEx8BcGm55p1g



(p. C9) The first King of Beers was a German immigrant who came to America just before the Civil War. Adolphus Busch set down roots in heavily Germanic St. Louis, used an inheritance to buy a brewery-supply business and married into the Anheuser family, which owned a struggling brewery of its own. Installed as president of the family business (re-christened Anheuser-Busch), Adolphus purchased a beer recipe--you have to love this--used by monks in a Bohemian village named Budweis. The crisp, pale lager was known as Budweiser.


. . .


Adolphus certainly knew how to sell beer. He was the first American brewer to pasteurize his product, meaning that he could store it longer and ship it greater distances. He bought his own rail-car company and glass bottler; in the age of trusts he was a one-man conglomerate. Anticipating the family taste for luxury, Adolphus maintained baronial mansions in St. Louis, Cooperstown, N.Y., and Pasadena, Calif. His style was grand or, as Mr. Knoedelseder puts it, "over-the-top gauche."



For the full review, see:

Roger Lowenstein. "BOOKSHELF; Fall of the House of Busch." The Wall Street Journal (Sat., December 1, 2012): C9.

(Note: ellipsis added.)

(Note: the online version of the review has the date November 30, 2012.)





Book under review:

Knoedelseder, William. Bitter Brew: The Rise and Fall of Anheuser-Busch and America's Kings of Beer. New York: HarperBusiness, 2012.






March 19, 2013

Real Entrepreneurs Do Not Launch a Startup in Order to Cash In and Move On




The following passage is Steve Jobs speaking, as quoted by Walter Isaacson.

I agree with the part about real entrepreneurs not going public quick in order to cash in. But I disagree that the real entrepreneurs are mainly interested in building a lasting company. I think that often they are mainly interested in getting a project, or a series of projects, done (and done reasonably well). Recall that when Walt Disney couldn't convince Roy Disney to pursue the Disneyland project, Walt left the main Disney company to pursue the project through a secondary rump Disney company.


(p. 569) I hate it when people call themselves "entrepreneurs" when what they're really trying to do is launch a startup and then sell or go public, so they can cash in and move on. They're unwilling to do the work it takes to build a real company, which is the hardest work in business. That's how you really make a contribution and add to the legacy of those who went before. You build a company that will still stand for something a generation or two from now. That's what Walt Disney did, and Hewlett and Packard, and the people who built Intel. They created a company to last, not just to make money. That's what I want Apple to be.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






March 18, 2013

Much of "A Charlie Brown Christmas" Was Funded Out of Producer's Own Pocket



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Source of book image: http://www.awn.com/files/imagepicker/23/artofpeanuts-cover-620.jpg



(p. C10) Of all the "Peanuts" television specials ever made, the first--"A Charlie Brown Christmas" (1965)--was the Charlie Browniest. The 25-minute special was an underdog, just like its hapless protagonist, and barely made it on the air. CBS gave producer Lee Mendelson so minuscule a budget, we learn in Charles Solomon's "The Art and Making of Peanuts Animation," that he was forced to fund the rest out of his own pocket--even though Coca-Cola had already guaranteed sponsorship. When "A Charlie Brown Christmas" pulled in sensational ratings, CBS grudgingly asked for follow-ups. "We're going to order four more," a network executive told Mr. Mendelson, "though my aunt in New Jersey didn't like it either"--a line that Schulz might have written.


. . .


"A Charlie Brown Christmas" established the template, mixing morals and gags in a way that made the peachiness seem endearing. The perfectly pitched dialogue, written by Schulz himself, was voiced (at his insistence) by actual children. The expressionist use of line and color was introduced by director Bill Melendez, and the understated yet supremely catchy Latin jazz scores were the work of pianist-composer Vince Guaraldi and his combo. The tune Guaraldi called "Linus and Lucy" came to be synonymous with "Peanuts" for the generations that grew up on the specials.

While the movements of the characters--especially Snoopy--could be antic, Guaraldi's scores set a cool counterpoint and provided a sense of serenity that was utterly unique. The characters weren't always moving--sometimes they would stop and simply listen to each other--and Schulz insisted that there be no laugh track. He made the climax of the drama Linus walking to the center of the school stage to recite from the gospel of Luke--a decision daring even in its day, not least because it stopped the action for an extended period to show a hand-drawn character delivering a lisping speech.



For the full review, see:

WILL FRIEDWALD. "BOOKSHELF; Cheers for Chuck." The Wall Street Journal (Sat., December 22, 2012): C10.

(Note: ellipsis added.)

(Note: the online version of the review has the date December 21, 2012.)


Book under review:

Solomon, Charles. The Art and Making of Peanuts Animation: Celebrating Fifty Years of Television Specials. San Francisco, CA: Chronicle Books, 2012.






March 15, 2013

Jobs Believed Great Companies Decline When Salesmen (Rather than Engineers and Designers) Take Over




The following passage is Steve Jobs speaking, as quoted by Walter Isaacson.


(p. 568) I have my own theory about why decline happens at companies like IBM or Microsoft. The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of (p. 569) the product becomes less important. The company starts valuing the great salesmen, because they're the ones who can move the needle on revenues, not the product engineers and designers. So the salespeople end up running the company. John Akers at IBM was a smart, eloquent, fantastic salesperson, but he didn't know anything about product. The same thing happened at Xerox. When the sales guys run the company, the product guys don't matter so much, and a lot of them just turn off.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






March 14, 2013

Foreign Aid Is Not Effective



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Source of book image: http://img1.imagesbn.com/p/9781580054348_p0_v1_s260x420.JPG



(p. C8) In 2002, Tori Hogan was a 20-year-old intern for the international nonprofit Save the Children, helping write a report on the effect of humanitarian aid on children. In a dusty refugee-camp high school in Kenya a teenage student told her: "A lot of aid workers come and go, but nothing changes. If the aid projects were effective, we wouldn't still be living like this after all these years." That remark ended Tori Hogan's "dreams of 'saving Africa,' " she writes in "Beyond Good Intentions," a book that bypasses sweeping condemnations of the aid industry to reach sometimes less satisfying zones of nuance.


. . .


The most savage writing on this topic comes from authors who have devoted chunks of their lives to conflict zones. In "The Crisis Caravan" (2010), Dutch journalist Linda Polman quotes, to devastating effect, Sierra Leone rebels who claim that they launched mass amputations in 1999 to compete with Congo and Kosovo for international attention and development aid. Michael Maren, the author of "Road to Hell" (2010), lost his child to the aid effort in Somalia.



The book under review is:

Hogan, Tori. Beyond Good Intentions: A Journey into the Realities of International Aid. pb (appears there was no hb edition) ed. Berkeley, CA: Seal Press, 2012.

(Note: ellipsis added.)



The Polman book mentioned above, is:

Polman, Linda. The Crisis Caravan: What's Wrong with Humanitarian Aid? New York: Metropolitan Books, 2010.


The Maren book mentioned above, is:

Maren, Michael. The Road to Hell: The Ravaging Effects of Foreign Aid and International Charity. New York: The Free Press, 1997.






March 13, 2013

To Avoid Economic Crises We Need to Look at Evidence from Economic History



(p. 1093) Methodologically, the most fundamental and forceful message from the book is that, by ignoring history and the fact that crises remain frequent, recurrent, episodic events--in both rich and poor countries--almost everyone, including researchers and policymakers, made themselves vulnerable to the wishful thinking encapsulated in the book's title. There is a deeper statistical point here. Crises, and for that matter large recessions and other phenomena that are of first-order interest given their implications for economic activity, occur at quite a low frequency. They are rare events, meaning that they do not occur so frequently, at least for most countries in a short-span time series. Thus recent experience can be an unfaithful guide for scholars and statesmen alike, a good example being the complacent thinking that accompanied the erstwhile Great Moderation of recent decades even as financial pressures built up nationally and internationally. Possibly the most important lesson that readers will take away from this book is that if we are to do better in future, from our policy thinking in the chambers of power to our macroeconometric analyses in academe, (p. 1094) we need to admit the existence of, and come to grips with, a much broader universe of evidence.


For the full review, see:

Taylor, Alan M. "Global Financial Stability and the Lessons of History: A Review of Carmen M. Reinhart and Kenneth S. Rogoff's This Time Is Different: Eight Centuries of Financial Folly." Journal of Economic Literature 50, no. 4 (Dec. 2012): 1092-105.

(Note: italics in original.)


The book that Taylor reviews, is:

Reinhart, Carmen M., and Kenneth Rogoff. This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, 2009.







March 11, 2013

Open Systems Limit the Integrated Vision that Creates Great Products




The following passage is Steve Jobs speaking, as quoted by Walter Isaacson.


(p. 568) People pay us to integrate things for them, because they don't have the time to think about this stuff 24/7. If you have an extreme passion for producing great products, it pushes you to be integrated, to connect your hardware and your software and content management. You want to break new ground, so you have to do it yourself. If you want to allow your products to be open to other hardware or software, you have to give up some of your vision.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






March 10, 2013

Ibrahim's Celtel Provided Private Infrastructure to Aid African Growth



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Source of book image: http://media.wiley.com/product_data/coverImage300/04/04707432/0470743204.jpg



I was searching for a biography of the entrepreneur Mo Ibrahim who founded the innovative African cell phone company Celtel. The closest I have been able to find so far is Less Walk, More Talk which looks promising, but which I have not yet read.

Arguably, cell phones in Africa have provided important infrastructure that has made it somewhat easier to be productive there, and hence made a contribution to economic growth.



The book is:

Southwood, Russell. Less Walk More Talk: How Celtel and the Mobile Phone Changed Africa. Hoboken, NJ: John Wiley & Sons, 2009.






March 7, 2013

Steve Jobs: "Never Rely on Market Research"




The following passage is Steve Jobs speaking, as quoted by Walter Isaacson.


(p. 567) Some people say, "Give the customers what they want." But that's not my approach. Our job is to figure out what they're going to want before they do. I think Henry Ford once said, "If I'd asked customers what they wanted, they would have told me, 'A faster horse!'" People don't know what they want until you show it to them. That's why I never rely on market research. Our task is to read things that are not yet on the page.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






March 6, 2013

Entrepreneur Ping Fu Learned the Resilience of Bamboo



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








(p. A11) The history of American business is full of immigrant success stories--of men and women who flee poverty and oppression in their home countries, arrive on our shores with only pennies in their pockets, and go on to build companies that generate wealth, create jobs, and provide innovative products and services.

Count among them Ping Fu, the Chinese-born chief executive of the high-tech company Geomagic, which provides 3D-imaging for such modern-day miracles as customized prosthetic limbs. If your child wears orthodontic braces, chances are that they were designed for his teeth with the help of Geomagic technology. Ms. Fu founded the company in 1997, 13 years after arriving in San Francisco with $80 in her purse and three English phrases in her vocabulary: "hello," "thank you" and "help."


. . .


In the U.S., Ms. Fu worked as a maid, a waitress and a baby sitter while learning English and studying computer science. She eventually landed at Bell Labs in Illinois before striking out on her own. "I was a reluctant and unlikely entrepreneur," she writes. In China, "I had been hardwired to think that money was evil, and traumatized as a child because of my family's success." Encouraged by her Shanghai Papa to follow in the family's entrepreneurial tradition, she and her then-husband launched Geomagic. In her book, she traces the challenges she faced in building a company--obtaining funding, winning customers, managing a growing staff of professionals.

Ms. Fu's life story raises a core question about the development of the human psyche: Why is it that, confronted with the kind of horrors that Ms. Fu experienced as a child, some survivors succeed in later life while others fail, overcome by the trials they endured?

Ms. Fu credits the tranquil, happy childhood she experienced for the first eight years of her life. She also points to the Taoist teachings of her Shanghai Papa, who taught her to admire the flexible nature of the bamboo trees that grew in the family garden. Bamboo, he told her, "suggests resilience, meaning that we have the ability to bounce back from even the most difficult times."



For the full review, see:

MELANIE KIRKPATRICK. "BOOKSHELF; The Art Of Resilience; Ping Fu endured gang-rape and political prison in China before arriving on our shores and founding her own high-tech firm." The Wall Street Journal (Weds., January 9, 2013): D7.

(Note: ellipsis added.)

(Note: the online version of the review has the date January 8, 2013.)



The book under review is:

Fu, Ping. Bend, Not Break: A Life in Two Worlds. New York: Portfolio, 2012.






March 3, 2013

Profits Allow You to Make Great Products, But the Products, Not the Profits, Are the Motivation




The following passage is Steve Jobs speaking, as quoted by Walter Isaacson.


(p. 567) My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary. Sure, it was great to make a profit, because that was what allowed you to make great products. But the products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money. It's a subtle difference, but it ends up meaning everything: the people you hire, who gets promoted, what you discuss in meetings.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.







March 2, 2013

Organic Food May Be Less Healthy than Non-Organic Food



Schwarcz, Joe - The Right Chemistry BK 2013-01-12.jpeg

















Source of book image: http://www.leckeragency.com/sites/default/files/books/Schwarcz,%20Joe%20-%20The%20Right%20Chemistry%20Cover.jpeg



(p. D7) . . . , when did "chemical" become a dirty word? That's a question raised by one of Canada's brightest scientific minds: Joe Schwarcz, director of the Office for Science and Society at McGill University in Montreal. Dr. Schwarcz, who has received high honors from Canadian and American scientific societies, is the author of several best-selling books that attempt to set the record straight on a host of issues that commonly concern health-conscious people.

I've read two of his books, "Science, Sense and Nonsense" (published in 2009) and "The Right Chemistry" (2012), and recently attended a symposium on the science of food that Dr. Schwarcz organized at McGill.

What follows are tips from his books and the symposium that can help you make wiser choices about what does, and does not, pass your lips in 2013.


. . .


ORGANIC OR NOT? Wherever I shop for food these days, I find an ever-widening array of food products labeled "organic" and "natural." But are consumers getting the health benefits they pay a premium for?

Until the 20th century, Dr. Schwarcz wrote, all farming was "organic," with manure and compost used as fertilizer and "natural" compounds of arsenic, mercury and lead used as pesticides.

Might manure used today on organic farms contain disease-causing micro-organisms? Might organic produce unprotected by insecticides harbor cancer-causing molds? It's a possibility, Dr. Schwarcz said. But consumers aren't looking beyond the organic sales pitch.

Also questionable is whether organic foods, which are certainly kinder to the environment, are more nutritious. Though some may contain slightly higher levels of essential micronutrients, like vitamin C, the difference between them and conventionally grown crops may depend more on where they are produced than how.

A further concern: Organic producers disavow genetic modification, which can be used to improve a crop's nutritional content, enhance resistance to pests and diminish its need for water. A genetically modified tomato developed at the University of Exeter, for example, contains nearly 80 times the antioxidants of conventional tomatoes. Healthier, yes -- but it can't be called organic.



For the full story, see:

JANE E. BRODY. "PERSONAL HEALTH; What You Think You Know (but Don't) About Wise Eating." The New York Times (Tues., January 1, 2013): D7.

(Note: ellipses added; bold in original.)

(Note: the online version of the article has the date DECEMBER 31, 2012.)



The Schwarcz books mentioned above, are:

Schwarcz, Joe. The Right Chemistry: 108 Enlightening, Nutritious, Health-Conscious and Occasionally Bizarre Inquiries into the Science of Daily Life. Toronto, Ontario: Doubleday Canada, 2012.

Schwarcz, Joe. Science, Sense & Nonsense. Toronto, Ontario: Doubleday Canada, 2009.






February 27, 2013

Steve Jobs' "Nasty Edge" Helped Him Create an Apple "Crammed with A Players"



(p. 565) . . . I think . . . [Jobs] actually could have controlled himself, if he had wanted. When he hurt people, it was not because he was lacking in emotional awareness. Quite the contrary: He could size people up, understand their inner thoughts, and know how to relate to them, cajole them, or hurt them at will.

The nasty edge to his personality was not necessary. It hindered him more than it helped him. But it did, at times, serve a purpose. Polite and velvety leaders, who take care to avoid bruising others, are generally not as effective at forcing change. Dozens of the colleagues whom Jobs most abused ended their litany of horror stories by saying that he got them to do things they never dreamed possible. And he created a corporation crammed with A players.



Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: ellipses and bracketed "Jobs" added.)






February 26, 2013

Yang Documents How Mao Starved the Proletariat



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Source of book image: http://img1.imagesbn.com/p/9780374277932_p0_v1_s260x420.JPG




(p. C12) Yang Jisheng's "Tombstone: The Great Chinese Famine, 1958-1962" exemplifies E.H. Carr's famous dictum: "Study the historian before you study the facts." Mr. Yang is not the first historian to exhume the darkest crime of the political party that still rules China but the first Chinese journalist and longtime Party member to do so. He uses the Party's own historical records and the perpetrators' own words to craft his devastatingly detailed indictment.


For the full review essay, see:

Sylvia Nasar (author of passage quoted above, one of 50 contributors to whole article). "Twelve Months of Reading; We asked 50 of our friends to tell us what books they enjoyed in 2012--from Judd Apatow's big plans to Bruce Wagner's addictions. See pages C10 and C11 for the Journal's own Top Ten lists." The Wall Street Journal (Sat., December 15, 2012): passim (Nasar's contribution is on p. C12).

(Note: the online version of the review essay has the date December 14, 2012.)



The book under review, is:

Yang, Jisheng. Tombstone: The Great Chinese Famine, 1958-1962. New York: Farrar, Straus and Giroux, 2012.







February 25, 2013

Green Threats to Restrict Coal Creates Incentive to Extract More Coal Now



(Wang, p. 1146) The last chapter of the book advances the supply-side analysis and presents the "Green Paradox," that "(t)he mere announcement of intentions to fight global warming made the world warm even faster" ([Sinn, p. ] 189). The key insight is that demand-reduction measures affect carbon supply through pressure on future prices. Since the existing "green" policies almost always involve increasing stringency and widening coverage over time, the increasing downward price pressure therefore induces resource owners to expedite extraction and thereby exacerbates the climate problem.


For the full review, see:

Wang, Tao. "The Green Paradox: A Supply-Side Approach to Global Warming." Journal of Economic Literature 50, no. 4 (Dec. 2012): 1145-46.

(Note: bracketed information added.)


The book under review is:

Sinn, Hans-Werner. The Green Paradox: A Supply-Side Approach to Global Warming. Cambridge and London: MIT Press, 2012.






February 24, 2013

Entrepreneur Mackey Says Whole Foods Drops Prices as Larger Size Creates Economies of Scale



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"John Mackey." Source of caption and photo: online version of the NYT article quoted and cited below.





(p. 16) In your new book, "Conscious Capitalism," you write that Whole Foods sees its customers as its "most important stakeholders" and that the company is obsessed with their happiness. The biggest complaint I hear about Whole Foods is how expensive it is. Why not drop prices to make your customers happier? People always complain about prices being too high. Whole Foods prices have dropped every year as we get to be larger and we have economies of scale. Also, people are not historically well informed about food prices. We're only spending about 7 percent of our disposable personal income on food. Fifty years ago, it was nearly 16 percent.


. . .


In 2009, some Whole Foods customers organized boycotts after you wrote an op-ed in The Wall Street Journal expressing opposition to Obama's health care proposals. Do you wish you hadn't written it?
No, I don't. I regret that a lot of people didn't actually read it and it got taken out of context. President Obama asked for ideas about health care reform, and I put my ideas out there. Whole Foods has a good health care plan. It's not a solution to America's health care problems, but it's part of the solution.

So did you vote for Romney?
I did.

I imagine a certain percentage of Whole Foods customers will also boycott because of this.
I don't know what to say except that I'm a capitalist, first. There are many things I don't like about Romney, but more things I don't like about Obama. This is America, and people disagree on things.



For the full interview, see:

Andrew Goldman, Interviewer. "TALK; The Kale King." The New York Times Magazine (Sun., January 20, 2013): 16.

(Note: ellipsis added; bold in original, indicating interviewer questions.)

(Note: the online version of the interview has the date January 18, 2013, and has the title "TALK; John Mackey, the Kale King.")


Mackey's book is:

Mackey, John, and Rajendra Sisodia. Conscious Capitalism: Liberating the Heroic Spirit of Business. Boston, MA: Harvard Business Review Press, 2013.






February 23, 2013

Admiring Jobs' New Products, Gates Wistfully Wondered If "Maybe I Should Have Stayed in That Game"



(p. 553) Bill Gates had never lost his fascination with Jobs. In the spring of 2011 I was at a dinner with him in Washington, where he had come to discuss his foundation's global health endeavors. He expressed amazement at the success of the iPad and how Jobs, even while sick, was focusing on ways to improve it. "Here I am, merely saving the world from malaria and that sort of thing, and Steve is still coming up with amazing new products," he said wistfully. "Maybe I should have stayed in that game." He smiled to make sure that I knew he was joking, or at least half joking.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






February 22, 2013

Darwin Shared His Thought Processes Without Condescension



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"SAGE OF AGES; Portrait of Charles Darwin in 1881, by Julia Margaret Cameron." Source of caption and photo: online version of the WSJ article quoted and cited below.






(p. C14) . . . Mr. Johnson observes:

No scientific innovator has ever taken more trouble to smooth the way for lay readers without descending into vulgarity. What is almost miraculous about the book is Darwin's generosity in sharing his thought processes, his lack of condescension. There is no talking down, but no hauteur, either. It is a gentlemanly book.

In both style and substance, this passage is classic Paul Johnson.


. . .


What makes Darwin good, in the biographer's estimation, is the scientist's democratic dissemination of knowledge. Darwin triumphed with "The Origin of Species," Mr. Johnson contends, not only because of his ability to portray the theory of evolution as the inescapable outcome of his decades of study and the work of fellow scientists, whom he was careful to praise, but because he was acutely aware that he had to present his notions of natural selection and survival of the fittest so as not to stir up public controversy. To an extraordinary degree, Darwin deflected attacks by couching his discoveries in terms of the plants he liked to examine and cultivate. He had relatively little to say about human evolution.



For the full review, see:

CARL ROLLYSON. "Studies of the Moral Animal." The Wall Street Journal (Sat., December 15, 2012): C14.

(Note: ellipses added.)

(Note: the online version of the review essay has the date December 14, 2012.)



The book under review is:

Johnson, Paul M. Darwin: Portrait of a Genius. New York: Viking Adult, 2012.







February 19, 2013

Steve Jobs Advised Obama to Reduce Regulations of Business and Union Power in Education



(p. 544) The meeting . . . lasted forty-five minutes, and Jobs did not hold back. "You're headed for a one-term presidency," Jobs told Obama at the outset. To prevent that, he said, the administration needed to be a lot more business-friendly. He described how easy it was to build a factory in China, and said that it was almost impossible to do so these days in America, largely because of regulations and unnecessary costs.

Jobs also attacked America's education system, saying that it was hopelessly antiquated and crippled by union work rules. Until the teachers' unions were broken, there was almost no hope for education reform. Teachers should be treated as professionals, he said, not as industrial assembly-line workers. Principals should be able to hire and fire them based on how good they were. Schools should be staying open until at least 6 p.m. and be in session eleven months of the year. It was absurd, he added, that American classrooms were still based on teachers standing at a board and using textbooks. All books, learning materials, and assessments should be digital and interactive, tailored to each student and providing feedback in real time.



Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: ellipsis added.)






February 18, 2013

Entrepreneur Peter Thiel Says We Should Fight for Longer Lives



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Source of book image: http://si.wsj.net/public/resources/images/OB-PJ926_bkrv10_DV_20110829191924.jpg







(p. C13) Sonia Arrison's "100 Plus" was first published in 2011, but its message is evergreen: how scientists are directly attacking the problem of aging and death and why we should fight for life instead of accepting decay as inevitable. The goal of longer life doesn't just mean more years at the margin; it means a healthier old age. There is nothing to fear but our own complacency.


For the full review essay, see:

Peter Thiel (author of passage quoted above, one of 50 contributors to whole article). "Twelve Months of Reading; We asked 50 of our friends to tell us what books they enjoyed in 2012--from Judd Apatow's big plans to Bruce Wagner's addictions. See pages C10 and C11 for the Journal's own Top Ten lists." The Wall Street Journal (Sat., December 15, 2012): passim (Thiel's contribution is on p. C13).

(Note: the online version of the review essay has the date December 14, 2012.)



The book Thiel endorses is:

Arrison, Sonia. 100 Plus: How the Coming Age of Longevity Will Change Everything, from Careers and Relationships to Family and Faith. New York: Basic Books, 2011.






February 15, 2013

Steve Jobs Framing a Decision in Terms of Christensen's "The Innovator's Dilemma"





The following passage is Steve Jobs speaking, as quoted by Walter Isaacson.



(p. 532) It's important that we make this transformation, because of what Clayton Christensen calls "the innovator's dilemma," where people who invent something are usually the last ones to see past it, and we certainly don't want to be left behind. I'm going to take MobileMe and make it free, and we're going to make syncing content simple. We are building a server farm in North Carolina. We can provide all the syncing you need, and that way we can lock in the customer.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






February 14, 2013

Arne Duncan Endorses Christensen's Disruption of All Levels of Education



DisruptingClassAndChristensen2013-01-11.jpg

Source of book image and photo of Christensen: http://images.businessweek.com/ss/08/12/1215_best_design_books/image/disruptingclass.jpg



(p. C6) Clayton Christensen is a provocative thinker, and I have been greatly influenced by his work on disruptive innovation and how it can transform education.


For the full review essay, see:

Arne Duncan (author of passage quoted above, one of 50 contributors to whole article). "Twelve Months of Reading; We asked 50 of our friends to tell us what books they enjoyed in 2012--from Judd Apatow's big plans to Bruce Wagner's addictions. See pages C10 and C11 for the Journal's own Top Ten lists." The Wall Street Journal (Sat., December 15, 2012): passim (Duncan's contribution is on p. C6).

(Note: the online version of the review essay has the date December 14, 2012.)



Christensen's books suggesting disruptive innovations for education are:

Christensen, Clayton M., Curtis W. Johnson, and Michael B. Horn. Disrupting Class: How Disruptive Innovation Will Change the Way the World Learns. updated ed. New York: NY: McGraw-Hill, 2011.

Christensen, Clayton M., and Henry J. Eyring. The Innovative University: Changing the DNA of Higher Education from the inside Out. San Francisco, CA: Jossey-Bass, 2011.






February 11, 2013

Apple's Corporate Culture Under Jobs: "Accountability Is Strictly Enforced"



(p. 531) In theory, you could go to your iPhone or any computer and access all aspects of your digital life. There was, however, a big problem: The service, to use Jobs's terminology, sucked. It was complex, devices didn't sync well, and email and other data got lost randomly in the ether. "Apple's MobileMe Is Far Too Flawed to Be Reliable," was the headline on Walt Mossberg's review in the Wall Street Journal.

Jobs was furious. He gathered the MobileMe team in the auditorium on the Apple campus, stood onstage, and asked, "Can anyone tell me what MobileMe is supposed to do?" After the team members offered their answers, Jobs shot back: "So why the fuck doesn't it do that?" Over the next half hour he continued to berate them. "You've tarnished Apple's reputation," he said. You should hate each other for having let each other down. Mossberg, our friend, is no longer writing good things about us." In front of the whole audience, he got rid of the leader of the MobileMe team and replaced him with Eddy Cue, who oversaw all Internet content at Apple. As Fortune's Adam Lashinsky reported in a dissection of the Apple corporate culture, "Accountability is strictly enforced."




Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






February 10, 2013

Is America Moving Toward a Less Upwardly Mobile Future?



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Source of book image: http://catholicexchange.com/wp-content/uploads/2012/07/Coming-Apart.jpg







(p. C6) The future as described by Charles Murray in "Coming Apart'' is bleak enough to have been imagined by George Orwell. Unfortunately, "Coming Apart" is nonfiction, meticulously documented and depressingly real. Mr. Murray examines America as it moves away from an upwardly mobile, socially mobile country with shared purpose and shared identities to a country dividing into two isolated and disparate camps.


For the full review essay, see:

Jeb Bush (author of passage quoted above, one of 50 contributors to whole article). "Twelve Months of Reading; We asked 50 of our friends to tell us what books they enjoyed in 2012--from Judd Apatow's big plans to Bruce Wagner's addictions. See pages C10 and C11 for the Journal's own Top Ten lists." The Wall Street Journal (Sat., December 15, 2012): passim (Bush's contribution is on p. C6).

(Note: the online version of the review essay has the date December 14, 2012.)



The book under review, is:

Murray, Charles. Coming Apart: The State of White America, 1960-2010. New York: Crown Forum, 2012.






February 7, 2013

The Universality of Values: Every Kid Wants a Cell Phone



(p. 528) When they got to Istanbul, . . . [Jobs] hired a history professor to give his family a tour. At the end they went to a Turkish bath, where the professor's lecture gave Jobs an insight about the globalization of youth:

I had a real revelation. We were all in robes, and they made some Turkish coffee for us. The professor explained how the coffee was made very different from anywhere else, and I realized, "So fucking what?" Which kids even in Turkey give a shit about Turkish coffee? All day I had looked at young people in Istanbul. They were all drinking what every other kid in the world drinks, and they were wearing clothes that look like they were bought at the Gap, and they are all using cell phones. They were like kids everywhere else. It hit me that, for young people, this whole world is the same now. When we're making products, there is no such thing as a Turkish phone, or a music player that young people in Turkey would want that's different from one young people elsewhere would want. We're just one world now.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: ellipsis and bracketed "Jobs" added; indented Jobs block quote was indented in the original.)






February 3, 2013

Steve Jobs Viewed Patents as Protecting Property Rights in Ideas



(p. 512) . . . Apple filed suit against HTC (and, by extension, Android), alleging infringement of twenty of its patents. Among them were patents covering various multi-touch gestures, swipe to open, double-tap to zoom, pinch and expand, and the sensors that determined how a device was being held. As he sat in his house in Palo Alto the week the lawsuit was filed, he became angrier than I had ever seen him:

Our lawsuit is saying, "Google, you fucking ripped off the iPhone, wholesale ripped us off." Grand theft. I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong. I'm going to destroy Android, because it's a stolen product. I'm willing to go to thermonuclear war on this. They are scared to death, because they know they are guilty. Outside of Search, Google's products--Android, Google Docs--are shit.

A few days after this rant, Jobs got a call from Schmidt, who had resigned from the Apple board the previous summer. He suggested they get together for coffee, and they met at a café in a Palo Alto shopping center. "We spent half the time talking about personal matters, then half the time on his perception that Google had stolen Apple's user interface designs," recalled Schmidt. When it came to the latter subject, Jobs did most of the talking. Google had ripped him off, (p. 513) he said in colorful language. "We've got you red-handed," he told Schmidt. "I'm not interested in settling. I don't want your money. If you offer me $5 billion, I won't want it. I've got plenty of money. I want you to stop using our ideas in Android, that's all I want." They resolved nothing.



Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: ellipsis added.)






February 2, 2013

Eastern Europeans Were Lab Rats in Stalin's Monstrous Experiment



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Source of book image: http://media.cleveland.com/books_impact/photo/ironjpg-2761d5de1590effb.jpg



(p. C12) In a stunning follow-up to "Gulag," Anne Applebaum takes readers back to the events that triggered the half-century-long standoff between the U.S. and the U.S.S.R. Instead of the usual aerial view, "Iron Curtain" re-creates what it was like on the ground for those who became the lab rats in Stalin's monstrous social experiment.


For the full review essay, see:

Sylvia Nasar (author of passage quoted above, one of 50 contributors to whole article). "Twelve Months of Reading; We asked 50 of our friends to tell us what books they enjoyed in 2012--from Judd Apatow's big plans to Bruce Wagner's addictions. See pages C10 and C11 for the Journal's own Top Ten lists." The Wall Street Journal (Sat., December 15, 2012): passim (Nasar's contribution is on p. C12).

(Note: the online version of the review essay has the date December 14, 2012.)



The book under review, is:

Applebaum, Anne. Iron Curtain: The Crushing of Eastern Europe, 1944-1956. New York: Doubleday, 2012.







January 30, 2013

Rupert Murdoch and Steve Jobs "Hit It Off Well"



(p. 508) Murdoch and Jobs hit it off well enough that Murdoch went to his Palo Alto house for dinner twice more during the next year. Jobs joked that he had to hide the dinner knives on such occasions, because he was afraid that his liberal wife was going to eviscerate Murdoch when (p. 509) he walked in. For his part, Murdoch was reported to have uttered a great line about the organic vegan dishes typically served: "Eating dinner at Steve's is a great experience, as long as you get out before the local restaurants close." Alas, when I asked Murdoch if he had ever said that, he didn't recall it.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






January 29, 2013

Fragile Governments Cling to Failed Foreign Aid



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Source of book image: http://si.wsj.net/public/resources/images/OB-VL312_bkrvta_DV_20121122124330.jpg







(p. C12) Nassim Nicholas Taleb's "Antifragile" argues that some people, organizations and systems are resilient in the face of stress because they are able to alter themselves by adapting and learning. The converse is fragility, embodied in entities that are immovable even when faced with shocks or adversity. To my mind, an obvious example is how numerous governments and international agencies have clung to foreign aid as a tool to combat poverty even though aid has failed to deliver sustainable growth and meaningfully reduce indigence. And nation-states, which rest on one unifying vision of the nation, tend to be fragile, while city-states that adjust, adapt and constantly evolve tend to be antifragile. Mr. Taleb's lesson: Embrace, rather than try to avoid, the shocks.


For the full review essay, see:

Dambisa Moyo (author of passage quoted above, one of 50 contributors to whole article). "Twelve Months of Reading; We asked 50 of our friends to tell us what books they enjoyed in 2012--from Judd Apatow's big plans to Bruce Wagner's addictions. See pages C10 and C11 for the Journal's own Top Ten lists." The Wall Street Journal (Sat., December 15, 2012): passim (Moyo's contribution is on p. C12).

(Note: the online version of the review essay has the date December 14, 2012.)



The book under review, is:

Taleb, Nassim Nicholas. Antifragile: Things That Gain from Disorder. New York: Random House, 2012.






January 26, 2013

The Project Entrepreneur: Never Say Die



(p. 485) . . . [Jobs] chafed at not being in control, and he sometimes hallucinated or be-(p. 486)came angry. Even when he was barely conscious, his strong personality came through. At one point the pulmonologist tried to put a mask over his face when he was deeply sedated. Jobs ripped it off and mumbled that he hated the design and refused to wear it. Though barely able to speak, he ordered them to bring five different options for the mask and he would pick a design he liked. The doctors looked at Powell, puzzled. She was finally able to distract him so they could put on the mask. He also hated the oxygen monitor they put on his finger. He told them it was ugly and too complex. He suggested ways it could be designed more simply. "He was very attuned to every nuance of the environment and objects around him, and that drained him," Powell recalled.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: ellipsis and bracketed "Jobs" added.)






January 25, 2013

ExxonMobil's "Honorable If Rigid Corporate Culture"



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






(p. C12) From Indiana to Indonesia, ExxonMobil is the multinational corporation that people love to hate. John D. Rockefeller's creation is famed and feared for its discipline, its disregard for public opinion and its ability, year after year, to pump out the largest profits of any corporation on the planet. In "Private Empire," Steve Coll provides a rare exploration of what makes a modern corporate giant tick and shows why the world looks different to the executives in the "God Pod" at ExxonMobil's Texas headquarters than it might to you or me.


For the full review essay, see:

Marc Levinson. "Boardroom Reading of 2012." The Wall Street Journal (Sat., December 15, 2012): C12.

(Note: the online version of the review essay has the date December 14, 2012.)



From another review of the same book:


"Private Empire" is meticulous, multi-angled and valuable. It is also, perhaps surprisingly, despite all the dark facts I have dumped above, impartial. Mr. Coll and his phlegmatic research assistants have interviewed more than 400 people, including Exxon Mobil's longtime chief executive Lee R. Raymond, a legendarily hard character.

It's among this book's achievements that it attempts to view a dysfunctional energy world, as often as not, through Exxon Mobil's eyes. The company is portrayed here, some egregious missteps aside, as possessing an honorable if rigid corporate culture that seeks to supply a product (unlike tobacco companies, to which it is often compared) that a functioning society actually must have.



For this full review, see:

DWIGHT GARNER. "Oil's Dark Heart Pumps Strong." The New York Times (Sat., April 27, 2012): C25 & C32(?).

(Note: the online version of the review essay has the date April 26, 2012 and has the title "BOOKS OF THE TIMES; Oil's Dark Heart Pumps Strong; 'Private Empire,' Steve Coll's Book on Exxon Mobil.")



The book under review, is:

Coll, Steve. Private Empire: ExxonMobil and American Power. New York: The Penguin Press, 2012.






January 22, 2013

Apple's iTunes for Windows Gave "a Glass of Ice Water to Somebody in Hell"



(p. 463) Mossberg wanted the evening joint appearance to be a cordial discussion, not a debate, but that seemed less likely when Jobs unleashed a swipe at Microsoft during a solo interview earlier that day. Asked about the fact that Apple's iTunes software for Windows computers was extremely popular, Jobs joked, "It's like giving a glass of ice water to somebody in hell."

So when it was time for Gates and Jobs to meet in the green room before their joint session that evening, Mossberg was worried. Gates got there first, with his aide Larry Cohen, who had briefed him about Jobs's remark earlier that day. When Jobs ambled in a few minutes later, he grabbed a bottle of water from the ice bucket and sat down. After a moment or two of silence, Gates said, "So I guess I'm the representative from hell." He wasn't smiling. Jobs paused, gave him one of his impish grins, and handed him the ice water. Gates relaxed, and the tension dissipated.



Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






January 21, 2013

The Creation of Consistent, Predictable Dyes and Paints



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Source of book image: http://www.kristenlovesdesign.com/wp-content/uploads/2012/09/The-Color-Revolution-by-Regina-Lee-Blaszczyk.png




(p. C12) Few things seem as eternal as color. Yet as Regina Lee Blaszczyk argues, color has a history, a history largely created by business. In "The Color Revolution," Ms. Blaszczyk shows how the invention of synthetic organic chemistry in the 1850s allowed chemists to create consistent, predictable colors in dyes and paints. Once a chemical company's magenta was reliable, manufacturers could select it from a color card, order it by mail, and use it to produce dresses and dishware in exactly the promised hue.


For the full review essay, see:

Marc Levinson. "Boardroom Reading of 2012." The Wall Street Journal (Sat., December 15, 2012): C12.

(Note: the online version of the review essay has the date December 14, 2012.)



The book under review, is:

Blaszczyk, Regina Lee. The Color Revolution, Lemelson Center Studies in Invention and Innovation. Cambridge, MA: The MIT Press, 2012.






January 18, 2013

Steve Jobs Was Deeply Influenced by Clayton Christensen's "The Innovator's Dilemma"



(p. 408) Microsoft was willing to license its Windows Media software and digital rights format to other companies, just as it had licensed out its operating system in the 1980s. Jobs, on the other hand, would not license out Apple's FairPlay to other device makers; it worked only on an iPod. Nor would he allow other online stores to sell songs for use on iPods. A variety of experts said this would eventually cause Apple to lose market share, as it did in the computer wars of the 1980s. "If Apple continues to rely on a proprietary architecture," the Harvard Business School professor Clayton Christensen told Wired, "the iPod will likely become a niche product." (Other than in this case, Christensen was one of the world's most insightful business analysts, and Jobs was deeply (p. 409) influenced by his book The Innovator's Dilemma.) Bill Gates made the same argument. "There's nothing unique about music," he said. "This story has played out on the PC."


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






January 17, 2013

A Well-Researched Case Study on How Mulally Saved Ford



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Source of book image: http://graphics8.nytimes.com/images/2012/04/01/business/01-SHELF/01-SHELF-articleInline.jpg



(p. C12) Tomes by management gurus telling you how to remake your company are a dime a dozen. Well-researched case studies are much rarer. In "American Icon," Bryce G. Hoffman takes a careful look at how Alan Mulally, recruited from Boeing in 2006, restructured Ford Motor Co. in the midst of the steepest economic downturn since the 1930s. An engineer with no automotive background, Mr. Mulally came into a company on the verge of collapse and brought it back with insistent demands for accountability, information-sharing and tough decisions. Mr. Hoffman, who wrote this book with the company's cooperation, provides a fascinating and detailed examination of how a dynamic leader brought about change. He makes clear that much of the credit goes to others, not least Don Leclair, then the chief financial officer, who, even before Mr. Mulally's arrival, was arranging to mortgage everything up to Ford's blue-oval trademark to amass the $23.6 billion in cash that enabled the company to survive the recession.


For the full review essay, see:

Marc Levinson. "Boardroom Reading of 2012." The Wall Street Journal (Sat., December 15, 2012): C12.

(Note: the online version of the review essay has the date December 14, 2012.)



The book under review, is:

Hoffman, Bryce G. American Icon: Alan Mulally and the Fight to Save Ford Motor Company. New York: Crown Business, 2012.






January 14, 2013

With iTunes, Apple Leapfrogged CD Burners (a Boat Apple Had Missed)




Is the example sketched below, and in a previous entry, a case of a first mover disadvantage? Or is it simply a case of a lucky or wise bounce-back from a genuine mistake?


(p. 382) . . . [Job's] angry insistence that the iMac get rid of its tray disk drive and use instead a more elegant slot drive meant that it could not include the first CD burners, which were initially made for the tray format. "We kind of missed the boat on that," he recalled. "So we needed to catch up real fast." The mark of an innovative company is not only that it comes up with new ideas first, but also that it knows how to leapfrog when it finds itself behind.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: ellipsis and bracketed "Job's" added.)






January 13, 2013

Harvard University Press Dropped Watson's "The Double Helix" as Too Controversial



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"Partners; James D. Watson, left, with Francis Crick and their model of part of a DNA molecule in 1953. Crick did not like Dr. Watson's book at first." Source of caption: print version of the NYT article quoted and cited below. Source of photo: online version of the NYT article quoted and cited below.





(p. D2) Anyone seeking to understand modern biology and genomics could do much worse than start with the discovery of the structure of DNA, on which almost everything else is based. The classic account of the discovery, "The Double Helix," by James D. Watson, was first published in 1968 and has now been reissued in an annotated and illustrated edition.


. . .


An appendix makes it clear how close "The Double Helix" came to being suppressed. Dr. Watson sent the manuscript to many of the central players, inviting their comments on its accuracy. Harvard University Press had accepted it for publication, but the Harvard authorities came to feel it was too hot a potato and dropped it.

Atheneum Publishers, which picked it up, requested a blander title -- previous versions had included "Honest Jim" and "Base Pairs." The latter -- referring to the paired sets of chemical bases that form the steps in the double helix, and by extension to the two discoverers -- gave particular offense to Crick, who failed to see why he should be considered base. Atheneum's lawyers then tried to make the text inoffensive to the many possible litigants.

But Dr. Watson was able to resist many changes. He had cannily persuaded Bragg to write a foreword, and this endorsement from an establishment figure provided sufficient protection for the book to be published. It proceeded to sell more than a million copies.



For the full review, see:

NICHOLAS WADE. "BOOKS ON SCIENCE; Twists in the Tale of the Great DNA Discovery." The New York Times (Tues., November 13, 2012): D2.

(Note: ellipsis added.)

(Note: the online version of the review has the date November 12, 2012.)



The annotated version of the Watson book is:

Watson, James D. The Annotated and Illustrated Double Helix. New York: Simon & Schuster, 2012.






January 10, 2013

Apple "Finding a Way to Leapfrog Over Its Competitors"




Isaacson says Jobs wanted two refinements in the iMac. One was new colors. The other is discussed below.

I am not sure what to make of this episode. Is Isaacson suggesting that it was good for Apple that Jobs made a mistake on the type of CD hardware to put in the iMac? That this added constraint "would then force Apple to be imaginative and bold"?

Or is the moral that good people who make a lot of quick decisions, make mistakes, sometimes big mistakes, and that Jobs found a way to bounce back from this one?


(p. 356) There was one other important refinement that Jobs wanted for the iMac: getting rid of that detested CD tray. "I'd seen a slot-load drive on a very high-end Sony stereo," he said, "so I went to the drive manufacturers and got them to do a slot-load drive for us for the version of the iMac we did nine months later." Rubinstein tried to argue him out of the change. He predicted that new drives would come along that could burn music onto CDs rather than merely play them, and they would be available in tray form before they were made to work in slots. "If you go to slots, you will always be behind on the technology," Rubinstein argued.

"I don't care, that's what I want," Jobs snapped back. They were having lunch at a sushi bar in San Francisco, and Jobs insisted that they continue the conversation over a walk. "I want you to do the slot-load drive for me as a personal favor," Jobs asked. Rubinstein agreed, of course, but he turned out to be right. Panasonic came out with a CD drive that could rip and burn music, and it was available first for computers that had old-fashioned tray loaders. The effects of this (p. 357) would ripple over the next few years: It would cause Apple to be slow in catering to users who wanted to rip and burn their own music, but that would then force
Apple to be imaginative and bold in finding a way to leapfrog over its competitors when Jobs finally realized that he had to get into the music market.



Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






January 6, 2013

"Think Profit"



(p. 339) At the January 1998 San Francisco Macworld, Jobs took the stage where Amelio had bombed a year earlier. He sported a full beard and a leather jacket as he touted the new product strategy. And for the first time he ended the presentation with a phrase that he would make his signature coda: "Oh, and one more thing . . ." This time the "one more thing" was "Think Profit." When he said those words, the crowd erupted in applause. After two years of staggering losses, Apple had enjoyed a profitable quarter, making $45 million. For the full fiscal year of 1998, it would turn in a $309 million profit. Jobs was back, and so was Apple.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: ellipsis in original.)






January 2, 2013

Jobs Laid Off 3,000 from Apple to Save It from Bankruptcy



(p. 339) In his first year back, Jobs laid off more than three thousand people, which salvaged the company's balance sheet. For the fiscal year that ended when Jobs became interim CEO in September 1997, Apple lost $1.04 billion. "We were less than ninety days from being insolvent," he recalled.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






December 30, 2012

"The Arpanet Was Not an Internet"



XeroxParcSign2012-12-18.jpg "Xerox PARC headquarters." Source of caption and photo: online version of the WSJ article quoted and cited below.


(p. A11) A telling moment in the presidential race came recently when Barack Obama said: "If you've got a business, you didn't build that. Somebody else made that happen." He justified elevating bureaucrats over entrepreneurs by referring to bridges and roads, adding: "The Internet didn't get invented on its own. Government research created the Internet so that all companies could make money off the Internet."


. . .


Robert Taylor, who ran the ARPA program in the 1960s, sent an email to fellow technologists in 2004 setting the record straight: "The creation of the Arpanet was not motivated by considerations of war. The Arpanet was not an Internet. An Internet is a connection between two or more computer networks."

If the government didn't invent the Internet, who did? Vinton Cerf developed the TCP/IP protocol, the Internet's backbone, and Tim Berners-Lee gets credit for hyperlinks.

But full credit goes to the company where Mr. Taylor worked after leaving ARPA: Xerox. It was at the Xerox PARC labs in Silicon Valley in the 1970s that the Ethernet was developed to link different computer networks. Researchers there also developed the first personal computer (the Xerox Alto) and the graphical user interface that still drives computer usage today.

According to a book about Xerox PARC, "Dealers of Lightning" (by Michael Hiltzik), its top researchers realized they couldn't wait for the government to connect different networks, so would have to do it themselves. "We have a more immediate problem than they do," Robert Metcalfe told his colleague John Shoch in 1973. "We have more networks than they do." Mr. Shoch later recalled that ARPA staffers "were working under government funding and university contracts. They had contract administrators . . . and all that slow, lugubrious behavior to contend with."



For the full commentary, see:

Gordon Crovitz. "INFORMATION AGE; Who Really Invented the Internet?" The Wall Street Journal (Mon., July 23, 2012): A11.

(Note: ellipsis between paragraphs was added; ellipsis internal to last paragraph was in original.)

(Note: the online version of the commentary has the date July 22, 2012.)



I read the Hiltzik book several years ago, and my memory of it is not sharp, but I remember thinking that it was a useful book:

Hiltzik, Michael A. Dealers of Lightning: Xerox PARC and the Dawn of the Computer Age. New York: HarperBusiness, 1999.






December 25, 2012

"The People Who Are Crazy Enough to Think They Can Change the World Are the Ones Who Do"



(p. 329) . . . those who could stand up to Jobs, including Clow and his teammates Ken Segall and Craig Tanimoto, were able to work with him to create a tone poem that he liked. In its original sixty-second version it read:

Here's to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They're not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can't do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world are the ones who do.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: ellipsis added.)






December 24, 2012

Williams Made Providence a Sanctuary for the Persecuted



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Source of book image: http://d.gr-assets.com/books/1320716933l/11797348.jpg





I have not yet read Barry's book on Roger Williams, but I did enjoy and learn from his earlier The Great Influenza book.



(p. 12) Williams struck overland, through snow and bitter cold, "wch I feele yet," he reminisced later in life. He survived because he had help. "The ravens fed me in the wilderness," he said, comparing himself to the scriptural prophets sustained by bird-borne morsels, though his "ravens" were Indians. With their assistance, he reached the upper bend of a bay that would be named for its inhabitants, the Narragansett. There, Williams bought land from its native proprietors and established a settlement he called Providence, to honor the divine assistance given to him and other Christians on their flights from persecution.


. . .


Next, Williams refused to take an oath of fidelity to Massachusetts, on the grounds that anything sworn in God's name for worldly purposes was corrupt.

The authorities in Massachusetts were so outraged that having failed to arrest Williams, they tried to obliterate his new settlement. He went back to England to get a charter to protect his colony on his own terms: with a "hedge or wall of Separation between the Garden of the Church and the Wildernes of the world." In several publications, he argued that the individual conscience should not -- could not -- be governed, let alone persecuted. If God was the ultimate punisher of sin, it was impious for humans to assume his authority. And it was "directly contrary to the nature of Christ Jesus . . . that throats of men should be torne out for his sake."

Barry shows how controversial these beliefs were at the time, and in this way reinforces the standard image of Williams as an early proponent of liberty of conscience.



For the full review, see:

JOYCE E. CHAPLIN. "Errand in the Wilderness." The New York Times Book Review (Sun., May 26, 2012): 12.

(Note: ellipsis between paragraphs was added; ellipsis internal to quotation was in original.)

(Note: the online version of the review has the date May 25, 2012 and has the title "Roger Williams: The Great Separationist.")


The book being reviewed, is:

Barry, John M. Roger Williams and the Creation of the American Soul: Church, State, and the Birth of Liberty. New York: Viking Adult, 2012.






December 21, 2012

Ellison and Jobs on Money



(p. 299) . . . Jobs and his family went to Hawaii for Christmas vacation. Larry Ellison was also there, as he had been the year (p. 300) before. "You know, Larry, I think I've found a way for me to get back into Apple and get control of it without you having to buy it," Jobs said as they walked along the shore. Ellison recalled, "He explained his strategy, which was getting Apple to buy NeXT, then he would go on the board and be one step away from being CEO." Ellison thought that Jobs was missing a key point. "But Steve, there's one thing I don't understand," he said. "If we don't buy the company, how can we make any money?" It was a reminder of how different their desires were. Jobs put his hand on Ellison's left shoulder, pulled him so close that their noses almost touched, and said, "Larry, this is why it's really important that I'm your friend. You don't need any more money."

Ellison recalled that his own answer was almost a whine: "Well, I may not need the money, but why should some fund manager at Fidelity get the money? Why should someone else get it? Why shouldn't it be us?"

"I think if I went back to Apple, and I didn't own any of Apple, and you didn't own any of Apple, I'd have the moral high ground," Jobs replied.

"Steve, that's really expensive real estate, this moral high ground," said Ellison. "Look, Steve, you're my best friend, and Apple is your company. I'll do whatever you want."



Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: ellipsis added.)






December 20, 2012

Chernobyl May Have Caused No Long-Term Increase in Cancer



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Source of book image: http://luxuryreading.com/wp-content/uploads/2012/07/9781605294452.jpg




(p. C11) . . . Andrew Blackwell, a journalist and self-described "sensitive, eco-friendly liberal," deserves praise for producing an environmentalist book that avoids the usual hyperventilation, upending stubborn myths with prosaic facts.


. . .


His Geiger counter convulses on a visit to the abandoned areas around Chernobyl, but Mr. Blackwell reacts soberly. While the initial disaster provoked a justifiable public panic, it also inspired scare-mongering from groups like Greenpeace, which claimed that the fallout would cause 270,000 cancer cases. He points to a study commissioned by the United Nations concluding that, after an initial spike in thyroid cancer, "no measurable increase has yet been demonstrated in the region's cancer rates." The author is also sure to irritate certain readers with the claim that "paradoxically, perversely, the accident may have actually been good" for the local environment, since the evacuation created an accidentally verdant nature reserve.



For the full review, see:

MICHAEL C. MOYNIHAN. "A Guided Tour of Catastrophe" The Wall Street Journal (Sat., May 26, 2012): C11.

(Note: ellipses added.)

(Note: the online version of the review has the date May 25, 2012.)


The book being reviewed, is:

Blackwell, Andrew. Visit Sunny Chernobyl: And Other Adventures in the World's Most Polluted Places. New York: Rodale Books, 2012.






December 17, 2012

"It's Kind of Fun to Do the Impossible"



(p. 284) "It's kind of fun to do the impossible," Walt Disney once said. That was the type of attitude that appealed to Jobs. He admired Disney's obsession with detail and design, and he felt that there was a natural fit between Pixar and the movie studio that Disney had founded.


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






December 13, 2012

"Did Alexander Graham Bell Do Any Market Research Before He Invented the Telephone?"



(p. 170) After the Macintosh team returned to Bandley 3 that afternoon, a truck pulled into the parking lot and Jobs had them all gather next to it. Inside were a hundred new Macintosh computers, each personalized with a plaque. "Steve presented them one at a time to each team member, with a handshake and a smile, as the rest of us stood around cheering," Hertzfeld recalled. It had been a grueling ride, and many egos had been bruised by Jobs's obnoxious and rough management style. But neither Raskin nor Wozniak nor Sculley nor anyone else at the company could have pulled off the creation of the Macintosh. Nor would it likely have emerged from focus groups and committees. On the day he unveiled the Macintosh, a reporter from Popular Science asked Jobs what type of market research he had done. Jobs responded by scoffing, "Did Alexander Graham Bell do any market research before he invented the telephone?"


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.

(Note: italics in original.)






December 12, 2012

"Planning Is Crap"



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Source of book image: http://images.indiebound.com/636/044/9780807044636.jpg



(p. C8) As Mr. Wooten recounts, obstacles abounded from a municipality bent on redesigning New Orleans while the city was still in crisis. Neighborhoods from middle-class Lakeview to the devastated Lower Ninth Ward began to fear that the city they loved didn't love them back.

"Planning is crap," said Martin Landrieu, a member of a prominent local political family, at a meeting of Lakeview residents. "What you really need is the cleaning up of houses . . . . Where are the hammers and nails?" Yet five months after Katrina, a city commission called Bring New Orleans Back presented an ambitious plan to restore the city that included converting neighborhoods that had heavy flooding into green space. The commission also imposed a temporary moratorium on rebuilding there. Residents would have to show that their communities were viable or risk being planned out of existence; they were given four months.



For the full review, see:

CARLA MAIN. "After the Waters Receded." The Wall Street Journal (Sat., August 4, 2012): C8.

(Note: ellipsis in original.)

(Note: the online version of the article was dated August 3, 2012.)






December 9, 2012

"What Marketing Guys Are: Paid Poseurs"



(p. 152) Jobs had asked Hertzfeld and the gang to prepare a special screen display for Sculley's amusement. "He's really smart," Jobs said. "You wouldn't believe how smart he is." The explanation that Sculley might buy a lot of Macintoshes for Pepsi "sounded a little bit fishy to me," Hertzfeld recalled, but he and Susan Kare created a screen of Pepsi caps and cans that danced around with the Apple logo. Hertzfeld was so excited he began waving his arms around during the demo, but Sculley seemed underwhelmed. "He asked a few questions, but he didn't seem all that interested," Hertzfeld recalled. He never ended up warming to Sculley. "He was incredibly phony, a complete poseur," he later said. "He pretended to be interested in technology, but he wasn't. He was a marketing guy, and that is what marketing guys are: paid poseurs."


Source:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






December 8, 2012

"It Isn't What You Know that Counts--It Is How Efficiently You Can Refresh"



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







(p. A17) Knowledge, then, is less a canon than a consensus in a state of constant disruption. Part of the disruption has to do with error and its correction, but another part with simple newness--outright discoveries or new modes of classification and analysis, often enabled by technology.


. . .


In some cases, the facts themselves are variable.  . . .


. . .


More commonly, however, changes in scientific facts reflect the way that science is done. Mr. Arbesman describes the "Decline Effect"--the tendency of an original scientific publication to present results that seem far more compelling than those of later studies. Such a tendency has been documented in the medical literature over the past decade by John Ioannidis, a researcher at Stanford, in areas as diverse as HIV therapy, angioplasty and stroke treatment. The cause of the decline may well be a potent combination of random chance (generating an excessively impressive result) and publication bias (leading positive results to get preferentially published).

If shaky claims enter the realm of science too quickly, firmer ones often meet resistance. As Mr. Arbesman notes, scientists struggle to let go of long-held beliefs, something that Daniel Kahneman has described as "theory-induced blindness." Had the Austrian medical community in the 1840s accepted the controversial conclusions of Dr. Ignaz Semmelweis that physicians were responsible for the spread of childbed fever--and heeded his hand-washing recommendations--a devastating outbreak of the disease might have been averted.

Science, Mr. Arbesman observes, is a "terribly human endeavor." Knowledge grows but carries with it uncertainty and error; today's scientific doctrine may become tomorrow's cautionary tale. What is to be done? The right response, according to Mr. Arbesman, is to embrace change rather than fight it. "Far better than learning facts is learning how to adapt to changing facts," he says. "Stop memorizing things . . . memories can be outsourced to the cloud." In other words: In a world of information flux, it isn't what you know that counts--it is how efficiently you can refresh.



For the full review, see:

DAVID A. SHAYWITZ. "BOOKSHELF; The Scientific Blind Spot." The Wall Street Journal (Mon., November 19, 2012): A17.

(Note: ellipses added, except for the one internal to the last paragraph, which was in the original.)

(Note: the online version of the article was dated November 18, 2012.)


The book under review, is:

Arbesman, Samuel. The Half-Life of Facts: Why Everything We Know Has an Expiration Date. New York: Current, 2012.






December 4, 2012

Isaacson's "Steve Jobs" Tells Us Much About the Innovative Project Entrepreneur



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Source of book image: http://www.internetmonk.com/wp-content/uploads/walter-isaacson-steve-jobs1.png






Steve Jobs is one of my favorite examples of what I call the "project entrepreneur." Walter Isaacson has written a fascinating biography of Jobs, full of memorable examples for any student of the innovative entrepreneur.

During the next few weeks, I will occasionally add entries that quote some of the more important or thought-provoking passages.



The book under review is:

Isaacson, Walter. Steve Jobs. New York: Simon & Schuster, 2011.






November 29, 2012

Personal DNA Data, Smart Phones, and the Social Network Can Democratize Medicine



(p. 236) With the personal montage of your DNA, your cell phone, your social network---aggregated with your lifelong health information and physiological and anatomic data---you are positioned to reboot the future of medicine. Who could possibly be more interested and more vested in your data? For the first time, the medical world is getting democratized. Think of the priests before the Gutenberg printing press. Now, nearly six hundred years later, think of physicians and the creative destruction of medicine.


Source:

Topol, Eric. The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care. New York: Basic Books, 2012.






November 26, 2012

American Innovators Created Synergies and Interchangeable Parts



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








(p. A13) . . . the post-Civil War industrialization had an important and largely overlooked predecessor in the first decades of the 19th century, when, as Charles Morris writes in "The Dawn of Innovation," "the American penchant for mechanized, large-scale production spread throughout industry, presaging the world's first mass-consumption economy." It is a story well worth telling, and Mr. Morris tells it well.


. . .


Whole industries sprang up as the country's population boomed and spilled over into the Middle West. The rich agricultural lands there produced huge surpluses of grain and meat, especially pork. The city of Cincinnati--whose population grew to 160,000 in 1860, from 2,500 in 1810--became known as "Porkopolis" because of the number of hogs its slaughterhouses processed annually.

Mr. Morris does a particularly good job of explaining the crucial importance of synergy in economic development, how one development leads to another and to increased growth. The lard (or pig fat) from the slaughterhouses, he notes, served as the basis for the country's first chemical industry. Lard had always been used for more than pie crust and frying. It was a principal ingredient in soap, which farm wives made themselves, a disagreeable and even dangerous task thanks to the lye used in the process.

But when lard processing was industrialized to make soap, it led to an array of byproducts such as glycerin, used in tanning and in pharmaceuticals. Stearine, another byproduct, made superior candles. Just in the decade from the mid-1840s to the mid-1850s, Cincinnati soap exports increased 20-fold, as did the export of other lard-based products. Procter & Gamble, founded in Cincinnati in 1837 by an Irish soap maker and an English candle maker who had married sisters, grew into a giant company as the fast-rising middle class sought gentility.

Mr. Morris goes into great detail on the development of interchangeable parts--the system of making the components of a manufactured product so nearly identical that they can be easily substituted and replaced.



For the full review, see:

John Steele Gordon. "BOOKSHELF; The Days Of Porkopolis." The Wall Street Journal (Tues., November 20, 2012): A13.

(Note: ellipses added.)

(Note: the online version of the article was updated November 19, 2012.)



The book under review, is:

Morris, Charles R. The Dawn of Innovation: The First American Industrial Revolution. Philadelphia, PA: PublicAffairs, 2012.






November 25, 2012

Progress Will Slow If Consumers Wait for Doctors to Creatively Destroy Medicine



(p. 195) . . . it remains unclear whether there is adequate plasticity of a plurality of physicians to embrace the digital world and acknowledge that the era of paternalism is passé. My sense is that young physicians who are digital natives will be likely to assimilate but that it will be quite difficult for the vast majority who are in practice and inculcated with an older idea of how medical care should be rendered. Eventually there will be enough digital native physicians to take charge, but that will take decades to be accomplished. In the meantime, consumers are fully capable of leading the movement and contributing to medicine's creative destruction. And so they must.


Source:

Topol, Eric. The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care. New York: Basic Books, 2012.

(Note: ellipsis added.)






November 22, 2012

"Highly Leveraged Economies, . . . , Seldom Survive"



ThisTimeIsDifferentBK2012-11-14.jpg











Source of book image: http://si.wsj.net/public/resources/images/ED-AK313_book10_DV_20091008170122.jpg





(p. 762) Every once in a while, a work comes along whose key points ought to be part of the information set of every literate economist. Carmen M. Reinhart and Kenneth S. Rogoff's This Time is Different: Eight Centuries of Financial Folly is such a work. It describes and analyzes a long international history of several types of financial crises.


. . .


The authors resist giving too much structural interpretation to their analysis. Most would agree with their conclusion that " . . . highly leveraged economies, particularly those in which continual rollover of short-term debt is sustained only by confidence in relatively illiquid underlying assets, seldom survive" (p. 292).



For the full review, see:

Boskin, Michael J. "Review of: This Time Is Different: Eight Centuries of Financial Folly." Journal of Economic Literature 48, no. 3 (September 2010): 762-66.

(Note: ellipsis internal to the final quotation, and the italics, are in the original; ellipsis between paragraphs is added.)

(Note: the "p. 292" refers to a page in the book, and not a page of the review.)(


The book being reviewed, is:

Reinhart, Carmen M., and Kenneth Rogoff. This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, 2009.






November 21, 2012

Sclerotic Doctors Resist Change



(p. 177) Atherosclerosis, referring to a progressive and degenerative process of artery walls, is typically translated for a lay audience as "hardening of the arteries." We've never needed a similar word to describe the medical community. It came with sclerosis built in. Of all the professions represented on the planet, perhaps none is more resistant to change than physicians. If there were ever a group defined by lacking plasticity, it would first apply to doctors.

(p. 178) The inherent "hardness" of physicians and the medical community suggests they will have a difficult time adapting to the digital world. Before the emergence of the Internet, physicians were high priests, holding all the knowledge and expertise, not to be challenged or questioned by the lowly consumer patient. "Doctor knows best" was the pervasive sentiment, shared by patients and especially physicians.



Source:

Topol, Eric. The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care. New York: Basic Books, 2012.






November 14, 2012

Entrepreneurs of Coffee, the Battlefield, and Missing Minerals



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Source of book image: http://img.qbd.com.au/product/l/9780691143705.jpg



[p. 167] The book . . . contains a variety of entertaining stories and colorful facts about entrepreneurship that could potentially be used for teaching. [p. 168] Murray, for instance, explains that the word "entrepreneur" was borrowed from the French language in the late Middle Ages, a time when it was used to describe a battlefield commander (p. 88). Kuran describes how Middle Eastern coffee entrepreneurs originally faced harsh resistance from many clerics who believed that "coffee drinkers reap hell-fire" (pp. 71-72). Hudson traces early merchant activity and entrepreneurship all the way back to Sumerian cities in Mesopotamia in the third millennium BC (pp. 11-17). These cities, made rich by their fertile alluvial soil, still needed to acquire other important minerals, missing in their own ground, from the distant Iranian plateau or Anatolia. Since military conquest proved too expensive and because the Sumerian cities really needed these resources, they pioneered international import-export activities in their temples and palaces.


For the full review, see:

Bikard, Michael, and Scott Stern. "The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times." Journal of Economic Literature 49, no. 1 (March 2011): 164-68.

(Note: ellipsis added.)

(Note: the page numbers in square parentheses refer to the review; the page numbers in curved parentheses refer to the book under review.)


Book being reviewed:

Landes, David S., Joel Mokyr, and William J. Baumol, eds. Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times. Princeton, NJ: Princeton University Press, 2010.






November 10, 2012

The Case for More Climate Adaptations and Fewer Climate Mitigations



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Source of book image: http://perseuspromos.com/images/covers/200/9780465019267.jpg



(p. 777) Climatopolis begins with the assumption that our future will bring some combination of higher temperatures, sea level rise, more intense natural disasters, and changes in precipitation and drought conditions. The forecast is considered inevitable because of humanity's deep and (p. 778) growing dependence on energy from fossil fuels, the burning of which generates emissions that cause climate change. In a way that some readers are likely to find overly pessimistic, dismissive, or both, Kahn asserts that we are unlikely to invent a "magical" technology that allows us to live well without producing greenhouse gases. He is equally skeptical about whether geo-engineering will help stabilize the climate. So when it comes to facing a future that includes climate change, Kahn has concluded as soon as page 5 that "unlike a ship, we cannot turn away."

Economics is, after all, the dismal science, but early pessimism in Climatopolis quickly gives way to an overall optimistic theme. It is first encountered, somewhat surprisingly, in a chapter titled "What We've Done When Our Cities Have Blown Up." With examples that range from fires and floods to wars and terrorist attacks, Kahn makes the case that we humans are a surprisingly resilient species. Among the lessons he draws are that destruction often triggers economic booms, people learn from their mistakes, cities are shaped by the accumulation of small decisions by millions of self-interested people, and when conditions are bad in one location people migrate to where it is better.

Kahn gets traction out of the notion that people "vote with their feet," and he describes how climate change will affect where people want to go. Rising temperatures will cause Sun Belt cities in the United States to suffer, for example, while northern cities such as Minneapolis and Detroit will become more attractive places to live.


. . .


Climatopolis . . . cautions against maladaptive policies, and the recommendation here will be familiar to economists: prices should be left undistorted to reflect real costs and risks. Kahn is critical of a policy in Los Angeles under which people who demand more water pay a lower marginal price, and thereby face exactly the wrong incentive for conservation as water becomes increasingly scarce. He also points to the problems of subsidized insurance or caps on premiums for residents in climate-vulnerable areas, as these policies only promote greater vulnerability. What is more, Kahn would like us to stop treating people who move into harm's way as victims in need of a bailout when natural disasters strike. He writes that, "Ironically, to allow capitalism to help us adapt to climate change, the government must precommit to not protect 'the victims'."



For the full review, see:

Kotchen, Matthew J. "Review of Kahn's Climatopolis." Journal of Economic Literature 49, no. 3 (September 2011): 777-79.

(Note: ellipses added.)


Book under review:

Kahn, Matthew E. Climatopolis: How Our Cities Will Thrive in the Hotter Future. New York: Basic Books, 2010.






November 9, 2012

"The Resistance from the Priesthood of Medicine Is at Its Height"



(p. 77) In December 2010 in Milwaukee, Wisconsin, Nicholas Volker, a five-year-old boy with a gastrointestinal condition that had not previously been seen, who had undergone over a hundred surgical operations and was almost constantly hospitalized and intermittently septic, was virtually on death's door. But when his DNA sequence was determined, his doctors found the culprit mutation. That discovery led to the proper treatment, and now Nicholas is healthy and thriving. Even though this was only the first clearly documented case of the life-saving power of human genomics in medicine, (p. 78) few could now deny that the field was going to have a vital role in the future of medicine. Some would argue that the treatment led to an even bigger breakthrough: health insurance coverage of sequencing costs for select cases.

It took the better part of a decade from the completion of the first draft of the Human Genome Project for genomics to reach the clinic in such a dramatic way. To make treatment like Volker's common will likely take more time still. Even if that's the ultimate prize, the creative destruction of medicine still has various other, less comprehensive, genomic tools for us to use, based on investigations of things like single-nucleotide polymorphisms, the exome, and more. The material can be a bit heady, but it's worth pushing through: these tools could effect not just dramatic corrections of faulty genes but a better, more scientific understanding of disease susceptibility and what drugs to take. Moreover, as they empower patients and democratize medicine, they make medical knowledge available to all and deep knowledge of ourselves available to each of us. Nevertheless, at this level, perhaps more than anywhere else in this ongoing medical revolution, the resistance from the priesthood of medicine is at its height. The fight might be tougher than the material, but in neither case can we afford to give up.



Source:

Topol, Eric. The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care. New York: Basic Books, 2012.






November 6, 2012

When Trade Is a Matter of Life and Death (and the Progress of Knowledge)



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Source of book image: http://www.mikedash.com/assets/images/Batavia-l.jpg



(p. 236) In Mike Dash's book, Batavia's Graveyard, the mutineers on the ship Batavia get stranded on a parched sand bar with the liquor and foodstuffs, but no fresh water. A few hundred watery yards away are the remnants of the loyal crew, stuck on another islet without liquor or provisions, but with plentiful fresh water. Trade proves impossible. The analog of this breakdown is the current relationship between history and the social sciences.


Source:

Clark, Gregory. "The Ends of Life: Roads to Fulfillment in Early Modern England." Journal of Economic History 71, no. 1 (March 2011): 236-37.

(Note: italics in original.)


Dash's book that Clark mentions:

Dash, Mike. Batavia's Graveyard: The True Story of the Mad Heretic Who Led History's Bloodiest Mutiny. New York: Crown, 2002.






November 5, 2012

When Bibliometrics Are a Matter of Life and Death



(p. 51) . . . it is essential, if at all possible, to have a go-to physician expert and authority when one has a newly diagnosed, serious condition, such as a brain or, neurologic conditions like multiple sclerosis and Parkinson's disease, heart valve abnormality. How do you find that individual doctor?

In order to leverage the Internet and gain access to state-of-the-art expertise, you need to identify the physician who conducts the leading research in the field. Let's pick pancreatic cancer as an example of a serious condition that often proves to be rapidly fatal. The first step is to go to Google Scholar and find the top-cited articles for that condition by typing in "pancreatic cancer." They are generally listed in order by descending number of citations. Look for the senior, last author of the articles. The last author of the top-listed paper in the Journal of Clinical Oncology from 1997 is Daniel D. Von Hoff, with over 2,000 citations ("cited by ... " appears at the end of each hit). Now you may have identified an expert. Enter "Daniel Von Hoff" into PubMed (www.ncbi.nlm.nih.gov/sites/pubmed) to see how many papers he has published: 567. Most are related to pancreatic cancer or cancer research.

(p. 52) Now go back to Google Scholar and enter his name, and you'll see over 24,000 hits--this number includes papers that cite his work. There are some problems with these websites, since getting citations by other peer-reviewed publications takes time; if a breakthrough paper is published, it will be years to accumulate hundreds, if not thousands, of citations. Thus, the lag time or incubation phase of citations may result in missing a rising star. If it is a common name, there may be admixture of citations of different researchers with the same name, albeit different topics, so it is useful to enter in all elements including the middle initial and to scan the topic list to alleviate that problem. For perspective, a paper that has been cited 1,000 times by others is rare and would be considered a classic. In this example, the top paper by Von Hoff in 1997 is a long time ago, and he is no longer at the University of Texas, San Antonio-he moved to Phoenix, Arizona. How would you find that out? Look for Daniel D. Von Hoff using a search engine such as Google or Bing, and look up his profile on Wikipedia. Without any help from any doctor, you will have found the country's leading authority on pancreatic cancer. And you will have also identified some backups at Johns Hopkins using the same methodology.




Source:

Topol, Eric. The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care. New York: Basic Books, 2012.

(Note: initial ellipsis added; parenthetical ellipsis in original.)






November 3, 2012

"Richly Researched" Study of "Ironies of Antitrust Policy" in Retailing



(p. 819) Levinson's book opens up a crucial discussion on the role of integrated retailer-distributors in shaping the twentieth-century U.S. economy. As he rightly notes in the book's conclusion, A&P was in many ways the Walmart of its day: it used its buying power to squeeze inefficiencies out of supply chains, it was widely reviled for upending small-town business patterns and bitterly fighting union organizers, and yet it drew waves of customers who appreciated its low prices. While we have many business histories of mass-production industries, we have only a handful of richly researched studies of the mass retailers that have, in the words of historian Nelson Lichtenstein (2009), "become the key players in the worldwide marketplace of our time." Levinson has produced a valuable book for business and economic historians interested in retailing, supply chains, and the ironies of antitrust policy. As a former editor for The Economist, furthermore, Levinson is particularly effective at translating challenging economic concepts into language that lay audiences and undergraduate students can grasp.


For the full review, see:

Hamilton, Shane. "The Great A&P and the Struggle for Small Business in America." Journal of Economic Literature 50, no. 3 (Sept. 2012): 818-19.

(Note: italics in original.)


The book under review is:

Levinson, Marc. The Great A&P and the Struggle for Small Business in America. New York: Hill and Wang, 2011.


The Lichtenstein book mentioned is:

Lichtenstein, Nelson. The Retail Revolution: How Wal-Mart Created a Brave New World of Business. hb ed. New York: Metropolitan Books, 2009.






November 2, 2012

A Rising Tax Gathers No Rolling Stone



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Source of book image: http://1.bp.blogspot.com/-Nhhn-YcP9IY/TjkQHfGGEeI/AAAAAAAAAVA/_jKMGRBm9Ac/s1600/life-keith-richards.jpg



(p. 289) The tax rate in the early '70s on the highest earners was 83 percent, and that went up to 98 percent for investments and so-called unearned income. So that's the same as being told to leave the country. ... The last thing I think the powers that be expected when they hit us with the super-super tax is that we'd say, fine, we'll leave. We'll be another one not paying tax to you. They just didn't factor that in. It made us bigger than ever, and it produced Exile on Main St., which was maybe the best thing we did. They didn't believe we'd be able to continue as we were if we didn't live in England. And in all honesty, we were very doubtful too. We didn't know if we would make it, but if we didn't try, what would we do? Sit in England and they'd give us a penny out of every pound we earned? We had no desire to be closed down. And so we upped and went to France.


Source:

Richards, Keith. Life. New York: Little, Brown and Company, 2010.

(Note: I first saw the quote on the back cover of: Journal of Political Economy 119, no. 1 (Feb. 2011).)

(Note: ellipsis added.)






October 25, 2012

Reality Is Not Always "Elegant"



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Source of book image: http://images.betterworldbooks.com/067/Ordinary-Geniuses-Segre-Gino-9780670022762.jpg



(p. C9) In the summer of 1953, while visiting Berkeley, Gamow was shown a copy of the article in Nature where Watson and Crick spelled out some of the genetic implications of their discovery that DNA is structured as a double helix. He immediately realized what was missing. Each helix is a linear sequence of four molecules known as bases. The sequence contains all the information that guides the manufacture of the proteins from which living things are made. Proteins are assembled from 20 different amino acids. What is the code that takes you from the string of bases to the amino acids? Gamow seems to have been the first to look at the problem in quite this way.

But he made a physicist's mistake: He thought that the code would be "elegant"--that each amino acid would be specified by only one string of bases. (These strings were dubbed "codons.") He produced a wonderfully clever code in which each codon consisted of three bases. That was the only part that was right. In the actual code sometimes three different codons correspond to the same amino acid, while some codons do not code for an amino acid at all. These irregularities are the results of evolutionary stops and starts, and no amount of cleverness could predict them.



For the full review, see:

JEREMY BERNSTEIN. "The Inelegant Universe." The Wall Street Journal (Sat., August 13, 2011): C9.


The book under review is:

Segrè, Gino. Ordinary Geniuses: Max Delbruck, George Gamow, and the Origins of Genomics and Big Bang Cosmology. New York: Viking, 2011.






October 24, 2012

"Our World Has Been "Schumpetered""



"Schumpeter" is now a verb!


(p. v) In the mid-twentieth century Joseph Schumpeter, the noted Austrian economist, popularized the term "creative destruction" to denote transformation that accompanies radical innovation. In recent years, our world has been "Schumpetered." By virtue of the intensive infiltration of digital devices into our daily lives, we have radically altered how we communicate with one another and with our entire social network at once. We can rapidly turn to our prosthetic brain, the search engine, at any moment to find information or compensate for a senior moment. Everywhere we go we take pictures and videos with our cell phone, the one precious object that never leaves our side. Can we even remember the old days of getting film developed? No longer is there such a thing as a record album that we buy as a whole--instead we just pick the song or songs we want and download them anytime and anywhere. Forget about going to a video store to rent a movie and finding out it is not in stock. Just download it at home and watch it on television, a computer monitor, a tablet, or even your phone. If we're not interested in getting a newspaper delivered and accumulating enormous loads of paper to recycle, or having our hands smudged by newsprint, we can simply click to pick the stories that interest us. Even clicking is starting to get old, since we can just tap a tablet or cell phone in virtual silence. The Web lets us sample nearly all books in print without even making a purchase and efficiently download the whole book in a flash. We have both a digital, virtual identity and a real one. This profile just scratches the surface of the way our lives have been radically transformed through digital innovation. Radically transformed. Creatively destroyed.


Source:

Topol, Eric. The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care. New York: Basic Books, 2012.






October 19, 2012

Openness to Creative Destruction Will Speed Health Care Progress



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Source of book image: http://si.wsj.net/public/resources/images/OB-RQ412_bkrvme_DV_20120202132402.jpg





Eric Topol has bucked the medical establishment before. In entries on August 20, 2006 and on December 26, 2006 on this blog, he was quoted as arguing that stents were being overused. Now he argues that the medical establishment is slowing progress that could reduce disability and extend life. He advocates the sequencing of each of our genomes and a medical revolution that will fine-tune treatment to our genomic differences.

Many agree with Topol's view of the future of medicine, but many medical schools are neglecting teaching future doctors about the therapeutic implications of individual genomics.

Topol calls for the creative destruction of medical education and other medical institutions.

The early part of the book is weak because it discusses subjects on which Topol is not an expert---such as the history and applications of information technology. In these sections, he too often tediously explains the obvious and widely known. Sometimes in this section of the book, he is just wrong, as when (p. 14) he claims that Werner Sombart originated "creative destruction."

After the early chapters the book comes into its own when Topol discusses medical advances and challenges. While his early prose may be aimed too low, his later prose may be aimed too high---but it is better to be talked up to than down to, and the best of the later chapters contain some fascinating descriptions of what is happening on the frontiers of medicine, and what could be happening if we change policies and institutions to make medicine more open to creative destruction.

In the following few weeks, I will be quoting several of the more important or thought-provoking passages.


Book discussed:

Topol, Eric. The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care. New York: Basic Books, 2012.






October 15, 2012

"The New Upper Class Must Start Preaching What It Practices"



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Source of book image: http://si.wsj.net/public/resources/images/OB-RO889_bkrvmu_DV_20120130124608.jpg







(p. C2) There remains a core of civic virtue and involvement in working-class America that could make headway against its problems if the people who are trying to do the right things get the reinforcement they need--not in the form of government assistance, but in validation of the values and standards they continue to uphold. The best thing that the new upper class can do to provide that reinforcement is to drop its condescending "nonjudgmentalism." Married, educated people who work hard and conscientiously raise their kids shouldn't hesitate to voice their disapproval of those who defy these norms. When it comes to marriage and the work ethic, the new upper class must start preaching what it practices.


For the full essay, see:

CHARLES MURRAY. "The New American Divide; The ideal of an 'American way of life' is fading as the working class falls further away from institutions like marriage and religion and the upper class becomes more isolated. Charles Murray on what's cleaving America, and why." The Wall Street Journal (Sat., January 21, 2012): C1-C2.


The essay quoted above is related to Murray's book:

Murray, Charles. Coming Apart: The State of White America, 1960-2010. New York: Crown Forum, 2012.






October 14, 2012

Kahneman Says "Intuitive Thinking" Is "the Origin of Most of What We Do Right--Which Is Most of What We Do"



(p. 415) The investment of attention improves, performance in numerous activities--think of the risks of driving through a narrow space while your mind is wandering-and is essential to some tasks, including comparison, choice, and ordered reasoning. However, System 2 is not a paragon of rationality. Its abilities are limited and so is the knowledge to which it has access. We do not always think straight when we reason, and the errors are not always due to intrusive and incorrect intuitions. Often we make mistakes because we (our System 2) do not know any better.

I have spent more time describing System 1, and have devoted many (p. 416) pages to errors of intuitive judgment and choice that I attribute to it. However, the relative number of pages is a poor indicator of the balance between the marvels and the flaws of intuitive thinking. System 1 is indeed the origin of much that we do wrong, but it is also the origin of most of what we do right--which is most of what we do. Our thoughts and actions are routinely guided by System 1 and generally are on the mark. One of the marvels is the rich and detailed model of our world that is maintained in associative memory: it distinguishes surprising from normal events in a fraction of a second, immediately generates an idea of what was expected instead of a surprise, and automatically searches for some causal interpretation of surprises and of events as they take place.



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





October 13, 2012

Romney Praises Dan Senor Book on Israeli Entrepreneurship



SenorDanRomneyAdviserBriefing2012-09-03.jpg "Dan Senor, left, a leading campaign adviser, at a briefing on Saturday for the Romney campaign on the plane en route to Israel." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. A10) WASHINGTON -- Moments after making remarks in Jerusalem about Middle East culture that enraged Palestinians and undermined the public relations value of his trip to Israel, Mitt Romney looked around the room for Dan Senor, one of his campaign's top foreign policy advisers.

It was Mr. Senor's book about entrepreneurs in Israel that informed his comments, Mr. Romney explained to the group of Jewish-American donors he had assembled at the King David hotel. The book, "Start-up Nation," is among Mr. Senor's writings that Mr. Romney frequently cites in public.



For the full story, see:

MICHAEL D. SHEAR. "Adviser Draws Attention to Romney Mideast Policy." The New York Times (Thurs., August 2, 2012): A10.

(Note: the online version of the article is dated August 1, 2012.)



The Senor book is:

Senor, Dan, and Saul Singer. Start-up Nation: The Story of Israel's Economic Miracle. hb ed. New York: Twelve, 2009.



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"L. Paul Bremer III, left, in 2004 when he was the top United States envoy in Iraq, with Mr. Senor, who was his spokesman." Source of caption and photo: online version of the NYT article quoted and cited above.







October 11, 2012

Garfield's Doctors "Basically Tortured Him to Death"



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Source of book image: http://rsirving.files.wordpress.com/2012/04/destinyrepublic.jpeg


(p. 15) Had Garfield been left where he lay, he might well have survived; the bullet failed to hit his spine or penetrate any vital organs. Instead, he was given over to the care of doctors, who basically tortured him to death over the next 11 weeks. Two of them repeatedly probed his wound with their unsterilized fingers and instruments before having him carted back to the White House on a hay-and-horsehair mattress.

There, control of the president was seized by a quack with the incredible name of Dr. Doctor Willard Bliss. Dr. Doctor Bliss insisted on stuffing Garfield with heavy meals and alcohol, which brought on protracted waves of vomiting. He and his assistants went on probing the wound several times a day, causing infections that burrowed enormous tunnels of pus throughout the president's body.

Garfield's medical "care" is one of the most fascinating, if appalling, parts of Millard's narrative. Joseph Lister had been demonstrating for years how his theories on the prevention of infection could save lives and limbs, but American doctors largely ignored his advice, not wanting to "go to all the trouble" of washing hands and instruments, Millard writes, enamored of the macho trappings of their profession, the pus and blood and what they referred to fondly as the "good old surgical stink" of the operating room.

Further undermining the president's recovery was his sickroom in the White House -- then a rotting, vermin-ridden structure with broken sewage pipes. Outside, Washington was a pestilential stink hole; besides the first lady, four White House servants and Guiteau himself had contracted malaria. Hoping to save Garfield from the same, Bliss fed him large doses of quinine, causing more intestinal cramping.

The people rallied around their president even as his doctors failed him. The great Western explorer and geologist John Wesley Powell helped design Ameri­ca's first air-conditioning system to relieve Garfield's agony. Alexander Graham Bell worked tirelessly to invent a device that could locate the bullet. (It failed when Dr. Bliss insisted he search only the wrong side of Garfield's torso.) Two thousand people worked overnight to lay 3,200 feet of railroad track, so the president might be taken to a cottage on the Jersey Shore. When the engine couldn't make the grade, hundreds of men stepped forward to push his train up the final hill.

The president endured everything with amazing fortitude and patience, even remarking near the end, when he learned a fund was being taken up for his family: "How kind and thoughtful! What a generous people!"

"General Garfield died from malpractice," Guiteau claimed, defending himself at his spectacle of a trial. This was true, but not enough to save Guiteau from the gallows.



For the full review, see:

KEVIN BAKER. "Death of a President." The New York Times Book Review (Sun., October 2, 2011): 14-15.

(Note: the online version of the review has the date September 30, 2011, and has the title "The Doctors Who Killed a President.")


The full reference for the book under review, is:

Millard, Candice. Destiny of the Republic: A Tale of Madness, Medicine and the Murder of a President. New York: Doubleday, 2011.






October 10, 2012

The Precautionary Principle Would Have Blocked Many Great Innovations



(p. 351) The intense aversion to trading increased risk for some other advantage plays out on a grand scale in the laws and regulations governing risk. This trend is especially strong in Europe where the precautionary principle, which prohibits any action that might cause harm, is a widely accepted doctrine. In the regulatory context, the precautionary principle imposes the entire burden of proving safety on anyone who undertakes actions that might harm people or the environment. Multiple international bodies have specified that the absence of scientific evidence of potential damage is not sufficient justification for taking risks. As the jurist Cass Sunstein points out, the precautionary principle is costly, and when interpreted strictly it can be paralyzing. He mentions an impressive list of innovations that would not have passed the test, including "airplanes, air conditioning, antibiotics, automobiles, chlorine, the measles vaccine, open-heart surgery, radio, refrigeration, smallpox vaccine, and X-rays." The strong version of the precautionary principle is obviously untenable. But enhanced loss aversion is embedded in a strong and widely shared moral intuition; it originates in System 1. The dilemma between intensely loss-averse moral attitudes and efficient risk management does not have a simple and compelling solution.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.

(Note: italics in original.)





October 7, 2012

"Education Bubble": "A Spurious Inflation of the Credentials Required for Many Jobs"



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Source of book image: http://2.bp.blogspot.com/-N1hV093ckVc/T8YmCXE2sQI/AAAAAAAAAYc/1B5hWDeXbzQ/s1600/basement.jpg



(p. 17) In June 2008, The Atlantic published an essay by an adjunct instructor of English, identified only as "Professor X," whose job filled him with despair. Although the courses he taught were introductory, success was beyond many of his students, who, he wrote, were "in some cases barely literate." X found giving F's to be excruciating -- "I am the man who has to lower the hammer," he lamented -- in part because he identified with his older students, who seemed to have lost their way in their careers much as X himself had.


. . .


. . . X's function, in the ecology of the colleges where he teaches, is gatekeeper -- most students who fail his classes will drop out -- and he articulates the ethical challenge before him this way: "What grade does one give a college student who progresses from a 6th- to a 10th-grade level of achievement?" X gives F's.


. . .


X and his wife got snookered in the housing bubble, and he wonders if the misery in his classroom might result from a similar education bubble. In 1940, there were 1.5 million college students in America; in 2006, there were 20.5 million. In X's opinion, a glut of degrees has led to a spurious inflation of the credentials required for many jobs. Tuitions are rising, and two-thirds of college graduates now leave school with debt, owing on average about $24,000. A four-year degree is said to increase wages about $450,000 over the course of a lifetime, but X doubts the real value of degrees further down on the hierarchy of prestige. To him, the human cost is more conspicuous.


. . .


Professor X can be caustic about the euphemism and somewhat willed optimism that sometimes befog discussion of how to teach unprepared students. To relieve his and his students' unhappiness, he proposes that employers stop demanding unnecessary degrees: a laudable suggestion, unlikely to be realized until the degree glut has dried up.



For the full review, see:

CALEB CRAIN. "Lost in the Meritocracy." The New York Times Book Review (Sun., May 1, 2011): 17.

(Note: ellipses added.)

(Note: the online version of the review has the date April 29, 2011.)


The full reference for the book under review, is:

X, Professor. In the Basement of the Ivory Tower: Confessions of an Accidental Academic. New York: Viking, 2011.






October 6, 2012

Sunk-Cost Fallacy "Can Be Overcome"



(p. 346) The sunk-cost fallacy keeps people for too long in poor jobs, unhappy marriages, and unpromising research projects. I have often observed young scientists struggling to salvage a doomed project when they would be better advised to drop it and start a new one. Fortunately, research suggests that at least in some contexts the fallacy can be overcome. The sunk-cost fallacy is identified and taught as a mistake in both economics and business courses, apparently to good effect: there is evidence that graduate students in these fields are more willing than others to walk away from a failing project.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





October 3, 2012

Big Science Done Privately at Great Risk



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Source of book image: http://t0.gstatic.com/images?q=tbn:ANd9GcQPLdrVlC1FT3ojxyxWJLq55AeAs87pw_Bw6ks1ugFnkcI_DBa_1w&t=1



(p. 23) Next time you find yourself grousing when the passenger in front reclines his seat a smidge too far, consider the astronomers of the Enlightenment. In 1761 and 1769, dozens and dozens of stargazers traveled thousands of miserable miles to observe a rare and awesome celestial phenomenon. They went by sailing ship and open dinghy, by carriage, by sledge and on foot. They endured discomfort that in our own flabby century would generate years of litigation. And they did it all for science: the men in powdered wigs and knee britches were determined to measure the transit of Venus.


. . .


The British astronomer Edmond Halley had realized that precise measurement of a transit might give astronomers armed with a clock and a telescope the data they needed to calculate how far Earth is from the Sun. With that distance in hand, they could work out the actual size of the solar system, the great astronomical problem of the era. The catch was that it would take multiple measurements from carefully chosen locations all over the Northern and Southern Hemispheres. But that was somebody else's problem. Halley knew he wouldn't live to see the transit of 1761.

That challenge fell to the French astronomer Joseph-Nicolas Delisle, who managed to energize and rally his colleagues in the years leading up to the transit, then coordinate the enormous effort that would ultimately involve scientists and adventurers from France, Britain, Russia, Germany, the Netherlands, Italy, Sweden and the American colonies. When you think about how hard it is to arrange a simple dinner with a few friends who live in the same city and use the same language when e-mailing, it's enough to take your breath away.


. . .


Sea travel was so risky in 1761 that observers took separate ships to the same destination to increase the chances some of them would make it alive. The Seven Years' War was on, and getting caught in the cross-fire was a constant concern. One French scientist carried a passport arranged by the Royal Society in London advising the British military "not to molest his person or Effects upon any account." Others were shelled by the French or caught in border troubles with the Russians. An observer en route to Tobolsk, in Siberia, found himself floating in ice up to his waist when his carriage fell through the frozen river they were traveling in lieu of a road. He made it to his destination. Another, heading toward eastern Finland via the iced-over Gulf of Bothnia, was repeatedly catapulted out of his sledge as the runners caught on the crests of frozen waves. He made it too.



For the full review, see:

JoANN C. GUTIN. "Masters of the Universe." The New York Times Book Review (Sun., May 20, 2012): 19.

(Note: ellipses added.)

(Note: the online version of the review has the date May 18, 2012.)


The full reference for the book under review, is:

Wulf, Andrea. Chasing Venus: The Race to Measure the Heavens. New York: Alfred A. Knopf, 2012.



ApparatusTransitVenus2012-09-01.jpg Source of image: online version of the NYT article quoted and cited above.






October 2, 2012

Kahneman Preaches that People Can and Should Act More Rationally



(p. 338) . . . I have a sermon ready for Sam if he rejects the offer of a single highly favorable gamble played once, and for you if you share his unreason-able aversion to losses:

I sympathize with your aversion to losing any gamble, but it is costing you a lot of money. Please consider this question: Are you on your deathbed? Is this the last offer of a small favorable gamble that you will ever consider? Of course, you are unlikely to be offered exactly this gamble again, but you will have many opportunities to consider attractive gambles with stakes that are very small relative to your wealth. You will do yourself a large financial favor if you are able to see each of these gambles as part of a bundle of small gambles and rehearse the mantra that will get you significantly closer to economic rationality: you win a few, you lose a few. The main purpose of the mantra is to control your emotional response when you do lose. If you can trust it to be effective, you should remind yourself of it when deciding whether or not to accept a small risk with positive expected value. Remember these qualifications when using the mantra:
  • It works when the gambles are genuinely independent of each other; it does not apply to multiple investments in the same industry, which would all go bad together.

(p. 339)


  • It works only when the possible loss does not cause you to worry about your total wealth. If you would take the loss as significant bad news about your economic future, watch it!

  • It should not be applied to long shots, where the probability of winning is very small for each bet.

If you have the emotional discipline that this rule requires, you will never consider a small gamble in isolation or be loss averse for a small gamble until you are actually on your deathbed and not even then.

This advice is not impossible to follow. Experienced traders in financial markets live by it every day, shielding themselves from the pain of losses by broad framing. As was mentioned earlier, we now know that experimental subjects could be almost cured of their loss aversion (in a particular context) by inducing them to "think like a trader," just as experienced baseball card traders are not as susceptible to the endowment effect as novices are. Students made risky decisions (to accept or reject gambles in which they could lose) under different instructions. In the narrow-framing condition, they were told to "make each decision as if it were the only one" and to accept their emotions. The instructions for broad framing of a decision included the phrases "imagine yourself as a trader," "you do this all the time," and "treat it as one of many monetary decisions, which will sum together to produce a 'portfolio'." The experimenters assessed the subjects' emotional response to gains and losses by physiological measures, including changes in the electrical conductance of the skin that are used in lie detection. As expected, broad framing blunted the emotional reaction to losses and increased the willingness to take risks.



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.

(Note: ellipsis added; italics in original.)





September 29, 2012

How a Group of "Natural Philosophers" Created Science in a London "Full of Thieves, Murderers and Human Waste"



clockworkuniverseBK2012-09-01.jpg

















Source of book image: http://www.edwarddolnick.net/images/clockworkuniverse-cover.jpg



(p. 19) London before the mid-1600s was a general calamity. The streets were full of thieves, murderers and human waste. Death was everywhere: doctors were hapless, adults lived to about age 30, children died like flies. In 1665, plague moved into the city, killing sometimes 6,000 people a week. In 1666, an unstoppable fire burned the city to the ground; the bells of St. Paul's melted. Londoners thought that the terrible voice of God was "roaring in the City," one witness wrote, and they would do best to accept the horror, calculate their sins, pray for guidance and await retribution.

In the midst of it all, a group of men whose names we still learn in school formed the Royal Society of London for the Improvement of Natural Knowledge. They thought that God, while an unforgiving judge, was also a mathematician. As such, he had organized the universe according to discernible, mathematical law, which, if they tried, they could figure out. They called themselves "natural philosophers," and their motto was "Nullius in verba": roughly, take no one's word for anything. You have an idea? Demonstrate it, do an experiment, prove it. The ideas behind the Royal Society would flower into the Enlightenment, the political, cultural, scientific and educational revolution that gave rise to the modern West.

This little history begins Edward Dolnick's "Clockwork Universe," so the reader might think the book is about the Royal Society and its effects. But the Royal Society is dispatched in the first third of the book, and thereafter, the subject is how the attempt to find the mathematics governing the universe played out in the life of Isaac Newton.


. . .


To go from sinful "curiositas" to productive "curiosity," from blind acceptance to open-eyed inquiry, from asking, "Why?" to answering, "How?" -- this change, of all the world's revolutions, must surely be the most remarkable.



For the full review, see:

ANN FINKBEINER. "Masters of the Universe." The New York Times Book Review (Sun., March 27, 2011): 19.

(Note: the online version of the review has the date March 25, 2011, and had the title "What Newton Gave Us.")


The full reference for the book under review, is:

Dolnick, Edward. The Clockwork Universe: Isaac Newton, the Royal Society, and the Birth of the Modern World. New York: HarperCollins Publishers, 2011.







September 28, 2012

Reference Point Ignored Due to "Theory-Induced Blindness"



(p. 290) The omission of the reference point from the indifference map is a surprising case of theory-induced blindness, because we so often encounter cases in which the reference point obviously matters. In labor negotiations, it is well understood by both sides that the reference point is the existing contract and that the negotiations will focus on mutual demands for concessions relative to that reference point. The role of loss aversion in bargaining is also well understood: making concessions hurts. You have much (p. 291) personal experience of the role of reference point. If you changed jobs or locations, or even considered such a change, you surely remember that the features of the new place were coded as pluses or minuses relative to where you were. You may also have noticed that disadvantages loomed larger than advantages in this evaluation--loss aversion was at work. It is difficult to accept changes for the worse. For example, the minimal wage that unemployed workers would accept for new employment averages 90% of their previous wage, and it drops by less than 10% over a period of one year.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





September 25, 2012

"Science Is Weakest in the Lands of Islam"



HouseOfWisdomBK2012-09-01.jpg




















Source of book image: http://photo.goodreads.com/books/1327925578l/10379376.jpg



(p. 18) The upshot was, while the Greek works in particular were disappearing in Europe, they were being preserved in Arabic to be retranslated later into Latin for a rebirth of "lost" knowledge. This is one half of the point the author makes frequently in the text and, in boldface, as the book's subtitle.

The other half is that contrary to some doubters, the Arab interest in learning extended well beyond translations: thinkers working alone or in observatories and houses of wisdom were conducting original research during "the world's most impressive period of scholarship and learning since ancient Greece." Accordingly, al-Khalili writes that ­al-Mamun stands as "the greatest patron of science in the cavalcade of Islamic rulers."

Sometimes al-Khalili, like a lawyer who suspects a jury of unyielding skepticism, strains to give stature to the leading lights of Arabic science in the Middle Ages. But modern historians of science agree that more attention should be given to the Arab contribution to the preservation and expansion of knowledge at this critical period, and the author has done so in considerable detail and with rising passion.

But that was then, and al-Khalili is obligated to end on an inescapable but deflating note: science today is in a chronic state of neglect in the Arab world and the broader Islamic culture of more than one billion people. Al-Khalili spreads the blame widely, citing inadequate financing for research and education, sclerotic bureaucracies, religious conservatism, even an ingrained fear of science. The Pakistani physicist Abdus Salam, perhaps the greatest Muslim scientist of the last century, won a Nobel Prize in 1979 and did what he could to promote a scientific renaissance among his people, without success. "Of all civilizations on this planet, science is weakest in the lands of Islam," Salam said in despair. "The dangers of this weakness cannot be overemphasized since the honorable survival of a society depends directly on its science and technology in the condition of the present age."

By recounting Arabic science's luminous past, al-Khalili says, he hopes to instill a sense of pride that will "propel the importance of scientific enquiry back to where it belongs: at the very heart of what defines a civilized and enlightened society."



For the full review, see:

JOHN NOBLE WILFORD. "The Muslim Art of Science." The New York Times Book Review (Sun., May 22, 2011): 18.

(Note: the online version of the review has the date May 20, 2011.)


The full reference for the book under review, is:

al-Khalili, Jim. The House of Wisdom: How Arabic Science Saved Ancient Knowledge and Gave Us the Renaissance. New York: The Penguin Press, 2010.






September 24, 2012

Kahneman Grants that "the Basic Concepts of Economics Are Essential Intellectual Tools"



(p. 286) Most graduate students in economics have heard about prospect theory and loss aversion, but you are unlikely to find these terms in the index of an introductory text in economics. I am sometimes pained by this omission, but in fact it is quite reasonable, because of the central role of rationality in basic economic theory. The standard concepts and results that undergraduates are taught are most easily explained by assuming that Econs do not make foolish mistakes. This assumption is truly necessary, and it would be undermined by introducing the Humans of prospect theory, whose evaluations of outcomes are unreasonably short-sighted.

There are good reasons for keeping prospect theory out of introductory texts. The basic concepts of economics are essential intellectual tools, which are not easy to grasp even with simplified and unrealistic assumptions about the nature of the economic agents who interact in markets. Raising questions about these assumptions even as they are introduced would be confusing, and perhaps demoralizing. It is reasonable to put priority on helping students acquire the basic tools of the discipline. Furthermore, the failure of rationality that is built into prospect theory is often irrelevant to the predictions of economic theory, which work out with great precision in some situations and provide good approximations in many others. In some contexts, however, the difference becomes significant: the Humans described by prospect theory are (p. 287) guided by the immediate emotional impact of gains and losses, not by long-term prospects of wealth and global utility.

I emphasized theory-induced blindness in my discussion of flaws in Bernoulli's model that remained unquestioned for more than two centuries. But of course theory-induced blindness is not restricted to expected utility theory. Prospect theory has flaws of its own, and theory-induced blindness to these flaws has contributed to its acceptance as the main alternative to utility theory.



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





September 21, 2012

Models Often "Ignore the Messiness of Reality"



SuperCooperatorsBK2012-08-31.png




















Source of book image: http://www.namingandtreating.com/wp-content/uploads/2011/04/SuperCooperators_small.png



(p. 18) Nowak is one of the most exciting modelers working in the field of mathematical biology today. But a model, of course, is only as good as its assumptions, and biology is much messier than physics or chemistry. Nowak tells a joke about a man who approaches a shepherd and asks, ''If I tell you how many sheep you have, can I have one?'' The shepherd agrees and is astonished when the stranger answers, ''Eighty-three.'' As he turns to leave, the shepherd retorts: ''If I guess your profession, can I have the animal back?'' The stranger agrees. ''You must be a mathematical biologist.'' How did he know? ''Because you picked up my dog.''


. . .


Near the end of the book, Nowak describes Gustav Mahler's efforts, in his grandiloquent Third Symphony, to create an all-encompassing structure in which ''nature in its totality may ring and resound,'' adding, ''In my own way, I would like to think I have helped to give nature her voice too.'' But there remains a telling gap between the precision of the models and the generality of the advice Nowak offers for turning us all into supercooperators. We humans really are infinitely more complex than falling apples, metastasizing colons, even ant colonies. Idealized accounts of the world often need to ignore the messiness of reality. Mahler understood this. In 1896 he invited Bruno Walter to Lake Attersee to glimpse the score of the Third. As they walked beneath the mountains, Walter admonished Mahler to look at the vista, to which he replied, ''No use staring up there -- I've already composed it all away into my symphony!''



For the full review, see:

OREN HARMAN. "A Little Help from Your Friends." The New York Times Book Review (Sun., April 10, 2011): 18.

(Note: ellipsis added.)

(Note: the online version of the review has the date April 8, 2011, and has the title "How Evolution Explains Altruism.")


The full reference for the book under review, is:

Nowak, Martin A., and Roger Highfield. Supercooperators: Altruism, Evolution, and Why We Need Each Other to Succeed. New York: Free Press, 2011.






September 20, 2012

Sticking with Expected Utility Theory as an Example of "Theory-Induced Blindness"



(p. 286) Perhaps carried away by their enthusiasm, [Rabin and Thaler] . . . concluded their article by recalling the famous Monty Python sketch in which a frustrated customer attempts to return a dead parrot to a pet store. The customer uses a long series of phrases to describe the state of the bird, culminating in "this is an ex-parrot." Rabin and Thaler went on to say that "it is time for economists to recognize that expected utility is an ex-hypothesis." Many economists saw this flippant statement as little short of blasphemy. However, the theory-induced blindness of accepting the utility of wealth as an explanation of attitudes to small losses is a legitimate target for humorous comment.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.

(Note: bracketed names and ellipsis added.)





September 17, 2012

A Marshmallow Now or an Elegant French Pastry Four Years Later



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Source of book image: http://images.amazon.com/images/G/01/richmedia/images/cover.gif



(p. 19) Growing up in the erratic care of a feckless single mother, "Kewauna seemed able to ignore the day-to-day indignities of life in poverty on the South Side and instead stay focused on her vision of a more successful future." Kewauna tells Tough, "I always wanted to be one of those business ladies walking downtown with my briefcase, everybody saying, 'Hi, Miss Lerma!' "

Here, as throughout the book, Tough nimbly combines his own reporting with the findings of scientists. He describes, for example, the famous "marshmallow experiment" of the psychologist Walter Mischel, whose studies, starting in the late 1960s, found that children who mustered the self-control to resist eating a marshmallow right away in return for two marshmallows later on did better in school and were more successful as adults.

"What was most remarkable to me about Kewauna was that she was able to marshal her prodigious noncognitive capacity -- call it grit, conscientiousness, resilience or the ability to delay gratification -- all for a distant prize that was, for her, almost entirely theoretical," Tough observes of his young subject, who gets into college and works hard once she's there. "She didn't actually know any business ladies with briefcases downtown; she didn't even know any college graduates except her teachers. It was as if Kewauna were taking part in an extended, high-stakes version of Walter Mischel's marshmallow experiment, except in this case, the choice on offer was that she could have one marshmallow now or she could work really hard for four years, constantly scrimping and saving, staying up all night, struggling, sacrificing -- and then get, not two marshmallows, but some kind of elegant French pastry she'd only vaguely heard of, like a napoleon. And Kewauna, miraculously, opted for the napoleon, even though she'd never tasted one before and didn't know anyone who had. She just had faith that it was going to be delicious."



For the full review, see:

ANNIE MURPHY PAUL. "School of Hard Knocks." The New York Times Book Review (Sun., August 26, 2012): 19.

(Note: the online version of the article is dated August 23, 2012.)


The full reference for the book under review, is:

Tough, Paul. How Children Succeed: Grit, Curiosity, and the Hidden Power of Character. Boston, MA: Houghton Mifflin Harcourt, 2012.






September 16, 2012

"Theory-Induced Blindness"



(p. 276) The mystery is how a conception of the utility of outcomes that is vulnerable to . . . obvious counterexamples survived for so long. I can explain (p. 277) it only by a weakness of the scholarly mind that I have often observed in myself. I call it theory-induced blindness: once you have accepted a theory and used it as a tool in your thinking, it is extraordinarily difficult to notice its flaws. If you come upon an observation that does not seem to fit the model, you assume that there must be a perfectly good explanation that you are somehow missing. You give the theory the benefit of the doubt, trusting the community of experts who have accepted it. . . . As the psychologist Daniel Gilbert observed, disbelieving is hard work, and System 2 is easily tired.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.

(Note: ellipses added.)





September 12, 2012

Premortem Reduces Bias from Uncritical Optimism



(p. 265) As a team converges on a decision--and especially when the leader tips her hand--public doubts about the wisdom of the planned move are gradually suppressed and eventually come to be treated as evidence of flawed loyalty to the team and its leaders. The suppression of doubt contributes to overconfidence in a group where only supporters of the decision have a voice. The main virtue of the premortem is that it legitimizes doubts. Furthermore, it encourages even supporters of the decision to search for possible threats that they had not considered earlier. The premortem is not a panacea and does not provide complete protection against nasty surprises, but it goes some way toward reducing the damage of plans that are subject to the biases of WYSIATI and uncritical optimism.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





September 9, 2012

Economists Optimistic that Economy Can Adapt to Climate Change



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Source of book image: http://www.bibliovault.org/thumbs/978-0-226-47988-0-frontcover.jpg




(p. 222) Efficient policy decisions regarding climate change require credible estimates of the future costs of possible (in)action. The edited volume by Gary Libecap and Richard Steckel contributes to this important policy discussion by presenting work estimating the ability of economic actors to adapt to a changing climate. The eleven contributed research chapters primarily focus on the historical experience of the United States and largely on the agricultural sector. While the conclusions are not unanimous, on average, the authors tend to present an optimistic perspective on the ability of the economy to adapt to climate change.


For the full review, see:

Swoboda, Aaron. "Review of: The Economics of Climate Change: Adaptations Past and Present." Journal of Economic Literature 50, no. 1 (March 2012): 222-24.



Book under review:

Libecap, Gary D., and Richard H. Steckel, eds. The Economics of Climate Change: Adaptations Past and Present, National Bureau of Economic Research Conference Report. Chicago: University of Chicago Press, 2011.






September 8, 2012

People "Reward the Providers of Dangerously Misleading Information"



(p. 262) As Nassim Taleb has argued, inadequate appreciation of the uncertainty of the environment inevitably leads economic agents to take risks they should avoid. However, optimism is highly valued, socially and in the market; people and firms reward the providers of dangerously misleading information more than they reward truth tellers. One of the lessons of the financial crisis that led to the Great Recession is that there are periods in which competition, among experts and among organizations, creates powerful forces that favor a collective blindness to risk and uncertainty.

The social and economic pressures that favor overconfidence are not (p. 263) restricted to financial forecasting. Other professionals must deal with the fact that an expert worthy of the name is expected to display high confidence. Philip Tetlock observed that the most overconfident experts were the most likely to be invited to strut their stuff in news shows. Overconfidence also appears to be endemic in medicine. A study of patients who died in the ICU compared autopsy results with the diagnosis that physicians had provided while the patients were still alive. Physicians also reported their confidence. The result: "clinicians who were 'completely certain' of the diagnosis antemortem were wrong 40% of the time." Here again, expert overconfidence is encouraged by their clients: "Generally, it is considered a weakness and a sign of vulnerability for clinicians to appear unsure. Confidence is valued over uncertainty and there is a prevailing censure against disclosing uncertainty to patients." Experts who acknowledge the full extent of their ignorance may expect to be replaced by more confident competitors, who are better able to gain the trust of clients. An unbiased appreciation of uncertainty is a cornerstone of rationality--but it is not what people and organizations want. Extreme uncertainty is paralyzing under dangerous circumstances, and the admission that one is merely guessing is especially unacceptable when the stakes are high. Acting on pretended knowledge is often the preferred solution.



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





September 6, 2012

Macaulay Argues that a Limited Government that Protects Property Will Promote Economic Growth



Our rulers will best promote the improvement of the nation by strictly confining themselves to their own legitimate duties, by leaving capital to find its most lucrative course, commodities their fair price, industry and intelligence their natural reward, idleness and folly their natural punishment, by maintaining peace, by defending property, by diminishing the price of law, and by observing strict economy in every department of the state. Let the Government do this: the People will assuredly do the rest.


Source:

Macaulay, Thomas Babington, Lord. "Review of: Robert Southey's "Sir Thomas More; or, Colloquies on the Progress and Prospects of Society"." In Critical and Historical Essays Contributed to the Edinburgh Review. London: Longman, Green, Longman, and Roberts, 1830.

(Note: the quote above appeared on the back cover of The Cato Journal 30, no. 1 (Winter 2010); Macaulay's full review, including the quote, can be viewed online at: http://www.econlib.org/library/Essays/macS1.html )

(Note: the online version does not give page numbers, but gives what I think are "screen" numbers. The passage quoted is all of "SC.96" which appears at the very end of the essay.)





September 5, 2012

Renaissance Florence: "A Really Vibrant, Flexible, and Free-Market City"



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Source of book image: http://covers.booktopia.com.au/big/9781421400594/the-economy-of-renaissance-florence.jpg



(p. 176) Chapters 4 and 5 deal with manufacturing, by far the main source of employment in the city. The Florentine textile industry had developed thanks to the Arno River, which provided water and power, and had become a market leader in Europe for high-quality products. Production was based, as everywhere in Europe, on a putting-out system--but strictly confined to the city. The author describes the organization and its changes over time, stressing, as for international banking, the flexibility of firms and their high turnover. Workers were organized in guilds, but the author stresses their nature as political associations rather than their economic role. Florentine guilds did not restrict the access to profession nor stifle innovation. Chapter 6 describes the banks catering for urban market--including local branches of international banks as well as smaller local firms, plus pawnbrokers, both Catholic and Jews. Local banks appeared thoroughly modern in their business and the resort to banking services was quite widespread. Artisans and workers were routinely paid with checks and had bank accounts. And the whole system worked well with almost no state intervention, at least until the late sixteenth century.


. . .


. . . , the author argues that Florentine society was very upwardly mobile, at least for the standard of the time and that the distribution of wealth by household according to the 1427 Catasto was fairly equal (although inequality increased in the next century).

(p. 177) As a whole, at the end of the book one has the impression of a really vibrant, flexible, and free-market city. The standard of living was undoubtedly high and not only for the wealthy, as witnessed by the art treasures of the city, but also for the working class. Literacy and numeracy was very common, and the majority of children attended a primary school.



For the full review, see:

Federico, Giovanni. "Review of: The Economy of Renaissance Florence." Journal of Economic Literature 48, no. 1 (2010): 175-77.


Book under review:

Goldthwaite, Richard A. The Economy of Renaissance Florence. Baltimore, MD: The Johns Hopkins University Press, 2009.





September 4, 2012

Big Firm CFOs Were Confident about Their "Worthless" Stock Forecasts



(p. 261) For a number of years, professors at Duke University conducted a survey in which the chief financial officers of large corporations estimated the returns of the Standard & Poor's index over the following year. The Duke scholars collected 11,600 such forecasts and examined their accuracy. The conclusion was straightforward: financial officers of large corporations had no clue about the short-term future of the stock market; the correlation between their estimates and the true value was slightly less than zero! When they said the market would go down, it was slightly more likely than not that it would go up. These findings are not surprising. The truly bad news is that the CFOs did not appear to know that their forecasts were worthless.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





September 1, 2012

Mitt Romney on Innovation and Creative Destruction



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Source of book image: http://mittromneycentral.com/uploads/No-Apology1.jpg






(p. 108) Innovation and Creative Destruction

The key to increasing national prosperity is to promote good ideas and create the conditions that can lead them to be fully exploited--in existing businesses as well as new ones. Government is generally not the source of new ideas, although innovations from NASA and the military have provided frequent exceptions. Nor is government where innovation is commercially developed. But government policies do, in fact, have a major impact on the implementation of innovative ideas. The degree to which a nation makes itself productive, and thus how prosperous its citizens become, is determined in large measure by whether government adopts policies that stimulate innovation or that stifle it.

The government policy that has the greatest effect on innovation is simply whether or not the government will allow it. It's sad but true: Government can and often does purposefully prevent innovation and the resulting improvement in productivity. Recall my hypothetical example of a society in which half the farming jobs were lost due to innovation in the use of a plow? Some nations accept and encourage such "creative destruction," recognizing that in the long run it leads to greater productivity and wealth for its citizens. But other nations succumb to the objections of those in danger of becoming unemployed and prevent innovation that may reduce short-term employment.

Two centuries ago, more than three-quarters of our workforce actually did labor on farms. Over the succeeding decades, innovations like irrigation, fertilizer, and tractors were welcomed, and eventually large farming corporations were allowed to prosper, despite protests from family farmers and the often heart-wrenching dislocations that accompanied consolidation of farmlands. The result was the disappearance of millions of agricultural jobs and the large-scale migration of Americans from rural regions to our cities. Once there, they provided the labor that powered America's new industrial age. And at the same time, because farming innovation and productivity were allowed to flourish, America became the leader in agriculture education, research, and industry. Innovations from these sources have enabled us to produce sufficient food to feed not only our growing population but other parts of the world as well.



Source:

Romney, Mitt. No Apology: The Case for American Greatness. New York: St. Martin's Press, 2010.

(Note: bold in original.)






August 31, 2012

Failed Entrepreneurial Firms that Signal New Markets Are "Optimistic Martyrs"



(p. 260) Colin Camerer and Dan Lovallo, who coined the concept of competition neglect, illustrated it with a quote from the then chairman of Disney Studios. Asked why so many expensive big-budget movies are released on the same days (such as Memorial Day and Independence Day), he replied: Hubris. Hubris. If you only think about your own business, you think, "I've got a good story department, I've got a good marketing department, we're (p. 261) going to go out and do this." And you don't think that everybody else is thinking the same way. In a given weekend in a year you'll have five movies open, and there's certainly not enough people to go around.

The candid answer refers to hubris, but it displays no arrogance, no conceit of superiority to competing studios. The competition is simply not part of the decision, in which a difficult question has again been replaced by an easier one. The question that needs an answer is this: Considering what others will do, how many people will see our film? The question the studio executives considered is simpler and refers to knowledge that is most easily available to them: Do we have a good film and a good organization to market it? The familiar System 1 processes of WYSIATI and substitution produce both competition neglect and the above-average effect. The consequence of competition neglect is excess entry: more competitors enter the market than the market can profitably sustain, so their average outcome is a loss. The outcome is disappointing for the typical entrant in the market, but the effect on the economy as a whole could well be positive. In fact, Giovanni Dosi and Dan Lovallo call entrepreneurial firms that fail but signal new markets to more qualified competitors "optimistic martyrs"-- good for the economy but bad for their investors.



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.






August 30, 2012

"People Were Being Infantilized and Made Dependent"



JohnsonBorisLondonMayor2012-08-20.jpg









Mayor of London Boris Johnson. Source of caption and photo: online version of the NYT article quoted and cited below.















(p. 16) While I was reading your book "Johnson's Life of London," in which you take readers on a tour of the city while discussing some of history's most famous Londoners, I thought to myself, Being mayor of London can't be that taxing if you could find time to write such a decent book.
The job of mayor of London is unbelievably taxing, particularly in the run-up to the Olympics. It just happens I write fast and always have done. Some people play the piano, some do Sudoku, some watch television, some people go out to dinner parties. I write books.


. . .


Do you remember the moment you knew that you were a Conservative?
When I was a 22- or 23-year-old reporter in a place called Wolverhampton. I got impatient with some of the stuff I saw going on about damp and mold, about who's ultimately responsible for improving the ventilation in people's houses. I felt that people were being infantilized and made dependent by the system and that the local Labour politicians had no interest in sorting it out, were content to harvest these people's votes without improving their lives.

Wow. You were politically formed by mold.
It was the spores of damp, of mold forming on the walls in Wolverhampton.



For the full interview, see:

ANDREW GOLDMAN, interviewer. "TALK; Boris Johnson, Tory With an Attitude." The New York Times Magazine (Sun., June 3, 2012): 16.

(Note: ellipsis added; bold in original.)



Johnson's book is:

Johnson, Boris. Johnson's Life of London: The People Who Made the City That Made the World. New York: Riverhead Books, 2012.






August 29, 2012

Resilience



(p. 183) In 1832, a young man was fired from his job and lost his bid for election to the state legislature. The next year his new business failed. Three years later he suffered a nervous breakdown. After recovering, he was defeated as speaker in the state legislature. He was defeated in his efforts to win his party's nomination to Congress in 1843. He was rejected as land officer in 1849. In 1854, he was defeated in the U.S. Senate election and, in 1856, his efforts to win the nomination as his party's vice president failed. The string of failures continued. He was again defeated in the Senate election in 1858. Finally, in 1860, Abraham Lincoln was elected as the sixteenth president of the United States.


Source:

Audretsch, David. "Review of: Adapt: Why Success Always Starts with Failure." Journal of Economic Literature 50, no. 1 (March 2012): 183.






August 28, 2012

Entrepreneurs Thrive in a Culture of "Chutzpah"



VanceCyrus2012-08-22.jpg "Manhattan District Attorney Cyrus Vance, Jr." Source of caption and photo: online version of the WSJ article quoted and cited below.


(p. C13) Before a recent business trip to Israel, someone handed me a copy of "Start-Up Nation: The Story of Israel's Economic Miracle," a book by Dan Senor and Saul Singer about Israel's culture of innovation and entrepreneurialism. I had finished the book on the overnight flight to Tel Aviv. When I returned home a week later, based on what I had seen in Israel, I purchased multiple copies and handed them out to senior staff who work with me.

"Start-Up Nation" recounts and dissects how Israel, in just 60 years, has thrived as an economy, creating an environment where talent and technology have attracted more venture-capital dollars per person than any other country in the world.

In a nutshell, and admittedly oversimplifying, the authors boil Israel's success down to a few, core themes. First, Israel was born into and exists in an adverse political environment. Surrounded by hostile neighbors, Israelis survived--and thrived--by adapting quickly, making the most out of limited resources and taking on outsize challenges without fear or undue regard for authority. The latter quality might be called chutzpah. Second, Israelis all participate in military service, before university. The skills they learn in the military, and the maturity they gain from military service, make their work force better skilled and more capable of better teamwork at the entry level on up.

If my recent visit provides any evidence of national characteristics, Israelis question authority, openly and all the time. At any given meal, whether it included ordinary citizens, generals, government officials or business executives, deference was in short supply. No quarter is given. But debate and disagreement create a climate of self-awareness. That in turns helps to create a culture of achievement.

So why did I give copies of the book to my senior staff? I believe in a bottom-up organizational culture, where problems are identified, raised and solved by the line employees who make the enterprise run. Our American system--and especially our legal and government cultures--frequently operates with a top-down style, which can discourage creativity and individualism.

The one thing that I am not planning to do is give copies of "Start-Up Nation" to my children until they graduate from college and have left the house. They have questioned my authority enough already.



For the full book discussion, see:

Cyrus Vance. "Twelve Months of Reading: Cyrus Vance." The Wall Street Journal (Sat., December 17, 2011): C13.

(Note: the broad multi-page article was sub-divided into sections headed by the name of the person who was writing the book advice in that section. Internally the broad article seemed to be entitled "Books of the Year.")


The first book Vance recommends is:

Senor, Dan, and Saul Singer. Start-up Nation: The Story of Israel's Economic Miracle. hb ed. New York: Twelve, 2009.






August 27, 2012

Overly Optimistic Entrepreneurs Seek Government Support for Projects that Will Usually Fail




People have a right to be overly-optimistic when they invest their own money in entrepreneurial projects. But governments should be prudent caretakers of the money they have taken from taxpayers. The overly-optimistic bias of subsidy-seeking entrepreneurs weakens the case for government support of entrepreneurial projects.


(p. 259) The optimistic risk taking of entrepreneurs surely contributes to the economic dynamism of a capitalistic society, even if most risk takers end up disappointed. However, Marta Coelho of the London School of Economics has pointed out the difficult policy issues that arise when founders of small businesses ask the government to support them in decisions that are most likely to end badly. Should the government provide loans to would-be entrepreneurs who probably will bankrupt themselves in a few years? Many behavioral economists are comfortable with the "libertarian paternalistic" procedures that help people increase their savings rate beyond what they would do on their own. The question of whether and how government should support small business does not have an equally satisfying answer.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





August 24, 2012

"Discovering a Viper in the Bed of Their Child"



ArguablyBK2012-08-21.jpg













Source of book image: http://files.list.co.uk/images/2011/09/15/arguably-lst090367.jpg





(p. 8) Anyone who occasionally opens one of our more serious periodicals has learned that the byline of Christopher Hitchens is an opportunity to be delighted or maddened -- possibly both -- but in any case not to be missed. He is our intellectual omnivore, exhilarating and infuriating, if not in equal parts at least with equal wit. He has been rather famously an aggressive critic of God and his followers, after cutting his sacrilegious teeth on Mother Teresa. He wrote a deadpan argument for trying Henry Kissinger as a war criminal, then was branded an apostate by former friends on the left for vigorously supporting the wars in Afghanistan and Iraq. (He memorably -- a lot of what Hitchens has written merits the adverb -- shot back that his antiwar critics were "the sort who, discovering a viper in the bed of their child, would place the first call to People for the Ethical Treatment of Animals.") And he is dying of esophageal cancer, a fact he has faced with exceptional aplomb.

This fifth and, one fears, possibly last collection of his essays is a reminder of all that will be missed when the cancer is finished with him.


. . .


(p. 9) At times the book feels like an ongoing argument with the leftist intellectuals on the other side of the Atlantic, who tend to view America as lacking in history, culture or moral standing.

In an essay on the journalism of Karl Marx, written for the left-leaning Guardian, he puts an elbow in the ribs of his old socialist friends: "If you are looking for an irony of history, you will find it . . . in the fact that he and Engels considered Russia the great bastion of reaction and America the great potential nurse of liberty and equality. This is not the sort of thing they teach you in school (in either country)."

"There is currently much easy talk about the 'decline' of my adopted country, both in confidence and in resources," he writes in his introduction. "I don't choose to join this denigration."

Christopher Hitchens: American patriot. We've done a lot worse.

If there is a God, and he lacks a sense of irony, he will send Hitchens to the hottest precinct of hell. If God does have a sense of irony, Hitchens will spend eternity in a town that serves no liquor and has no library. Either way, heaven will be a less interesting place.



For the full review, see:

BILL KELLER. "Christopher Hitchens, a Man of His Words." The New York Times Book Review (Sun., September 11, 2011): 8-9.

(Note: ellipsis between paragraphs was added; ellipsis internal to a Hitchens quote was in the original.)

(Note: the online version of the article is dated September 9, 2011.)


The full reference for Arguably, is:

Hitchens, Christopher. Arguably: Essays. New York: Twelve, 2012.



HitchensChristopher2012-08-21.jpg













"Christopher Hitchens." Source of caption and photo: online version of the NYT article quoted and cited above.








August 23, 2012

For Inventors "Optimism Is Widespread, Stubborn, and Costly"



(p. 257) One of the benefits of an optimistic temperament is that it encourages persistence in the face of obstacles. But persistence can be costly. An impressive series of studies by Thomas Åstebro sheds light on what happens when optimists receive bad news. He drew his data from a Canadian organization--the Inventors Assistance Program--which collects a small fee to provide inventors with an objective assessment of the commercial prospects of their idea. The evaluations rely on careful ratings of each invention on 37 criteria, including need for the product, cost of production, and estimated trend of demand. The analysts summarize their ratings by a letter grade, where D and E predict failure--a prediction made for over 70% of the inventions they review. The forecasts of failure are remarkably accurate: only 5 of 411 projects that were given the lowest grade reached commercialization, and none was successful.

Discouraging news led about half of the inventors to quit after receiving a grade that unequivocally predicted failure. However, 47% of them continued development efforts even after being told that their project was hopeless, and on average these persistent (or obstinate) individuals doubled their initial losses before giving up. Significantly, persistence after discouraging advice was relatively common among inventors who had a high score on a personality measure of optimism--on which inventors generally scored higher than the general population. Overall, the return on private invention was small, "lower than the return on private equity and on high-risk securities." More generally, the financial benefits of self-employment are mediocre: given the same qualifications, people achieve higher average returns by selling their skills to employers than by setting out on their own. The evidence suggests that optimism is widespread, stubborn, and costly.



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





August 20, 2012

Catherine the Great as Benevolent Despot



CatherineTheGreatBK2012-08-18.jpg















Source of book image: http://online.wsj.com/article/SB10001424052970204644504576653083743832432.html?KEYWORDS=Catherine+Great



(p. C3) Bereft of husband and child, a lonely Catherine began to read the histories, philosophy and literature of Greece and Rome and of the Enlightenment. Montesquieu's "The Spirit of Laws," which analyzed the strengths and weaknesses of despotic rule, had a powerful impact on her. She was particularly interested in his thesis that the conduct of a specific despot could partially redeem that form of rule. Thereafter, she attributed to herself a "republican soul" of the kind advocated by Montesquieu.

Voltaire, the venerated patriarch of the Enlightenment, had concluded that a despotic government might well be the best possible form of government--if it were reasonable. But to be reasonable, he said, it must be enlightened; if enlightened, it could be both efficient and benevolent. Soon after ascending to the throne, Catherine began a correspondence with Voltaire that eventually extended to hundreds of letters over more than 20 years.


. . .


Near the end of her reign Catherine was asked how she understood the "blind obedience with which her orders were obeyed." Catherine smiled and answered, "It is not as easy as you think.... I examine the circumstances, I take advice, I consult the enlightened part of the people, and so in this way I find out what sort of effect my laws will have. And when I am already convinced in advance of good approval, then I issue my orders and have the pleasure of observing what you call blind obedience."

Catherine died in 1796, when George Washington was finishing his second term in office. Since then, the temptations of absolute power have remained great; despots have continued to appear, afflicting people everywhere. We have learned, at enormous cost, the difficulty of combining despotism with benevolence. Few rulers have even tried. Catherine tried.



For the full commentary, see:

ROBERT K. MASSIE. "Catherine the Great's Lessons for Despots; Russia's erudite empress tried to redeem absolute rule; her failures highlight dangers still present today." The Wall Street Journal (Sat., November 12, 2011): C3.

(Note: ellipsis added.)


For Massie's full biography of Catherine the Great, see:

Massie, Robert K. Catherine the Great: Portrait of a Woman. New York: Random House, 2011.






August 19, 2012

Entrepreneurs Are Optimistic About the Odds of Success



(p. 256) The chances that a small business will survive for five years in the United States are about 35%. But the individuals who open such businesses do not believe that the statistics apply to them. A survey found that American entrepreneurs tend to believe they are in a promising line of business: their (p. 257) average estimate of the chances of success for "any business like yours" was 60%--almost double the true value. The bias was more glaring when people assessed the odds of their own venture. Fully 81% of the entrepreneurs put their personal odds of success at 7 out of 10 or higher, and 33% said their chance of failing was zero.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





August 15, 2012

"Planning Fallacy": Overly Optimistic Forecasting of Project Outcomes



(p. 250) This should not come as a surprise: overly optimistic forecasts of the outcome of projects are found everywhere. Amos and I coined the term planning fallacy to describe plans and forecasts that

  • are unrealistically close to best-case scenarios
  • could be improved by consulting the statistics of similar cases


. . .


The optimism of planners and decision makers is not the only cause of overruns. Contractors of kitchen renovations and of weapon systems readily admit (though not to their clients) that they routinely make most of their profit on additions to the original plan. The failures of forecasting in these cases reflect the customers' inability to imagine how much their wishes will escalate over time. They end up paying much more than they would if they had made a realistic plan and stuck to it.

Errors in the initial budget are not always innocent. The authors of unrealistic plans are often driven by the desire to get the plan approved--(p. 251)whether by their superiors or by a client--supported by the knowledge that projects are rarely abandoned unfinished merely because of overruns in costs or completion times. In such cases, the greatest responsibility for avoiding the planning fallacy lies with the decision makers who approve the plan. If they do not recognize the need for an outside view, they commit a planning fallacy.



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.

(Note: ellipsis added; italics in original.)





August 11, 2012

"Unknown Unknowns" Will Delay Most Projects




Kahneman's frequently-used acronym "WYSIATI," used in the passage quoted below, means "What You See Is All There Is."


(p. 247) On that long-ago Friday, our curriculum expert made two judgments about the same problem and arrived at very different answers. The inside view is the one that all of us, including Seymour, spontaneously adopted to assess the future of our project. We focused on our specific circumstances and searched for evidence in our own experiences. We had a sketchy plan: we knew how many chapters we were going to write, and we had an idea of how long it had taken us to write the two that we had already done. The more cautious among us probably added a few months to their estimate as a margin of error.

Extrapolating was a mistake. We were forecasting based on the informa-(p. 248)tion in front of us--WYSIATI--but the chapters we wrote first were probably easier than others, and our commitment to the project was probably then at its peak. But the main problem was that we failed to allow for what Donald Rumsfeld famously called the "unknown unknowns:' There was no way for us to foresee, that day, the succession of events that would cause the project to drag out for so long. The divorces, the illnesses, the crises of coordination with bureaucracies that delayed the work could not be anticipated. Such events not only cause the writing of chapters to slow down, they also produce long periods during which little or no progress is made at all. The same must have been true, of course, for the other teams that Seymour knew about. The members of those teams were also unable to imagine the events that would cause them to spend seven years to finish, or ultimately fail to finish, a project that they evidently had thought was very feasible. Like us, they did not know the odds they were facing. There are many ways for any plan to fail, and although most of them are too improbable to be anticipated, the likelihood that something will go wrong in a big project is high.



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





August 10, 2012

Shedding Light, or "The Greatest Symbol of Modern Progress"



ekirch.jpg
















Source of book image: http://www.vtmagazine.vt.edu/fall06/news.html


(p. 5) IN the wake of widespread violence during the New York City blackout of 1977, a newspaper columnist quipped that just one flick of a light switch separated civilization from primordial chaos.

Leaving the hyperbole aside, artificial illumination has arguably been the greatest symbol of modern progress. By making nighttime infinitely more inviting, street lighting -- gas lamps beginning in the early 1800s followed by electric lights toward the end of the century -- drastically expanded the boundaries of everyday life to include hours once shrouded in darkness. Today, any number of metropolitan areas in the United States and abroad, bathed in the glare of neon and mercury vapor, bill themselves as 24-hour cities, open both for business and pleasure.


. . .


. . . there was never any question that 19th-century communities welcomed lamps, which in conjunction with police forces, posed a powerful deterrent to lawlessness. Another benefit lay in the numerous pedestrians drawn by their inviting glow, whose very presence helped to discourage crime.

"As safe and agreeable to walk out in the evening as by day-light," pronounced a New Yorker in 1853.

Certainly, public anxiety over the recent removal of lamps should not be minimized. No longer are there witches and wolves to fear, but research strongly suggests, as one might expect, the critical value of street lighting as a hindrance to crime and serious accidents.


. . .


Financial costs and public safety, however, are not the only issues. Without the benefit of street lighting, towns and cities, after sunset, will be diminished as communities. Families will be more apt to "cocoon" at home, rather than visit friends or attend sporting and cultural events. And, too, our appreciation for night itself will suffer. Evenings can be best enjoyed if they remain inviting and safe, whether for neighborhood gatherings, walking Fido or gazing at the heavens -- all with less chance of losing your wallet or stumbling into a ditch.



For the full commentary, see:

A. ROGER EKIRCH. "OPINION; Return to a Darker Age." The New York Times, SundayReview Section (Sun., January 8, 2012): 5.

(Note: ellipses added.)

(Note: the online version of the commentary has the date January 7, 2012.)


Ekrich wrote a related book:

A. Roger Ekirch. At Day's Close: Night in Times Past. New York: W. W. Norton & Company, 2005.





August 7, 2012

Intuitive Expertise Develops Best When Feedback Is Clear and Fast



(p. 241) Some regularities in the environment are easier to discover and apply than others. Think of how you developed your style of using the brakes on your car. As you were mastering the skill of taking curves, you gradually learned when to let go of the accelerator and when and how hard to use the brakes. Curves differ, and the variability you experienced while learning ensures that you are now ready to brake at the right time and strength for any curve you encounter. The conditions for learning this skill arc ideal, because you receive immediate and unambiguous feedback every time you go around a bend: the mild reward of a comfortable turn or the mild punishment of some difficulty in handling the car if you brake either too hard or not quite hard enough. The situations that face a harbor pilot maneuvering large ships are no less regular, but skill is much more difficult to acquire by sheer experience because of the long delay between actions and their noticeable outcomes. Whether professionals have a chance to develop intuitive expertise depends essentially on the quality and speed of feedback, as well as on sufficient opportunity to practice.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.






August 6, 2012

Stewart Brand Marvels at Hippie Perfectionist Jobs' Results



BrandStewart2012-08-05.jpg











Stewart Brand. Source of photo: online version of the NYT interview quoted and cited below.






(p. 3) Stewart Brand is best known as the editor of the Whole Earth Catalog, a counterculture compendium published twice a year between 1968 and 1972 and the only catalog to win the National Book Award. Its credo, "Stay hungry. Stay foolish," influenced many of the hippie generation, most notably Steve Jobs.


. . .


READING I'm devouring "Steve Jobs," by Walter Isaacson. Steve's life and interests intersected with mine a number of times, so revisiting all that in sequence is like galloping through a version of my own life, plus I get to fill in the parts of his life I wondered about. Take a hippie who is also a driven perfectionist at crafting digital tools, let him become adept at managing corporate power, and marvel at what can result. The book I'm studying line by line, and dog-earing every other page, is Steven Pinker's "Better Angels of Our Nature." It chronicles the dramatic decline of violence and cruelty in human affairs in every century. Now that we know that human behavior has been getting constantly gentler and fairer, how do we proceed best with that wind at our backs?



For the full interview, see:

KATE MURPHY, interviewer. "DOWNLOAD; Stewart Brand." The New York Times, Sunday Review (Sun., Nov. 6, 2011): 3.

(Note: ellipsis added.)

(Note: the online version of the interview has the date November 5, 2011.)







August 4, 2012

Veterinarians Can Suggest Innovative Hypotheses to Doctors



ZoobiquityBK2012-08-01.jpg














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





Vets face less government regulation and so are freer to rapidly innovate. They may thus be a promising source of innovative hypotheses for medical doctors.


(p. D2) Cardiologist Barbara Natterson-Horowitz made her first foray into the world of animal medicine when she was asked to treat Spitzbuben, an exceedingly cute emperor tamarin suffering from heart failure.

But first, the veterinarian at the Los Angeles Zoo warned Dr. Natterson-Horowitz: Mere eye contact with the tiny primate could trigger a potentially fatal surge of stress hormones. What she learns from that experience spurs a journey to examine the links between the human and animal condition--and the discovery that the species are closer than she ever imagined.


. . .


The authors recommend that doctors, who often look with disdain on veterinarians, go the next step and collaborate with them in a cross-disciplinary "zoobiquitous" approach--using knowledge about how animals live, die and heal to spark innovative hypothesis for advancing medicine.



For the full review, see:

LAURA LANDRO. "Healthy Reader." The Wall Street Journal (Tues., June 12, 2012): D2.

(Note: ellipsis added.)

(Note: the online version of the review has the date June 11, 2012.)


The book being reviewed, is:

Natterson-Horowitz, Barbara, and Kathryn Bowers. Zoobiquity: What Animals Can Teach Us About Health and the Science of Healing. New York: Alfred A. Knopf, 2012.





August 3, 2012

When Is Intuitive Judgment Valid?



(p. 240) If subjective confidence is not to be trusted, how can we evaluate the probable validity of an intuitive judgment? When do judgments reflect true expertise? When do they display an illusion of validity? The answer comes from the two basic conditions for acquiring a skill:

  • an environment that is sufficiently regular to be predictable
  • an opportunity to learn these regularities through prolonged practice


When both these conditions are satisfied, intuitions are likely to be skilled. Chess is an extreme example of a regular environment, but bridge and poker also provide robust statistical regularities that can support skill. Physicians, nurses, athletes, and firefighters also face complex but fundamentally orderly situations. The accurate intuitions that Gary Klein has described are due to highly valid cues that the expert's System 1 has learned to use, even if System 2 has not learned to name them. In contrast, stock pickers and political scientists who make long-term forecasts operate in a zero-validity environment. Their failures reflect the basic unpredictability of the events that they try to forecast.




Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.






August 2, 2012

Romney Right that Culture Matters for Economic Success



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Source of book image: http://photo.goodreads.com/books/1172699090l/209176.jpg




In the piece quoted below, and in much of the TV media coverage, the story is spun as being that Romney offended the Palestinians. But that is not the story. The story is that Romney courageously highlighted an important, but politically incorrect, truth---culture, generally, does matter for economic performance; and Israeli culture, specifically, has encouraged economic growth.

Romney referred to an important book by the distinguished economic historian David Landes. Last school year, one of the students in my Economics of Technology seminar gave a presentation on a related Landes book. That presentation can be viewed at: http://www.amazon.com/review/R2GLBAMFCS5PXH/ref=cm_cr_pr_perm?ie=UTF8&ASIN=0521094186&linkCode=&nodeID=&tag=

I recently read another relevant book, Start-Up Nation, that directly supports Romney's specific claim, by making the case that Israeli culture is especially congenial to entrepreneurial initiative and success.



(p. A1) JERUSALEM -- Mitt Romney offended Palestinian leaders on Monday by suggesting that cultural differences explain why the Israelis are so much more economically successful than Palestinians, thrusting himself again into a volatile issue while on his high-profile overseas trip.


. . .


In the speech, Mr. Romney mentioned books that had influenced his thinking about nations -- particularly "The Wealth and Poverty of Nations," by David S. Landes, which, he said, argues that culture is the defining factor in determining the success of a society.

"Culture makes all the (p. A14) difference," Mr. Romney said. "And as I come here and I look out over this city and consider the accomplishments of the people of this nation, I recognize the power of at least culture and a few other things."

He added, "As you come here and you see the G.D.P. per capita, for instance, in Israel, which is about $21,000, and compare that with the G.D.P. per capita just across the areas managed by the Palestinian Authority, which is more like $10,000 per capita, you notice such a dramatically stark difference in economic vitality. And that is also between other countries that are near or next to each other. Chile and Ecuador, Mexico and the United States."

The remarks, which vastly understated the disparities between the societies, drew a swift rejoinder from Palestinian leaders.



For the full story, see:

ASHLEY PARKER and RICHARD A. OPPEL Jr. "Romney Trip Raises Sparks at a 2nd Stop." The New York Times (Tues., July 31, 2012): A1 & A14.

(Note: ellipsis added.)

(Note: the online version of the story has the date July 30, 2012.)


The Landes book discussed by Romney is:

Landes, David S. The Wealth and Poverty of Nations. New York: W.W. Norton & Company, 1998.


The book on Israeli entrepreneurship, that I mention in my comments, is:

Senor, Dan, and Saul Singer. Start-Up Nation: The Story of Israel's Economic Miracle. hb ed. New York: Twelve, 2009.






July 30, 2012

Simple Algorithms Predict Better than Trained Experts



(p. 222) I never met Meehl, but he was one of my heroes from the time I read his Clinical vs. Statistical Prediction: A Theoretical Analysis and a Review of the Evidence.

In the slim volume that he later called "my disturbing little book," Meehl reviewed the results of 20 studies that had analyzed whether clinical predictions based on the subjective impressions of trained professionals were more accurate than statistical predictions made by combining a few scores or ratings according to a rule. In a typical study, trained counselors predicted the grades of freshmen at the end of the school year. The counselors interviewed each student for forty-five minutes. They also had access to high school grades, several aptitude tests, and a four-page personal statement. The statistical algorithm used only a fraction of this information: high school grades and one aptitude test. Nevertheless, the formula was more accurate than 11 of the 14 counselors. Meehl reported generally sim-(p. 223)ilar results across a variety of other forecast outcomes, including violations of parole, success in pilot training, and criminal recidivism.

Not surprisingly, Meehl's book provoked shock and disbelief among clinical psychologists, and the controversy it started has engendered a stream of research that is still flowing today, more than fifty years after its publication. The number of studies reporting comparisons of clinical and statistical predictions has increased to roughly two hundred, but the score in the contest between algorithms and humans has not changed. About 60% of the studies have shown significantly better accuracy for the algorithms. The other comparisons scored a draw in accuracy, but a tie is tantamount to a win for the statistical rules, which are normally much less expensive to use than expert judgment. No exception has been convincingly documented.



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.

(Note: italics in original.)





July 27, 2012

Edison Was Great Inventor; "Jobs Was the Far Shrewder Businessman"



EdisonThomasAlva2012-06-22.jpg "Thomas Alva Edison." Source of caption and photo: online version of the NYT article quoted and cited below.



I have not read Stross' books on Jobs and Edison. According to some of the Amazon reviews of the Jobs book, back in 1993 Stross was much more critical of Jobs than he is in the piece below:



(p. 4) I wrote a book about Mr. Jobs in 1993.


. . .


Years later, I wrote a biography of Edison, a person whom Mr. Jobs admired. When you compare the two personalities and their careers, a few similarities emerge immediately. Both had less formal schooling than most of their respective peers. Both possessed the ability to visualize projects on a grand scale. Both followed an inner voice when making decisions. And both had terrific tempers that could make their employees quake.


. . .


Mr. Jobs was the far shrewder businessman, even if he never talked about wealth as a matter of personal interest. When Edison died, he left behind an estate valued at about $12 million, or about $180 million in today's dollars. His friend Henry Ford had once joked that Edison was "the world's greatest inventor and the world's worst businessman." Mr. Jobs was worth a commanding $6.5 billion.

Mr. Jobs was perhaps the most beloved billionaire the world has ever known. Richard Branson's tribute captures the way people felt they could identify with Mr. Jobs's life narrative: "So many people drew courage from Steve and related to his life story: adoptees, college dropouts, struggling entrepreneurs, ousted business leaders figuring out how to make a difference in the world, and people fighting debilitating illness. We have all been there in some way and can see a bit of ourselves in his personal and professional successes and struggles."



For the full commentary, see:

RANDALL STROSS. "The Power of Taking the Big Chance." The New York Times, SundayBusiness Section (Sun., October 9, 2011): 4.

(Note: online version of the commentary is dated October 8, 2011, and has the title "The Wizard and the Mortal: Two Sides of Genius.")

(Note: in the print version, the same title, on the same page, was used as heading for two different articles on Steve Jobs--Lohr's on the left side, and Stross' on the right side.)


Stross' books on Jobs and Edison are:

Stross, Randall E. Steve Jobs & the Next Big Thing. New York: Scribner Publishers, 1993.

Stross, Randall E. The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World. New York: Crown Publishers, 2007.






July 26, 2012

Experts "Produce Poorer Predictions than Dart-Throwing Monkeys"



(p. 219) Tetlock interviewed 284 people who made their living "commenting or offering advice on political and economic trends." He asked them to assess the probabilities that certain events would occur in the not too distant future, both in areas of the world in which they specialized and in regions about which they had less knowledge. Would Gorbachev be ousted in a coup? Would the United States go to war in the Persian Gulf? Which country would become the next big emerging market? In all, Tetlock gathered more than 80,000 predictions. He also asked the experts how they reached their conclusions, how they reacted when proved wrong, and how they evaluated evidence that did not support their positions. Respondents were asked to rate the probabilities of three alternative outcomes in every case: the persistence of the status quo, more of something such as political freedom or economic growth, or less of that thing.

The results were devastating. The experts performed worse than they would have if they had simply assigned equal probabilities to each of the three potential outcomes. In other words, people who spend their time, and earn their living, studying a particular topic produce poorer predictions than dart-throwing monkeys who would have distributed their choices evenly over the options. Even in the region they knew best, experts were not significantly better than nonspecialists.



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.


Tetlock's book is:

Tetlock, Philip E. Expert Political Judgment: How Good Is It? How Can We Know? Princeton, NJ: Princeton University Press, 2005.





July 25, 2012

Joe Biden's Dad Told Him to "Get Up" in Face of Job Loss







Innovative entrepreneurs, through the process of creative destruction, provide us with wonderful new products and services. But sometimes the process also results in job loss. One response to the job loss is to shut down innovation. Another is to preach resilience. Joe Biden's Dad said "get up." (The clip is from a talk that Joe Biden gave to the National Press Club on August 1, 2007. The full talk is posted to the C-SPAN web site.)


A mainly similar presentation of the "get up" message is on p. xxii of Biden's autobiography:

Biden, Joe. Promises to Keep: On Life and Politics. New York: Random House, 2007.






July 23, 2012

Alexander Field Claims 1930s Were "Technologically Progressive"



GreatLeapForwardBK2012-06-22.jpg
















Source of book image: http://yalepress.yale.edu/images/full13/9780300151091.jpg



(p. 1) UNDERNEATH the misery of the Great Depression, the United States economy was quietly making enormous strides during the 1930s. Television and nylon stockings were invented. Refrigerators and washing machines turned into mass-market products. Railroads became faster and roads smoother and wider. As the economic historian Alexander J. Field has said, the 1930s constituted "the most technologically progressive decade of the century."


. . .


(p. 6) The closest thing to a unified explanation for these problems is a mirror image of what made the 1930s so important. Then, the United States was vastly increasing its productive capacity, as Mr. Field argued in his recent book, "A Great Leap Forward." Partly because the Depression was eliminating inefficiencies but mostly because of the emergence of new technologies, the economy was adding muscle and shedding fat. Those changes, combined with the vast industrialization for World War II, made possible the postwar boom.

In recent years, on the other hand, the economy has not done an especially good job of building its productive capacity. Yes, innovations like the iPad and Twitter have altered daily life. And, yes, companies have figured out how to produce just as many goods and services with fewer workers. But the country has not developed any major new industries that employ large and growing numbers of workers.



For the full commentary, see:

DAVID LEONHARDT. "The Depression: If Only Things Were That Good." The New York Times, SundayReview Section (Sun., October 9, 2011): 1 & 6.

(Note: ellipsis added.)

(Note: online version of the commentary is dated October 8, 2011.)


Book discussed:

Field, Alexander J. A Great Leap Forward: 1930s Depression and U.S. Economic Growth, Yale Series in Economic and Financial History. New Haven, CT: Yale University Press, 2011.






July 22, 2012

The Illusion that Investment Advisers Have Skill



(p. 215) Some years ago I had an unusual opportunity to examine the illusion of financial skill up close. I had been invited to speak to a group of investment advisers in a firm that provided financial advice and other services to very wealthy clients. I asked for some data to prepare my presentation and was granted a small treasure: a spreadsheet summarizing the investment outcomes of some twenty-five anonymous wealth advisers, for each of eight consecutive years. Each adviser's score for each year was his (most of them were men) main determinant of his year-end bonus. It was a simple matter to rank the advisers by their performance in each year and to determine whether there were persistent differences in skill among them and whether the same advisers consistently achieved better returns for their clients year after year.

To answer the question, I computed correlation coefficients between the rankings in each pair of years: year 1 with year 2, year 1 with year 3, and so on up through year 7 with year 8. That yielded 28 correlation coefficients, one for each pair of years. I knew the theory and was prepared to find weak evidence of persistence of skill. Still, I was surprised to find that the average of the 28 correlations was .01. In other words, zero. The consistent correlations that would indicate differences in skill were not to be found. The results resembled what you would expect from a dice-rolling contest, not a game of skill.



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





July 19, 2012

Larry Page on Tesla, Commerce, and Changing the World







Funding is a key constraint for the innovative project entrepreneur. By "project entrepreneur" I mean the innovator who views money as a means to achieving the project, and not as an end in itself. In this brief clip from Page's 2007 AAAS talk, he discusses how as a 12 year-old reading Tesla's autobiography he almost cried at how Tesla's failure to commercialize his ideas limited his ability to change the world.


The Tesla autobiography is:

Tesla, Nikola. My Inventions: The Autobiography of Nikola Tesla. SoHo Books, 2012.






July 18, 2012

Neglecting Valid Stereotypes Has Costs



(p. 169) The social norm against stereotyping, including the opposition to profiling, has been highly beneficial in creating a more civilized and more equal society. It is useful to remember, however, that neglecting valid stereotypes inevitably results in suboptimal judgments. Resistance to stereotyping is a laudable moral position, but the simplistic idea that the resistance is costless is wrong. The costs are worth paying to achieve a better society, but denying that the costs exist, while satisfying to the soul and politically correct, is not scientifically defensible.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





July 15, 2012

Hitchens Adds to the Case Against Woodrow Wilson



ToEndAllWarsBK2012-06-22.jpg

















Source of book image:
http://media.oregonlive.com/books_impact/photo/9635633-large.jpg



Reading the review quoted below, reminded me of how much I will miss Christopher Hitchens.


(p. 12) If General Pershing's fresh and plucky troops had not reached the scene in the closing stages of the bloodbath, universal exhaustion would almost certainly have compelled an earlier armistice, on less savage terms. Without President Wilson's intervention, the incensed and traumatized French would never have been able to impose terms of humiliation on Germany; the very terms that Hitler was to reverse, by such relentless means, a matter of two decades later. In this light, the great American socialist Eugene V. Debs, who publicly opposed the war and was kept in prison by a vindictive Wilson until long after its ending, looks like a prescient hero. Indeed, so do many of the antiwar militants to whose often-buried record Hochschild has done honor. (Unsentimental to the last, though, he shows that many of them went on to lose or waste their lives on Bolshevism, the other great mutant system to emerge from the abattoir.) This is a book to make one feel deeply and painfully, and also to think hard.


For the full review, see:

CHRISTOPHER HITCHENS. "Mortal Debate." The New York Times Book Review (Sun., May 15, 2011): 1 & 12.

(Note: the online version of the review has the date May 13, 2011, and has the title "The Pacifists and the Trenches.")


The book under review is:

Hochschild, Adam. To End All Wars: A Story of Loyalty and Rebellion, 1914-1918. New York: Houghton Mifflin Harcourt Publishing Co., 2011.






July 14, 2012

Some Irrationality Occurs Because Not Much Is at Stake, and Rationality Takes Time and Effort



(p. 164) The laziness of System 2 is part of the story. If their next vacation had depended on it, and if they had been given indefinite time and told to follow logic and not to answer until they were sure of their answer, I believe that most of our subjects would have avoided the conjunction fallacy. However, their vacation did not depend on a correct answer; they spent very little time on it, and were content to answer as if they had only been "asked for their opinion." The laziness of System 2 is an important fact of life, and the observation that representativeness can block the application of an obvious logical rule is also of some interest.


Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.





July 11, 2012

Muckraking Friend of Teddy Roosevelt and Woodrow Wilson Was "Intrigued by Mussolini" and "Captivated by Lenin"



IHaveSeenTheFutureBK2012-06-22.jpg











Source of book image: http://si.wsj.net/public/resources/images/OB-NV754_bkrvst_DV_20110510153656.jpg






(p. 29) As one of the original "muckrakers," Steffens wrote newspaper and magazine exposés that gave journalism a new purpose, . . .


. . .


He learned to write and to invest, and within nine years was the managing editor of McClure's, one of the most popular and prestigious magazines in the country.

He was, as usual, in the right place at the right time. Volatile Sam McClure was transforming his namesake publication into a journal that would rip the veil from American life, forcing readers to confront the corruption that had seeped into every seam of their democracy. The January 1903 issue alone featured an installment of Ida Tarbell's groundbreaking history of the Standard Oil Company; . . .


. . .


He managed to remain friends with Roosevelt and then Woodrow Wilson . . .


. . .


Intrigued by Mussolini, Steffens was captivated by Lenin, whom he interviewed briefly during the revolution. He became one of the first of that sad little band of Western intellectuals who fell head over heels for the Soviet Union. Unlike most of them, he did not deny the stories of atrocities leaking out of the workers' paradise. Even more chilling, he simply believed them necessary to bring about the great changes to come. He never wavered from his infamous first impression of the U.S.S.R., "I have seen the future, and it works." Instead, living comfortably on money he made from the stock market, he insisted that "nothing must jar our perfect loyalty to the party and its leaders," and that "the notion of liberty . . . is false, a hangover from our Western tyranny."



For the full review, see:

KEVIN BAKER. "Lincoln Steffens: Muckraker's Progress." The New York Times Book Review (Sun., May 15, 2011): 29.

(Note: ellipses added except for the one inside the last quoted paragraph.)

(Note: the online version of the article has the date May 13, 2011.)


The book under review is:

Hartshorn, Peter. I Have Seen the Future: A Life of Lincoln Steffens. Berkeley, CA: Counterpoint, 2011.






July 10, 2012

Love Canal as a "Pseudo-Event" Caused by an "Availability Cascade"



(p. 142) An availability cascade is a self-sustaining chain of events, which may start from media reports of a relatively minor event and lead up to public panic and large-scale government action. On some occasions, a media story about a risk catches the attention of a segment of the public, which becomes aroused and worried. This emotional reaction becomes a story in itself, prompting additional coverage in the media, which in turn produces greater concern and involvement. The cycle is sometimes sped along deliberately by "availability entrepreneurs," individuals or organizations who work to ensure a continuous flow of worrying news. The danger is increasingly exaggerated as the media compete for attention-grabbing headlines. Scientists and others who try to dampen the increasing fear and revulsion attract little attention, most of it hostile: anyone who claims that the danger is overstated is suspected of association with a "heinous cover-up." The issue becomes politically important because it is on everyone's mind, and the response of the political system is guided by the intensity of public sentiment. The availability cascade has now reset priorities. Other risks, and other ways that resources could he applied for the public good, all have faded into the background.

Kuran and Sunstein focused on two examples that are still controversial: the Love Canal affair and the so-called Alar scare. In Love Canal, buried toxic waste was exposed during a rainy season in 1979, causing contamination of the water well beyond standard limits, as well as a foul smell. The residents of the community were angry and frightened, and one of them, (p. 143) Lois Gibbs, was particularly active in an attempt to sustain interest in the problem. The availability cascade unfolded according to the standard script. At its peak there were daily stories about Love Canal, scientists attempting to claim that the dangers were overstated were ignored or shouted down, ABC News aired a program titled The Killing Ground, and empty baby-size coffins were paraded in front of the legislature. A large number of residents were relocated at government expense, and the control of toxic waste became the major environmental issue of the 1980s. The legislation that mandated the cleanup of toxic sites, called CERCLA, established a Superfund and is considered a significant achievement of environmental legislation. It was also expensive, and some have claimed that the same amount of money could have saved many more lives if it had been directed to other priorities. Opinions about what actually happened at Love Canal are still sharply divided, and claims of actual damage to health appear not to have been substantiated. Kuran and Sunstein wrote up the Love Canal story almost as a pseudo-event, while on the other side of the debate, environmentalists still speak of the "Love Canal disaster."



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.

(Note: italics in original.)





July 6, 2012

Experience Can Provide Sound Intuitive Knowledge



(p. 11) . . . , the accurate intuitions of experts are better explained by the effects of prolonged practice than by heuristics. We can now draw a richer and more balanced picture, in which skill and heuristics are alternative sources of intuitive judgments and choices.

The psychologist Gary Klein tells the story of a team of firefighters that entered a house in which the kitchen was on fire. Soon after they started hosing down the kitchen, the commander heard himself shout, "Let's get out of here!" without realizing why. The floor collapsed almost immediately after the firefighters escaped. Only after the fact did the commander realize that the fire had been unusually quiet and that his ears had been unusually hot. Together these impressions prompted what he called a "sixth sense of danger." He had no idea what was wrong, but he knew something was wrong. It turned out that the heart of the fire had not been in the kitchen but in the basement beneath where the men had stood.

We have all heard such stories of expert intuition: the chess master who walks past a street game and announces "White mates in three" without stopping, or the physician who makes a complex diagnosis after a single glance at a patient. Expert intuition strikes us as magical, but it is not. Indeed, each of us performs feats of intuitive expertise many times each day. Most of us are pitch-perfect in detecting anger in the first word of a telephone call, recognize as we enter a room that we were the subject of the conversation, and quickly react to subtle signs that the driver of the car in the next lane is dangerous. Our everyday intuitive abilities are no less marvelous than the striking insights of an experienced firefighter or physician--only more common.

The psychology of accurate intuition involves no magic. Perhaps the best short statement of it is by the great Herbert Simon, who studied chess masters and showed that after thousands of hours of practice they come to see the pieces on the board differently from the rest of us. You can feel Simon's impatience with the mythologizing of expert intuition when he writes: "The situation has provided a cue; this cue has given the expert access to information stored in memory, and the information provides the answer. Intuition is nothing more and nothing less than recognition."



Source:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.

(Note: ellipsis added.)





July 5, 2012

Steve Jobs Showed that Art and Commerce Could Be "Happy Bedfellows"



OldmanGary2012-06-22.jpg














Gary Oldman. Source of photo: online version of the NYT article quoted and cited below.







(p. 2) Gary Oldman is an English actor . . . widely known for his roles as Sirius Black in the "Harry Potter" film series and Jim Gordon in the Batman movies.


. . .


READING Right now I'm reading the Steve Jobs biography by Walter Isaacson. I love when people have a singleness of purpose and don't get dissuaded. I can connect with that. I can recognize it. I think a lot of artists have that. Art and commerce are not particularly happy bedfellows, but he was the exception.

I read quite a lot of biographies. I like nonfiction. The other book I'm carrying around with me at the moment is "River of Shadows: Eadweard Muybridge and the Technological Wild West" by Rebecca Solnit. It deals with the 19th century and the arrival of speed with the coming of the industrial age. We were very much governed by nature before; we were at the mercy of our own speed and horses and the like. It's interesting to think of living at that pace.



For the full interview, see:

KATE MURPHY. "DOWNLOAD; Gary Oldman." The New York Times, SundayReview Section (Sun., February 5, 2012): 2.

(Note: ellipses added; bold in original.)

(Note: online version of the interview is dated February 4, 2012.)






July 3, 2012

Our Cups Will Runneth Over If We Choose Entrepreneurship, Imagination, Will and Optimism



AbundanceBK2012-06-11.jpg



















Source of book image: http://www.abundancethebook.com/wp-content/uploads/2012/01/cover-NYTimes-3d-500.jpg?139d23


(p. 18) in Silicon Valley, where the locals tend to be too busy starting companies to wallow in gloom, Peter Diamandis has stood out as one of the more striking optimists. Several years ago, Diamandis founded the X Prize Foundation, which rewards entrepreneurs with cash for achieving difficult goals, like putting a reusable spaceship into flight on a limited budget. More recently he helped start Singularity University, an academic program that convenes several weeks a year in the Valley and educates business leaders about the "disruptive" -- i.e., phenomenally innovative -- technological changes Diamandis is anticipating. To be sure, Diamandis is both very bright (he studied molecular biology and aerospace engineering at M.I.T. before getting an M.D. at Harvard) and well informed. Moreover, he's not the kind of optimist who will merely see the glass as half full. He'll give you dozens of reasons, some highly technical, why it's half full. Then he'll explain that your cognitive biases are tricking you into seeing the glass of water in a negative light, and cart out the research of acclaimed psychologists like Daniel Kahne­man to prove his point. Finally he may suggest you stop fretting: new technologies will soon fill the glass up anyway. Indeed, they are likely to overfill it.


. . .


(p. 19) Throughout the book Diamandis . . . offers small groups of driven entrepreneurs as a kind of Leatherman solution to the world's problems. It's true that plenty of insurgents are doing impressive things out there -- Elon Musk's Tesla Motors, which helped jump-start the world's electric car industry, is a good example.


. . .


. . . , there's a significant idea embedded within "Abundance": We should remain aware, as writers like Jared Diamond have likewise told us, that societies can choose their own future, and thus their own fate. In that spirit Diamandis and Kotler put forth a range of possible goals we may achieve if we have the imagination and the will. A little optimism wouldn't hurt, either.



For the full review, see:

JON GERTNER. "Plenty to Go Around." The New York Times Book Review (Sun., April 1, 2012): 18 & 19.

(Note: ellipses added.)

(Note: the online version of the review has the date March 30, 2012.)


The book under review is:

Diamandis, Peter H., and Steven Kotler. Abundance: The Future Is Better Than You Think. New York: Free Press, 2012.






July 1, 2012

Behavioral Economics Does Not Undermine Capitalism



thinkingfastandslowBK2012-06-21.jpg












Source of book image: http://www.brainpickings.org/wp-content/uploads/2011/10/thinkingfastandslow.jpg





Daniel Kahneman first gained fame in economics through research with Tversky in which they showed that some of economists' assumptions about human rationality do not always hold true.

Kahneman, whose discipline is psychology, went on to win the Nobel Prize in economics, sharing the prize with Vernon Smith. (Since the Prize is not normally awarded posthumously, Tversky was not a candidate.)

I have always thought that ultimately there should be only one unified science of human behavior---not claims that are "true" in economics and other claims that are "true" in psychology. (I even thought of minoring in psychology in college, before I realized that the price of minoring included taking time-intensive lab courses where you watched rats run through mazes.)

But I don't think the implications of current work in behavioral economics are as clear as has often been asserted.

Some important results in economics do not depend on strong claims of rationality. For instance, the most important "law" in economics is the law of demand, and that law is due to human constraints more than to human rationality. Gary Becker, early in his career, wrote an interesting paper in which he showed that the law of demand could also be derived from habitual and random behavior. (I remember in conversation, George Stigler saying that he did not like this paper by Becker, because it did not hone closely to the rationality assumption that Stigler and Becker defended in their "De Gustibus" article.)

The latest book by Kahneman is rich and stimulating. It mainly consists of cataloging the names of, and evidence for, a host of biases and errors that humans make in thinking. But that does not mean we cannot choose to be more rational when it matters. Kahneman believes that there is a conscious System 2 that can over-ride the unconscious System 1. In fact, part of his motive for cataloging bias and irrationality is precisely so that we can be aware, and over-ride when it matters.

Sometimes it is claimed, as for instance in a Nova episode on PBS, that bias and irrationality were the main reasons for the financial crisis of 2008. I believe the more important causes were policy mistakes, like Clinton and Congress pressuring Fannie Mae and Freddie Mac to make home loans to those who did not have the resources to repay them; and past government bailouts encouraging finance firms to take greater risks. And the length and depth of the crisis were increased by government stimulus and bailout programs. If instead, long-term cuts had been made in taxes, entrepreneurs would have had more of the resources they need to create start-ups that would have stimulated growth and reduced unemployment.

More broadly, aspects of behavioral economics mentioned, but not emphasized, by Kahneman, can actually strengthen the underpinnings for the case in favor of entrepreneurial capitalism. Entrepreneurs may be more successful when they are allowed to make use of informal knowledge that would not be classified as "rational" in the usual sense. (I discuss this some in my forthcoming paper, "The Epistemology of Entrepreneurship.")

Still, there are some useful and important examples and discussions in Kahneman's book. In the next several weeks, I will be quoting some of these.


Book discussed:

Kahneman, Daniel. Thinking, Fast and Slow. New York: Farrar, Straus and Giroux, 2011.


The Becker article mentioned above is:

Becker, Gary S. "Irrational Behavior and Economic Theory." Journal of Political Economy 70, no. 1 (Feb. 1962): 1-13.


The Stigler-Becker article mentioned above is:

Stigler, George J., and Gary S. Becker. "De Gustibus Non Est Disputandum." American Economic Review 67, no. 2 (March 1977): 76-90.





June 29, 2012

A Renting Labor Force Is More Dynamically Mobil



RentalPropertyGraphic2012-06-12.jpg









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






(p. C2) The U.S. economy needs the dynamism that renting enables as much as--if not more than--it needs the stability that ownership engenders. In the current economy, there are vast gulfs between the employment pictures in different regions and states, from 12% unemployment in Nevada to 3% unemployment in North Dakota. But a steelworker in Buffalo, or an underemployed construction worker in Las Vegas, can't easily take his skills to where they are needed in North Dakota or Wyoming if he's underwater on his mortgage. Economists, in fact, have found that there is frequently a correlation between persistently high local unemployment rates and high levels of homeownership.


For the full essay, see:

DANIEL GROSS. "Renting Prosperity; Americans are getting used to the idea of renting the good life, from cars to couture to homes. Daniel Gross explores our shift from a nation of owners to an economy permanently on the move--and how it will lead to the next boom.." The Wall Street Journal (Sat., May 5, 2012): C1 & C2.

(Note: the online version of the essay has the date May 4, 2012.)






June 26, 2012

Sam Walton Was No Overnight Success



(p. 199) Sam Walton used to joke that people thought he was an overnight success. "No," he'd say, "they just heard of me last night."


Source:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.





June 22, 2012

Sam Walton Was "America's Greatest Entrepreneur of the Twentieth Century"



(p. 194) Sam Walton is my pick for America's greatest entrepreneur of the twentieth century.

He not only built the world's largest retailing empire and the single most valuable company in America, he created the institution with the greatest muscle to do good today.



Source:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.





June 14, 2012

"Under a Mountain in Omaha"



(p. 170) lnformatics had been run from the top down. Here's a story typical of the way the company worked. They had a trainer at headquarters who was told to educate the troops at the Federal Systems Division in northern California, which was run by Geno Tolari, a tough-minded football player from Pittsburgh. When the trainer arrived and announced, "I'm here to train your people," Geno shot back, "You can't train my people."

The trainer got haughty. After all, he was from headquarters. "I'm the education department. I train your people."

But Geno insisted, "You can't train my people because you don't know what they do."

So now the trainer asked, "Okay, what do they do?"

Geno answered, "I don't know."

The trainer thought Geno was joking with him, and insisted, "I'm the trainer; I need to know what they do."

That's when Geno confessed, "I can't tell you because I don't (p. 171) know. They're under a mountain in Omaha, and it's a military secret, and the Air Force won't tell us what they do."



Source:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.






June 13, 2012

Lincoln "Would Abhor" Roosevelt's "Progressivism"



LifeOfRobertTLincolnBK2012-06-11.jpg











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







(p. A13) In 1912, . . . , Robert Lincoln uncharacteristically leapt into the arena of national debate to challenge Theodore Roosevelt's appropriation of his father's name for TR's "New Nationalism" agenda. Robert, writing in the Boston Herald, labeled Roosevelt's progressivism a doctrine that the elder Lincoln "would abhor if living."


For the full review, see:

RYAN L. COLE. "BOOKSHELF; The Son Also Rises; Prominent lawyer, self-made millionaire, cabinet secretary--Robert Lincoln was more than just his father's greatest advocate." The Wall Street Journal (Fri., May 9, 2012): A13.

(Note: ellipsis added.)

(Note: the online version of the review has the date May 9, 2012.)


The book under review is:

Emerson, Jason. Giant in the Shadows: The Life of Robert T. Lincoln. Carbondale, Illinois: Southern Illinois University Press, 2012.






June 12, 2012

Obama's World Bank President Opposes Growth, Profits and Globalization



President Obama's pick for World Bank President, Dr. Jim Yong Kim, is scheduled to take office on July 1, 2012.



(p. A8) Dr. Kim has drawn fire recently for comments in a book he co-edited in 2000, "Dying for Growth." In a piece he co-authored for it, Dr. Kim co-wrote that "the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men."


. . .


. . . an economist who has become one of Dr. Kim's leading critics, New York University's William Easterly, said the World Bank nominee offered an "amateur" approach to economics through an "antiglobalization point of view" that is critical of corporations.

"His critique was much more radical, that the system itself was responsible for creating poverty," Mr. Easterly said.



For the full review, see:

SUDEEP REDDY. "WORLD NEWS; Criticism Over U.S.'s World Bank Pick Swells." The Wall Street Journal (Mon., April 9, 2012): A8.

(Note: ellipses added.)

(Note: online version of the article is dated April 8, 2012.)


William Easterly's wonderful and courageous book is:

Easterly, William. The Elusive Quest for Growth: Economists' Adventures and Misadventures in the Tropics. Cambridge, MA: The MIT Press, 2002 [1st ed. 2001].







June 10, 2012

If Milken's Bonds Are "Junk" then Yunis' Microloans Are "Junk" Too



(p. 167) The world owes a debt of gratitude to Mike Milken and his creative team. Did some people go too far? Yes. Did some of them take advantage of the freer flow of capital and end up doing more damage than good? Sure. But markets are messy. Major shifts in the flow of capital often lead to periods of excess before the pendulum swings back and equilibrium is restored. Mike Milken and his team made a major contribution to today's market atmosphere of high liquidity, which in turn has also helped lift the world's poor out of poverty. Today the Grameen Bank in Bangladesh has created microloans for mothers living on $2 a day. And that won Grameen the Nobel Prize. The Nobel Committee didn't call microloans "junk" debt.


Source:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.





June 8, 2012

Happiness Research Undermines European-Style Labor-Market Regulation



Bryan Caplan persuasively pans the book he is revieiwng. But along the way Caplan makes an intriguing observation of his own:



(p. A11) . . . , happiness research makes a powerful case against European-style labor-market regulation. For most economists, the effect on worker well-being is unclear. On the one hand, regulation boosts wages; on the other, it increases the probability that you will have no wages at all. From the standpoint of a happiness researcher, however, this is a no-brainer. A small increase in wages has but a small and ephemeral effect on happiness. A small increase in unemployment, by contrast, has a massive and--unlike most other factors--durable effect on happiness. Supposedly "humane" regulations to boost workers' incomes have a dire cost in terms of human happiness.


For the full review, see:

BRYAN CAPLAN. "BOOKSHELF; Lessons From Cloud Nine; Happiness predicts higher job performance and even future health. But what predicts happiness?" The Wall Street Journal (Tues., August 16, 2011): A11.

(Note: ellipsis added.)






June 6, 2012

Michael Milken Provided "Access to Capital for Growing Companies"



(p. 163) Although [high yield] . . . bonds eventually became known as a favored tool for leveraged--buyout specialists in the 1980s, Mike's original goal was different. He wanted to provide access to capital for growing companies that needed financing to expand and create jobs. Most of these companies lacked the investment grade" bond ratings required before the big financial institutions would back them. Mike knew that non-investment-grade (a k a "junk") companies create virtually all new jobs, and he believed that helping these companies grow strengthened the American economy and created good jobs for American workers.

It was by studying credit history at Berkeley in the 1960s that Mike developed his first great insight. He found that while there could be significant risk in any one high-yield bond, a carefully constructed portfolio of these assets produced a consistently better return over the long run than supposedly "safe" investment-grade debt. This was proved during the two decades of the 1970s and '80s when returns on high-yield bonds topped all other asset classes. Mike saw a great opportunity when he realized that the perception of default risk far exceeded the reality. In fact, these bonds had a surprisingly low-risk profile when adjusted for the potential returns.

After twenty years of superior gains, the high-yield bond market finally fell in 1990. Actually, it didn't fall--it was pushed by unwise government regulation that forced institutions to sell their bonds. The dip only lasted a year, however, with the market roaring back 46 percent in 1991.

Mike's competitors--Goldman Sachs, Morgan Stanley, and Credit Suisse First Boston, the old oligopolies of the syndication (p. 164) business--labeled them "junk bonds" to disparage Mike's brainchild. He was not a member of their white-shoe club and they were not going to take his act lying down.



Source:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.

(Note: bracketed words and ellipsis added.)





June 2, 2012

In Antitrust, as in Medicine, First Do No Harm



(p. 94) Western Union's lawyers carne up with a dusty old New York Stale law, dated 1905, that said no one could buy more than 10 percent of a telegraph company chartered in that state without the approval of Albany lawmakers. Hard to believe, but it was right there in black and white and there was no possibility of getting the New York State legislature to understand why it was vital to build digital highways.

Talk about unintended consequences!

(p. 95) Originally, the law was written to stop Western Union from monopolizing the telegram business, but the law backfired and was used by the monopolist for its own protection.



Source:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.





May 30, 2012

"Innovation" Should Be Reserved for Electricity, Printing Press, Telephone and iPhone



LightBulbInnovationGraphic2012-05-29.jpg Source of graphic: online version of the WSJ article quoted and cited below.



(p. B1) "Most companies say they're innovative in the hope they can somehow con investors into thinking there is growth when there isn't," says Clayton Christensen, a professor at Harvard Business School and the author of the 1997 book, "The Innovator's Dilemma."


. . .


Scott Berkun, the author of the 2007 book "The Myths of Innovation," which warns about the dilution of the word, says that what most people call an innovation is usually just a "very good product."

He prefers to reserve the word for civilization-changing inventions like electricity, the printing press and the telephone--and, more recently, perhaps the iPhone.


. . .


Mr. Berkun tracks innovation's popularity as a buzzword back to the 1990s, amid the dot-com bubble and the release of James M. Utterback's "Mastering the Dynamics of Innovation" and Mr. Christensen's "Dilemma."


. . .


(p. B8) Mr. Christensen classifies innovations into three types: efficiency innovations, which produce the same product more cheaply, such as automating credit checks; sustaining innovations, which turn good products into better ones, such as the hybrid car; and disruptive innovations, which transform expensive, complex products into affordable, simple ones, such as the shift from mainframe to personal computers.

A company's biggest potential for growth lies in disruptive innovation, he says, noting that the other types could just as well be called ordinary progress and normally don't create more jobs or business.

But the disruptive innovations can take five to eight years to bear fruit, he says, so companies lose patience.

It is far easier, he adds, for companies to just say they're innovating. "Everybody's innovating, because any change is innovation."



For the full story, see:

LESLIE KWOH. "You Call That Innovation? Companies Love to Say They Innovate, but the Term Has Begun to Lose Meaning." The Wall Street Journal (Weds., May 23, 2012): B1 & B8.

(Note: ellipses added.)






May 25, 2012

Wise and Wyly Words on Air Conditioning



(p. 42) It was February 1958. I got myself a room, not far from the office, in a little house built in the 1920s owned by a seventy-five-year-old woman named Mrs. Thompson. I lived in her "in-law's room," which meant I had my own front door, but I had to share the bathroom with her and, because I did not have a kitchen, I had to eat out. My rent was $10 a week.

I had my car, which meant I could get around, and the training school was air-conditioned, which meant my second summer in Dallas was a lot more pleasant than my first.

Thank you, Willis Haviland Carrier, for inventing air-conditioning. I owe you one. And I'm not the only one. At the height of the dot-com stock market bubble of 1999, Barton Biggs--the wise, graying investments guru at Morgan Stanley--posed this question to seventy-one people: which invention is more important, the Internet or air-conditioning? Barton was on the losing side of the vote, 70-2.

Obviously, he'd found seventy people who'd never spent an August in Texas.




Source:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.





May 23, 2012

First Principle for Trustbusters Should Be "Do No Harm"



(p. A2) In essence, Justice says that, beginning in 2008, several plankton, in the form of five publishers, conspired against a whale, Amazon, whose monopoly clout had imposed a $9.99 retail price for e-books.

The deal the publishers eventually reached with Apple unfixed the price of e-books by linking their prices to the cover price of the print version. More importantly, publishers could begin to reclaim the right to set e-book retail prices generally.


. . .


Apple, with 15% of the e-book market, is no monopolist. The five publishers, though Justice insists they dominate trade publishing, account for only about half of e-book sales. Crucially for antitrust, the barriers to entry are zilch: Amazon, with 60% market share, could create its own e-book imprint tomorrow and begin bidding for the most popular authors.


. . .


Let's go back to "per se" vs. "rule of reason." Because the 1890 Sherman Act is so sweeping and almost any business arrangement could be read as prohibited, courts understandably evolved a "rule of reason" to distinguish the permissible from the impermissible. Unfortunately, the result has been antitrust as we know it: wild and fluctuating discretion masquerading as law. Retail price maintenance alone has been embraced and dumped so many times by the courts that it must feel like Jennifer Aniston.

"Do no harm" would be a better principle for trustbusters.



For the full commentary, see:

HOLMAN W. JENKINS, JR. "BUSINESS WORLD; Washington vs. Books; What about piracy, low barriers to entry and the fact that literature isn't chopped liver?" The Wall Street Journal (Sat., April 14, 2012): A15.

(Note: the online version of the commentary is dated April 13, 2012.)






May 22, 2012

Entrepreneur Krupp Was Paternalistically "Benevolent" and Was Skeptical of Capitalism



KrupBK2012-05-17.jpg











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








(p. A13) Harold James, professor of history and international affairs at Princeton University, portrays a vastly different organization in "Krupp," a painstaking chronicle of a company that traces its roots to a steel foundry in Essen in 1810. Mr. James's Krupp is a company for which the manufacturing of war matériel was always of secondary interest to that of civilian production. The company might have preferred to concentrate on manufacturing railroad equipment and consumer goods, but in the developing and expansionist German empire of the 19th century, state requirements for the tools of power dovetailed with Krupp's desire for regular long-term contracts. The result for Krupp was a practical, if not deliberate, focus on armaments.

From the manufacturer's perspective, the emphasis on war matériel did not consign Krupp to the ranks of belligerent militarists; it was just smart business. "The purpose of work should be the common good," founder Alfred Krupp once said, or at least that quote graces a statue the company erected after his death in 1887. All through the 19th century, Mr. James says, the pursuit of profit was less central to the Krupp mission than building a solid enterprise within a framework of social responsibility. As early as 1836, Krupp established a voluntary health-insurance program for its workers. By the middle of the century, life-insurance and pension plans had been instituted. Workers' hostels and company hospitals were constructed. In exchange for this paternalistic benevolence, Krupp expected complete loyalty from its work force and vehemently opposed the slightest hint of union organization or political activity among its employees.

"Alfred Krupp perfectly fits the mold of the heroic entrepreneur," Mr. James writes. "Profoundly skeptical of joint-stock companies, banks, and capitalism in general, but also of big-scale science and modern research methods, he was a genius at extending to its utmost limits the possibilities of the craft entrepreneur."



For the full review, see:

JENNIFER SIEGEL. "BOOKSHELF; Heavy Industry, Burdened Past; The company's 19th-century founder said it was devoted to the "common good." In World War II, it worked hard for the Third Reich." The Wall Street Journal (Tues., April 17, 2012): A13.

(Note: the online version of the interview is dated April 16, 2012.)






May 21, 2012

Texas Was a Place Where It Was OK for an Entrepreneur to Be Poco Loco



(p. 42) Today, everybody knows something about Texas, but in those days Texas was still like an undiscovered oasis of freethinking, individualistic, action-oriented, business-minded people. It was a place where gut American characteristics were concentrated and magnified. A place where you could taste the frontier spirit that is part of our national heritage. There was a feeling in the air that you could invent yourself as any character you chose, and that your neighbors would leave you alone to be whoever you wanted to be. I liked the aggressiveness of the people in pursuing their goals, and the fact that you could be poco loco, as Spanish speakers say: a little crazy. This quality is a big help when you're an entrepreneur. I felt that, in Dallas. there was extra oxygen in the air.


Source:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.

(Note: italics in original.)





May 17, 2012

Quick Computing If Air Conditioning Worked



(p. 36) Using those IBM 650s was no easy feat. You had to take your turn in line with the other students, write your program, key punch it onto a big stack of cards, do your proofs to make sure it was accurate, and feed it into the computer. If you were lucky and the air-conditioning did not malfunction, you'd get your results back quickly. But there would be errors, which you had to correct, and then you had to repeat the process over and over again until the 650--working on the data with the program that you wrote--came up with the right answers.


Source:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.





May 16, 2012

"Birdseye Coaxes Readers to Re-examine Everyday Miracles"



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Source of book image: http://media.miamiherald.com/smedia/2012/05/04/10/50/13z9ot.Em.56.jpg



(p. C7) Birdseye made and lost money, went west to search for the cause of Rocky Mountain spotted fever and hunted fox for furs in Labrador, where he took his wife and infant son to live 250 miles by dogsled from the nearest hospital. He harpooned whales near his home in Gloucester, Mass., and wore a necktie while doing it. And he designed the industrial processes that made it possible to fast-freeze food, thus rendering obsolete much canned, dried, salted and smoked food and the musty basement bins that once held a winter's diet of turnips, onions and potatoes.

Food had been frozen earlier but more slowly. Crystallization turned it mushy and tasteless. It was poor man's food. In Labrador, fishing with the Inuit, Birdseye noticed that when a fish was pulled from a hole in the ice and into minus-40-degree air, it froze instantly, staying so fresh that when it was thawed months later, it would sometimes come alive.

He spent years putting together modern mass production with what he had seen in Labrador. By the 1920s, he was fast-freezing food that was far closer to fresh than any competition. "Today's locavore movement--the movement to shun food from afar and eat what is produced locally . . . would have perplexed him," Mr. Kurlansky writes. After all, "consumers could go to a supermarket and buy the food of California, France and China for less money."


. . .


The author makes a telling point about locavores: "We need to grasp that people who are accustomed only to artisanal goods long for the industrial. It is only when the usual product is industrial that the artisanal is longed for. This is why artisanal food, the dream of the food of family farms, caught on so powerfully in California, one of the early strongholds of agribusiness with little tradition of small family farms."

Birdseye's heroism has been forgotten, and his frozen food is taken for granted, the way all inventions are taken sooner or later. He sold his business for $23.5 million in 1929 to what would become General Foods. He stayed on as a consultant and also ran his light bulb company, which he would sell too.



For the full review, see:

HENRY ALLEN. "The American Way of Eating; Harlan Sanders and Clarence Birdseye, just like today's locavores, saw a meal as a way to improve people's lives." The Wall Street Journal (Sat., May 5, 2012): C5 & C7.

(Note: ellipsis added.)

(Note: the online version of the review is dated May 4, 2012.)




(p. C6) "Birdseye" is a slight but intriguing book that raises far more questions than it answers. But it indeed coaxes readers to re-examine everyday miracles like frozen food, and to imagine where places with no indigenous produce would be without them. It emphasizes the many steps that went into developing such a simple-seeming process.


For the full review, see:

JANET MASLIN. "BOOKS OF THE TIMES; The Inventor Who Put Frozen Peas on Our Tables." The New York Times (Thurs., April 26, 2012): C6.

(Note: the online version of the review is dated April 25, 2012.)



Book reviewed:

Kurlansky, Mark. Birdseye: The Adventures of a Curious Man. New York: Doubleday, 2012.



KurlanskyMark2012-05-07.jpg











"Mark Kurlansky." Source of caption and photo: online version of the NYT article quoted and cited above.







May 13, 2012

A "Boring" and "Excellent" Business Education



(p. 34) Most of what they taught us in those days was functional. This was before they added "entrepreneurship" to business courses. It was all about manufacturing, marketing, and personnel. I found that somewhat boring. I had two favorite courses. The first was Small Business. It was the only course where all the pieces carne together. The other was Computing, which was the first computer course that the Michigan Business School had ever taught. I had a feeling that this was the big new thing. But, more important, it was what IBM did. I had never seen a computer lab before. This was soon after Remington Rand made headlines with its UNIVAC I, the world's first commercial computer.


. . .


(p. 59) The University of Michigan is an excellent school. I loved being there and I am proud to have earned an MBA. When I was there, I noticed that the fìve-and--ten-cents-store founder, Sebastian S. Kresge--the man who invented the Kmart chain--had given them Kresge Hall. When I could afford to, I figured, why not do the same? I have always been so grateful for what I learned there. In 1997 I gave the school funding for a Sam Wyly Hall. (A few years earlier, Charles and I had helped to build Louisiana Tech's 16-story Wyly Tower of Learning.) It's fulfilling to me that today Paton Scholars study at Sam Wyly Hall on the Ann Arbor campus.



Source of both quotes:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.

(Note: ellipsis added.)





May 12, 2012

Some Tasks Are Done Better in Private Offices



QuietBK2012-05-03.jpg
















Source of book image: http://timeopinions.files.wordpress.com/2012/01/quiet-final-jacket.jpg



(p. 4) When the R.C. Hedreen Company, a real estate development firm based in Seattle, commissioned a renovation of a 10,800-square-foot floor in an old downtown office building five years ago, it specified a perimeter of private offices. Collaborative spaces are provided for creative teamwork, but the traditional offices remain the executives' home ports.

''Individually, a lot of our workday is taken up with tasks that are better served by working alone in private offices,'' says David Thyer, Hedreen's president.

Susan Cain, author of ''Quiet: The Power of Introverts in a World That Can't Stop Talking,'' is skeptical of open-office environments -- for introverts and extroverts alike, though she says the first group suffers much more amid noise and bustle.

Introverts are naturally more comfortable toiling alone, she says, so they will cope by negotiating time to work at home, or by isolating themselves with noise-canceling headphones -- ''which is kind of an insane requirement for an office environment, when you think about it,'' she says.

Ms. Cain also says humans have a fundamental need to claim and personalize space. ''It's the room of one's own,'' she says. ''Your photographs are on the wall. It's the same reason we have houses. These are emotional safety zones.''



For the full story, see:

LAWRENCE W. CHEEK. "Please, Just Give Me Some Space: In New Office Designs, Room to Roam and to Think." The New York Times, SundayBusiness Section (Sun., March 18, 2012): 1 & 4.



The book mentioned is:

Cain, Susan. Quiet: The Power of Introverts in a World That Can't Stop Talking. New York: Crown, 2012.






May 8, 2012

Entrepreneur Sam Wyly Hard to Classify



1000-dollars-and-an-ideaBK.jpg











Source of book image: http://www.charlesandsamwyly.com/images/1000-dollars-and-an-idea.jpg



I sometimes divide entrepreneurs into two broad types: free agent entrepreneurs and innovative entrepreneurs. Free agent entrepreneurs are the self-employed. Innovative entrepreneurs are the agents of Schumpeter's process of creative destruction.

Then there are entrepreneurs like Sam Wyly who don't fit very well in either category.

He built or improved businesses in ways that made the world better, but usually did not involve breakthrough innovations.

Like many of the entrepeneurs considered in Amar Bhidé's main books, Wyly grew businesses that served consumers, enriched investors and created jobs. Some of his most important start-ups, especially early-on, involved computer services. And his efforts to compete with the government-backed AT&T monopoly, were heroic.

I read the 2008 version of his autobiography a few months ago, and found that it contained a few stories and observations that are worth pondering. In the next few weeks I will briefly quote a few of these.


The 2008 Wyly autobiography is:

Wyly, Sam. 1,000 Dollars and an Idea: Entrepreneur to Billionaire. New York: Newmarket Press, 2008.


I have not read the 2011 version of Wyly's autobiography:

Wyly, Sam. Beyond Tallulah: How Sam Wyly Became America's Boldest Big-Time Entrepreneur. New York: Melcher Media, 2011.


The dominant examples in Bhidé's two main books are entrepreneurs like Wyly. The two main Bhidé books are:

Bhidé, Amar. The Origin and Evolution of New Businesses. Oxford, UK: Oxford University Press, 2000.

Bhidé, Amar. The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World. Princeton, NJ: Princeton University Press, 2008.






May 3, 2012

Steve Jobs Channels Ellis Wyatt



(p. 260) In 2007 Forbes magazine named Steve Jobs the highest-paid exec-(p. 261)utive of any of America's five hundred largest companies, based on gains in the value of stock granted to him at Apple. He was on the board of directors of the Walt Disney Co. Yet his former residence in Woodside, where he had once met with Catmull and Smith and mused about buying Lucasfilm's Computer Division, was now in a state of decay under his ownership.

He had wanted to demolish it; after a group of neighborhood residents opposed his plan to do so, he left the house open to the elements. The interior suffered damage from water and mold. Vines crept up the stucco walls and wandered inside.

The memories that haunted its hallways were those of Jobs's darkest times. He had bought the house only months before the humiliation of his firing from Apple; he lived in it through that firing and through the hard, money-hemorrhaging years of Pixar and NeXT. He left it as his fortunes were about to change, as he was sending Microsoft away from Pixar, convinced that he had something he should hold on to.

When a judge ruled against his quest for a demolition permit, Jobs appealed in 2006 and 2007 all the way to the California Supreme Court, but he lost at every stage. He received proposals from property owners offering to cart the house away in sections and restore it elsewhere; he rejected them. One way or another, it seemed, he meant for the house to be destroyed.



Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: italics in original.)

(Note: The passage above is from the Epilogue and the pages given above are from the hardback edition (pp. 260-261). The identical passage also appears in the 2009 paperback edition, but on p. 265.





May 2, 2012

"There Was Never a Plan . . . Just a Series of Mistakes"



CaroRobert2012-04-30.jpg "Robert Caro in his Manhattan office. The later volumes of his L.B.J. biography have taken more years to write than it took the former president to live them." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. 37) "There was never a plan," Caro said to me, explaining how he had become a historian and biographer. "There was just a series of mistakes."


. . .


(p. 38) Caro had a[n] . . . epiphany about power in the early '60s. He had moved on to Newsday by then, where he discovered that he had a knack for investigative reporting, and was assigned to look into a plan by Robert Moses to build a bridge from Rye, N.Y., across Long Island Sound to Oyster Bay. "This was the world's worst idea," he told me. "The piers would have had to be so big that they'd disrupt the tides." Caro wrote a series exposing the folly of this scheme, and it seemed to have persuaded just about everyone, including the governor, Nelson Rockefeller. But then, he recalled, he got a call from a friend in Albany saying, "Bob, I think you need to come up here." Caro said: "I got there in time for a vote in the Assembly authorizing some preliminary step toward the bridge, and it passed by something like 138-4. That was one of the transformational moments of my life. I got in the car and drove home to Long Island, and I kept thinking to myself: 'Everything you've been doing is baloney. You've been writing under the belief that power in a democracy comes from the ballot box. But here's a guy who has never been elected to anything, who has enough power to turn the entire state around, and you don't have the slightest idea how he got it.' "

The lesson was repeated in 1965, when Caro had a Nieman fellowship at Harvard and took a class in land use and urban planning. "They were talking one day about highways and where they got built," he recalled, "and here were these mathematical formulas about traffic density and population density and so on, and all of a sudden I said to myself: 'This is completely wrong. This isn't why highways get built. Highways get built because Robert Moses wants them built there. If you don't find out and explain to people where Robert Moses gets his power, then everything else you do is going to be dishonest.' "



For the full story, see:

CHARLES McGRATH. "Robert Caro's Big Dig." The New York Times Magazine (Sun., April 15, 2012): 34-39 & 52.

(Note: ellipses and bracketed letter added.)

(Note: the online version of the story is dated April 12, 2012.)


Caro's book on Robert Moses is:

Caro, Robert A. The Power Broker: Robert Moses and the Fall of New York. New York: Alfred A. Knopf, Inc., 1974.





April 30, 2012

Physicist Says "Financial Models Are Only Mediocre Metaphors"



ModelsBehavingBadlyBK2012-04-08.jpg











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








(p. A19) Trained as a physicist, Emanuel Derman once served as the head of quantitative analysis at Goldman Sachs and is currently a professor of industrial engineering and operations research at Columbia University. With "Models Behaving Badly" he offers a readable, even eloquent combination of personal history, philosophical musing and honest confession concerning the dangers of relying on numerical models not only on Wall Street but also in life.

Mr. Derman's particular thesis can be stated simply: Although financial models employ the mathematics and style of physics, they are fundamentally different from the models that science produces. Physical models can provide an accurate description of reality. Financial models, despite their mathematical sophistication, can at best provide a vast oversimplification of reality. In the universe of finance, the behavior of individuals determines value--and, as he says, "people change their minds."

In short, beware of physics envy. When we make models involving human beings, Mr. Derman notes, "we are trying to force the ugly stepsister's foot into Cinderella's pretty glass slipper. It doesn't fit without cutting off some of the essential parts." As the collapse of the subprime collateralized debt market in 2008 made clear, it is a terrible mistake to put too much faith in models purporting to value financial instruments. "In crises," Mr. Derman writes, "the behavior of people changes and normal models fail. While quantum electrodynamics is a genuine theory of all reality, financial models are only mediocre metaphors for a part of it."



For the full review, see:

BURTON G. MALKIEL. "BOOKSHELF; Physics Envy; Creating financial models involving human behavior is like forcing 'the ugly stepsister's foot into Cinderella's pretty glass slipper.'" The Wall Street Journal (Weds., December 14, 2011): A19.


The book under review is:

Derman, Emanuel. Models.Behaving.Badly: Why Confusing Illusion with Reality Can Lead to Disaster, on Wall Street and in Life. New York: Free Press, 2011.





April 29, 2012

"In a Garage Pursuing a Dream"



(p. 257) The increase in computer-animated films . . . marked the dawning of a democratic moment in artistic expression and entrepreneurship. Just as technological developments in digital production were (p. 258) opening the door more widely in live-action filmmaking, technology was making computer animation more accessible every year.

Computer animation was still an art form that required talent and intense Commitment; it wasn't within reach of Everyman. The accessibility of its tools, however, brought new possibilities. Where Pixar's early years had required a succession of wealthy patrons--Alexander Schure, George Lucas, and Steve Jobs--an enterprising artist of the early twenty-first century was not so dependent. The hardware and software of an animator's workstation, once the province of major studios and effects houses, could now be had for the cost of a good used car. As Pixar started its new life as a crown jewel of the Walt Disney Co., it was plausible that it would sooner or later have to jockey release dates with a new kind of rival. Or, rather, it would have to face a rival that looked much the way Pixar itself did thirty years earlier, as a group of men and women in a garage pursuing a dream.



Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: ellipsis added.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





April 26, 2012

NGO Workers Are More Concerned with Following Plan than Achieving Mission



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Source of book image: http://www.bibliovault.org/thumbs/978-0-8047-7672-1-frontcover.jpg






In the quote below, "NGO" means "Non-Government Organization," for instance, a philanthropy.


(p. 17) As for the state's representatives, their authority was what Coburn calls a "useful fiction." The district governor wielded his connections to Kabul as best he could, but did not possess great influence, in part because -- in keeping with the most sophisticated state-building methods -- government aid was mainly distributed by locally elected committees. Istalif's police were seen as hapless at best, predatory at worst; Coburn found that villagers were eager to protect him from a local officer. The French soldiers who periodically showed up in the bazaar had little impact, though their presence did become an excuse for keeping women out of the area. But Coburn observed that "no group was less effective at accumulating influence" than the NGO community. The best development experts accomplished little: their turnover was high, and they frequently bestowed their largess on deserving locals -- women, refugees who'd returned from abroad with some education, victims of wartime injuries -- who didn't have the connections or ability to capitalize on their good fortune. NGO workers seemed less concerned with achieving a valuable outcome than with demonstrating to their backers that they had followed a mission plan to the letter.


For the full review, see:

ALEXANDER STAR. "Applied Anthropology." The New York Times Book Review (Sun., November 20, 2011): 16-17.

(Note: the online version of the commentary is dated November 18, 2011, and has the title "Afghanistan: What the Anthropologists Say.")


The book being discussed is:

Coburn, Noah. Bazaar Politics: Power and Pottery in an Afghan Market Town. Stanford Studies in Middle Eastern and Islamic Societies and Cultures. Stanford, CA: Stanford University Press, 2011.





April 25, 2012

Intellectual Property Rights as Refined in Case Law



The questions and answers in court illustrate how case law would approach the issue of refining and reforming intellectual property issues based on concepts of justice, but also on practical issues. (This is from Disney and Pixar lawyer Steve Marenberg questioning Dick Cook in testimony before Judge Clarence Brimmer, Jr. on November 1, 2001, the day before Monsters, Inc. was scheduled to be released.)



(p. 193) Q : So obviously the delay of the film by injunction or otherwise would affect the first weekend and the ability to gain all of the benefits you've gotten by virtue of the tact that November second is the first weekend?

A : It would be a disaster.

Q : And that would affect, then, not only the theatrical performance of the film, but what other markets in the United Sates?

A : Well, it would completely be a snowball effect in a reverse way in that it would certainly put a damper on all of the home video activities, all the DVD activities; in fact, would influence international because international is greatly influenced on how well it does in the United States, and by taking that away, it would definitely, definitely, have a big, big impact on the success of the film.

And furthermore, going further, is that it would take away any of the other ancillary things that happen, you (p. 194) know, whether it would become a television series, whether or not it becomes a piece of an attraction at the parks, whether it becomes a land at the parks, or any of those kinds of things.



Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)

(Note: on p. 190 of the book, Price misspells Marenberg's name as "Marenburg.")





April 21, 2012

Workers Want to See Compensation Related to Contribution



This is a great example contra (or at least qualifying) Daniel Pink's claim that all you need do for knowledge workers is provide them enough money so that they can provide for the basic needs of themselves and their family.



(p. 145) The public offering process brought details of the intended allocation of Pixar stock options into view. A registration statement and other documents with financial data had to be prepared for the Securities and Exchange Commission and a prospectus needed to be made ready for potential investors. These documents had to be reviewed and edited, and it was here that the word apparently leaked: A small number of people were to receive low-cost options on enormous blocks of stock. Catmull, Levy, and Lasseter were to get options on 1.6 million shares apiece; Guggenheim and Reeves were to get 1 million and 840,000, respectively. If the company's shares sold at the then-planned price of fourteen dollars, the men would be instant multimillionaires.

The revelation was galling. Apart from the money, there was the symbolism: The options seemed to denigrate the years of work everyone else had put into the company. They gave a hollow feel to Pixar's labor-of-love camaraderie, its spirit that everyone was there to do cool work together. Also, it was hard not to notice that Levy, one of the top recipients, had just walked in the door.

"There was a big scene about all that because some people got (p. 146) huge amounts more than other people who had come at the same time period and who had made pretty significant contributions to the development of Pixar and the ability to make Toy Story," Kerwin said. "People like Tom Porter and Eben Ostby and Loren Carpenter--guys that had been there since the beginning and were part of the brain trust."

Garden-variety employees would also get some options, but besides being far fewer, those options would vest over a four-year period. Even employees who had been with the organization since its Lucasfilm days a decade earlier--employees who had lost all their Pixar stock in the 1991 reorganization--would be starting their vesting clock at zero. In contrast, most of the options of Catmull, Lasseter, Guggenheim, and Reeves vested immediately--they could be turned into stock right away.

"I decided, 'Well, gee, I've been at this company eight years, and I'll have been here twelve years before I'm fully vested,' " one former employee remembered. " 'It doesn't sound like these guys are interested in my well-being.' A lot of this piled up and made me say, 'What am I doing? I'm sitting around here trying to make Steve Jobs richer in ways he doesn't even appreciate.' "



Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: italics in original.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)


For Daniel Pink's views, see:

Pink, Daniel H. Drive: The Surprising Truth About What Motivates Us. New York: Riverhead Books, 2009.






April 19, 2012

"Dematerialization" Means More Goods from Fewer Resources



(p. C4) Economic growth is a form of deflation. If the cost of, say, computing power goes down, then the users of computing power acquire more of it for less--and thus attain a higher standard of living. One thing that makes such deflation possible is dematerialization, the reduction in the quantity of stuff needed to produce a product. An iPhone, for example, weighs 1/100th and costs 1/10th as much as an Osborne Executive computer did in 1982, but it has 150 times the processing speed and 100,000 times the memory.

Dematerialization is occurring with all sorts of products. Banking has shrunk to a handful of electrons moving on a cellphone, as have maps, encyclopedias, cameras, books, card games, music, records and letters--none of which now need to occupy physical space of their own. And it's happening to food, too. In recent decades, wheat straw has shrunk as grain production has grown, because breeders have persuaded the plant to devote more of its energy to making the thing that we value most. Future dematerialization includes the possibility of synthetic meat--produced in a lab without brains, legs or guts.

Dematerialization is one of the reasons that Peter Diamandis and Steven Kotler give for the future's being "better than you think" in their new book, "Abundance."



For the full commentary, see:

MATT RIDLEY. "MIND & MATTER; The Future Is So Bright, it's Dematerializing." The Wall Street Journal (Sat., February 25, 2012): C4.


The book mentioned by Ridley is:

Diamandis, Peter H., and Steven Kotler. Abundance: The Future Is Better Than You Think. New York: Free Press, 2012.






April 18, 2012

"Scratch a White Liberal and You'll Find a Bigot"



My-long-trip-homeBK2012-04-04.jpg















Source of book image: http://www.mediabistro.com/fishbowldc/files/2011/10/my-long-trip-home.jpg



(p. C1) As a social studies major in his junior year at Harvard, Mark Whitaker attended a debate on the subject of ethnicity. One participant was the chairman of the department. Mr. Whitaker stood up to raise some questions.

"What would you tell someone who didn't have a clear ethnic identity?" he asked. "For example, what would you tell someone who had one parent who was black and another who was white? Who had one parent who was American and another who was European? Who had moved dozens of times as a child and didn't have a specific place to call home?" Everyone in the room knew that Mr. Whitaker was talking about himself.

"I guess I would say that that's too bad," the professor answered. "In the future I hope we don't have too many more people like you."

Mr. Whitaker recounts this story in "My Long Trip Home," a book filled with as much family tumult as Jeannette Walls described in "The Glass Castle" and a racial factor to boot. It's a story that registers not only for its shock value but also for the perspective and wisdom with which it can now be told.

The episode did not anger him, he said. He saw it as his professor's Freudian slip, "exposing a wish to hold on to a sense of certainty about his roots in the face of a gathering demographic storm that threatened to wash them away." But Mr. Whitaker's troubled and combative black father, who is the book's central figure through sheer force of personality, had a more heated reaction. "As I always say, scratch a white liberal and you'll find a bigot," Cleophaus Sylvester Whitaker Jr. told his son.



For the full review, see:

JANET MASLIN. "BOOKS OF THE TIMES; Born Along the Racial Fault Line." The New York Times (Mon., November 7, 2011): C1 & C4.

(Note: the online version of the review is dated November 6, 2011.)


The book under review is:

Whitaker, Mark. My Long Trip Home: A Family Memoir. New York: Simon & Schuster, 2011.




WhitakerMark2012-04-04.jpg











"Mark Whitaker" Source of caption and photo: online version of the NYT article quoted and cited above.









April 17, 2012

Add to Your List of Marketing Mistakes



(p. 142) The consumer products arm of Disney--the group responsible for licensing toys and other tie-ins--was also slow to see the potential of Toy Story. It was a case of out of sight, out of mind: Toy Story was in production hundreds of miles away. Preoccupied with two other forthcoming releases, Pocahontas and The Hunchback of Notre Dame, Disney Consumer Products left the Pixar film on the back burner. When Guggenheim met with one of the division's senior licensing executives in December 1994, he was alarmed to discover that she saw no licensing potential in the film.

"We put together a presentation reel of scenes from the film that we'd already completed, and material on how the film was being made" Guggenheim said. "We were taking that around the company so people could get a feeling of what this film was all about."

The executive told him, I don't know how we're going to do toys for this.

"What do you mean?" Guggenheim queried. "It's Toy Story. You know, Toy . . . Story."

Yes, she said, but you have all these toys that already exist--Mr. Potato Head, Speak & Spell, all that stuff. How are we ever going to make money off that?

"But you have all these original characters. You've got Buzz, you've got Woody."



Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: ellipsis and italics in original.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





April 13, 2012

Mhyrvold Left Work with Hawking for the Excitement of Entrepreneurship



(p. 139) Microsoft was represented ¡n the discussion by its senior vice president for advanced technology, a thirty-five-year-old Nathan Myhrvold. After finishing his Ph.D. at Princeton at age twenty-three, Myhrvold had worked for a year as a postdoctoral fellow with the physicist Stephen Hawking at Cambridge, tackling theories of (p. 140) gravitation and curved space-time, before taking a three-month leave of absence to help some friends in the Bay Area with a software project. He became caught up in the excitement of personal computer software and entrepreneurship and never went back. In Berkeley, he co-founded a company called Dynamical Systems to develop operating system for personal computers, which struggled for two years until Microsoft bought it in 1986. At Microsoft, he persuaded Bill Gates to let him establish a corporate research center, Microsoft Research, with Myhrvold himself in charge.


Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: italics in original.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





April 10, 2012

James Morrison Was a "Retailing Genius"



GeniusForMoneyBK2012-03-25.jpg











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








(p. A13) Morrison was not an inventor-capitalist but a retailing genius, more Sam Walton than Steve Jobs. He catered to England's growing consumer class by diversifying his wares and, in his ever-growing network of shops, introducing luxurious showrooms. He was a disciple of volume, seeking "high turnover, small profits, and quick returns." He sent his traveling men not to find buyers, as was typical, but to find the best suppliers. Advantageously purchased in bulk, goods would sell themselves. Morrison's buyers were specialists, anticipating the practices of later department stores. He kept his finger on the pulse of fashion and on "market making" events. Legendarily, he was never caught short of black crepe when a member of the royal family was ill. "The Duke of York has died most conveniently," he once quipped while tallying profits.

The "Napoleon of shopkeepers" went on to found his own merchant bank and accumulate a prodigious investment portfolio, much of it in American bonds. Strategic lending to broke aristocrats greased Morrison's way into Parliament, where he served as a "radical Whig," championing political reform and free trade.


. . .


. . . Morrison conducted both his retailing and his banking business with impeccable transparency. The investments he sold were honestly structured, and the risks he ran were his own, backed by sufficient collateral. Morrison's was an era before bailouts, an era of some moral luck but little moral hazard. Markets rose and fell with reasonably predictable effects. For him and many of his contemporaries, credit remained a personal matter of the highest consequence. In this, alas, a character such as Morrison now seems more alien than familiar.



For the full review, see:

JEFFREY COLLINS. "BOOKSHELF; King of the Shopkeepers; The lessons of a merchant prince and a brilliant retailer whose wool, linen, silk, thread and lace flew off the shelves." The Wall Street Journal (Mon., March 5, 2012): A13.

(Note: ellipses added.)


The book under review is:

Dakers, Caroline. A Genius for Money: Business, Art and the Morrisons. New Haven, CT: Yale University Press, 2012.






April 5, 2012

Lasseter's Success Came from Seeing How the Details Affected the Storytelling



(p. 138) "I had no reason to think it would be any good," recalled Barzel, who was then a recently minted California Institute of Technology Ph.D. on the lighting team. "I knew John was absolutely brilliant as a animator of shorts. But I've read authors who write good short stories and crummy novels; I figured it's a different skill. I had no reason to think John would have the skill to pull off a full-length movie."

He expected something that animators and animation buffs might find interesting, but that probably would not have a particularly wide audience.

"I joined because I wanted the practical experience," he said, "I thought, Well, it's going to be the first full-length [computer-animated] movie, so it'll be a fun thing to have been associated with, however it turns out."

What finally made Barzel a believer was watching Lasseter at work. He found that Lasseter had an uncanny ability to shift between the macro level of the entire film and the micro level of whatever detail he was dealing with at the moment. "Looking at an individual frame -- it's meticulous work-- he would always be aware of its role in the larger context of storytelling," Barzel recalled. "He'd say something like, 'This is the first time this character responds to that situation; it's really important that he get the right glint in his eye.' " Barzel started to think, John knows what he's doing. This movie could be really good.



Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: italics and brackets in original.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





April 4, 2012

Lean Start-Ups "Ruthlessly Cull Failures"



eric-ries-lean-startup.jpgEric Ries and his book. Source of photo: http://nemonics.files.wordpress.com/2011/11/eric-ries-lean-startup.jpg?w=584&h=262



(p. D3) "What's different in the Valley is that we've found a quasi-scientific method for reinventing businesses and industries, not just products," said Randy Komisar, a partner in a leading venture capital firm, Kleiner Perkins Caufield & Byers, and a lecturer on entrepreneurship at Stanford University. "The approach is much more systematic than it was several years ago."

The newer model for starting businesses relies on hypothesis, experiment and testing in the marketplace, from the day a company is founded. That is a sharp break with the traditional approach of drawing up a business plan, setting financial targets, building a finished product and then rolling out the business and hoping to succeed. It was time-consuming and costly.

The preferred formula today is often called the "lean start-up." Its foremost proponents include Eric Ries, an engineer, entrepreneur and author who coined the term and is now an entrepreneur in residence at the Harvard Business School, and Steven Blank, a serial entrepreneur, author and lecturer at Stanford.

The approach emphasizes quickly developing "minimum viable products," low-cost versions that are shown to customers for reaction, and then improved. Flexibility is the other hallmark. Test business models and ideas, and ruthlessly cull failures and move on to Plan B, Plan C, Plan D and so on -- "pivoting," as the process is known.



For the full story, see:

STEVE LOHR. "Looking Backward to Put New Technologies in Focus." The New York Times (Tues., December 6, 2011): D3 & D4.

(Note: the online version of the story is dated December 5, 2011.)


Ries' recent book is:

Ries, Eric. The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses. New York: Crown Business, 2011.


Blank's books are:

Blank, Steve. Not All Those Who Wander Are Lost. CafePress.com, 2010.

Blank, Steven Gary. The Four Steps to the Epiphany: Successful Strategies for Products That Win. 2nd ed: CafePress.com, 2005.

Blank, Steve, and Bob Dorf. The Startup Owner's Manual: The Step-by-Step Guide for Building a Great Company. K & S Ranch, 2012.


Another relevant book is:

Maurya, Ash. Running Lean: Iterate from Plan A to a Plan That Works. 2nd ed. Sebastopol, CA: O'Reilly Media, 2012.






April 1, 2012

"Being Able to Work on a Great Project"



(p. 133) Recruiting was brisk; the magnet for talent was not the pay, generally mediocre, but rather the allure of taking part in the first fully computer-animated feature film. "Disney gave us a very modest budget [$17.5 million] for Toy Story," Guggenheim said. "Although that budget went up progressively over time, it didn't afford for very high salaries, unfortunately. We tried to make the other working conditions better. Just the enthusiasm of being able to work on a great project is as often as not what attracts artists and animators."


Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: italics and brackets in original.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





March 23, 2012

Faraday and Einstein Were Visual and Physical Thinkers, Not Mathematicians



Faraday_Chemical_History-of-a-CandleBK2012-03-08.jpg













Source of book image: http://www.rsc.org/images/Faraday_Chemical_History-of-a-Candle_180_tcm18-210390.jpg





(p. C6) Michael Faraday is one of the most beguiling and lovable figures in the history of science. Though he could not understand a single equation, he deduced the essential structure of the laws of electromagnetism through visualization and physical intuition. (James Clerk Maxwell would later give them mathematical form.) Albert Einstein kept a picture of Faraday over his desk, for Einstein also thought of himself primarily as a visual and physical thinker, not an abstract mathematician.


. . .


Faraday's text is still charming and rich, a judgment that few popular works on science could sustain after so many years. Though he addresses himself to an "auditory of juveniles," he calls for his audience to follow a close chain of reasoning presented through a series of experiments and deductions.


. . .


. . . : "In every one of us there is a living process of combustion going on very similar to that of a candle," as Faraday illustrates in his experiments.

In his closing, he turns from our metabolic resemblance to a candle to his deeper wish that "you may, like it, shine as lights to those about you."



For the full review, see:

PETER PESIC. "BOOKSHELF; Keeper of the Flame." The Wall Street Journal (Sat., January 7, 2012): C6.

(Note: ellipses added.)


Book under review:

Faraday, Michael. The Chemical History of a Candle. Oxford, UK: Oxford University Press 2011.






March 21, 2012

In History, Documenting Your Sources Matters More than Your Credentials



DysonGeorge2012-03-09.jpg









George Dyson. Source of photo: online version of the NYT interview quoted and cited below.





(p. D11) BELLINGHAM, Wash. -- More than most of us, the science historian George Dyson spends his days thinking about technologies, old and very new.


. . .


Though this 58-year-old author's works are centered on technology, they often have an autobiographical subtext. Freeman Dyson, the physicist and mathematician who was a protagonist of Project Orion, is his father. Esther Dyson, the Internet philosopher and high-tech investor, is his sister. We spoke for three hours at his cottage here, and later by telephone. A condensed and edited version of the conversations follows.


. . .


. . . today you make your living as a historian of science and technology. How does a high school dropout get to do that?

Hey, this is America. You can do what you want! I love this idea that someone who didn't finish high school can write books that get taken seriously. History is one of the only fields where contributions by amateurs are taken seriously, providing you follow the rules and document your sources. In history, it's what you write, not what your credentials are.



For the full interview, see:

CLAUDIA DREIFUS, interviewer. "Looking Backward to Put New Technologies in Focus." The New York Times (Tues., December 6, 2011): D11.

(Note: question bolded in original; ellipses added.)

(Note: the online version of the interview is dated December 5, 2011.)


Dyson's most recent book is:

Dyson, George. Turing's Cathedral: The Origins of the Digital Universe. New York: Pantheon Books, 2012.






March 19, 2012

"No Street Protester Has Yet Endowed a University Department"



AmericanEgyptologistBK2012-03-08.jpg











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







(p. A13) Over the next three decades, Breasted would excavate a series of sites in Egypt, the Sudan and the Near East. He would also develop an important ability to identify rich and influential benefactors and to gain their confidence without resorting to sycophancy. . . . Notable among the Maecenas figures he cultivated was John D. Rockefeller.

Rockefeller had been an early patron of the University of Chicago; he might have done something for Near Eastern studies in any case, but it is clear that without Breasted's energy and enthusiasm, Rockefeller's scholarly philanthropy would never have taken the course it did. Eventually, he provided the funding for an entire Oriental Institute in 1931. (The OI, as it is affectionately known, had existed from 1919 but essentially as a concept between academic committees.) Together with its Egyptian offshoot, Chicago House, the OI is perhaps the leading center of Egyptology and Assyriology in the world. At the moment, on both sides of the Atlantic, we are hearing a lot about the evils of bankers and capitalism, but as far as I know no street protester has yet endowed a university department.



For the full review, see:

JOHN RAY. "BOOKSHELF; From Illinois To Mesopotamia; Excavating sites in Egypt and the Near East, writing groundbreaking books and developing a talent for courting wealthy donors." The Wall Street Journal (Thurs., February 23, 2012): A13.

(Note: ellipsis added.)


Book under review:

Abt, Jeffrey. American Egyptologist: The Life of James Henry Breasted and the Creation of His Oriental Institute. Chicago: University of Chicago Press, 2012.






March 16, 2012

Lasseter's Epiphany: "This Is What Walt Was Waiting For"



(p. 52) In a trailer on the Disney lot, Lasseter huddled with Rees and Kroyer to look at the first computer-generated scene to come in--a race among drivers in virtual motorcycles known as light cycles. The scene had no character animation and its graphics were rudimentary, but it brought Lasseter an epiphany. The dimensionality of the scene was something he had never witnessed before. If this technology could be melded with Disney animation, he thought, he would have the makings of a revolution. Until then, three-dimensional effects in animation had required difficult, costly sessions with the multistory "multiplane" camera, practical for only a few key sequences in a film, if that. The computers could even move the audience's point of view around a scene like a Steadicam. The possibilities seemed infinite.

"I couldn't believe what I was seeing," he said later. "Walt Disney, all his career, all his life, was striving to get more dimension in his (p. 53) animation . . . and I was standing there, looking at it, going, 'This is what Walt was waiting for.'"

He was not able to interest the animation executives in it; they did not care to hear about new technology unless it made animation faster or cheaper.



Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: ellipsis in original.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





March 15, 2012

"The Astaires' Defiant New World Optimism"



AstairesBK2012-03-07.jpg













Source of book image:
http://ecx.images-amazon.com/images/I/513pEMI-LeL._.jpg





(p. C6) The Astaire universe was made of crazy joy, that guiltless worldview unique to the art of the American 1920s. The Astaires' trademarked exit was the gleefully mischievous "runaround," in which they trotted about the stage in ever increasing circles as if joined at the hip, expanding their geometry till they reached the wings and vanished. It was goofy and expert at once, a way of defining musical comedy as the state of being young, cute and in love with life.


. . .


"For all their jazz-fueled modernity," Ms. Riley writes of the Astaires' London réclame, they were "anti-modernist." This pair was more than sunshine. The sheer zest with which they frisked through a show ran "counter to High Modernism's pervasive sense of the instability of the self and the universe." This was the time, Ms. Riley notes, of "The Waste Land," "Ulysses," "Vile Bodies." Art was in despair. But the Astaires' "defiant New World optimism" proved a remedy: meeting cute, assuming disguises and high-hatting the blues with fascinating rhythm. It's a very American notion: that a strong foundation in popular art creates a positive worldview in general. Call it the audacity of charm.


. . .


They don't make shows that way anymore, and Ms. Riley's book is thus a resuscitation of a naive but perhaps more authentically native showbiz, an art of natural forces. "The Astaires" is a salute to an America at ease with itself and doing something wonderful in the song-and-dance line that seemed, for a time, like the hottest thing in the culture.



For the full review, see:

Kathleen Riley. "BOOKSHELF; Sibling Revelry." The Wall Street Journal (Sat., March 3, 2012): C6.

(Note: ellipses added.)


The book under review is:

Riley, Kathleen. The Astaires: Fred & Adele. New York: Oxford University Press, USA, 2012.






March 13, 2012

Upper Class "Have Lost the Confidence to Preach What They Practice"



Coming-ApartBK2012-03-07.jpg













Source of book image:
http://4.bp.blogspot.com/-K9jKNHD0vwE/Tzn4yKgEtII/AAAAAAAAC8Q/2wZqk1Hl1V4/s1600/murray-coming-apart.jpg




(p. 9) The problem, Murray argues, is not that members of the new upper class eat French cheese or vote for Barack Obama. It is that they have lost the confidence to preach what they practice, adopting instead a creed of "ecumenical niceness." They work, marry and raise children, but they refuse to insist that the rest of the country do so, too. "The belief that being a good American involved behaving in certain kinds of ways, and that the nation itself relied upon a certain kind of people in order to succeed, had begun to fade and has not revived," Murray writes.


For the full review, see:

NICHOLAS CONFESSORE. "Tramps Like Them; Charles Murray Argues that the White Working Class Is No Longer a Virtuous Silent Majority." The New York Times Book Review (Sun., February 12, 2012): 9.

(Note: the online version of the review has the date February 10, 2012 and has the title "Tramps Like Them; Charles Murray Examines the White Working Class in 'Coming Apart'.")







March 11, 2012

"Innovation and Invention Don't Grow Out of the Government's Orders"



ZhouYouguangTrendyOldGuy2012-03-07.jpg""You can have democracy no matter what level of development. Just look at the Arab Spring."- Zhou Youguang" Source of caption and photo: online version of the NYT article quoted and cited below.


(p. A5) BEIJING. EVEN at 106 years old, Zhou Youguang is the kind of creative thinker that Chinese leaders regularly command the government to cultivate in their bid to raise their nation from the world's factory floor.

So it is curious that he embodies a contradiction at the heart of their premise: the notion that free thinkers are to be venerated unless and until they challenge the legitimacy of the ruling Communist Party.

Mr. Zhou is the inventor of Pinyin, the Romanized spelling system that linked China's ancient written language to the modern age and helped China all but stamp out illiteracy. He was one of the leaders of the Chinese translation of the Encyclopaedia Britannica in the 1980s. He has written about 40 books, the most recent published last year.


. . .


His blog entries range from the modernization of Confucianism to Silk Road history and China's new middle class. Computer screens hurt his eyes, but he devours foreign newspapers and magazines. A well-known Chinese artist nicknamed him "Trendy Old Guy."


. . .


THE decade-long Cultural Revolution that began in 1966 wiped out Mr. Zhou's lingering belief in communism. He was publicly humiliated and sent to toil for two years in the wilderness.


. . .


About Mao, he said in an interview: "I deny he did any good." About the 1989 Tiananmen Square massacre: "I am sure one day justice will be done." About popular support for the Communist Party: "The people have no freedom to express themselves, so we cannot know."

As for fostering creativity in the Communist system, Mr. Zhou had this to say, in a 2010 book of essays: "Inventions are flowers that grow out of the soil of freedom. Innovation and invention don't grow out of the government's orders."

No sooner had the first batch of copies been printed than the book was banned in China.



For the full story, see:

SHARON LaFRANIERE. "THE SATURDAY PROFILE; A Chinese Voice of Dissent That Took Its Time." The New York Times (Sat., March 3, 2012): A5.

(Note: ellipses added.)

(Note: the online version of the article has the date March 2, 2012.)






March 10, 2012

"Crises Are an Inevitable Concomitant of Risk"



(p. 11) Some economic risks are worth taking, and crises are an inevitable concomitant of risk. Crises, like firm failures, can be seen as a manifestation of the Schumpeterian process of creative destruction. The role for economic analysis is to ensure that the creation dominates and that the destruction is not too costly.


Source:

Eichengreen, Barry. Capital Flows and Crises. Cambridge, MA: The MIT Press, 2003.






March 6, 2012

"Amazed by the Short-Term Psychology in the Market"



(p. A1) Even after European leaders appeared to have averted a chaotic default by Greece with an eleventh-hour deal for aid, worries persist that a debt disaster on the Continent has merely been delayed.

The tortured process that culminated in that latest bailout has exposed the severe limitations of Europe's approach to the crisis. Many fear that policy makers simply don't have the right tools to deal with other troubled countries like Italy, Spain, Ireland and Portugal, a situation that could weigh on the markets and the broader economy.

"I don't want to be a Cassandra, but the idea that it's over is an illusion," said Kenneth S. Rogoff, a professor of economics at Harvard and co-author of "This Time Is Different: Eight Centuries of Financial Folly." "I am amazed by the short-term psychology in the market."


. . .


(p. B3) "I don't think we're anywhere near the endgame," Professor Rogoff of Harvard said.



For the full commentary, see:

PETER EAVIS. " NEWS ANALYSIS; For Greece, a Bailout; for Europe, Perhaps Just an Illusion." The New York Times (Weds., February 22, 2012): A1 & B3 (sic).

(Note: ellipsis added.)

(Note: the online version of the commentary is dated February 21, 2012.)



Rogoff and Reinhart's thought-provoking and much-praised book is:

Reinhart, Carmen M., and Kenneth Rogoff. This Time Is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, 2009.






March 3, 2012

Freedom Grew from the Greek Agora



Culture-Of-FreedomBK2012-02-29.jpg











Source of book image: http://images.borders.com.au/images/bau/97801997/9780199747405/0/0/plain/a-culture-of-freedom-ancient-greece-and-the-origins-of-europe.jpg





(p. C9) A city's central space reveals much about the society that built it. In the middle of the typical Greek city-state, or polis, stood neither a palace nor a temple--the dominant centering structures of Asian and Egyptian cities--but an open public square, an agora, useful for gatherings and the conduct of business. When Cyrus the Great, founder of the Achaemenid Persian Empire, first encountered Greeks on his western boundaries, he sneered at the race of shopkeepers who hung about the agora cheating one another all day. Yet that same race would later defeat his descendants, Darius and Xerxes, in two of the most consequential battles the Western world has seen, at Marathon in 490 B.C. and at Salamis 10 years later.


. . .


Mr. Meier's approach runs counter to a tendency in recent classical scholarship to trace Greek ideas to non-Greek sources or to seek common ground on which East and West once met. The polis itself has been claimed in the past few decades as a Near Eastern, or Phoenician, invention; Carthage too, it seems, had an agora at its hub. But Mr. Meier takes pains to dismiss this claim. Relying on expertise amassed in his long academic career, he reasserts the uniqueness of Greek political evolution, the mysterious and somewhat miraculous process that culminates, at the end of this account, in the emergence of Athenian democracy.


. . .


After surveying the crucial reforms of the Athenian leader Cleisthenes, the foundation stones of the world's first democratic constitution, Mr. Meier asks: "Was it just a matter of time before the Attic citizenry was reorganized--so that Cleisthenes did something that would have happened sooner or later anyway? Or were Cleisthenes' achievements beyond the scope of men less able and daring?"



For the full review, see:

JAMES ROMM. "The Greeks' Daring Experiment." The Wall Street Journal (Sat., FEBRUARY 11, 2012): C9.

(Note: ellipses added.)


The book under review is:

Meier, Christian. A Culture of Freedom: Ancient Greece and the Origins of Europe. Oxford, UK: Oxford University Press, 2011.





February 29, 2012

Successful Innovation Depends More on Will than on Intellect



(p. 9) The odysseys of [Lasseter, Catmull, Smith and Jobs], and of Pixar as a whole, bring to mind the observation of the maverick economist Joseph Schumpeter that successful innovation "is a feat not of intellect, but of will." Writing about the psychology of entrepreneurs in the early twentieth century, a rime when the subject was unfashionable, he believed few individuals are prepared for "the resistances and uncertainties incident to doing what has not been done before." Those who braved the risks of failure did so out of noneconomic as well as economic motives, among them "the joy of creating, of getting things done, or simply of exercising one's energy and ingenuity." In Pixar's case, at least, the resistances and uncertainties were abundant--as was the will.


Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





February 28, 2012

Carnegie and Twain Opposed Roosevelt's Imperialism



HonorInDustBK2012-02-22.jpg










Source of book image: http://www.chinarhyming.com/wp-content/uploads/2012/01/51Hr-aIgESL._SL500_AA300_.jpg





Marxists and others on the left often claim that big business is the main force behind U.S. imperialism. Is it not ironic that the most imperialistic U.S. President was the anti-big-business "progressive" Teddy Roosevelt who was vehemently opposed by big businessman Andrew Carnegie?

Mark Twain is sometimes accused of insufficient sympathy with the downtrodden. Those who so accuse, misunderstand his message. He too opposed Roosevelt's war on the Filipinos.

(Carnegie and Twain's friendship is discussed in David Nasaw's biography of Carnegie.)



(p. 13) There was within the United States a strong and vocal anti-imperialist movement, which included former President Grover Cleveland, Andrew Carnegie and Mark Twain, but it struggled to tamp down the country's growing expansionist zeal, and to compete with the energy, tenacity and bulldog ambition of one man in particular: Theodore Roosevelt. Roosevelt, who in just six years rose meteorically from New York City police commissioner to president, nurtured a deep and unshakable contempt for what he called the "unintelligent, cowardly chatter for 'peace at any price.' " Not only had the "clamor of the peace faction" left him unmoved, Roosevelt wrote, it had served to strengthen his conviction that "this country needs a war."


. . .


Although Roosevelt moves in and out of Jones's narrative, disappearing for long stretches, he still manages to steal the spotlight, just as he does in every book in which he appears. When McKinley dragged his feet before sending troops to Cuba, Roosevelt sneered that the president had "no more backbone than a chocolate éclair." In the Department of the Navy, Roosevelt gleefully took over while his boss was on summer vacation, anointing himself the "hot weather secretary" and crowing to a friend that he was having "immense fun running the Navy." In Cuba, after choosing his regiment of Rough Riders from 23,000 applicants, he ordered his famous charge up Kettle Hill wearing a custom-made fawn-colored Brooks Brothers uniform with canary-yellow trim.



For the full review, see:

CANDICE MILLARD. "Looking for a Fight; At the Turn of the 20th Century, Theodore Roosevelt Set Out to Transform the United States into a Major World Power." The New York Times Book Review (Sun., February 19, 2012): 13.

(Note: ellipsis added.)

(Note: the online version of the article is dated February 17, 2012 and has the title "Looking for a Fight; A New History of the Philippine-American War.")



The book under review is:

Jones, Gregg. Honor in the Dust: Theodore Roosevelt, War in the Philippines, and the Rise and Fall of America's Imperial Dream. New York: New American Library, 2012.



The Nasaw book on Carnegie mentioned in my initial comments is:

Nasaw, David. Andrew Carnegie. New York: Penguin Press, 2006.

(Note: the pagination of the hardback and paperback editions of Nasaw's book are the same.)






February 25, 2012

How Pixar Vision Was Made Real



(p. 8) . . . Pixar's story was anything but preordained. It is a triple helix of artistic, technological, and business struggles, and it is a study in the tremendously uncertain and contingent nature of artistic, technological, and business success. It illustrates how professional prestige and social status flow into each other, and how a small organization can magnify its power by deploying them as an economic force. It shows how small things, done well, can lead to big things. It is the story of a small group of individuals who started with a shared ambition to create a new way of telling stories--within a virtual world of mathematical constructions--and who traveled a long and circuitous road until their vision became a reality.


Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





February 24, 2012

Manifesto for a Rising Standard of Living



AbundanceBK2012-02-22.jpg











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







(p. A13) Mr. Diamandis is the chairman and chief executive of the X Prize Foundation and the founder of more than a dozen high-tech companies. With his journalist co-author, he has produced a manifesto for the future that is grounded in practical solutions addressing the world's most pressing concerns: overpopulation, food, water, energy, education, health care and freedom. The authors suggest that "humanity is now entering a period of radical transformation where technology has the potential to significantly raise the basic standard of living for every man, woman, and child on the planet."


. . .


Predictions of a rosy future have a way of sounding as unrealistic as end-is-nigh forecasts. But Messrs. Diamandis and Kotler are not just dreamers. They lay out a plausible road map, discussing, among other things, the benefits of do-it-yourself tinkering--like the work by geneticist J. Craig Venter in beating the U.S. government in the race to sequence the human genome--and the growing willingness of techno-philanthropists like Bill Gates to tackle real-world problems.

The biggest hurdles, however, are not scientific or technological but political. There are still too many corrupt dictators and backward-looking governments keeping millions in penury. But as we have seen lately, the misruled have a way of throwing off despotic governments. With ever more people reaching for freedom, countless millions are tacitly embracing the Diamandis motto: "The best way to predict the future is to create it yourself."



For the full review, see:

MICHAEL SHERMER. "BOOKSHELF; Defying the Doomsayers; Abundance" argues that growing technologies have the potential not only to spread information but to solve some of humanity's most vexing problems." The Wall Street Journal (Thurs., FEBRUARY 22, 2012): A13.

(Note: ellipsis added.)


The book being reviewed is:

Diamandis, Peter H., and Steven Kotler. Abundance: The Future Is Better Than You Think. New York: Free Press, 2012.







February 21, 2012

"The Patience of Jobs"



(p. 7) Steve Jobs was missing from the scene of the meeting, though he would soon be Disney's largest individual shareholder (the acquisition was a stock-for-stock trade) and the newest member of Disney's board. Lasseter was right about his money; Jobs had driven a hard bargain in buying Lucas's Computer Division for five million dollars (not ten million, as is sometimes reported), but as it turned out, he put ten times that amount into the company over the course of a decade to keep it afloat. Few other investors would have had the patience of Jobs.


Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





February 20, 2012

Nasar Gives Compelling Portrait of Joseph Schumpeter and His Vienna



Grand-PursuitBK2012-02-05.jpg














Source of book image: http://luxuryreading.com/wp-content/uploads/2011/10/grand-pursuit.jpg





(p. C31) Ms. Nasar gives us Belle Époque Vienna -- infatuated with modernity and challenging London in the race to electrify with new telephone service, state-of-the-art factories and power-driven trams -- and then a devastating picture of Vienna at the end of World War I: war veterans loitering outside restaurants waiting for scraps, and desperate members of a middle class that saw inflation wipe out all its savings trading a piano for a sack of flour, a gold watch chain for a few sacks of potatoes.


. . .


Among the more compelling portraits in this volume is that of Joseph Alois Schumpeter, the brilliant European economist who argued that the distinctive feature of capitalism was "incessant innovation" -- a "perennial gale of creative destruction" -- and who identified the entrepreneur as the visionary who could "revolutionize the pattern of production by exploiting an invention" or "an untried technological possibility."



For the full review, see:

MICHIKO KAKUTANI. "BOOKS OF THE TIMES; The Economist's Progress: Better Living Through Fiscal Chemistry." The New York Times (Fri., December 2, 2011): C31.

(Note: ellipsis added.)

(Note: the online version of the article is dated December 1, 2011.)







February 17, 2012

"What Success Had Brought Him, . . . , Was Freedom"



(p. 5) The success of Pixar's films had brought him something exceedingly rare in Hollywood: not the house with the obligatory pool in the backyard and the Oscar statuettes on the fireplace mantel, or the country estate, or the vintage Jaguar roadster--although he had all of those things, too. It wasn't that he could afford to indulge his affinity for model railroads by acquiring a full-size 1901 steam locomotive, with plans to run it on the future site of his twenty-thousand-square-foot mansion in Sonoma Valley wine country. (Even Walt Dìsney's backyard train had been a mere one-eighth-scale replica.)

None of these was the truly important fruit of Lasseter's achievements. What success had brought him, most meaningfully, was freedom. Having created a new genre of film with his colleagues at Pixar, he had been able to make the films he wanted to make, and he was coming back to Disney on his own terms.



Source:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.

(Note: ellipsis in title was added.)

(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)





February 16, 2012

"Human Progress Is Built on Man's Desire to Correct His Mistakes"



ChinaInTenWordsBK2012-02-04.jpg











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








(p. A17) Yu Hua is one of China's most acclaimed novelists, hugely popular in his own country and the recipient of several international literary prizes. He brings a novelist's sensibility to "China in Ten Words," his first work of nonfiction to be published in English. This short book is part personal memoir about the Cultural Revolution and part meditation on ordinary life in China today. It is also a wake-up call about widespread social discontent that has the potential to explode in an ugly way.


. . .


Mr. Yu argues that corruption infects every aspect of modern Chinese society, including the legal system. Historically, Chinese peasants with grievances could go to the capital and petition the emperor for redress. Today, Mr. Yu writes, millions--yes, millions--of desperate citizens flock to Beijing each year hoping to find an honest official who will dispense justice where the law has failed them at home. What will happen when they discover that their leaders at the national level are just as corrupt as those at the local level?

The violence and deprivations of the Cultural Revolution are by now well known, but Mr. Yu's reminiscences add color and texture to what the world has learned in recent years about that lost decade. The youthful Yu Hua is something of a wise guy and a schemer, pitting himself against bureaucratic inanities. It is sometimes impossible to know whether to laugh or cry.


. . .


As awful as the Cultural Revolution was, in Mr. Yu's telling its horrors sometimes pale next to those of the present day. The chapter on "bamboozle" describes how trickery, fraud and deceit have become a way of life in modern China. "There is a breakdown of social morality and a confusion in the value system of China today," he states. He writes, for example, about householders around the country who are evicted from their homes on the orders of unscrupulous, all-powerful local officials.

Mr. Yu's portrait of contemporary Chinese society is deeply pessimistic. The competition is so intense that, for most people, he says, survival is "like war." He has few hopeful words to offer, other than to quote the ancient philosopher Mencius, who taught that human progress is built on man's desire to correct his mistakes. Meanwhile, he writes, "China's pain is mine."



For the full review, see:

MELANIE KIRKPATRICK. "BOOKSHELF; Cultural Lexicon; People, leader, reading, revolution, disparity, copycat and bamboozle--some words that serve as a springboard for critiques of China." The Wall Street Journal (Weds., December 7, 2011): A17.

(Note: ellipses added.)


The book under review is:

Yu, Hua. China in Ten Words. New York: Pantheon Books, 2011.






February 12, 2012

Pixar as a Case Study on Innovative Entrepreneurship



Pixar-TouchBK2012-02-05.jpg














Source of book image: http://murraylibrary.org/2011/09/the-pixar-touch-the-making-of-a-company/





Toy Story and Finding Nemo are among my all-time-favorite animated movies. How Pixar developed the technology and the story-telling sense, to make these movies is an enjoyable and edifying read.

Along the way, I learned something about entrepreneurship, creative destruction, and the economics of technology. In the next couple of months I occasionally will quote passages that are memorable examples of broader points or that raise thought-provoking questions about how innovation happens.


Book discussed:

Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.






February 10, 2012

Creative Destruction Helps Us Be Well



CreativeDestructionOfMedicine2012-02-04.jpg










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








Dr. Eric Topol's credible and thought-provoking comments on the over-use of stents appeared in entries in this blog in August 2006 and in December 2006.



(p. A15) "The U.S. government has been preoccupied with health care 'reform,' but this refers to improving access and insurance coverage and has little or nothing to do with innovation," even though, as Dr. Topol notes, adopting new approaches would improve care and lower costs. . . .


. . .


"The Creative Destruction of Medicine"--an allusion to economist Joseph Schumpeter's description of "creative destruction" as an engine of business innovation--is a venture capitalist's delight, describing dozens of medical technologies that show great promise. The book also provides colorful anecdotes about Dr. Topol's own sampling of these products, as both a doctor and stand-in patient.


. . .


. . . , full adoption of the new tools will require the Food and Drug Administration to alter the way it evaluates products. The FDA, he says, should allow the testing of drugs on patients who are selected for their prospect of deriving a benefit. Right now, the FDA usually requires drugs to be tested in a scattershot fashion on large populations. With drugs being tested on cancer patients, he notes, the "FDA insists on a body count to be able to quantify how much and how long the new drug improves survival"--even though diagnostic markers can sometimes reveal in advance which patients are unlikely to gain a benefit.

Dr. Topol worries that doctors will resist technologies that empower patients because the tools will also diminish the doctors' gatekeeper role. The American Medical Association, for example, battled firms that provide genetic information directly to patients. "This arrangement ultimately appears untenable," the author writes, "and eventually there will need to be full democratization of DNA for medicine to be transformed."



For the full review, see:

SCOTT GOTTLIEB. "BOOKSHELF; Digital Doctoring; It's hard to fake sleep to avoid your spouse's bedtime chatter when a 'Zeo clock' is displaying your real-time brain waves." The Wall Street Journal (Fri., February 3, 2012): A15.

(Note: ellipses added.)

(Note: the online version of the review has the title "BOOKSHELF; Digital Doctoring; The digital revolution can spur unprecedented advances in the medical sciences, argues Eric Topol in "The Creative Destruction of Medicine".")



The book under review is:

Topol, Eric. The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care. New York: Basic Books, 2012.






February 7, 2012

The Tasmanian Technological Regress: "Slow Strangulation of the Mind"



(p. 78) The most striking case of technological regress is Tasmania. Isolated on an island at the end of the world, a population of less than 5,000 hunter-gatherers divided into nine tribes did not just stagnate, or fail to progress. They fell steadily and gradually back into a simpler toolkit and lifestyle, purely because they lacked the numbers to sustain their existing technology. Human beings reached Tasmania at least 35,000 years ago while it was still connected to Australia. It remained connected - on and off - until about 10,000 years ago, when the rising seas filled the Bass Strait. Thereafter the Tasmanians were isolated. By the time Europeans first encountered Tasmanian natives, they found them not only to lack many of the skills and tools of their mainland cousins, but to lack many technologies that their own ancestors had once possessed. They had no bone tools of any kind, such as needles and awls, no cold-weather clothing, no fish hooks, no hafted tools, no barbed spears, no fish traps, no spear throwers, no boomerangs. A few of these had been invented on the mainland after the Tasmanians had been isolated from it - the boomerang, for instance - but most had been made and used by the very first Tasmanians. Steadily and inexorably, so the archaeological history tells, these tools and tricks were abandoned. Bone tools, for example, grew simpler and simpler until they were dropped altogether about 3,800 years ago. Without bone tools it became impossible to sew skins into clothes, so even in the bitter winter, the Tasmanians went nearly naked but for seal-fat grease smeared on their skin and wallaby pelts over their shoulders. The first Tasmanians caught and ate plenty of fish, but by the time of Western contact they not only ate no fish (p. 79) and had eaten none for 3,000 years, but they were disgusted to be offered it (though they happily ate shellfish).

The story is not quite that simple, because the Tasmanians did invent a few new things during their isolation. Around 4,000 years ago they came up with a horribly unreliable form of canoe-raft, made of bundles of rushes and either paddled by men or pushed by swimming women (!), which enabled them to reach offshore islets to harvest birds and seals. The raft would become waterlogged and disintegrate or sink after a few hours, so it was no good for re-establishing contact with the mainland. As far as innovation goes, it was so unsatisfactory that it almost counts as an exception to prove the rule. The women also learnt to dive up to twelve feet below the water to prise clams off the rocks with wooden wedges and to grab lobsters. This was dangerous and exhausting work, which they were very skilled at: the men did not take part. So it was not that there was no innovation; it was that regress overwhelmed progress.

The archaeologist who first described the Tasmanian regress, Rhys Jones, called it a case of the 'slow strangulation of the mind', which perhaps understandably enraged some of his academic colleagues. There was nothing wrong with individual Tasmanian brains; there was something wrong with their collective brains. Isolation - self-sufficiency - caused the shrivelling of their technology. Earlier I wrote that division of labour was made possible by technology. But it is more interesting than that. Technology was made possible by division of labour: market exchange calls forth innovation.



Source:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.





February 3, 2012

How to Slow Down Creative Destruction



(p. 356) This catallaxy will not go smoothly, or without resistance. Natural and unnatural disasters will still happen. Governments will bail out big corporations and big bureaucracies, hand them special favours such as subsidies or carbon rations and regulate them in such a way as to create barriers to entry, slowing down creative destruction. Chiefs, priests, thieves, financiers, consultants and others will appear on all sides, feeding off the surplus (p. 357) generated by exchange and specialisation, diverting the life-blood of the catallaxy into their own reactionary lives. It happened in the past. Empires bought stability at the price of creating a parasitic court; monotheistic religions bought social cohesion at the price of a parasitic priestly class; nationalism bought power at the expense of a parasitic military; socialism bought equality at the price of a parasitic bureaucracy; capitalism bought efficiency at the price of parasitic financiers.


Source:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.





February 2, 2012

Kickstarter Helps Finance Projects



KickstarterProjects2012-01-29.jpg "The creators of the TikTok Watchband, left, and the Elevation Dock have raised far more money on Kickstarter than they initially sought." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. B1) Kickstarter is a "crowd-funding" site. It's a place for creative people to get enough start-up money to get their projects off the ground. The categories include music, film, art, design, food, publishing and technology. The projects seeking support might be recording a CD, putting on a play, producing a short film or developing a cool new tech product.

Suppose you're the one who needs money. You describe your project with a video, a description and a target dollar amount. Listing your project is free.

If the citizens of the Web pledge enough money to meet your target by the deadline you set, then you get your money and (p. B7) you proceed with your project. At that point, Kickstarter takes 5 percent, and you pay 3 to 5 percent to Amazon.com's credit card service.

If you don't raise the money by the deadline, the deal is off. Your contributors keep their money, and Kickstarter takes nothing.

But here's the part I had trouble understanding: These are not investments. If you make a pledge, you'll never see your money again, even if the play, movie or gadget becomes a huge hit. You do get some little memento of your financial involvement -- a T-shirt or a CD, for example, or a chance to preorder the gadget being developed -- but nothing else tangible. Not even a tax deduction.

Furthermore, you have no guarantee that the project will even see the light of day. All kinds of things happen between inspiration and production. People lose interest, get married, move away, have trouble lining up a factory. The whole thing dies, and it was all for nothing.

So why, I kept wondering, does anybody participate? Who would give money for so little in return?


. . .


I started reading about . . . projects. The one that seemed to be drumming up the most interest lately is called the Elevation Dock. It's just a charging stand for the iPhone, but wow, what a stand. It's exquisitely milled from solid, Applesque aluminum. You don't have to take your iPhone (or iPod Touch) out of its case to insert it into this dock. And the dock is solid enough that you can yank the phone out of it with one hand. The dock stays on the desk.


. . .

Other projects seeking your support: Jaja, a drawing stylus for iPad and Android tablets that's pressure-sensitive (makes fatter lines when you bear down harder); LED Side Glow Hats (baseball caps with illuminated brims for working in dark places); Eye3 (an inexpensive flying drone for aerial photography); and so on.

Not all of them will reach their financing goals (only 44 percent do). Even fewer will wind up on store shelves.

But in dark economic times, Kickstarter offers aspirational voyeurism: you can read about the big dreams of the little people. And you can give the worthy artists a small financial vote of confidence -- and enjoy the ride with them.



For the full story, see:

DAVID POGUE. "STATE OF THE ART; Embracing the Mothers of Invention." The New York Times (Thurs., January 26, 2012): B1 & B7.

(Note: ellipses added.)

(Note: the online version of the article was dated January 25, 2012.)






January 30, 2012

Creative Destruction Creates as Many New Jobs as It Destroys



(p. 113) It was Joseph Schumpeter who pointed out that the competition which keeps a businessman awake at night is not that from his rivals cutting prices, but that of entrepreneurs making (p. 114) his product obsolete. As Kodak and Fuji slugged it out for dominance in the 35mm film industry in the 1990s, digital photography began to extinguish the entire market for analogue film - as analogue records and analogue video cassettes had gone before. Creative destruction, Schumpeter called it. His point was that there is just as much creation going on as destruction - that the growth of digital photography would create as many jobs in the long run as were lost in analogue, or that the savings pocketed by a Wal-Mart customer are soon spent on other things, leading to the opening of new stores to service those new demands. In America, roughly 15 per cent of jobs are destroyed every year; and roughly 15 per cent created.


Source:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.





January 26, 2012

Paleolithic Homo Sapiens Engaged in Long Distance Trade



(p. 71) At Mezherich, in what is now Ukraine, 18,000 years ago, jewellery made of shells from the Black Sea and amber from the Baltic implied trade over hundreds of miles.

This is in striking contrast to the Neanderthals, whose stone tools were virtually always made from raw material available within an hour's walk of where the tool was used.



Source:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.





January 22, 2012

Hunter-Gatherers Suffered Violence, Famine and Disease--No Idyllic Golden Age



(p. 44) The warfare death rate of 0.5 per cent of the population per year that was typical of many hunter-gatherer societies would equate to two billion people dying during the twentieth century (instead of 100 million). At a cemetery uncovered at Jebel Sahaba, in Egypt, dating from 14,000 years ago, twenty-four of the fifty-nine bodies had died from unhealed wounds caused by spears, darts and arrows. Forty of these bodies were women or children. Women and children generally do not take part in warfare - but they are (p. 45) frequently the object of the fighting. To be abducted as a sexual prize and see your children killed was almost certainly not a rare female fate in hunter-gatherer society. After Jebel Sahaba, forget the Garden of Eden; think Mad Max.

It was not just warfare that limited population growth. Hunter-gatherers are often vulnerable to famines. Even when food is abundant, it might take so much travelling and trouble to collect enough food that women would not maintain a sufficient surplus to keep themselves fully fertile for more than a few prime years. Infanticide was a common resort in bad times. Nor was disease ever far away: gangrene, tetanus and many kinds of parasite would have been big killers. Did I mention slavery? Common in the Pacific north-west. Wife beating? Routine in Tierra del Fuego. The lack of soap, hot water, bread, books, films, metal, paper, cloth? When you meet one of those people who go so far as to say they would rather have lived in some supposedly more delightful past age, just remind them of the toilet facilities of the Pleistocene, the transport options of Roman emperors or the lice of Versailles.



Source:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.





January 21, 2012

"Just What Ailments Are Pylos Tablets Supposed to Alleviate?"



LinearBscript2012-01-14.jpg










"Professor Bennett's work opened a window to deciphering tablets written in Linear B, a Bronze Age Aegean script." Source of caption and photo: online version of the NYT obituary quoted and cited below.



(p. 22) Deciphering an ancient script is like cracking a secret code from the past, and the unraveling of Linear B is widely considered one of the most challenging archaeological decipherments of all time, if not the most challenging.


. . .


Linear B recorded the administrative workings of Mycenaean palatial centers on Crete and the Greek mainland 3,000 years ago: accounts of crops harvested, flocks tended, goods manufactured (including furniture, chariots and perfume), preparations for religious feasts and preparations for war.

It was deciphered at last in 1952, not by a scholar but by an obsessed amateur, a young English architect named Michael Ventris. The decipherment made him world famous before his death in an automobile accident in 1956.

As Mr. Ventris had acknowledged, he was deeply guided by Professor Bennett's work, which helped impose much-needed order on the roiling mass of strange, ancient symbols.

In his seminal monograph "The Pylos Tablets" (1951), Professor Bennett published the first definitive list of the signs of Linear B. Compiling such a list is the essential first step in deciphering any unknown script, and it is no mean feat.


. . .


"We know how much Ventris admired Bennett, because he immediately adopted Bennett's sign list of Linear B for his own work before the decipherment," said Mr. Robinson, whose book "The Man Who Deciphered Linear B" (2002) is a biography of Mr. Ventris. "He openly said, 'This is a wonderful piece of work.' "


. . .


As meticulous as Professor Bennett's work was, it once engendered great confusion. In 1951, after he sent Mr. Ventris a copy of his monograph, a grateful Ventris went to the post office to pick it up. As Mr. Robinson's biography recounts, a suspicious official, eyeing the package, asked him: "I see the contents are listed as Pylos Tablets. Now, just what ailments are pylos tablets supposed to alleviate?"



For the full obituary, see:

MARGALIT FOX. "Emmett L. Bennett Jr., Ancient Script Expert, Dies at 93." The New York Times, First Section (Sun., January 1, 2012,): 22.

(Note: ellipses added.)

(Note: the online version of the obituary is dated December 31, 2011, and has the title: "Emmett L. Bennett Jr., Expert on Ancient Script, Dies at 93.")


The book on the amateur, uncredentialed Ventris is:

Robinson, Andrew. The Man Who Deciphered Linear B: The Story of Michael Ventris. London, UK: Thames & Hudson, 2002.



BennettEmmettJr2012-01-14.jpg













"Emmett L. Bennett Jr." Source of caption and photo: online version of the NYT obituary quoted and cited above.







January 18, 2012

You Have More Servants than the Sun King



(p. 36) The Sun King had dinner each night alone. He chose from forty dishes, served on gold and silver plate. It took a staggering 498 people to prepare each meal. He was rich because he consumed the work of other people, mainly in the form of their services. He was rich because other people did things for him. At that time, the average French family would have prepared and consumed its own meals as well as paid tax to support his servants in the palace. So it is not hard to conclude that Louis XIV was rich because others were poor.

But what about today? Consider that you are an average person, say a woman of 35, living in, for the sake of argument, Paris and earning the median wage, with a working husband and two children. You are far from poor, but in relative terms, you are immeasurably poorer than Louis was. Where he was the richest of the rich in the world's richest city, you have no servants, no palace, no carriage, no kingdom. As you toil home from work on the crowded Metro, stopping at the shop on the way to buy a ready meal for four, you might be thinking that Louis XIV's dining arrangements were way beyond your reach. And yet consider this. The cornucopia that greets you as you enter the supermarket dwarfs anything that Louis XIV ever experienced (and it is probably less likely to contain salmonella). You can buy a fresh, frozen, tinned, smoked or pre-prepared meal made with beef, chicken, pork, lamb, fish, prawns, scallops, eggs, potatoes, beans, carrots, cabbage, aubergine, kumquats, celeriac, okra, seven kinds of lettuce, cooked in olive, walnut, sunflower or peanut oil and flavoured with cilantro, turmeric, basil or rosemary . . . You may have no chefs, but you can decide (p. 37) on a whim to choose between scores of nearby bistros, or Italian, Chinese, Japanese or Indian restaurants, in each of which a team of skilled chefs is waiting to serve your family at less than an hour's notice. Think of this: never before this generation has the average person been able to afford to have somebody else prepare his meals.

You employ no tailor, but you can browse the internet and instantly order from an almost infinite range of excellent, affordable clothes of cotton, silk, linen, wool and nylon made up for you in factories all over Asia. You have no carriage, but you can buy a ticket which will summon the services of a skilled pilot of a budget airline to fly you to one of hundreds of destinations that Louis never dreamed of seeing. You have no woodcutters to bring you logs for the fire, but the operators of gas rigs in Russia are clamouring to bring you clean central heating. You have no wick-trimming footman, but your light switch gives you the instant and brilliant produce of hardworking people at a grid of distant nuclear power stations. You have no runner to send messages, but even now a repairman is climbing a mobile-phone mast somewhere in the world to make sure it is working properly just in case you need to call that cell. You have no private apothecary, but your local pharmacy supplies you with the handiwork of many thousands of chemists, engineers and logistics experts. You have no government ministers, but diligent reporters are even now standing ready to tell you about a film star's divorce if you will only switch to their channel or log on to their blogs.

My point is that you have far, far more than 498 servants at your immediate beck and call. Of course, unlike the Sun King's servants, these people work for many other people too, but from your perspective what is the difference? That is the magic that exchange and specialisation have wrought for the human species.



Source:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.

(Note: ellipsis in original.)





January 15, 2012

In Supporting Bailouts Buffett Was More Bootlegger than Baptist



ThrowThemAllOutBK.jpg














Source of book image: online version of the Omaha World-Herald review quoted and cited below.




(p. 9A) Peter Schweizer's new book, "Throw Them All Out" (Houghton Mifflin Harcourt, 211 pages, $26) mostly goes after members of Congress for profiting from inside information and making investments that are legal for them but would be illegal for almost anyone else.

But Chapter 6 is titled, "Warren Buffett: Baptist and Bootlegger."

Buffett is neither an actual Baptist nor a bootlegger, of course. Schweizer's reference is to the alliance of churchgoers and illegal marketers of liquor who both favored laws to limit the legal sale of alcohol, although for different reasons.

Schweizer wrote that during the 2008-09 financial crisis, Buffett pushed for government action and called attention to the problems, looking like a noble Baptist, but profited from the bailouts, like a bootlegger, through investments in Goldman Sachs, General Electric, Wells Fargo and other financial companies.

"Buffett needed the bailout," Schweizer wrote. "He began immediately to campaign for the $700 billion TARP rescue plan that was being hammered together in Washington." Several senators, including Ben Nelson, D-Neb., are Berkshire shareholders, Schweizer wrote, "and they had to know that passing the bailout bill would bring big returns for their Berkshire stock."

"There were many legitimate reasons to support the bill, and it can hardly be said that Buffett's support was the deciding factor," Schweizer wrote. "But his Baptist-bootlegger position was noteworthy for its strength in both directions: a lot of people followed his advice, and he and they made (p. 10A) a lot of money by pushing for the bailout. . . .

"Warren Buffett is a financial genius. But even more important for his portfolio, he's a political genius."



For the full story, see:

Steve Jordon. "Warren Watch: Author Says Buffett Is a 'Political Genius'." Omaha World-Herald (Sunday, November 20, 2011): 9A -10A.

(Note: ellipsis in original.)

(Note: the online version of the article has the title "Warren Watch: A 'Political Genius'.")


Steve Jordan is discussing the book:

Schweizer, Peter. Throw Them All Out. New York: Houghton Mifflin Harcourt Trade, 2011.


Bruce Yandle is the former President of APEE and the author of the classic article on how bootleggers and Baptists often become allies in calling for government action:

Yandle, Buce. "Bootleggers and Baptists: The Education of a Regulatory Economist." Regulation 7, no. 3 (1983): 12-16.





January 10, 2012

Happiness Depends Most on Being Free to Choose



(p. 27) Getting richer is not the only or even the best way of getting happier. Social and political liberation is far more effective, says the political scientist Ronald Ingleheart: the big gains in happiness come from living in a society that frees you to make choices about your lifestyle - about where to live, who to marry, how to express your sexuality and so on. It is the increase in free (p. 28) choice since 1981 that has been responsible for the increase in happiness recorded since then in forty-five out of fifty-two countries. Ruut Veenhoven finds that 'the more individualized the nation, the more citizens enjoy their life.'


Source:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.





January 8, 2012

Mackay Warned about Delusions, then Was Deluded by Bubble



(p. B1) Can you spot a bubble?

Ever since 1841, when a Scottish journalist named Charles Mackay published the book known today as "Extraordinary Popular Delusions and the Madness of Crowds," the answer has seemed clear. If you watch carefully for signs of euphoria, you can sidestep the damage when markets go mad.

But bubble spotting isn't as simple as Mackay made it sound--even, it turns out, for Mackay himself. Investors should always guard against the glib assertions of pundits who claim they can detect bubbles before they burst.


. . .


But new research tells the untold tale of Mackay's own behavior in the face of a bubble--and it is a shocker. A mathematician and former cryptographer at Bell Labs named Andrew Odlyzko has spent much of the past decade researching a forgotten stock mania. One of its biggest boosters was none other than Charles Mackay.

A bubble in British railroad stocks began in 1844, only three years after Mackay published his book, and it didn't start to collapse until late 1845. Even with the history of market folly fresh in his mind, Mackay urged British investors to pile into railway stocks, whose extravagant prices were based on absurdly unrealistic projections of future growth.

The most famous critic of bubbles who ever lived fell like a chump for a craze that was unfolding before his very eyes. On Oct. 2, 1845, Mackay wrote that "those who sound the alarm of an approaching railway crisis have somewhat exaggerated the danger."

He went on to ridicule anyone who argued that "the Railway mania of the present day" was similar to the devastating bubbles he had described in his own book. "There is no reason whatever to fear" a crash, he concluded.

He couldn't have been more wrong. From 1845 to the bottom in 1850, railway stocks fell by two-thirds--the equivalent of roughly $1 trillion of losses in today's money. Mackay never fessed up to his own extraordinary delusion.



For the full commentary, see:

JASON ZWEIG. "THE INTELLIGENT INVESTOR; The Extraordinary Popular Delusion of Bubble Spotting." The Wall Street Journal (Sat., NOVEMBER 5, 2011): B1.

(Note: ellipsis added.)






January 1, 2012

Ridley Argues that Our Future Can Be Bright




RationalOptimistBK.jpg

















Source of book image: http://1.bp.blogspot.com/_cheRMv1X2oI/TAOvTFTnoeI/AAAAAAAAAgU/WAp7q0I_5mw/s1600/Ridley+Rational+Optimist.jpg




Ridley's book is very well-written, well-argued and well-documented. He takes on all the main arguments against a happy future for humans. I agree with most of what he writes. (One exception is that I think he underestimates the importance of patents in enabling a broader group of inventors to continue inventing.)

In the coming weeks, I will be quoting some of the more memorable, thought-provoking, or useful passages.



Book discussed:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.






December 28, 2011

Collins Says Successful CEOs Are Empirical and Disciplined



GreatByChoiceBK.jpg















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







(p. A15) 'Great by Choice" is a sequel to Jim Collins's best-selling "Good to Great" (2001), which identified seven characteristics that enabled companies to become truly great over an extended period of time. Never mind that one of the 11 featured companies is now bankrupt (Circuit City) and another is in government receivership (Fannie Mae). Mr. Collins has a knack for analysis that business readers find compelling.

Mr. Collins's new book tackles the question of how to steer a company to lasting success in an environment characterized by change, uncertainty and even chaos. Like his previous work, this book builds its conclusions on a framework of painstaking research, conducted over nine years and overseen by Mr. Collins and his co-author, Morten T. Hansen, a management professor at the University of California, Berkeley.


. . .


Messrs. Collins and Hansen draw some interesting and counterintuitive conclusions from their research. First, the successful leaders were not the most "visionary" or the biggest risk-takers; instead, they tended to be more empirical and disciplined, relying on evidence over gut instinct and preferring consistent gains to blow-out winners. The successful companies were not more innovative than the control companies; indeed, they were in some cases less innovative. Rather, they managed to "scale innovation"--introducing changes gradually, then moving quickly to capitalize on those that showed promise. The successful companies weren't necessarily the most likely to adopt internal changes as a response to a changing environment. "The 10X companies changed less in reaction to their changing world than the comparison cases," the authors conclude.


. . .


If "Great by Choice" shares the qualities that made "Good to Great" so popular, it also shares some that drew criticism. The authors' conclusions sometimes feel like the claims of a well-written horoscope--so broadly stated that they are hard to disprove. Their 10X leaders are both "disciplined" and "creative," "prudent" and "bold"; they go fast when they must but slow when they can; they are consistent but open to change. This encompassing approach allows the authors to fit pretty much any leader who achieves 10X performance into their analysis. Would it ever be possible, one wonders, to find a leader whose success contradicted their thesis?



For the full review, see:

ALAN MURRAY. "BOOKSHELF; Turbulent Times, Steady Success; How certain companies achieved shareholder returns at least 10 times greater than their industry." The Wall Street Journal (Tues., OCTOBER 11, 2011): A15.

(Note: ellipses added.)






December 27, 2011

Companies Can Grow to Greatness in Brutally Turbulent Environments



(p. 118) All that said, there remains a question: what about "the perennial gale of creative destruction" as described by the famous twentieth-century economist Joseph Schumpeter, wherein technological change and visionary entrepreneurs upend and destroy the old order and create a new order, only to see their new order destroyed and replaced by an even newer order, in an endless cycle of chaos and upheaval? Perhaps all social institutions in our modern world face disruptive forces so fast, big, and unpredictable that every entity will fall within years or decades, without exception. Can we still stave off decline in the face of severe turbulence?

While working on How the Mighty Fall, my colleague Morten Hansen and I have been simultaneously working on a six-year research project to study companies that grew from vulnerability to greatness in severe environments characterized by rapid and unpredictable change in contrast to others that did not prevail in the same brutally turbulent environments.



Source:

Collins, Jim. How the Mighty Fall: And Why Some Companies Never Give In. New York: HarperCollins Publishers, Inc., 2009.

(Note: italics in original.)






December 20, 2011

A&P Sold Consumers Better and Lower-Priced Food



GreatA&Pbk.jpg














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








(p. A15) Mr. Levinson's history centers on the two Hartford sons who followed their father into the business. They would spend their entire working lives at the company being known simply as "Mr. George" and "Mr. John." Thoughtful and studious, Mr. George's idea of excitement was a good jigsaw puzzle; Mr. John, somewhat more outgoing, liked the horses but also a daily lunch of milk and crackers. Together the brothers, neither of whom had finished high school, built what would be, for 40 years, the largest retail outlet in the world.

The brothers' business philosophy was simple, writes Mr. Levinson: "If the company keeps its costs down and prices low, more shoppers would come through its doors, producing more profits than if it kept prices high." The more stores they could open, the greater the take.

But the Hartfords had a public-relations problem. Since the nation's earliest days, small family stores had served as community anchors. There were thousands across the country. Mom and pop knew every customer who came through their door; they extended credit to families down on their luck. If low-priced chains drove out such stores, what would happen to small-town America?

In fact, many mom-and-pop operations were inefficiently and incompetently run. A&P might be coldly corporate by comparison, but it offered consumers far more variety and fresher, better-quality goods at less cost to the family budget.



For the full review, see:

PATRICK COOKE. "BOOKSHELF; How a Grocer Bagged Profits; At its peak, the chain had nearly 16,000 stores. Critics charged it with competing unfairly by offering too-low prices.." The Wall Street Journal (Mon., AUGUST 29, 2011): A15.

(Note: ellipsis added.)



The book under review is:

Levinson, Marc. The Great A&P and the Struggle for Small Business in America. New York: Hill and Wang, 2011.





December 19, 2011

Entrepreneur Sam Walton Sought to Learn from Others



(p. 40) So where is Ames at the time of this writing, in 2008?

Dead. Gone. Never to be heard from again. Wal-Mart is alive and well, #1 on the Fortune 500 with $379 billion in annual revenues.

What happened? What distinguished Wal-Mart from Ames?

A big part of the answer lies in Walton's deep humility and learning orientation. In the late 1980s, a group of Brazilian investors bought a discount retail chain in South America. After purchasing the company, they figured they'd better learn more about discount retailing, so they sent off letters to about ten CEOs of American retailing companies, asking for a meeting to learn about how to run the new company better. All the (p. 41) CEOs either declined or neglected to respond, except one: Sam Walton.

When the Brazilians deplaned at Bentonville, Arkansas, a kindly, white-haired gentleman approached them, inquiring, "Can I help you?"

"Yes, we're looking for Sam Walton."

"That's me," said the man. He led them to his pickup truck, and the Brazilians piled in alongside Sam's dog, Ol' Roy.

Over the next few days, Walton barraged the Brazilians with question after question about their country, retailing in Latin America, and so on, often while standing at the kitchen sink washing and drying dishes after dinner. Finally, the Brazilians realized, Walton-the founder of what may well become the world's first trillion-dollar-per-year corporation-sought first
and foremost to learn from them, not the other way around.



Source:

Collins, Jim. How the Mighty Fall: And Why Some Companies Never Give In. New York: HarperCollins Publishers, Inc., 2009.






December 15, 2011

How Entrepreneurship Rebuilt San Francisco After the Fire



(p. 5) At 5:12 a.m. on April 18, 1906, Amadeo Peter Giannini felt an odd sensation, then a violent one, a slight, almost imperceptible shift in his surroundings coupled with a distant rumble like faraway thunder or a train! Pause. One second. Two seconds. Then-bang!-his house in San Mateo, California, began to pitch and shake, to, fro, up, and down. Seventeen miles north in (p. 6) San Francisco, the ground liquefied underneath hundreds of buildings, while heaving spasms under more solid ground catapulted stones and facades into the streets. Walls collapsed. Gas mains exploded. Fires erupted.

Determined to find out what had happened to his fledgling company, the Bank of Italy, Giannini endured a six-hour odyssey, navigating his way into the city by train and then by foot while people streamed in the opposite direction, fleeing the conflagration. Fires swept toward his offices, and Giannini had to rescue all the imperiled cash sitting in the bank. But criminals roamed through the rubble, prompting the mayor to issue a terse proclamation: "Officers have been authorized by me to KILL any and all persons found engaged in Looting or in the Commission of Any Other Crime." With the help of two employees, Giannini hid the cash under crates of oranges on two commandeered produce wagons and made a nighttime journey back to San Mateo, where he hid the money in his fireplace. Giannini returned to San Francisco the next morning and found himself at odds with other bankers who wanted to impose up to a six-month moratorium on lending. His response: putting a plank across two barrels right in the middle of a busy pier and opening for business the very next day. "We are going to rebuild San Francisco," he proclaimed.

Giannini lent to the little guy when the little guy needed it most. In return, the little guy made deposits at Giannini's bank. As San Francisco moved from chaos to order, from order to growth, from growth to prosperity, Giannini lent more to the little guy, and the little guy banked even more with Giannini. The bank gained momentum, little guy by little guy, loan by loan, deposit by deposit, branch by branch, across California, (p. 7) renaming itself Bank of America along the way. In October 1945, it became the largest commercial bank in the world, overtaking the venerable Chase National Bank. (Note of clarification: in 1998, NationsBank acquired Bank of America and took the name; the Bank of America described here is a different company than NationsBank.)



Source:

Collins, Jim. How the Mighty Fall: And Why Some Companies Never Give In. New York: HarperCollins Publishers, Inc., 2009.






December 10, 2011

Collins' "How the Mighty Fall" Is Useful Business Book



HowTheMightyFallBK.jpg

















Source of book image: http://www.harpercollins.com/harperimages/isbn/large/9/9780977326419.jpg



Jim Collins' business books are usually sensible, and are full of arresting examples and memorable hypotheses. His latest full-scale research effort (Great by Choice) is just out, but I have not yet read it. In the next few weeks, I will quote a few of the more thought-provoking or useful passages in his 2009 small book How the Mighty Fall.

Book discussed:

Collins, Jim. How the Mighty Fall: And Why Some Companies Never Give In. New York: HarperCollins Publishers, Inc., 2009.






December 5, 2011

"Private Life Was Completely Transformed in the Nineteenth Century"



(p. 448) Private life was completely transformed in the nineteenth century - socially, intellectually, technologically, hygienically, sartorially, sexually and in almost any other respect that could be made into an adverb. Mr Marsham was born (in 1822) into a world that was still essentially medieval - a place of candlelight, medicinal leeches, travel at walking pace, news from afar that was always weeks or months old - and lived to see the introduction of one marvel after another: steamships and speeding trains, telegraphy, photography, anaesthesia, indoor plumbing, gas lighting, antisepsis in medicine, refrigeration, telephones, electric lights, recorded music, cars and planes, skyscrapers, motion pictures, radio, and literally tens of thousands of tiny things more, from mass-produced bars of soap to push-along lawnmowers.

It is almost impossible to conceive just how much radical day-to-day change people were exposed to in the nineteenth century, particularly in the second half. Even something as elemental as the weekend was brand new.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





December 1, 2011

Justice for He Who Taxed Unjustly



(p. 444) At the height of the agricultural crisis, the British government under the Liberals did an odd thing. It invented a tax designed to punish a class of people who were already suffering severely and had done nothing in particular to cause the current troubles. The class was large landowners. The tax was death duties. Life was about to change utterly for thousands of people, including our own Mr Marsham.

The designer of the new tax was Sir William George Granville Venables Vernon Harcourt, the chancellor of the exchequer, a man who seems not to have been liked much by anyone at any point in his life, including his own family. Known familiarly, if not altogether affectionately, as 'Jumbo' because of his magnificent rotundity, Harcourt was an unlikely persecutor of the landed classes since he was one of them himself. The Harcourt family home was Nuneham Park in Oxfordshire, which we have visited in this book already. Nuneham, you may remember, was where an earlier Harcourt reconfigured the estate but failed to recollect where the old village well had been, fell into it and drowned. For as long as there had been (p. 445) Tories, the Harcourts had numbered themselves among them, so William's joining of the Liberals was seen within his family as the darkest treachery. Even Liberals were startled by his tax. Lord Rosebery, the prime minister (who was himself a big landowner), wondered if some relief should at least be granted in those cases where two inheritors died in quick succession. It would be harsh, Rosebery thought, to tax an estate a second time before the legatee had had a chance to rebuild the family finances. Harcourt, however, refused all appeals for concessions.

That Harcourt stood almost no chance of inheriting his own family property no doubt coloured his principles. In fact, to his presumed surprise, he did inherit it when his elder brother's son died suddenly, but heirlessly, in the spring of 1904. Harcourt didn't get to enjoy his good fortune long, however. He expired six months later himself, which meant that his heirs were among the first to be taxed twice over in exactly the way that Rosebery had feared and he had dismissed. Life doesn't often get much neater than that.




Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





November 23, 2011

No Evidence that Parents Were Ever Indifferent to the Well-Being of Their Children



(p. 404) No one expressed parental loss better (as no one expressed most things better) than William Shakespeare. These lines are from King John, written soon after his son Hamnet died at the age of eleven in 1596:

Grief fills the room up of my absent child
Lies in his bed, walks up and down with me,
Puts on his pretty looks, repeats his words,
Remembers me of all his gracious parts,
Stuffs out his vacant garments with his form.

(p. 405) These are not the words of someone for whom children are a product, and there is no reason to suppose - no evidence anywhere, including that of common sense - that parents were ever, at any point in the past, commonly indifferent to the happiness and well-being of their children. One clue lies in the name of the room in which we are now. 'Nursery' is first recorded in English in 1330 and has been in continuous use ever since. A room exclusively dedicated to the needs and comforts of children would hardly seem consistent with the belief that children were of no consequence within the household. No less significant is the word 'childhood' itself. It has existed in English for over a thousand years (the first recorded use is in the Lindisfarne Gospels circa AD 950), so whatever it may have meant emotionally to people, as a state of being, a condition of separate existence, it is indubitably ancient. To suggest that children were objects of indifference or barely existed as separate beings would appear to be a simplification at best.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: italics in original.)





November 22, 2011

The Costs of Altruism



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Source of book image: http://www.barbaraoakley.com/_font_face__book_antiqua___font_size__3___i__b_pathological_altruism__i___b__106998.htm



(p. D1) On entering the patient's room with spinal tap tray portentously agleam, Dr. Burton encountered the patient's family members. They begged him not to proceed. The frail, bedridden patient begged him not to proceed. Dr. Burton conveyed their pleas to the oncologist, but the oncologist continued to lobby for a spinal tap, and the exhausted family finally gave in.


. . .


(p. D2) . . . , Dr. Burton is a contributor to a scholarly yet surprisingly sprightly volume called "Pathological Altruism," to be published this fall by Oxford University Press. . . .

As the new book makes clear, pathological altruism is not limited to showcase acts of self-sacrifice, like donating a kidney or a part of one's liver to a total stranger. The book is the first comprehensive treatment of the idea that when ostensibly generous "how can I help you?" behavior is taken to extremes, misapplied or stridently rhapsodized, it can become unhelpful, unproductive and even destructive.


. . .


David Brin, a physicist and science fiction writer, argues in one chapter that sanctimony can be as physically addictive as any recreational drug, and as destabilizing. "A relentless addiction to indignation may be one of the chief drivers of obstinate dogmatism," he writes. . . .

Barbara Oakley, an associate professor of engineering at Oakland University in Michigan and an editor of the new volume, said in an interview that when she first began talking about its theme at medical or social science conferences, "people looked at me as though I'd just grown goat horns. They said, 'But altruism by definition can never be pathological.' "

To Dr. Oakley, the resistance was telling. "It epitomized the idea 'I know how to do the right thing, and when I decide to do the right thing it can never be called pathological,' " she said.


. . .


Yet given her professional background, Dr. Oakley couldn't help doubting altruism's exalted reputation. "I'm not looking at altruism as a sacred thing from on high," she said. "I'm looking at it as an engineer."



For the full story, see:

NATALIE ANGIER. "BASICS; The Pathological Altruist Gives Till Someone Hurts." The New York Times (Tues.,October 4, 2011): D1 & D2.

(Note: ellipses added.)

(Note: the online version of the article is dated October 3, 2011.)





November 15, 2011

Patent on Cotton Gin Not Enough for Whitney to Get Rich




(p. 395) Whitney patented his 'gin' (a shortened form of 'engine') and prepared to become stupendously wealthy.


. . .


(p. 396) . . . , the gin truly was a marvel. Whitney and Miller formed a partnership with every expectation of getting rich, but they were disastrous businessmen. For the use of their machine, they demanded a one-third share of any harvest - a proportion that plantation owners and southern legislators alike saw as frankly rapacious. That Whitney and Miller were both Yankees didn't help sentiment either. Stubbornly they refused to modify their demands, convinced that southern growers could not hold out in the face of such a transforming piece of technology. They were right about the irresistibility, but failed to note that the gin was also easily pirated. Any halfway decent carpenter could knock one out in a couple of hours. Soon plantation owners across the south were harvesting cotton with home-made gins. Whitney and Miller filed sixty suits in Georgia and many others elsewhere, but found little sympathy in southern courts. By 1800 - just seven years after the gin's invention - Miller and Catharine Greene were in such desperate straits that they had to sell the plantation.




Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: ellipses added.)





November 11, 2011

Unable to Compete with Cotton "European Textile Workers Bayed for Protection"



(p. 390) Cotton is such a commonplace material now that we forget that it was once extremely precious - more valuable than silk. But then in the seventeenth century, the East India Company began importing calicoes from India (from the city of Calicut, from which they take their name), and suddenly cotton became affordable. Calico was then essentially a collective term for chintzes, muslins, percales and other colourful fabrics, which caused unimaginable delight among western consumers because they were light and washable and the colours didn't run. Although some cotton was grown in Egypt, India dominated the cotton trade, as we are reminded by the endless numbers of words that came into English by way of that trade: khaki, dungarees, gingham, muslin, pyjamas, shawl, seersucker, and so on.

The sudden surge of Indian cotton pleased consumers, but not (p. 391) manufacturers. Unable to compete with this wonder fabric, European textile workers bayed for protection almost everywhere, and almost everywhere they received it. The importation of finished cotton fabrics was banned in much of Europe throughout the eighteenth century.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: italics in original.)





November 9, 2011

Schumpeter's Simile for Capitalist Mobility



(p. 156) In fact, the upper strata of society are like hotels which are indeed always full of people, but people who are forever changing.



Source:

Schumpeter, Joseph A. The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Translated by Redvers Opie. translation of 2nd German edition that appeared in 1926; translation first published by Harvard in 1934 ed. New Brunswick, NJ: Transaction Publishers, 1983.





November 7, 2011

The Penalty for Insulting the Future King



(p. 390) Brummell's fall from grace was abrupt and irreversible. He and the Prince of Wales had a falling out and ceased speaking. At a social occasion, the prince pointedly ignored Brummell and instead spoke to his companion. As the prince withdrew, Brummell turned to the companion and made one of the most famously ill-advised remarks in social history. 'Who's your fat friend?' he asked. Such an insult was social suicide. Shortly afterwards Brummell's debts caught up with him and he fled to France. He spent the last two and a half decades of his life living in poverty, mostly in Calais, growing slowly demented but always looking, in his restrained and careful way, sensational.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





November 3, 2011

Wigmakers Petitioned King "to Make Wig-Wearing by Males Compulsory"



(p. 384) . . . , pretty abruptly, wigs went out of fashion. Wigmakers, in desperation, petitioned George III to make wig-wearing by males compulsory, but the king declined. By the early 1800s nobody wanted them and old wigs were commonly used as dust mops. Today they survive only in certain courtrooms in Britain and the Commonwealth. Judicial wigs these days are made of horsehair and cost about £600,

I'm told. To avoid a look of newness - which many lawyers fear might suggest inexperience - new wigs are customarily soaked in tea to give them a suitable air of age.




Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: ellipsis added.)





October 29, 2011

Statute of Caps "Required People to Wear Caps Instead of Hats"



(p. 381) Sumptuary laws were enacted partly to keep people within their class, but partly also for the good of domestic industries, since they were often designed to depress the importation of foreign materials. For the same reason for a time there was a Statute of Caps, aimed at helping national capmakers through a depression, which required people to wear caps instead of hats. For obscure reasons, Puritans resented the law and were often fined for flouting it. But on the whole sumptuary laws weren't much enforced. Various clothing restrictions were enshrined in (p. 382) statutes in 1337, 1363, 1463, 1483, 1510, 1533 and 1554, but records show they were never much enforced. They were repealed altogether in 1604.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





October 27, 2011

Schumpeter on the Difference Between "Making a Road and Walking Along It"



(p. 85) Carrying out a new plan and acting according to a customary one are things as different as making a road and walking along it.



Source:

Schumpeter, Joseph A. The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Translated by Redvers Opie. translation of 2nd German edition that appeared in 1926; translation first published by Harvard in 1934 ed. New Brunswick, NJ: Transaction Publishers, 1983.






October 26, 2011

Arabic Numerals Enabled Better Accounting Systems



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






(p. A13) Humans have been recording counts for at least 35,000 years, if the notches in a Paleolithic-era baboon's fibula are an indicator.


. . .


Before the 13th century, European businessmen recorded figures in Roman numerals and computed with their fingers or a counting board. But these creaky accounting systems began to buckle under the growing complexity of regional and international finance. In 1202, Leonardo of Pisa--better known by his family name, Fibonacci--published the "Liber Abbaci," or "Book of Calculation," a 600-page tome detailing the rules of Hindu-Arabic arithmetic and algebra. Fibonacci's volume was directed not to scholars but to merchants, the first work in the West to demonstrate the commercial utility of Eastern mathematics. The book was an instant success and propelled the Pisan maestro d'abbaco to fame.

The "Liber Abbaci" inspired a flood of regionally produced (and lesser) primers on the subject. Arithmetic schools sprang up throughout Italy and would eventually count among their pupils da Vinci and Machiavelli. German merchants flocked to Venice during the 1300s to learn the new accounting practices. In "The Man of Numbers," mathematician Keith Devlin makes the case that Fibonacci's book spearheaded the decline and fall of the Roman numeral and transformed scientific, technological and commercial calculation in the West.

At age 15, Fibonacci accompanied his father, a Pisan trade representative, to the North African port of Bugia (now Bejaia, in Algeria). In the preface to "Liber Abbaci," Fibonacci writes of his early introduction to the "art of the nine Indian figures" and their computational power. After more than a decade of his own studies and tutelage under Arabic mathematicians across North Africa, he returned to Pisa to write his masterwork. Such was the acclaim that Fibonacci appeared before Emperor Frederick II--a colorful intellectual who referred to himself as Stupor mundi or Wonder of the World--and vanquished the emperor's court mathematician in an arithmetic duel.


. . .


. . . as Mr. Devlin reminds us, even something as prosaic as a sequence of 10 numbers can remake an entire world.



For the full review, see:

ALAN HIRSHFELD. "BOOKSHELF; Counting On Progress; Roman numerals were fine for adding and subtracting. Fibonacci saw that complex math required a better system." The Wall Street Journal (Thurs., JULY 7, 2011): A13.

(Note: ellipses added; italics in original.)


Book under review:

Devlin, Keith. The Man of Numbers: Fibonacci's Arithmetic Revolution. New York: Walker & Company, 2011.





October 25, 2011

The Huge Value of Exposing Ourselves to Unexpected Evidence




Bill Bryson tells how much we learned from the remains of a man from the neolithic age, who has been called Ötzi:


(p. 377) His equipment employed eighteen different types of wood - a remarkable variety. The most surprising of all his tools was the axe. It was copper-bladed and of a type known as a Remedello axe, after a site in Italy where they were first found. But Ötzi's axe was hundreds of years older than the oldest Remedello axe. 'It was,' in the words of one observer, 'as if the tomb of a medieval warrior had yielded a modern rifle.' The axe changed the timeframe for the copper age in Europe by no less than a thousand years.

But the real revelation and excitement were the clothes. Before Ötzi we had no idea - or, to be more precise, nothing but ideas - of how stone age people dressed. Such materials as survived existed only as fragments. Here was a complete outfit and it was full of surprises. His clothes were made from the skins and furs of an impressive range of animals - red deer, bear, chamois, goat and cattle. He also had with him a woven grass rectangle that was three feet long. This might have been a kind of rain cape, but it might equally have been a sleeping mat. Again, nothing like it had ever been seen or imagined.

Ötzi wore fur leggings held up with leather strips attached to a waist strap that made them look uncannily - almost comically - like the kind of nylon stockings and garter sets that Hollywood pin-ups wore in the Second World War. Nobody had remotely foreseen such a get-up. He wore a loincloth of goatskin and a hat made from the fur of a brown bear - probably a kind of hunting trophy. It would have been very warm and covetably stylish. The rest of his outfit was mostly made from the skin and fur of red deer. Hardly any came from domesticated animals, the opposite of what was expected.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





October 24, 2011

Reasons to Hope for 150 Year Life Span



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






(p. A13) Ms. Arrison is in the hopeful camp. She recounts advances in stem-cell research, pharmaceuticals and synthetic biology. And the tinkering with genes still goes on. We learn about Dr. Cynthia Kenyon at the University of California in San Francisco, who discovered that the life span of the tiny worm Caenorhabditis elegans could be doubled by partially disabling a single gene. Further improvements on the technique resulted in worms living six times longer than normal. "In human terms," Ms. Arrison says, "they be the equivalent of healthy, active five-hundred-year-olds." That may be a bit much to expect, but Ms. Arrison says she is confident that "human life expectancy will one day reach 150 years."


. . .


What is more, technology heavyweights are paying attention, including Bill Gates (if he were a teenager today, Mr. Gates once said, he'd be "hacking biology") and Jeff Bezos ("atom by atom we'll assemble small machines that will enter cell walls and make repairs"). Larry Ellison, of Oracle, started a foundation more than a decade ago to support anti-aging research; the institution donates about $42 million a year.


. . .


And if humans do begin living to 150, then what?


. . .


. . . , Ms. Arrison argues that apocalyptic prophecies are unlikely to be realized. Increasing wealth and mankind's adaptability and ingenuity mean that as new problems emerge, new solutions will be forthcoming. "In looking at the trends of history," she says, "we can see that even when there are downsides to a particular wealth- or health-enhancing technology, the problem is often fixed once the population reaches a point where it feels secure in spending the resources to do so."



For the full review, see:

NICK SCHULZ. "BOOKSHELF; Bioengineering Methuselah; Human beings living to be 150? And you thought Social Security and Medicare were in trouble now." The Wall Street Journal (Weds., August 31, 2011): A13.

(Note: ellipses added.)


Book under review:

Arrison, Sonia. 100 Plus: How the Coming Age of Longevity Will Change Everything, from Careers and Relationships to Family and Faith. New York: Basic Books, 2011.





October 22, 2011

Easter Island Was Ravaged by Rats, Peruvian Slaving Parties and Nonnative Diseases, Not by Ecocide



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Source of book image: http://0.tqn.com/d/archaeology/1/0/g/L/1/Statues-That-Walked-sm.jpg





The natives call Easter Island "Rapa Nui."



(p. C5) With the forest gone, Rapa Nui's soil degraded; unable to feed themselves, Mr. Diamond argued in his best-selling "Collapse" (2005), Easter Islanders faced "starvation, a population crash, and a descent into cannibalism." The fall was abrupt and overwhelming; scores of giant statues were abandoned, half-finished. Roggeveen had discovered a ruin--and a powerful eco-parable.

Books and articles by the hundred have pointed to Rapa Nui as the inevitable result of uncontrolled population growth, squandered resources and human fecklessness. "The person who felled the last tree could see it was the last tree," wrote Paul G. Bahn and John Flenley in "Easter Island, Earth Island" (1992). "But he (or she) still felled it." "The parallels between Easter Island and the whole modern world are chillingly obvious," Mr. Diamond proclaimed. "The clearest example of a society that destroyed itself by overexploiting its own resources," he said, Rapa Nui epitomizes "ecocide," presenting a stark image of "what may lie ahead of us in our own future."

No, it doesn't, write archaeologists Terry Hunt and Carl Lipo in "The Statues That Walked," a fascinating entry in the pop-science genre of Everything You Know Is Wrong. Messrs. Hunt and Lipo had no intention of challenging Mr. Diamond when they began research on Rapa Nui. But in their fourth year of field work, they obtained radiocarbon dates from Anakena Beach, thought to be the island's oldest settlement. The dates strongly indicated that the first settlers appeared around A.D. 1200--eight centuries later than Heyerdahl and other researchers had thought.

Wait a minute, the authors in effect said. Rapa Nui is so remote that researchers believe it must have been settled by a small group of adventurers--a few dozen people, brave or crazy, in boats. The new evidence suggested that their arrival had precipitated catastrophic deforestation "on the scale of decades, not centuries." The island then probably had only a few hundred inhabitants. Some ecologists estimate that the island originally had 16 million palm trees. How could so few people have cut down so much so fast?


. . .


The real culprit, according to "The Statues That Walked," was the Polynesian rat (Rattus exulans), which stowed away on the boats of the first Polynesian settlers. In laboratory settings, Polynesian rat populations can double in 47 days. Throw a breeding pair into an island with no predators and abundant food and arithmetic suggests the result: ratpocalypse. If the animals multiplied as they did in Hawaii, the authors calculate, Rapa Nui would quickly have housed between two and three million. Among the favorite food sources of R. exulans are tree seeds and tree sprouts. Humans surely cleared some of the forest, but the real damage would have come from the rats that prevented new growth.

"Rather than a case of abject failure," the authors argue, "Rapa Nui is an unlikely story of success." The islanders had migrated, perhaps accidentally, to a place with little water and "fundamentally unproductive" soil with "uniformly low" levels of phosphorus, an essential mineral for plant growth. To avoid the wind's dehydrating effects, the newcomers circled their gardens with stone walls known as manavai. Today, the researchers discovered, abandoned manavai occupy about 6.4 square miles, a tenth of the island's total surface.

More impressive still, about half of the island is covered by "lithic mulching," in which the islanders scattered broken stone over the fields. The uneven (p. C6) surface creates more turbulent airflow, reducing daytime surface temperatures and warming fields at night. And shattering the rocks exposes "fresh, unweathered surfaces, thus releasing mineral nutrients held within the rock." Only lithic mulching produced enough nutrients--just barely--to make Rapa Nui's terrible soil cultivable. Breaking and moving vast amounts of stone, the islanders had engineered an entirely new, more productive landscape.

Their success was short-lived. As Messrs. Hunt and Lipo point out, the 18th and 19th centuries were terrible times to reside in a small, almost defenseless Pacific nation. Rapa Nui was repeatedly ravaged by Peruvian slaving parties and nonnative diseases.


. . .


Easter Island's people did not destroy themselves, the authors say. They were destroyed.


. . .


Oral tradition said that the statues walked into their places. Oral tradition was correct, the authors say. By shaping the huge statues just right, the islanders were able to rock them from side to side, moving them forward in a style familiar to anyone who has had to move a refrigerator. Walking the statues, the authors show in experiments, needed only 15 or 20 people.

In a 2007 article in Science, Mr. Diamond estimated that hundreds of laborers were needed to move the statues, suggesting that the eastern settlements of the island alone had to have "a population of thousands"--which in turn was proof of the island's destructive overpopulation. By showing that the statues could have been moved by much fewer people, Messrs. Hunt and Lipo have removed one of the main supports of the ecocide theory and the parable about humankind it tells.



For the full review, see:

CHARLES C. MANN. "Don't Blame the Natives; It was a rat that caused the sudden collapse of Easter Island's civilization." The Wall Street Journal (Sat., JULY 30, 2011): C5-C6.

(Note: ellipses added; italics in original.)


Source of book under review:

Hunt, Terry, and Carl Lipo. The Statues That Walked: Unraveling the Mystery of Easter Island. New York: Free Press, 2011.





October 21, 2011

Bathtubs Started Out "Extremely Expensive" and Then Prices Fell




(p. 372) At last the world had baths that looked good and stayed looking good for a long time. But they were still extremely expensive. A bath alone could easily cost $200 in 1910 - a price well beyond the range of most households. But as manufacturers improved the processes of mass manufacture, prices fell and by 1940 an American could buy an entire bath suite - sink, bath and toilet - for $70, a price nearly everyone could afford.

Elsewhere, however, baths remained luxuries. In Europe a big part of the problem was a lack of space in which to put bathrooms. In 1954 just one French residence in ten had a shower or bath. In Britain the journalist Katharine Whitehorn has recalled that as recently as the late 1950s she and her colleagues on the magazine Woman's Own were not allowed to do features on bathrooms as not enough British homes had them, and such articles would only promote envy.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





October 17, 2011

The Lancet Accused Snow of Being "in the Pocket of Business Interests"




(p. 365) It is hard now to appreciate just how radical and unwelcome Snow's views were. Many authorities actively detested him for them. The Lancet concluded that he was in the pocket of business interests which wished to continue to fill the air with 'pestilent vapours, miasms and loathsome abominations of every kind' and make themselves rich by poisoning their neighbours. 'After careful enquiry,' the parliamentary inquiry concluded, 'we see no reason to adopt this belief.'


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: italics in original.)





October 16, 2011

Finance and Strategy Should Be More Integrated



ChristensenClayton2011-07-19.jpg"'God never said that finance and strategy are fundamentally different functions.' --Clayton Christensen" Source of caption and photo: online version of the WSJ interview quoted and cited below.




MR. MURRAY: We've talked about the innovator's dilemma, but what's the solution?

MR. CHRISTENSEN: The financial function stands in the way of much of this. God never said that finance and strategy are fundamentally different functions, yet the business schools decided to teach strategy and teach finance. This gets implemented in companies where strategy is the responsibility of this group, and finance this group. And a lot of the things that make sense financially make no sense strategically.


. . .


MR. MURRAY: The United States has led the world in various types of innovation for much of the past century. Is that something that will continue?

MR. CHRISTENSEN: I am very worried about America. I was thinking about this hard over the past year. It turns out that the majority of the entrepreneurs that made Silicon Valley happen weren't Americans. They were from Israel, China and India. We were a magnet to bring to our shores the best technologists in the world. Now our message to the rest of the world is, "You guys, we don't want you." The minute we say that and push those to Singapore and to Britain and elsewhere, I worry.



For the full interview, see:

Alan Murray, interviewer. "The Innovator's Solution; Clayton Christensen, Glenn Hutchins and Ellen Kullman on being cutting edge--without breaking the bank." The Wall Street Journal (Weds., June 27, 2011): C9.

(Note: bold and italics in original; ellipsis added.)





October 14, 2011

Larry Page's Wonderful Crusade to Save Us Time



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Source of book image: http://www.kurzweilai.net/images/intheplex.jpg




On C-SPAN's book TV I saw the last part of an interesting and entertaining interview with Steven Levy that was originally recorded at the Computer History Museum on April 6, 2011. Levy is the author of of In the Plex which I have not read, but which is now on my to-read list.

At the end of the interview, Levy read a passage from his book about how Larry Page is obsessed with reducing latency, which is a technical term for how long we have to wait for something to happen on a computer.

Isn't it wonderful that Larry Page is on a crusade to save us from wasted time?


Book discussed above:

Levy, Steven. In the Plex: How Google Thinks, Works, and Shapes Our Lives. New York: Simon & Schuster, 2011.

(Note: "latency" appears on the following pages of Steven Levy's book: 93, 184, 185, 186, 187, 207, 262, and 398.)






October 13, 2011

Only John Snow Saw Flaw in Miasma Theory




(p. 362) The miasma theory had just one serious flaw: it was entirely without foundation. Unfortunately only one man saw this, and he couldn't get others to see it with him. His name was John Snow.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





October 12, 2011

If Truman Had Not Used the Bomb, Hundreds of Thousands More American Soldiers Would Have Died



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






(p. A15) . . . , the author reminds us of the hundreds of thousands of Japanese who had died in the conventional bombings of places like Tokyo and Kyoto while Roosevelt was president, but with relatively little opprobrium attaching to FDR. Father Miscamble cites as well the horrific massacre of innocents for which the Japanese were responsible, a savagery still being unleashed in the summer of 1945, and the awful cost of battle in the Pacific, including 6,000 American dead and 20,000 wounded at Iwo Jima and 70,000 casualties suffered while capturing Okinawa. With these precedents, Herbert Hoover warned Truman that an invasion of the Japanese home islands could result in the loss of between half a million and a million American lives. Marshall, Leahy and Gen. Douglas MacArthur each had his own projected figures, none of them wildly different from Hoover's.

Under these circumstances, it was inconceivable that Truman would not have ordered the use of a potentially war-winning weapon the moment it could be deployed. It is impossible to imagine the depth of the public's fury if after the war Americans had discovered that their president, out of concern for his own conscience, had not used the weapons but instead condemned hundreds of thousands of American soldiers to certain death on the beaches and in the cities of mainland Japan.



For the full review, see:

ANNE JOLIS. "BOOKSHELF; In Defense Of 'Little Boy'; Herbert Hoover warned President Truman that invading Japan would cost at least half a million American lives." The Wall Street Journal (Weds., July 13, 2011): A15.

(Note: ellipsis added.)


Book reviewed:

Miscamble, Wilson D. The Most Controversial Decision: Truman, the Atomic Bombs, and the Defeat of Japan, Cambridge Essential Histories. New York: Cambridge University Press, 2011.






October 9, 2011

The Stinking Past




(p. 356) The people who cleaned cesspits were known as nightsoil men, and if there has ever been a less enviable way to make a living I believe it has yet to be described. They worked in teams of three or four. One man - the most junior, we may assume - was lowered into the pit itself to scoop waste into buckets. A second stood by the pit to raise and lower the buckets, and the third and fourth carried the buckets to a waiting cart. Nightsoil work was dangerous as well as disagreeable. Workers ran the risk of asphyxiation and even of explosions since they worked by the light of a lantern in powerfully gaseous environments. The Gentleman's Magazine in 1753 related the case of one nightsoil man who went into a privy vault in a London tavern and was overcome almost at once by the foul air. 'He call'd out for help, and immediately fell down on his face,' one witness reported. A colleague who rushed to the man's aid was similarly overcome. Two more men went to the vault, but could not get in because of the foul air, though they did manage to open the door a little, releasing the worst (p. 357) of the gases. By the time rescuers were able to haul the two men out, one was dead and the other was beyond help.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





October 6, 2011

"Insanely Great" Entrepreneur Steve Jobs Wanted "a Chance to Change the World"



Steve Jobs died yesterday (Weds., October 5, 2011).

Jobs was an innovator of my favorite kind, what I call a "project entrepreneur." He showed us what excitement and progress is possible if we preserve the institutions that allow entrepreneurial capitalism to exist.

When he was recruiting John Sculley to leave Pepsi and join Apple, Jobs asked him: "Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?" (p. 90).

Steve Jobs wanted to change the world. He got the job done.


Source of quote of Jobs' question to Sculley:

Sculley, John, and John A. Byrne. Odyssey: Pepsi to Apple. paperback ed. New York: HarperCollins, 1988.






October 5, 2011

In Middle Ages "Nearly Everyone Itched Nearly All the Time"




(p. 346) . . . in the Middle Ages the spread of plague made people consider more closely their attitude to hygiene and what they might do to modify their own susceptibility to outbreaks. Unfortunately, people everywhere came to exactly the wrong conclusion. All the best minds agreed that bathing opened the epidermal pores and encouraged deathly vapours to invade the body. The best policy was to plug the pores with dirt. For the next six hundred years most people didn't wash, or even get wet, if they could help it - and in consequence they paid an uncomfortable price. Infections became part of everyday life. Boils grew commonplace. Rashes and blotches were routine. Nearly everyone itched nearly all the time. Discomfort was constant, serious illness accepted with resignation.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: ellipsis added.)





October 4, 2011

Neuroscientist Sees Entrepreneurs as "Never Satisfied" Due to "Attenuated Dopamine Function"



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Source of book image: http://www.kurzweilai.net/images/The-Compass-of-Pleasure-Linden-David-J-9780670022588.jpg





David J. Linden is the author of The Compass of Pleasure and a Johns Hopkins University School of Medicine Professor of Neuroscience.



(p. 4) . . . , the psychological profile of a compelling leader -- think of tech pioneers like Jeff Bezos, Larry Ellison and Steven P. Jobs -- is also that of the compulsive risk-taker, someone with a high degree of novelty-seeking behavior. In short, what we seek in leaders is often the same kind of personality type that is found in addicts, whether they are dependent on gambling, alcohol, sex or drugs.

How can this be? We typically see addicts as weak-willed losers, and chief executives and entrepreneurs are people with discipline and fortitude. To understand this apparent contradiction we need to look under the hood of the brain, and in particular at the functions that relate to pleasure and reward.


. . .


Crucially, genetic variants that suppress dopamine signaling in the pleasure circuit substantially increase pleasure- and novelty-seeking behaviors -- their bearers must seek high levels of stimulation to reach the same level of pleasure that others can achieve with more moderate indulgence. Those blunted dopamine receptor variants are associated with substantially increased risk of addiction to a range of substances and behaviors.


. . .


The risk-taking, novelty-seeking and obsessive personality traits often found in addicts can be harnessed to make them very effective in the workplace. For many leaders, it's not the case that they succeed in spite of their addiction; rather, the same brain wiring and chemistry that make them addicts also confer on them behavioral traits that serve them well.

So, when searching for your organization's next leader, look for someone with an attenuated dopamine function: someone who is never satisfied with the status quo, someone who wants the feeling of success more than others -- but likes it less.



For the full commentary, see:

DAVID J. LINDEN. "Addictive Personality? You Might be a Leader." The New York Times, SundayReview Section (Sun., July 24, 2011): 4.

(Note: ellipses added.)

(Note: the online version of the commentary is dated July 23, 2011.)


The book mentioned above is:

Linden, David J. The Compass of Pleasure: How Our Brains Make Fatty Foods, Orgasm, Exercise, Marijuana, Generosity, Vodka, Learning, and Gambling Feel So Good. New York: Viking Adult, 2011.





October 1, 2011

Americans Resented Being Kept as a Captive Market




(p. 300) This suppression of free trade greatly angered the Scottish economist Adam Smith (whose Wealth of Nations, not coincidentally, came out the same year that America declared its independence) but not nearly as much as it did the Americans, who naturally resented the idea of being kept eternally as a captive market. It would be overstating matters to suggest that the exasperations of commerce were the cause of the American revolution, but they were certainly a powerful component.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





September 30, 2011

American Gangster as Destructive Entrepreneur



Denzel_Washington_American_Gangster2011-08-09.jpgSource of image: http://celebritywonder.ugo.com/wp/Denzel_Washington_in_American_Gangster_Wallpaper_12_1280.jpg



William Baumol famously categorized entrepreneurs as productive, unproductive, or destructive. (Somewhat similarly, Burt Folsom distinguished market entrepreneurs from political entrepreneurs.) Baumol's view is that we cannot much influence the supply of entrepreneurs, but good policies can increase the percent of entrepreneurs who are productive.

Frank Lucas, at least as portrayed in the 2007 film American Gangster, is an apt example of the destructive entrepreneur. As portrayed by Denzel Washington, the character is intense, willing to take risks, and works hards. There is a scene where Lucas argues that the quality of his product (cocaine) must not be adulterated, because his business depends on his customers knowing that his brand is better than that of competitors. He finds ways of making his supply chain shorter, and his distribution system more trustworthy (by hiring brothers and cousins).

One can easily imagine that with different incentives and constraints, the Denzel Washington character might have brought the world a product that made the world better, rather than worse.


The Baumol article mentioned is:

Baumol, William J. "Entrepreneurship: Productive, Unproductive, and Destructive." The Journal of Political Economy 98, no. 5, Part 1 (Oct. 1990): 893-921.


The Folsom book mentioned is:

Folsom, Burton W. The Myth of the Robber Barons. 4th ed: Young America's Foundation, 2003 (1st ed. 1987).





September 29, 2011

McKinsey Finds 30% of Employers Will Drop Health Coverage in Response to Obamacare



McKinsey is probably the best known business consulting and forecasting firm in the United States. Many well-known management gurus, and corporate executives, have spent time working for McKinsey (as did Chelsea Clinton). One of their senior partners (Foster) co-authored a useful book called Creative Destruction.


(p. A2) A report by McKinsey & Co. has found that 30% of employers are likely to stop offering workers health insurance after the bulk of the Obama administration's health overhaul takes effect in 2014.


. . .


Previous research has suggested the number of employers who opt to drop coverage altogether in 2014 would be minimal.

But the McKinsey study predicts a more dramatic shift from employer-sponsored health plans once the new marketplace takes effect. Starting in 2014, all but the smallest employers will be required to provide insurance or pay a fine, while most Americans will have to carry coverage or pay a different fine. Lower earners will get subsidies to help them pay for plans.

In surveying 1,300 employers earlier this year, McKinsey found that 30% said they would "definitely or probably" stop offering employer coverage in the years after 2014. That figure increased to more than 50% among employers with a high awareness of the overhaul law.



For the full story, see:

JANET ADAMY. "Study Sees Cuts to Health Plans." The Wall Street Journal (Weds., JUNE 8, 2011): A15.

(Note: ellipsis added.)


The Foster book is:

Foster, Richard N., and Sarah Kaplan. Creative Destruction: Why Companies That Are Built to Last Underperform the Market---and How to Successfully Transform Them. New York: Currency Books, 2001.






September 28, 2011

We Tend to Ignore Information that Contradicts Our Beliefs



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






We learn the most when our priors are contradicted. But the dissonance between evidence and beliefs is painful. So we often do not see, or soon forget, evidence that does not fit with our beliefs.

The innovative entrepreneur is often a person who sees and forces herself to remember, the dissonant fact, storing it away to make sense of, or make use of, later. At the start, she may be alone in what she sees and what she remembers. So if we are to benefit from her ability and willingness to bear the pain of dissonance, she must have the freedom to differ, and she must have the financial wherewith-all to support herself until her vision is more widely shared, better understood, and more fruitfully applied.


(p. A13) Beliefs come first; reasons second. That's the insightful message of "The Believing Brain," by Michael Shermer, the founder of Skeptic magazine. In the book, he brilliantly lays out what modern cognitive research has to tell us about his subject--namely, that our brains are "belief engines" that naturally "look for and find patterns" and then infuse them with meaning. These meaningful patterns form beliefs that shape our understanding of reality. Our brains tend to seek out information that confirms our beliefs, ignoring information that contradicts them. Mr. Shermer calls this "belief-dependent reality." The well-worn phrase "seeing is believing" has it backward: Our believing dictates what we're seeing.


. . .


One of the book's most enjoyable discussions concerns the politics of belief. Mr. Shermer takes an entertaining look at academic research claiming to prove that conservative beliefs largely result from psychopathologies. He drolly cites survey results showing that 80% of professors in the humanities and social sciences describe themselves as liberals. Could these findings about psychopathological conservative political beliefs possibly be the result of the researchers' confirmation bias?

As for his own political bias, Mr. Shermer says that he's "a fiscally conservative civil libertarian." He is a fan of old-style liberalism, as in liberality of outlook, and cites "The Science of Liberty" author Timothy Ferris's splendid formulation: "Liberalism and science are methods, not ideologies." The "scientific solution to the political problem of oppressive governments," Mr. Shermer says, "is the tried-and-true method of spreading liberal democracy and market capitalism through the open exchange of information, products, and services across porous economic borders."

But it is science itself that Mr. Shermer most heartily embraces. "The Believing Brain" ends with an engaging history of astronomy that illustrates how the scientific method developed as the only reliable way for us to discover true patterns and true agents at work. Seeing through a telescope, it seems, is believing of the best kind.



For the full review, see:

RONALD BAILEY. "A Trick Of the Mind; Looking for patterns in life and then infusing them with meaning, from alien intervention to federal conspiracy." The Wall Street Journal (Weds., July 27, 2011): A13.

(Note: ellipsis added.)


Book reviewed:

Shermer, Michael. The Believing Brain: From Ghosts and Gods to Politics and Conspiracies---How We Construct Beliefs and Reinforce Them as Truths. New York: Times Books, 2011.





September 27, 2011

Brits Sent Low Quality Goods to American Colonists




(p. 299) It was easy - and for many agents irresistibly tempting - to offload on to Americans clothes and furnishings that were unsold because they were no longer fashionable in England. 'You cannot really form an idea of the trash that is to be found in the best shops,' an English visitor named Margaret Hall wrote home to a friend. A cheerful catchphrase of English (p. 300) factories became: 'It's good enough for America.' Being over-charged was a constant suspicion. Washington wrote furiously to Cary after one consignment that many of the products supplied were 'mean in quality but not in price, for in this they excel indeed far above any I have ever had'.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





September 23, 2011

Navigation Acts, Were "Insanely Inefficient, but Gratifyingly Lucrative to British Merchants and Manufacturers"




(p. 297) Many of Monticello's quirks spring from the limitations of Jefferson's workmen. He had to stick to a simple Doric style for the exterior columns because he could find no one with the skills to handle anything more complex. But the greatest problem of all, in terms of both expense and frustration, was a lack of home-grown materials. It is worth taking a minute to consider what the American colonists were up against in trying to build a civilization in a land without infrastructure.

(p. 298) Britain's philosophy of empire was that America should provide it with raw materials at a fair price and take finished products in return. The system was enshrined in a series of laws known as the Navigation Acts, which stipulated that any product bound for the New World had either to originate in Britain or pass through it on the way there, even if it had been created in, say, the West Indies, and ended up making a pointless double crossing of the Atlantic. The arrangement was insanely inefficient, but gratifyingly lucrative to British merchants and manufacturers, who essentially had a fast-growing continent at their commercial mercy. By the eve of the revolution America effectively was Britain's export market. It took 80 per cent of British linen exports, 76 per cent of exported nails, 60 per cent of wrought iron and nearly half of all the glass sold abroad. In bulk terms, America annually imported 30,000 pounds of silk, 11,000 pounds of salt and over 130,000 beaver hats, among much else. Many of these things - not least the beaver hats - were made from materials that originated in America in the first place and could easily have been manufactured in American factories - a point that did not escape the Americans.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





September 22, 2011

Deregulation Revived Railroads



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"ALL ABOARD: The Wasp magazine in 1881 lampooned railroad moguls as having regulators in the palms of their hands." Source of caricature: online version of the WSJ article quoted and cited below.




(p. C8) Mr. Klein has written thoroughly researched and scrupulously objective biographies of the previously much maligned Jay Gould and E.H. Harriman, remaking their public images by presenting them in full. Now he has published the third and final volume of his magisterial history of the Union Pacific railroad, taking the company from 1969 to the present day.

Union Pacific--the only one of the transcontinentals to remain in business under its original name--is now a flourishing business. Thanks to a series of mergers, it is one of the largest railroads in the world, with more than 37,000 miles of track across most of the American West. Thanks to its investment in new technology, it is also among the most efficient.

In 1969, though, the future of American railroading was in doubt as the industry struggled against competition from airplanes, automobiles and trucks--all of which were in effect heavily subsidized through the government's support for airports and the Interstate Highway System.

Another major factor in the decline of the railroads had been the stultifying hand of the Interstate Commerce Commission. The ICC had come into existence in the late 19th century to limit the often high-handed ways of the railroads as they wrestled with the difficult economics of an industry that has very high fixed costs. ( . . . .) But the ICC soon evolved into a cartel mechanism that discouraged innovation and wrapped the railroad industry in a cocoon of stultifying rules.

Mr. Klein notes that in 1975 he wrote a gloomy article about the sad state of an industry with a colorful past: "Unlike many other historical romances," he wrote back then, "the ending did not promise to be a happy one."

Fortunately, a deregulation movement that began under the Carter administration--yes, the Carter administration--limited the power of the ICC and then abolished it altogether. As Mr. Klein shows in the well-written "Union Pacific," the reduction of government interference left capitalism to work its magic and produce--with the help of dedicated and skillful management--the modern, efficient and profitable railroad that is the Union Pacific.



For the full review, see:

JOHN STEELE GORDON. "Tracks Across America." The Wall Street Journal (Sat., JUNE 11, 2011): C8.

(Note: ellipsis added.)


Book reviewed in the part of the review quoted above:

Klein, Maury. Union Pacific: The Reconfiguration: America's Greatest Railroad from 1969 to the Present. New York: Oxford University Press, USA, 2011.






September 19, 2011

John Crandon Proved Scurvy Caused by Lack of Vitamin C




(p. 167) . . . , in 1939 a Harvard Medical School surgeon named John Crandon decided to settle matters once and for all by the age-old method of withholding Vitamin C from his diet for as long as it took to make himself really ill. It took a surprisingly long time. For the first eighteen weeks, his only symptom was extreme fatigue. (Remarkably, he continued to operate on patients throughout this period.) But in the nineteenth week he took an abrupt turn for the worse - so much so that he would almost certainly have died had he not been under close medical supervision. He was injected with 1,000 milligrams of Vitamin C and was restored to life (p. 168) almost at once. Interestingly, he had never acquired the one set of symptoms that everyone associates with scurvy: the falling out of teeth and bleeding of gums.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: ellipsis added.)





September 11, 2011

"Comfort" at Home Was Unfamiliar Before 1770




(p. 135) If you had to summarize it in a sentence, you could say that the history of private life is a history of getting comfortable slowly. Until the eighteenth century the idea of having comfort at home was so unfamiliar that there wasn't even a word for the condition. 'Comfortable' meant merely 'capable of being consoled'. Comfort was something you gave to the wounded or distressed. The first person to use the word in its modern sense was the writer Horace Walpole, who remarked in a letter to a friend in 1770 that a certain Mrs White was looking after him well and making him 'as comfortable as is possible'. By the early nineteenth century, everyone was talking about having a comfortable home or enjoying a comfortable living, but before Walpole's day no one did.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





September 8, 2011

Arthur Murray "America's First Space Pilot," RIP



MurrayArthurFirstSpacePilot2011-08-06.jpg








"Maj. Arthur Murray in 1954." Source of caption and photo: online version of the NYT article quoted and cited below.










(p. A18) "I begin to feel weightless, and I'm flying so fast my instruments can't keep up -- they show what happened two miles ago. I'm climbing so steeply I can't see the ground, and I feel confused. I have a sense of falling and I want to grab something for support."

It was May 28, 1954, and Maj. Arthur Murray, test pilot, would wrestle for the next 15 terrifying seconds with a rocket plane racing over 1,400 miles an hour and spinning wildly, supersonically out of control. In the turmoil, he would fly higher than any human being had ever been, 90,440 feet over the earth.

Finally, Major Murray's plane, a Bell X-1A, sank back into heavier air, and he had time to look at the dark blue sky and dazzling sunlight. He became the first human to see the curvature of the earth. At the time, he was called America's first space pilot.

Arthur Murray, known as Kit, died on July 25, in a nursing home in the town of West in Texas, his family said. He was 92. He requested that his ashes be scattered over the Mojave Desert, where some of his fellow test pilots crashed and died.

Tom Wolfe marveled at the test pilots of Edwards Air Force Base in his 1979 book "The Right Stuff" exclaiming, "My God -- to be part of Edwards in the late forties and early fifties!"



For the full obituary, see:

DOUGLAS MARTIN. "Arthur Murray, Test Pilot, Is Dead at 92." The New York Times (Fri., August 5, 2011): A18.

(Note: the online version of the story is dated August 4, 2011.)


The wonderful Tom Wolfe book mentioned is:

Wolfe, Tom. The Right Stuff. New York: Farrar, Straus & Giroux, Inc., 1979.





September 7, 2011

At First, Some Feared Electricity




(p. 133) Something of the prevailing ambivalence was demonstrated by Mrs Cornelius Vanderbilt, who went to a costume ball dressed as an electric light to celebrate the installation of electricity in her Fifth Avenue home in New York, but then had the whole system taken out when it was suspected of being the source of a small fire. Others detected more insidious threats. One authority named S. F. Murphy identified a whole host of electrically induced maladies - eyestrain, headaches, general unhealthiness and possibly even 'the premature exhaustion of life'. One architect was certain electric light caused freckles.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





September 4, 2011

Political Ideology Matters in Hiring and Tenure



compromising-scholarship-religious-and-political-bias-in-american-higher-educationBK.jpg
















Source of book image:
http://images.borders.com.au/images/bau/97816025/9781602582682/0/0/plain/compromising-scholarship-religious-and-political-bias-in-american-higher-education.jpg




(p. 34) . . . when a faculty committee is looking to hire or award tenure, political ideology seems to make a difference, according to a "collegiality survey" conducted by George Yancey.

Dr. Yancey, a professor of sociology at the University of North Texas, asked more than 400 sociologists which nonacademic factors might influence their willingness to vote for hiring a new colleague. You might expect professors to at least claim to be immune to bias in academic hiring decisions.

But as Dr. Yancey reports in his new book, "Compromising Scholarship: Religious and Political Bias in American Higher Education," more than a quarter of the sociologists said they would be swayed favorably toward a Democrat or an A.C.L.U. member and unfavorably toward a Republican. About 40 percent said they would be less inclined to vote for hiring someone who belonged to the National Rifle Association or who was an evangelical. Similar results were obtained in a subsequent survey of professors in other social sciences and the humanities.



For the full commentary, see:

LAURA PAPPANO. "The Master's as the New Bachelor's." The New York Times, EducationLife Section (Sun., July 24, 2011): 34.

(Note: ellipsis added.)

(Note: the online version of the commentary is dated July 22, 2011.)


Book mentioned:

Yancey, George. Compromising Scholarship; Religious and Political Bias in American Higher Education. Waco, TX: Baylor University Press, 2011.






September 3, 2011

Edison Excelled as an Organizer of Systems




(p. 131) Where Edison truly excelled was as an organizer of systems. The invention of the light bulb was a wondrous thing but of not much practical use when no one had a socket to plug it into. Edison and his tireless workers had to design and build the entire system from scratch, from power stations to cheap and reliable wiring, to lampstands and switches. Within months Edison had set up no fewer than 334 small electrical plants all over the world; (p. 132) within a year or so his plants were powering thirteen thousand light bulbs. Cannily he put them in places where they would be sure to make maximum impact: on the New York Stock Exchange, in the Palmer House Hotel in Chicago, La Scala opera house in Milan, the dining room of the House of Commons in London. Swan, meanwhile, was still doing much of his manufacturing in his own home. He didn't, in short, have a lot of vision. Indeed, he didn't even file for a patent. Edison took out patents everywhere, including in Britain in November 1879, and so secured his preeminence.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





August 30, 2011

Bill Bryson Slams Thomas Edison Based on Brief Comments in Linda Simon Book




In the passage quoted below, Bill Bryson is strongly critical of Thomas Edison. It's been many years since I last read a full biography of Edison, but my impression is that Bryson is not being fair to Edison.

I like Bryson and I like Edison, so I was bothered enough to dig out the online "Notes" that Bryson posted to go with his book. On the passage critical of Edison, he cites p. 83 of Linda Simon's Dark Light book.

It turns out that Simon is a literature professor whose book is mainly about the early fears that superstitious people had about electricity. Many of her sources are literary. The book is a long way from a focused, balanced biography of Edison.

On page 83, she makes a casual and unjustifiedly snide comment on Morgan, Vanderbilt, and especially Gould, and then criticizes Edison by associating him with them. She also criticizes Edison because others sometimes challenged his patents. (Just because lawsuits were brought against Edison, does not imply his patent claims were unsound---anyone can file a lawsuit who is willing to hire a lawyer.)

The "bribe" is apparently that Edison gave some reporters stock, or "suppers or songfests" who had reported favorably. To judge such claims, we would like more evidence and more context. (Today, many institutions hire former reporters to do public relations work. Universities often provide free meals to those whose favor they seek; even book publishers send out free books in the hope that they will be reviewed favorably. Do we count all of these as "bribes"? Are all "rewards" ipso facto "bribes"?)

My view is that if we are going to strongly malign the character of one who brought us so much good (Edison), we should do so based on stronger evidence than the brief casual opinions of Linda Simon.

On my "to do" list is to read a biography or two on Edison. When I do so, I will comment again on this issue.


(p. 130) By 1877, when he started his quest to make a commercially successful light, Edison was already well on his way to becoming known as 'the Wizard of Menlo Park'. Edison was not a wholly attractive human being. He didn't scruple to cheat or lie, and was prepared to steal patents or bribe journalists for favourable coverage. In the words of one of his contemporaries, he had 'a vacuum where his conscience ought to be'. But he was enterprising and hard-working and a peerless organizer.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





August 29, 2011

In 1880s Prices Fell Because of Technological Progress



RecentEconomicChangesBK.jpg
















Source of book image: http://covers.openlibrary.org/b/id/5764338-L.jpg







Michael Perelman has strongly suggested that I read David Well's book. It is on my "to do" list.



(p. C10) The dull title of "Recent Economic Changes" does no justice to David A. Wells's fascinating contemporary account of a deflationary miasma that settled over the world's advanced economies in the 1880s. His cheery conclusion: Prices were falling because technology was progressing. What had pushed the price of a bushel of wheat down to 67 cents in 1887 from $1.10 in 1882 was nothing more sinister than the opening up of new regions to cultivation (Australia, the Dakotas) and astounding improvements in agricultural machinery.


For the full review, see:

JAMES GRANT. "FIVE BEST; Little-Known Gold From the Gilded Age." The Wall Street Journal (Sat., AUGUST 6, 2011): C10.


Source of book under review:

Wells, David A. Recent Economic Changes and Their Effect on Production and Distribution of Wealth and Well-Being of Society. New York: D. Appleton and Co., 1889.


Michael Perelman argues that in Recent Economic Changes, David Wells anticipates the substance, although not the wording, of Schumpeter's "creative destruction":

Perelman, Michael. "Schumpeter, David Wells, and Creative Destruction." The Journal of Economic Perspectives 9, no. 3 (Summer 1995): 189-97.





August 19, 2011

"A Brilliant and Exhilarating and Profoundly Eccentric Book"



DeutschDavid2011-08-14.jpg







"David Deutsch." Source of caption and photo: online version of the NYT review quoted and cited below.




(p. 16) David Deutsch's "Beginning of Infinity" is a brilliant and exhilarating and profoundly eccentric book. It's about everything: art, science, philosophy, history, politics, evil, death, the future, infinity, bugs, thumbs, what have you. And the business of giving it anything like the attention it deserves, in the small space allotted here, is out of the question. But I will do what I can.


. . .


The thought to which Deutsch's conversation most often returns is that the European Enlightenment of the 17th and 18th centuries, or something like it, may turn out to have been the pivotal event not merely of the history of the West, or of human beings, or of the earth, but (literally, physically) of the universe as a whole.


. . .


(p. 17) Deutsch's enthusiasm for the scientific and technological transformation of the totality of existence naturally brings with it a radical impatience with the pieties of environmentalism, and cultural relativism, and even procedural democracy -- and this is sometimes exhilarating and sometimes creepy. He attacks these pieties, with spectacular clarity and intelligence, as small-­minded and cowardly and boring. The metaphor of the earth as a spaceship or life-­support system, he writes, "is quite perverse. . . . To the extent that we are on a 'spaceship,' we have never merely been its passengers, nor (as is often said) its stewards, nor even its maintenance crew: we are its designers and builders. Before the designs created by humans, it was not a vehicle, but only a heap of dangerous raw materials." But it's hard to get to the end of this book without feeling that Deutsch is too little moved by actual contemporary human suffering. What moves him is the grand Darwinian competition among ideas. What he adores, what he is convinced contains the salvation of the world, is, in every sense of the word, The Market.



For the full review, see:

DAVID ALBERT. "Explaining it All: David Deutsch Offers Views on Everything from Subatomic Particles to the Shaping of the Universe Itself." The New York Times Book Review (Sun., August 14, 2011): 16-17.

(Note: ellipses between paragraphs added; ellipsis in Deutsch quote in original.)

(Note: the online version of the review is dated August 12, 2011 and has the title "Explaining it All: How We Became the Center of the Universe.")


Book under review:

Deutsch, David. The Beginning of Infinity: Explanations That Transform the World. New York: Viking Adult, 2011.





August 17, 2011

A Case for Epistemic and Technological Optimism



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Source of book image: http://us.penguingroup.com/static/covers/all/5/5/9780670022755H.jpg



Horgan is well-known for writing a pessimistic book about the future of science. For him to write such a positive review of a book that reaches the opposite conclusion, is impressive (both about him and the book he is reviewing).

From Horgan's review and the reviews on Amazon as of 8/7/11, I view the Deutsch book as potentially important and profound. (I will write more when I have read it.)




(p. 17) . . . Mr. Deutsch knocks my 1996 book, "The End of Science," for proposing that the glory days of science--especially pure science, the effort to map out and understand reality--may be over. Mr. Deutsch equates my thesis with "dogmatism, stagnation and tyranny," all of which, for the record, I oppose. But he makes the case for infinite progress with such passion, imagination and quirky brilliance that I couldn't help enjoying his argument. More often than not I found myself agreeing with him--or at least hoping that he is right.


. . .


If we acknowledge our imperfections, Mr. Deutsch observes, then, paradoxically, there is no problem that we cannot tackle. Death, for instance. Or the apparent incompatibility between the two pillars of modern physics, quantum theory and general relativity. Or global warming, which Mr. Deutsch believes we can overcome through innovation rather than drastic cutbacks in consumption. He gores the sacred cow of "sustainability": Societies are healthiest, he declares, not when they achieve equilibrium but when they are rapidly evolving.



For the full review, see:

JOHN HORGAN. "BOOKSHELF; To Err Is Progress; How to foster the growth of scientific knowledge: accept that it is limited no matter how definitive it may seem." The Wall Street Journal (Weds., JULY 20, 2011): A17.

(Note: ellipses added.)


Source information on book under review:

Deutsch, David. The Beginning of Infinity: Explanations That Transform the World. New York: Viking Adult, 2011.






August 10, 2011

In Britain Ice Is Often Dispensed "as if It Were on Prescription"




(p. 73) In England, Wenham ice was more talked about than used. A few businesses took regular deliveries, but hardly any households (other than the royal one) did. By the 1850s not only was most ice sold in Britain not from Wenham, it wasn't from America at all. The Norwegians - not a people one normally associates with sharp practices - changed the name of Lake Oppegaard, near Oslo, to Lake Wenham so that they could tap into the lucrative market. By the 1850s most ice sold in Britain was in fact Norwegian, though it has to be said that ice never really caught on with the British. Even now, it is still often dispensed there as if it were on prescription. The real market, it turned out, was in America itself.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





August 9, 2011

Fannie Mae Execs "Resorted to Ad Hominem Attacks" When They Vilified the "Economic Pencil Brains"



RecklessEndangermentBK.jpg













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






(p. C6) Although the financial crisis of 2008 has left a long trail of casualties, one group has benefited from the cataclysm: financial journalists. Several have already published books shedding light on the unprecedented events that caused investment banks to fail, global stock markets to plummet and borrowers to lose their homes. "Reckless Endangerment," by Gretchen Morgenson, assistant business and financial editor and a columnist at The New York Times, and the financial analyst Joshua Rosner, is a worthy addition to the genre.


. . .


The book begins in 1994 with President Bill Clinton's kicking off a public-private partnership to extend homeownership to more Americans. . . .


. . .


. . . the institution to which the authors devote the most ink is Fannie Mae, the government-supported enterprise created in 1938 to make home loans more accessible. And the person they hold most accountable is someone whose role in the "mortgage maelstrom" has until now "escaped scrutiny": James A. Johnson, Fannie Mae's chief executive from 1991 to 1998. Mr. Johnson was the "anonymous architect of the public-private homeownership drive that almost destroyed the economy in 2008," the authors assert. "He was especially adept at manipulating lawmakers, eviscerating regulators and leaving taxpayers with the bill."

The description of Mr. Johnson's role is damning -- and although the account lacks his perspective, it is thoroughly supported through scores of interviews with academics, government officials and industry executives, some of whom are granted anonymity. While Mr. Johnson didn't respond to interview requests over five months, according to the authors, they overcome this obstacle with impressive use of public records and secondary sources, carefully attributed in the text or described in a two-page "Notes on Sources."


. . .


A particular strength of this book is the number of doubters the authors unearthed: the unsung government analysts, public lawyers and private researchers who dared to question policy decisions and stand up to the formidable "housers," as the true believers in government subsidies for home ownership are called.

The reader has a sickening sense of missed opportunity as these prophets are ignored or, worse, vilified, by those in a position to halt the mania. When a Congressional Budget Office researcher in 1995 reveals the multibillion-dollar extent of the government's subsidy to Fannie Mae and its brother institution, Freddie Mac (and that one-third of these benefits never reached borrowers), he suggests that "Congress may want to revisit the special relationship." Unable to assail the merits of his analysis, outraged Fannie Mae executives resorted to ad hominem attacks, calling budget office officials "digit-heads" and "economic pencil brains."



For the full review, see:

PAM LUECKE. "BOOKS OF THE TIMES; Nation Goes on Its Merry Way to Ruin." The New York Times (Tues., June 28, 2011): C6.

(Note: the online version of the review was dated June 27, 2011.)

(Note: ellipses added.)


Book being reviewed:

Morgenson, Gretchen, and Joshua Rosner. Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon. New York: Times Books, 2011.






August 6, 2011

Entrepreneur Frederic Tudor Spent Family Fortune to Make Ice Obsession a Business Success



(p. 71) Lake ice was a marvelous product. It created itself at no cost to the producer, was clean, renewable, and infinite in supply. The only drawbacks were that there was no infrastructure to produce and store it, and no market to sell it to. In order to make the ice industry exist, it was necessary to work out ways to cut and lift ice on a large scale, build storehouses, secure trading rights, and engage a reliable chain of shippers and agents (p. 72) and, above all, create a demand for ice in places where ice had seldom or never been seen, and was most assuredly not something anyone was predisposed to pay for. The man who did all this was a Bostonian of good birth and challenging disposition named Frederic Tudor. Making ice a commercial proposition became his overweening obsession.

The notion of shipping ice from New England to distant ports was considered completely mad - 'the vagary of a disordered brain', in the words of one of his contemporaries. The first shipment of ice to Britain so puzzled customs officials as to how to classify it that all 300 tons of it melted away before it could be moved off the docks. Shipowners were highly reluctant to accept it as cargo. They didn't relish the humiliation of arriving in a port with a holdful of useless water, but they were also wary of the very real danger of tons of shifting ice and sloshing melt-water making their ships unstable. These were men, after all, whose nautical instincts were based entirely on the idea of keeping water outside the ship, so they were loath to take on such an eccentric risk when there wasn't even a certain market at the end of it all.

Tudor was a strange and difficult man - 'imperious, vain, contemptuous of competitors and implacable to enemies', in the estimation of Daniel J. Boorstin. He alienated all his closest friends and betrayed the trust of colleagues, almost as if that were his life's ambition. Nearly all the technological innovations that made the ice trade possible were actually the work of his retiring, compliant, long-suffering associate Nathaniel Wyeth. It cost Tudor years of frustrated endeavour, and all of his family fortune, to get the ice business up and running, but gradually it caught on and eventually it made him and many others rich. For several decades, ice was America's second biggest crop, measured by weight. If securely insulated, ice could last a surprisingly long while. It could even survive the 16,000-mile, 130-day trip from Boston to Bombay - or at least about two-thirds of it could, enough to make the long trip profitable. Ice went to the furthest corners of South America and from New England to California via Cape Horn. Sawdust, a product previously without any value at all, proved to be an excellent insulator, providing useful extra income for Maine lumber mills.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





August 5, 2011

Banker Rhodes Saved Murdoch from Bankruptcy



BankerToTheWorldBK.jpg












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







(p. A13) In "Banker to the World," Mr. Rhodes tries to distil the "leadership lessons" he has learned from his remarkable career on the "front lines of global finance."


. . .


. . . , Mr. Rhodes does succeed in hammering home three lessons that we need to take to heart if we are to have any chance of navigating the troubled waters that lie ahead. The first is that there is no substitute for the human touch: For all banking's bells and whistles today, it is much the same business it was in Florentine Italy. Consider one of Mr. Rhodes's greatest exploits: coordinating the rescue of Rupert Murdoch's News Corp. from bankruptcy in 1990. Mr. Rhodes was worried that the collapse of Mr. Murdoch's heavily-indebted media empire would tip the world economy back into recession. But he decided to bet on Mr. Murdoch only after the two had sat down for a three-hour heart-to-heart over dinner in New York.



For the full review, see:

ADRIAN WOOLDRIDGE. "BOOKSHELF; A Conspiracy of Hunches; A rare master of both the financial and political realms reports on what a half-century of experience taught him." The Wall Street Journal (Weds., June 8, 2011): A15.

(Note: ellipsis added.)

(Note: online version of article had the date JULY 13, 2011.)


Book being reviewed:

Rhodes, William R. Banker to the World: Leadership Lessons from the Front Lines of Global Finance. New York: McGraw-Hill, 2011.





August 3, 2011

To Succeed in the Car Business, It Helps if You Care about Cars



CarGuysBK.jpg














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







(p. B1) . . . , General Motors embarked on a series of initiatives to overcome both the perception and reality of the growing import threat. The 1950s and '60s marked the decline of the "product guy" at GM and the ascendancy of "professional management," often individuals with a strong financial background.

It's not that senior GM management disliked cars. It was more an atmosphere of "benign neglect," a generalized consensus that we were, after all, primarily in the business of making money, and cars were merely a transitory form of money: put a certain quantity in at the front end, transform it into vehicles, and sell them for more money at the other (p. B12) end. The company cared about "the other two ends"--minimizing cost and maximizing revenue--but assumed that customer desire for the product was a given.

Responsibility for creation of the right product was delegated to lower levels in the organization, often to people with little understanding of quality design or great driving characteristics. I maintain that without a passionate focus on great products from the top of the company on down, the "low cost" part will be assured but the "high revenue" part won't happen, just as it didn't at GM for so many years.



For the full excerpt, see:

Bob Lutz. "Japan's Advantage and How the Cadillac Lost Its Shine." The Wall Street Journal (Mon., JUNE 13, 2011): B1 & B12.

(Note: ellipsis added.)


The excerpt is excerpted from:

Lutz, Bob. Car Guys Vs. Bean Counters: The Battle for the Soul of American Business. New York: Portfolio, 2011.





August 2, 2011

Refuting Claims of Bread Adulteration




(p. 67) . . . : The Nature of Bread, Honestly and Dishonestly Made, by Joseph Manning, M.D., . . . reported that it was common for bakers to add bean meal, chalk, white lead, slaked lime, and bone ash to every loaf they made.

These assertions are routinely reported as fact, even though it was demonstrated pretty conclusively over seventy years ago by Frederick A. Filby, in his classic work Food Adulteration (1934), that the claims could not possibly be true. Filby took the interesting and obvious step of baking loaves of bread using the accused adulterants in the manner and proportions described. In every case but one the bread was either as hard as (p. 68) concrete or failed to set at all, and nearly all the loaves smelled or tasted disgusting. Several needed more baking time than conventional loaves and so were actually more expensive to produce. Not one of the adulterated loaves was edible.




Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: ellipses added; italics in original.)





July 30, 2011

Capitalism Was Not Inevitable



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Source of book image:
http://ecx.images-amazon.com/images/I/519PfT2oUtL.jpg




(p. 15) What is the nature of capitalism? For Joseph Schumpeter, the Austrian-born economist whose writings have acquired a special relevance in the past year or two, this most modern of economic systems "incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one." Capitalism, Schumpeter proclaimed, cannot stand still; it is a system driven by waves of entrepreneurial innovation, or what he memorably described as a "perennial gale of creative destruction."

Schumpeter died in 1950, but his ghost looms large over Joyce Appleby's splendid new account of the "relentless revolution" unleashed by capitalism from the 16th century onward. Appleby, a distinguished historian who has dedicated her career to studying the origins of capitalism in the Anglo-American world, here broadens her scope to take in the global history of capitalism in all its creative -- and destructive -- glory.

She begins "The Relentless Revolution" by noting that the rise of the economic system we call capitalism was in many ways improbable. It was, she rightly observes, "a startling departure from the norms that had prevailed for 4,000 years," signaling the arrival of a new mentality, one that permitted private investors to pursue profits at the expense of older values and customs.

In viewing capitalism as an extension of a culture unique to a particular time and place, Appleby is understandably contemptuous of those who posit, in the spirit of Adam Smith, that capitalism was a natural outgrowth of human nature. She is equally scornful of those who believe that its emergence was in any way inevitable or inexorable.


. . .


. . . , she captures how a new generation of now forgotten economic writers active long before Adam Smith built a case "that the elements in any economy were negotiable and fluid, the exact opposite of the stasis so long desired." This was a revolution of the mind, not machines, and it ushered in profound changes in how people viewed everything from usury to joint stock companies. As she bluntly concludes, "there can be no capitalism . . . without a culture of capitalism."


. . .


The individual entrepreneur is at the center of her analysis, and her book offers thumbnail sketches of British innovators from James Watt to Josiah Wedgwood. She continues on to the United States and Germany, giving readers a whirlwind tour of the lives and achievements of a host of men whom she calls "industrial leviathans" -- Vanderbilt, Rockefeller and Carnegie in the United States; Thyssen, Siemens and Zeiss in Germany. All created new industries while destroying old ones.



For the full review, see:

STEPHEN MIHM. "Capitalist Chameleon." The New York Times Book Review (Sun., January 24, 2010): 15.

(Note: ellipses added except for the one in the "there can be no capitalism . . . without a culture of capitalism" quote.)

(Note: the online version of the review is dated January 22, 2010.)


Book under review:

Appleby, Joyce. The Relentless Revolution: A History of Capitalism. New York: W. W. Norton & Company, 2010.





July 29, 2011

Resistance to New Technology




(p. 59) . . . , not everyone was happy with the loss of open hearths. Many people missed the drifting smoke and were convinced they had been healthier when kept "well kippered in wood smoke," as one observer put it. As late as 1577, a William Harrison insisted that in the days of open fires our heads did never ake." Smoke in the roof space discouraged nesting birds and was believed to strengthen timbers. Above all, people complained that they weren't nearly as warm as before, which was true. Because fireplaces were so inefficient, they were constantly enlarged. Some became so enormous that they were built with benches in them, letting people sit inside the fireplace, almost the only place in the house where they could be really warm.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: ellipsis added.)





July 25, 2011

Medieval Pollution




(p. 58) One thing that did not escape notice in medieval times was that nearly all the space above head height was unusable because it was so generally filled with smoke. An open hearth had certain clear advantages--it radiated heat in all directions and allowed people to sit around it on all four sides--but it was also like having a permanent bonfire in the middle of one's living room. Smoke went wherever passing drafts directed it--and with many people coming and going, and all the windows glassless, every passing gust must have brought somebody a faceful of smoke--or otherwise rose up to the ceiling and hung thickly until it leaked out a hole in the roof.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





July 21, 2011

"People Condemned to Short Lives and Chronic Hardship Are Perhaps Unlikely to Worry Overmuch about Decor"




If "necessity is the mother of invention," then why did it take so long for someone to invent the louvered slats mentioned at the end of this passage?


(p. 55) In even the best homes comfort was in short supply. It really is extraordinary how long it took people to achieve even the most elemental levels of comfort. There was one good reason for it: life was tough. Throughout the Middle Ages, a good deal of every life was devoted simply to surviving. Famine was common. The medieval world was a world without reserves; when harvests were poor, as they were about one year in four on average, hunger was immediate. When crops failed altogether, starvation inevitably followed. England suffered especially catastrophic harvests in 1272, 1277, 1283, 1292, and 1311, and then an unrelievedly murderous stretch from 1315 to 1319. And this was of course on top of plagues and other illnesses that swept away millions. People condemned to short lives and chronic hardship are perhaps unlikely to worry overmuch about decor. But even allowing for all that, there was just a great, strange slowness to strive for even modest levels of comfort. Roof holes, for instance, let smoke escape, but they also let in rain and drafts until somebody finally, belatedly invented a lantern structure with louvered slats that allowed smoke to escape but kept out rain, birds, and wind. It was a marvelous invention, but by the time it (p. 56) was thought of, in the fourteenth century, chimneys were already coming in and louvered caps were not needed.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





July 18, 2011

"If We Can't Win on Quality, We Shouldn't Win at All"



ImFeelingLuckyBK.jpg












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






(p. A13) At the tail end of the 1990s dot-com boom, Douglas Edwards took a gamble: He left his marketing job at an old-media company, taking a $25,000 salary cut to start work at a small, little-known Internet concern in its second year of operation. That his new employer was losing money and burning through venture capital went without saying. But unlike the footloose 20-somethings who usually populated Silicon Valley start-ups, Mr. Edwards had little margin to bet wrong; he was 41, with a mortgage, three children and a worried wife. He hoped he could get his old job back if the company ran out of money.


. . .


Mr. Edwards came to his job as a subscriber to the conventional wisdom. In an early presentation to cofounder Larry Page and others, Mr. Edwards unwisely declared that only marketing, not technology, could set Google apart. "In a world where all search engines are equal," he asserted, "we'll need to rely on branding to differentiate us from our competitors."

The room became quiet. Then Mr. Page spoke up. "If we can't win on quality," he said, "we shouldn't win at all."



For the full review, see:

DAVID A. PRICE. "BOOKSHELF; How Google Got Going; Branding, shmanding, a marketer was told. 'If we can't win on quality,' Larry Page said, 'we shouldn't win at all.'" The Wall Street Journal (Tues., July 12, 2011): A13.

(Note: ellipsis added.)


Book being reviewed:

Edwards, Douglas. I'm Feeling Lucky: The Confessions of Google Employee Number 59. New York: Houghton Mifflin Harcourt Publishing Co., 2011.






July 17, 2011

Medieval Halls of the Rich Incubated Plague in a Nest of "Filth Unmentionable"




(p. 51) In even the best houses, floors were generally just bare earth strewn with rushes, harboring "spittle and vomit and urine of dogs and men, beer that hath been cast forth and remnants of fishes and other filth unmentionable," as the Dutch theologian and traveler Desiderius Erasmus rather crisply summarized in 1524. New layers of rushes were laid down twice a year normally, but the old accretions were seldom removed, so that, Erasmus added glumly, "the substratum may be unmolested for twenty years." The floors were in effect a very large nest, much appreciated by insects and furtive rodents, and a perfect incubator for plague. Yet a deep pile of flooring was generally a sign of prestige. It was common among the French to say of a rich man that he was "waist deep in straw."


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





July 13, 2011

Medieval Halls Did Not Conduce to Comfort or to Observing Modern Proprieties



Practically all living, awake or asleep, was done in this single large, mostly bare, always smoky chamber. Servants and family ate, dressed, and slept together--"a custom which conduced neither to comfort nor the observance of the proprieties," as J. Alfred Gotch noted with a certain clear absence of comfort himself in his classic book The Growth of the English House (1909). Through the whole of the medieval period, till well Into the fifteenth century the hall effectively was the house, so much so that it became the convention to give its name to the entire dwelling, as in Hardwlck Hall or Toad Hall.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: italics in original.)





July 10, 2011

"We Are All Dutchmen Now"



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Source of the book image: http://yalepress.yale.edu/images/full13/9780300115475.jpg



(p. A15) Samuel Pufendorf, a 17th-century German historian, described the English people as "having been ­always inclined to rebellion and intestine commotion." But England's regime change in 1688--soon called "glorious"--was a revolution with a difference. Instead of overthrowing the existing order in violent upheaval, it put "government upon its ancient and proper basis, which the measures of a mad bigot had almost ­destroyed." The "mad bigot" was, in this case, James II, the Stuart king (and a Catholic) who was deposed in ­favor of William of Orange, a Protestant from the Dutch Republic. Edmund Burke famously contrasted England's balance of change and continuity in 1688 with the ­ferocity in France a century later.

In "1688: The First Modern Revolution," Steve Pincus challenges this received account to argue that the ­Glorious Revolution marked a much greater break with history than Burke realized--and proved to be an ­emblem of the West's future. James II, Mr. Pincus notes, sought to extend state power at the expense of Parliament and the privileges of local communities. James's adversaries preferred the dynamism of commerce; they believed that wealth sprang from the limitless striving of human endeavor rather than the finite availability of land. France under Louis XIV provided James with a pattern for absolutism; the Dutch Republic provided his opponents with a commercial ideal. The Glorious ­Revolution is often seen as a clash ­between ­"popery"--the term for authoritarian ­Catholicism--and ­ancient English liberties. But Mr. Pincus persuasively describes it as the collision of two ideas about the state in society. In a sense, he implies, we are all Dutchmen now.



For the full review, see:

WILLIAM ANTHONY HAY. "Going Dutch; When a dynamic commercial ideal won out over centralized power." The Wall Street Journal (Tues., September 1, 2011): A15.

(Note: the online version of the review is dated AUGUST 31, 2009.)


The book under review is:

Pincus, Steve. 1688: The First Modern Revolution. New Haven, CT: Yale, 2009.



An alternative view is presented in a a book by Lisa Jardine (reference below). She argues that William of Orange was more interested in grabbing power than in promoting liberty. Her view is persuasively disputed in the following review by Andrew Roberts:

ANDREW ROBERTS. "A New William The Conqueror." The Wall Street Journal (Thurs., August 28, 2008): A13.


The Jardine book is:

Jardine, Lisa. Going Dutch: How England Plundered Holland's Glory. New York: HarperCollins Publishers, 2008.





July 9, 2011

38 Theories Why Humans Became Sedentary



(p. 36) . . . if people didn't settle down to take up farming, why then did they embark on this entirely new way of living? We have no idea--or actually, we have lots of ideas, but we don't know if any of them are right. According to the historian Felipe Fernández-Armesto, at least thirty-eight theories have been put forward to explain why people took to living in communities: that they were driven to it by climatic change, or by a wish to stay near their dead, or by a powerful desire to brew and drink beer, which could only be indulged by staying in one place. One theory, evidently seriously suggested (Jane Jacobs cites It In her landmark work of 1969, The Economy of Cities), was that "fortuitous showers" of cosmic rays caused mutations in grasses that made them suddenly attractive as a food source. The short answer is that no one knows why agriculture developed as it did.

Making food out of plants is hard work. The conversion of wheat, rice, corn, millet, barley, and other grasses into staple foodstuffs is one of the great achievements of human history, but also one of the more unexpected ones.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: italics in original; ellipsis added.)





July 5, 2011

"The American Machines Did Things that the World Earnestly Wished Machines to Do"



(p. 22) . . . when the displays were erected it came as something of a surprise to discover that the American section was an outpost of wizardry and wonder. Nearly all the American machines did things that the world earnestly wished machines to do--stamp out nails, cut stone, mold candles--but with a neatness, dispatch, and tireless reliability that left other nations blinking. Elias Howe's sewing machine dazzled the ladies and held out the impossible promise that one of the great drudge pastimes of domestic life could actually be made exciting and fun. Cyrus McCormick displayed a reaper that could do the work of forty men--a claim so improbably bold that almost no one believed it until the reaper (p. 23) was taken out to a farm in the Home Counties and shown to do all that it promised it could. Most exciting of all was Samuel Colt's repeat-action revolver, which was not only marvelously lethal but made from inter-changeable parts, a method of manufacture so distinctive that it became known as "the American system." Only one homegrown creation could match these virtuoso qualities of novelty, utility, and machine-age precision--Paxton's great hall itself, and that was to disappear when the show was over. For many Europeans this was the first unsettling hint that those tobacco-chewing rustics across the water were quietly creating the next industrial colossus--a transformation so improbable that most wouldn't believe it even as It was happening.

The most popular feature at the Great Exhibition was not an exhibition at all, but rather the elegant "retiring rooms," where visitors could relieve themselves in comfort, an offer taken up with gratitude and enthusiasm by 827,000 people--11,000 of them on a single day. Public facilities in London were woefully lacking in 1851. At the British Museum, up to 30,000 daily visitors had to share just two outside privies. At the Crystal Palace the toilets actually flushed, enchanting visitors so much that It started a vogue for installing flushing toilets at home-- . . .



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: ellipses added.)





July 3, 2011

Italian "Legal System Barely Functions"



(p. B4) The Italy that Mr. Severgnini describes seethes with frustration. Government works poorly. The legal system barely functions. Too many Italians are crowded into too little space. Fear of failure stymies innovation. Mr. Severgnini is dismayed at the national genius for enjoyment and the Italian inability to plan for the future. "Our sun is setting in installments," he writes. "It's festive and flamboyant, but it's still a sunset."


For the full review, see:

WILLIAM GRIMES. "BOOKS OF THE TIMES; An Insider Explains Italy, Land of Cheery Dysfunction." The New York Times (Weds., August 23, 2006): B1 & B4.


Book under review:

Severgnini, Beppe. La Bella Figura; a Field Guide to the Italian Mind. Translated by Giles Watson. pb ed. New York: Broadway Books, 2006.






July 2, 2011

Partage Provides Incentives to Recover Antiquities and the Means to Preserve Them



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Source of book image: http://press.princeton.edu/images/k8602.gif





(p. D1) In some cases, it makes aesthetic or archaeological sense to keep artifacts grouped together where they were found, but it can also be risky to leave everything in one place, particularly if the country is in turmoil or can't afford to excavate or guard all its treasures. After the Metropolitan Museum was pressured to hand over a collection called the Lydian Hoard, one of the most valuable (p. D2) pieces was stolen several years ago from its new home in Turkey.


. . .


(p. D2) In his book "Who Owns Antiquity?", James Cuno argues that scholars have betrayed their principles by acquiescing to politicians who have exploited antiquities to legitimize themselves and their governments. Saddam Hussein was the most blatant, turning Iraqi archeology museums into propaganda for himself as the modern Nebuchadnezzar, but other leaders have been just as cynical in using antiquities to bolster their claims of sovereignty.

Dr. Cuno advocates the revival of partage, the traditional system in which archeologists digging in foreign countries would give some of their discoveries to the host country and take others home. That way both sides benefit, and both sides have incentives to recover antiquities before looters beat them to it. . . .

As the director of the Art Institute of Chicago, Dr. Cuno has his own obvious motives for acquiring foreign antiquities, and he makes no apology for wanting to display Middle Eastern statues to Midwesterners.

"It is in the nature of our species to connect and exchange," Dr. Cuno writes. "And the result is a common culture in which we all have a stake. It is not, and can never be, the property of one modern nation or another."

Some of the most culturally protectionist nations today, like Egypt, Italy and Turkey, are trying to hoard treasures that couldn't have been created without the inspiration provided by imported works of art. (Imagine the Renaissance without the influence of "looted" Greek antiquities.) And the current political rulers of those countries often have little in common culturally with the creators of the artifacts they claim to own.



For the full commentary, see:

JOHN TIERNEY. "FINDINGS; A Case in Antiquities for 'Finders Keepers'." The New York Times (Tues., November 17, 2009): B6.

(Note: ellipses added.)

(Note: the online version of the commentary is dated November 16, 2009.)


The Cuno book discussed above, is:

Cuno, James. Who Owns Antiquity?: Museums and the Battle over Our Ancient Heritage. Princeton, NJ: Princeton University Press, 2008.






July 1, 2011

500 Kinds of Hammers: Even Marx Knew that Capitalism Produces Variety



HammerDiversityBasallaPage4.jpg



















The diversity of hammers, part 1. Source of graphic: page 4 of the Basalla book quoted and cited aways down below.




(p. 21 of Bryson) Suddenly, for the first time In history, there was in most people's lives a lot of everything. Karl Marx, living in London, noted with a tone of wonder, and just a hint of helpless admiration, that it was possible to buy five hundred kinds of hammer In Britain. Everywhere was activity, Modern Londoners live in a great Victorian city; the Victorians lived through It, so to speak. In twelve years eight railway termini opened In London. The scale of disruption--the trenches, the tunnels, the muddy excavations, the congestion of wagons and other vehicles, the smoke, the din, the clutter--that came from filling the city with railways, bridges, sewers, pumping stations, power stations, subway lines, and all the rest meant that Victorian London was not just the biggest city in the world but the noisiest, foulest, muddiest, busiest, most choked and dug-over place the world had ever seen.

The 1851 census also showed that more people in Britain now lived in cities than in the countryside--the first time that this had happened anywhere in the world--and the most visible consequence of this was crowds on a scale never before experienced. People now worked en masse, traveled en masse, were schooled, imprisoned, and hospitalized en masse. When they went out to enjoy themselves, they did that en masse, and nowhere did they go with greater enthusiasm and rapture than to the Crystal Palace.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.



On Marx and hammers, Bryson references p. 156 of Petroski:

Petroski, Henry. The Evolution of Useful Things: How Everyday Artifacts--from Forks and Pins to Paper Clips and Zippers--Came to Be as They Are. New York: A. Knopf, 1992.


Actually, Petroski's source on Marx on hammers clearly is Basalla who he quotes on pp. 23-24:

(p. 23 of Petroski) George Basalla, in The Evolution of Technology, suggests the great "diversity of things made by human hands" over the past two hundred years by pointing out that five million patents have been issued in America alone. . . . (p. 24) He then introduces the fundamental questions of his study:

The variety of made things is every bit as astonishing as that of living things. Consider the range that extends from stone tools to microchips, from waterwheels to spacecraft, from thumb-tacks to skyscrapers. In 1867 Karl Marx was surprised to learn . . . that five hundred different kinds of hammers were produced in Birmingham, England, each one adapted to a specific function in industry or the crafts. What forces led to the proliferation of so many variations of this ancient and common tool? Or more generally, why are there so many different kinds of things?

Basalla dismisses the "traditional wisdom" that attributes technological diversity to necessity and utility, and looks for other explanations, "especially ones that can incorporate the most general assumptions about the meaning and goals of life."


(Note: italics in original; first ellipsis added; second ellipsis in original.)


Petroski then again mentions Marx on hammers on the p. 156 that is referenced by Bryson:

(p. 156 of Petroski) In spite of Marx's astonishment that five hundred different kinds of hammers were made in Birmingham in the 1860s, this was no capitalist plot. Indeed, if there were a plot, it was to not make more. The proliferation of hammer types occurred because there were then, as now, many specialized uses of hammers, and each user wished to possess a tool that was suited as ideally as possible to the tasks he performed perhaps thousands of times each day, but seldom if ever in a formal social context. I have often reflected on the value of special hammers while using the two ordinary ones from my tool chest: a familiar carpenter's hammer with a claw, and a smaller version that fits in places the larger one does not. The tasks I've applied them to have included driving and removing nails, of course, but also opening and closing paint cans, pounding on chisels, tacking down carpets, straightening dented bicycle fenders, breaking bricks, driving wooden stakes, and on and on.



The Basalla book is:

Basalla, George. The Evolution of Technology, Cambridge Studies in the History of Science. Cambridge, UK: Cambridge University Press, 1988.


On p. 2 of Basalla, he writes:

(p. 2 of Basalla) The variety of made things is every bit as astonishing as that of living things. Consider the range that extends from stone tools to microchips, from waterwheels to spacecraft, from thumbtacks to skyscrapers. In 1867 Karl Marx was surprised to learn, as well he might have been, that five hundred different kinds of hammers were produced in Birmingham, England, each one adapted to a specific function in industry or the crafts . . .

(Note: ellipsis added.)


In Basalla's notes to this chapter, the only Marx he mentions is the first volume of Capital. Searching volume one of Capital in Google Books for "hammer," one discovers the relevant passage on p. 375:

(p. 374 of Marx) Manufacture is characterized by the differentiation of (p. 375) the instruments of labour--a differentiation whereby implements of a given sort acquire fixed shapes, adapted to each particular application, and by the specialisation (sic) of those instruments, giving to each special instrument its full play only in the hands of a specific detail labourer. In Birmingham alone 500 varieties of hammers are produced, and not only is each adapted to one particular process, but several varieties often serve exclusively for the different operations in one and the same process. The manufacturing period simplifies, improves, and multiplies the implements of labour, by adapting them to the exclusively special functions of each detail labourer.


The Marx book is:

Marx, Karl. Capital: A Critique of Political Economy, Vol. 1. New York: Modern Library, 1906 [first German edition in 1867].




HammerDiversityBasallaPage5.jpg



















The diversity of hammers, part 2. Source of graphic: page 5 of the Basalla book quoted and cited somewhere above.






June 27, 2011

"A Tax on Air and Light"



(p. 11) Paxton was very lucky in his timing, for just at the moment of the Great Exhibition glass suddenly became available in a way it never had before. Glass had always been a tricky material. It was not particularly easy to make, and really hard to make well, which is why for so much of its history it was a luxury Item. Happily, two recent technological breakthroughs had changed that. First, the French invented plate glass--so called because the molten glass was spread across tables known as plates. This allowed for the first time the creation of really large panes of glass, which made shop windows possible. Plate glass, however, had to be cooled for ten days after being rolled out, which meant that each table was unproductively occupied most of the time, and then each sheet required a lot of grinding and polishing. This naturally made it expensive. In 1838, a cheaper refinement was developed--sheet glass. This had most of the virtues of plate glass, but ¡t cooled faster and needed less polishing, and so could be made much more cheaply. Suddenly glass of a good size could be produced economically In limitless volumes.

Allied with this was the timely abolition of two long-standing taxes: the window tax and glass tax (which, strictly speaking, was an excise duty). The window tax dated from 1696 and was sufficiently punishing that (p. 12) people really did avoid putting windows in buildings where they could. The bricked-up window openings that are such a feature of man period
buildings in Britain today were once usually painted to look like windows. (It Is sometimes rather a shame that they aren't still.) The tax, sorely resented as "a tax on air and light," meant that many servants and others of constrained means were condemned to live In airless rooms.



Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





June 23, 2011

"The Century's Most Daring and Iconic Building Was Entrusted to a Gardener"



(p. 10) . . . the risks were considerable and keenly felt, yet after only a few days of fretful hesitation the commissioners approved Paxton's plan. Nothing--really, absolutely nothing--says more about Victorian Britain and its capacity for brilliance than that the century's most daring and iconic building was entrusted to a gardener. Paxton's Crystal Palace required no bricks at all--indeed, no mortar, no cement, no foundations. It was just bolted together and sat on the ground like a tent. This was not merely an (p. 11) ingenious solution to a monumental challenge but also a radical departure from anything that had ever been tried before.


Source:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.

(Note: ellipsis added.)





June 18, 2011

With Wit and Wisdom Bryson Shows How Home Life Has Improved



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Source of book image: http://img2.timeinc.net/ew/dynamic/imgs/101027/1127-EW-Must-List/at-home_300.jpg



Bill Bryson is best known for his witty travelogues. In recent years he has become more ambitious, venturing into the history of science, and now the history of domestic life. He is a keen observer with eyes open to the unexpected, the important and the droll. His latest book, At Home, contains much evidence and some useful analysis of how ordinary life has improved in western societies in the past couple of hundred years.

In the next several weeks, I plan to quote a few of the more illuminating passages from the book.


The Bryson book:

Bryson, Bill. At Home: A Short History of Private Life. New York: Doubleday, 2010.





June 17, 2011

"Big Money Is Dumb Money"




"Other People's Money" is a short story that appears in Cory Doctorow's short story collection With a Little Help.


(p. C7) Venture capitalists? Forget them, says "Other People's Money." Big money is dumb money. Much easier, says one old-lady manufacturer to a smart young gigafund manager, for her to make and market her own product, and keep the money (just like Mr. Doctorow), than for him to find and fund a hundred products and take a rake-off. He only deals in six-figure multiples, and that's no good: not nimble enough. And he has to get a return on all those billions, poor outdated soul.


For the full review, see:

TOM SHIPPEY. "The Author as Agent of Change; Cory Doctorow has big ideas about the future of technology--and how it can empower writers." The New York Times (Sat., MAY 21, 2011): C7.

The book of short stories is:

Doctorow, Cory. With a Little Help.






June 16, 2011

The Secret to a Long Life Is Conscientiousness



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






(p. D3) Cheerfulness, optimism, extroversion and sociability may make life more enjoyable, but they won't necessarily extend it, Howard S. Friedman and Leslie R. Martin found in a study that covered eight decades. The key traits are prudence and persistence. "The findings clearly revealed that the best childhood personality predictor of longevity was conscientiousness," they write, "the qualities of a prudent, persistent, well-organized person, like a scientist-professor -- somewhat obsessive and not at all carefree."


. . .


There are three explanations for the dominant role of conscientiousness. The first and most obvious is that conscientious people are more likely to live healthy lifestyles, to not smoke or drink to excess, wear seat belts, follow doctors' orders and take medication as prescribed. Second, conscientious people tend to find themselves not only in healthier situations but also in healthier relationships: happier marriages, better friendships, healthier work situations.

The third explanation for the link between conscientiousness and longevity is the most intriguing. "We thought it must be something biological," Dr. Friedman said. "We ruled out every other factor." He and other researchers found that some people are biologically predisposed to be not only more conscientiousness but also healthier. "Not only do they tend to avoid violent deaths and illnesses linked to smoking and drinking," they write, "but conscientious individuals are less prone to a whole host of diseases, not just those caused by dangerous habits." The precise physiological explanation is unknown but seems to have to do with levels of chemicals like serotonin in the brain.

As for optimism, it has its downside. "If you're cheerful, very optimistic, especially in the face of illness and recovery, if you don't consider the possibility that you might have setbacks, then those setbacks are harder to deal with," Dr. Martin said. "If you're one of those people who think everything's fine -- 'no need to back up those computer files' -- the stress of failure, because you haven't been more careful, is harmful. You almost set yourself up for more problems."



For the full review, see:

KATHERINE BOUTO. "BOOKS ON SCIENCE; Eighty Years Along, a Longevity Study Still Has Ground to Cover." The New York Times (Tues., April 19, 2011): D3.

(Note: ellipsis added.)

(Note: the online version of the article is dated April 18, 2011.)


The book under review is:

Friedman, Howard S., and Leslie R. Martin. The Longevity Project: Surprising Discoveries for Health and Long Life from the Landmark Eight-Decade Study. New York: Hudson Street Press, 2011.






June 15, 2011

Neanderthals and Cro-Magnons Did Not Much Overlap: Evidence Against an Early Human Golden Age



In 2010 archeologist Brian Fagan published a book that used his read of the evidence to imagine the interactions between Cro-Magnon (us) and Neanderthal humans. He mostly portrayed the interaction as one of wary, but mainly benign mutual neglect. His broader portrayal of the lives of the hunter-gatherer Cro-Magnons did not completely place them in a Golden Age, but did much to praise many aspects of their lives.

Also in 2010, Matt Ridley published a book that discussed and dismissed the view that the hunter-gatherers were to be admired. He mainly pointed to the evidence of how common violent death was among hunter-gatherers, and hence how precarious and fearful their lives must have been.

Now there is additional relevant evidence. Apparently the period of overlap between Cro-Magnons and Neanderthals was much briefer than had been previously believed. This implies (see below) that rather than benign mutual neglect, it is much more likely that the Cro-Magnons violently wiped out the Neanderthals.

Hobbes may not have been entirely wrong when he described early human life as "nasty, poor, brutish and short."


(p. D4) An improvement in the dating of fossils suggests that the Neanderthals, a heavily muscled, thick-boned human species adapted to living in ice age Europe, perished almost immediately on contact with the modern humans who started to enter Europe from the Near East about 44,000 years ago. Until now bones from several Neanderthal sites have been dated to as young as 29,000 years ago, suggesting there was extensive overlap between the two human species. This raised the question of whether there had been interbreeding between humans and Neanderthals, an issue that is still not resolved.


. . .


Reviewing . . . Neanderthal dates ascertained with the new ultrafiltration method, Dr. Higham sees an emerging pattern that no European Neanderthal site can reliably be dated to less than 39,000 years ago. "It's only with reliable techniques that we can interpret the archaeological past," he said.

He is re-dating Neanderthal sites across Europe and so far sees no evidence for any extensive overlap between Neanderthals and modern humans. "There was a degree of contemporaneity, but it may not have been very long," he said. A short period of contact would point to the extinction of the Neanderthals at the hands of modern humans.

"It's very unlikely for Neanderthals to go extinct without some agency from modern humans," Dr. Higham said.

Paul Mellars, an expert on Neanderthals at Cambridge University in England, said that the quality of the dates from Dr. Higham's laboratory was superb and that samples of bone re-dated by the lab's method were almost always found to be several thousand years older than previously measured. The picture supported by the new dates is that the interaction between modern humans and Neanderthals in Europe was brief in each region, lasting perhaps a few hundred years, Dr. Mellars said, until the modern humans overwhelmed their competitors through better technology and greater numbers.



For the full story, see:

NICHOLAS WADE. "Neanderthals and Early Humans May Not Have Mingled Much." The New York Times (Tues., May 10, 2011): D4.

(Note: ellipsis added.)

(Note: the online version of the article is dated May 9, 2011.)


The Fagan book is:

Fagan, Brian. Cro-Magnon: How the Ice Age Gave Birth to the First Modern Humans. New York: Bloomsbury Press, 2010.


The Ridley book is:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.





June 9, 2011

"Progress Depended on the Empirical Habit of Thought"



In the passage below from 1984 Orwell presents an underground rebel's account of why the authoritarian socialist dystopia cannot advance in science and technology.


(p. 155) The world of today is a bare, hungry, dilapidated place compared with the world that existed before 1914, and still more so if compared with the imaginary future to which the people of that period looked forward. In the early twentieth century, the vision of a future society unbelievably rich, leisured, orderly, and efficient--a glittering (p. 156) antiseptic world of glass and steel and snow-white concrete--was part of the consciousness of nearly every literate person. Science and technology were developing at a prodigious speed, and it seemed natural to assume that they would go on developing. This failed to happen, partly because of the impoverishment caused by a long series of wars and revolutions, partly because scientific and technical progress depended on the empirical habit of thought, which could not survive in a strictly regimented society.



Source:

Orwell, George. Nineteen Eighty-Four. New York: The New American Library, 1961 [1949].

By Canadian law, 1984 is no longer under copyright. The text has been posted on the following Canadian web site: http://wikilivres.info/wiki/Nineteen_Eighty-Four





June 5, 2011

"If You Could Choose, Would You Prefer to Live Then or Now?"



(p. 78) 'Perhaps I have not made myself clear,' he said. 'What I'm trying to say is this. You have been alive a very long time; you lived half your life before the Revolution. In 1925, for instance, you were already grown up. Would you say from what you can remember, that life in 1925 was better than it is now, or worse? If you could choose, would you prefer to live then or now?'


Source:

Orwell, George. Nineteen Eighty-Four. New York: The New American Library, 1961 [1949].


By Canadian law, 1984 is no longer under copyright. The text has been posted on the following Canadian web site: http://wikilivres.info/wiki/Nineteen_Eighty-Four





June 4, 2011

To Teach the Truth, the Best Teachers Must Become "Canny Outlaws"



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Source of book image: http://www.swarthmore.edu/Images/news/practical_wisdom.jpg




(p. 170) Walking into Mr. Drew's economics class, researchers might have interrupted a board meeting of the student-run start-up company that was at the heart of his course. Drawing on his own experience in industry, Mr. Drew taught students economic principles in a way that made sense to them because they were researching potential products they would actually sell (a mug with the school logo; a T-shirt designed by a student graphics team). They were conducting market surveys, accumulating capital, making decisions about the scale of investment, the risk, the profits.


. . .


In Houston. the magnet schools were forced to reorganize to prepare for the coming White-Perot reforms. McNeil changed her study. The new question was: How would these teachers cope with a curriculum that was test-driven?


. . .


Mr. Drew's economics class did not conform to the proficiency sequence and he had to drop the course, except as an elective.


. . .


The paperwork required by such new requirements--to assure the bureaucracy that teachers were teaching by the rules--discouraged individualized time spent with students and robbed time previously devoted to planning and assessing lessons. The requirements created the same kind of time bind Wong observed when such requirements were imposed on military trainers. (p. 171) And, as in the case of the new military training model, the new requirements discouraged flexibility, adaptability, and creativity.

McNeil found that many of the experienced teachers fought back. They became canny outlaws, or creative saboteurs, dodging the "law," finding ways to cover the "proficiencies" with great efficiency and squirreling away time to sneak real education back in at the margins of the standardized system, sometimes even conspiring with their students or teaching them how to "game" the system. Mr. Drew taught his students that economic cycles vary in length and intensity, but in the test prep period, he told them to forget this because the official answer was that each cycle lasts eighteen months. There was a danger that students who learned to look beyond the obvious, to ask "what if," to look for the exceptions to the rules, would do badly on the tests.


. . .


The ability of wise teachers to operate as canny outlaws is most seriously constrained when a highly scripted curriculum comes riding into town on the heels of high-stakes standardized tests. By prescribing, step by step, what to say and do each day to prepare students for these tests, such lockstep curricula pose a serious challenge to professional discretion. Yet even under these adverse conditions, in many schools there are canny
outlaws who find ways to avoid being channeled.



Source:

Schwartz, Barry, and Kenneth Sharpe. Practical Wisdom: The Right Way to Do the Right Thing. New York: Riverhead Books, 2010.

(Note: ellipses added.)


The McNeil book mentioned above is:

Linda, McNeil. Contradictions of School Reform: Educational Costs of Standardized Testing, Critical Social Thought. New York: Routledge, 2000.


The Wong report mentioned above is:

Wong, Leonard. "Stifled Innovation? Developing Tomorrow's Leaders Today." Strategic Studies Institute Monograph, April 1, 2002.



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Source of book image: http://i43.tower.com/images/mm101682007/contradictions-school-reform-educational-costs-standardized-testing-linda-m-mcneil-paperback-cover-art.jpg





June 1, 2011

Orwell's Indictment of Life Under Communism



(p. 52) He meditated resentfully on the physical texture of life. Had it always been like this? Had food always tasted like this? He looked round the canteen. A low-ceilinged, crowded room, its walls grimy from the contact of innumerable bodies; battered metal tables and chairs, placed so close together that you sat with elbows touching; bent spoons, dented trays, coarse white mugs; all surfaces greasy, grime in every crack; and a sourish, composite smell of bad gin and bad coffee and metallic stew and dirty clothes. Always in your stomach and in your skin there was a sort of protest, a feeling that you had been cheated of something that you had a right to. It was true that he had no memories of anything greatly different. In any time that he could accurately remember, there had never been quite enough to eat, one had never had socks or underclothes that were not full of holes, furniture had always been battered and rickety, rooms underheated, tube trains crowded, houses falling to pieces, bread dark-coloured, tea a rarity, coffee filthy-tasting, cigarettes insufficient--nothing cheap and plentiful except synthetic gin. And though, of course, it grew worse as one's body aged, was it not a sign that this was NOT the natural order of things, if one's heart sickened at the discomfort and dirt and scarcity, the interminable winters, the stickiness of one's socks, the lifts that never worked, the cold water, the gritty soap, the cigarettes that came to pieces, the food with its strange evil tastes? Why should one feel it to be intolerable unless one had some kind of ancestral memory that things had once been different?


Source:

Orwell, George. Nineteen Eighty-Four. New York: The New American Library, 1961 [1949].


By Canadian law, 1984 is no longer under copyright. The text has been posted on the following Canadian web site: http://wikilivres.info/wiki/Nineteen_Eighty-Four





May 28, 2011

"A Lonely Ghost Uttering a Truth that Nobody Would Ever Hear"



(p. 26) He was a lonely ghost uttering a truth that nobody would ever hear. But so long as he uttered it, in some obscure way the continuity was not broken. It was not by making yourself heard but by staying sane that you carried on the human heritage.


Source:
.
Orwell, George. Nineteen Eighty-Four. New York: The New American Library, 1961 [1949].

By Canadian law, 1984 is no longer under copyright. The text has been posted on the following Canadian web site: http://wikilivres.info/wiki/Nineteen_Eighty-Four





May 24, 2011

Crushed Under Eurostar in a Desparate Dash to a Better Life



(p. 280) In recent years, police have practically barricaded the marshalling yard in Calais, France,where the elegant Eurostar train must slow down before it enters the Channel Tunnel to England. Today the Calais marshalling yard for the Channel Tunnel looks like what the military might erect around a flying-saucer wreckage--barbed wire, electric fences, armed guards, and police dogs everywhere. Yet each night as darkness falls desperate men from the developing world, Africans and Pakistanis and Afghans and others, hide throughout the marshalling yard, sprint toward the Eurostar as it slows for the tunnel, and try to cling to its side as it accelerates again. They hope to survive until the train bears (p. 281) them into the United Kingdom, for French law treats illegal immigrants harshly, while England is more liberal. Numerous indigent developing-world men have been killed when they have slipped off the sides or the couplers of Eurostar, then fallen beneath its wheels; the stylish passengers aboard the train may feel a slight bump. Yet the men keep trying, though most must know there is hardly anything on this aerodynamically sleek train to grab hold of. Many are arrested as they dash toward the train and the favored life it represents. If released, they return to dash again. If deported, they try to sneak back into the country and dash again.


Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.





May 20, 2011

Garbage Landfill Is Home to 80,000 in Payatas



(p. 281) Perhaps you've heard of Smoky Mountain, the town-sized garbage landfill in Payatas, outside Manila in the Philippines, that is home to an estimated eighty thousand desperately poor Filipinos who eke out a miserable existence scavenging what others throw away. Eighty thousand people is more than the population of Utica, New York. Entire families have been born at the Smoky Mountain landfill and lived their lives there, amidst squalor, stench, and constant smoke of smoldering trash. In July 2000, about two hundred residents of the Payatas landfill died when a large hill of trash collapsed, burying them under a garbage avalanche.


Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.





May 16, 2011

Risking Likely Death for a Tiny Chance to "Dwell in Freedom and Earn $5.15 an Hour"



(p. 281) For all the legitimate problems people experience in the Western nations, we cannot imagine a world which generates such hopelessness that people will hurl themselves toward moving trains, or climb into the wheel wells of jetliners bound for the sky in order to have a tiny chance of getting to a place where they can dwell in freedom and earn $5.15 an hour.


Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.





May 15, 2011

"A Dart-Throwing Chimpanzee" Predicts as Well as "Experts"

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The image is of the Canadian edition, which has a different subtitle than the American edition cited below. Source of book image: http://3.bp.blogspot.com/_qGSiMLu6NXM/TTWIQkcllmI/AAAAAAAADEI/qD2yo1rxnL0/s1600/Future%2BBabble.jpg



(p. C6) How bad are expert predictions? Almost predictably bad. In 2005, Philip Tetlock, a professor of psychology at the University of Pennsylvania, published the results of a magisterial 20-year analysis of 27,450 judgments about the future from 284 experts. He discovered that the experts, in aggregate, did little better, and sometimes considerably worse, than "a dart-throwing chimpanzee."

While Mr. Tetlock guaranteed anonymity to get his experts to reveal how useless they were, Mr. Gardner names names. In the late 1960s, he notes, the political scientist Andrew Hacker predicted that race relations in America would soon get so bad that they would lead to the "dynamiting of bridges and water mains" and the "assassinating of public officials and private luminaries." In the early 1970s, Richard Falk, at Princeton, imagined that by the 1990s we would be living in a world dominated by "the politics of catastrophe." In the mid-1970s, Daniel Bell and other analysts assumed that high levels of inflation were, as Mr. Gardner puts it, "here to stay." (In fact, inflation cooled off in the early 1980s and has stayed low for decades.) In the early 1990s, Lester Thurow, the MIT economist, was one of the experts who predicted that Japan would dominate the 21st century, though he noted that Europe had a chance, too.

The high priest of erroneous prediction is, of course, Paul Ehrlich, who, though a respected entomologist, turned into an end-of-the-worlder with "The Population Bomb" (1968) and "The End of Affluence" (1974). In the latter book he wrote: "If I were a gambler, I would take even money that England will not exist in the year 2000." Now 77, Mr. Ehrlich is "a gregarious and delightful man, a natural performer," Mr. Gardner reports, thereby tapping into the sources of his success in the face of repeated failure: Never admit mistakes, never sound doubtful. As Mr. Gardner shows in his survey of expert prediction-making, the more you sound like you know what you are talking about, the more people will believe you.



For the full review, see:

TREVOR BUTTERWORTH. "Prophets of Error." Wall Street Journal (Sat., APRIL 30, 2011): C6.

(Note: the online version of the article is dated APRIL 30, 2011.)


The book being reviewed, is:

Gardner, Dan. Future Babble: Why Expert Predictions Are Next to Worthless, and You Can Do Better. New York: Dutton Adult, 2011.


The important Tetlock book mentioned, is:

Tetlock, Philip E. Expert Political Judgment: How Good Is It? How Can We Know? Princeton, NJ: Princeton University Press, 2005.





May 12, 2011

"The Frozen Body of Someone Desperate to Enter the United States"



(p. 279) In August 2001, as an American Airlines 777 jetliner arriving from overseas descended toward John F. Kennedy International Airport in New York and lowered its landing gear, the frozen body of a man fell into a marsh beneath the field's approach lanes. The body, believed to be that of a young Nigerian, was buried in a plain wooden casket in City Cemetery, the resting place of New York indigents popularly known as Potter's Field. No one will ever know for certain, but it appears the young man, who carried no identification, had hidden in the wheel well of the jet, hoping to steal into the United States. If, as police speculated, he was from an African village, he might not have known that the air outside a jetliner at cruise altitude may be minus-80 degrees Fahrenheit, and that wheel wells are unheated; they are also not pressurized, rendering breathing almost impossible at a jetliner's cruise altitude. Or the victim might have known these things and climbed into the wheel well anyway because he was desperate. The unknown man's death (p. 280) marked the third time since 1997 that the frozen body of someone desperate to enter the United States had fallen from the wheel wells as a jetliner from overseas lowered its landing gear on descent toward JFK. In the man's pockets were a few minor personal effects and a street-vendor's map of Manhattan.

Contemplating this tragedy I thought, first, of the horror the man must have experienced as the plane's mindless hydraulic mechanisms drew the landing struts and wheels up to crush him. Somehow he avoided being crushed--only to realize as the air craft ascended that it was getting very cold and the air was getting very thin, and he was going to die gasping and shaking. Then I contemplated what the man's final thoughts might have been. Fear, of course; regret. Perhaps, at the last, dread that his own death might consign the rest of his family in his village to a life of suffering: for the desperation of many trying to reach the West from the developing world is motivated by their desire to work extremely hard and to live on the edge here, sending part of their incomes back home to those even worse off.



Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.





May 11, 2011

Nearly Half of College Students Learn Nothing in First Two Years



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Source of book image: http://ffbsccn.files.wordpress.com/2011/01/academically-adrift.jpg




(p. D9) Andrew Carnegie didn't think much of college. More than a century ago, he looked around at the men commanding the industries of the day and found that few had wasted their time lollygagging on a campus quad. "The almost total absence of the graduate from high positions in the business world," he wrote in "The Empire of Business," "seems to justify the conclusion that college education, as it exists, is fatal to success in that domain."


. . .


. . . , as the reward for the collegiate credential has been going up, what goes into getting that degree has been going down. So find sociologists Richard Arum and Josipa Roksa in their book "Academically Adrift" (University of Chicago Press). Institutions of higher learning are "focused more on social than academic experiences," they write. "Students spend very little time studying, and professors rarely demand much from them in terms of reading and writing." More than a third of students do less than five hours of studying a week--and these shirkers end up, on average, earning B's.

Ms. Roksa, who teaches at University of Virginia, and Mr. Arum, a professor at New York University, mined data from thousands of sophomores who retook a learning assessment test they had first been given when they arrived at college. Nearly half the students showed no sign of intellectual progress after two years of undergraduate endeavor.


. . .


What would Mr. Carnegie have thought of it? "While the college student has been learning a little about the barbarous and petty squabbles of a far-distant past," he wrote, "or trying to master languages which are dead...the future captain of industry is hotly engaged in the school of experience, obtaining the very knowledge required for his future triumphs." Mr. Carnegie may have thought the knowledge gained at college was "adapted for life upon another planet," but he did expect that the students were gathering some sort of knowledge. Shouldn't parents footing the massive tab for tuition be able to expect the same?



For the full commentary, see:

ERIC FELTEN. "POSTMODERN TIMES; Now College is the Break." The Wall Street Journal (Fri., FEBRUARY 11, 2011): D9.

(Note: ellipses added.)


The book under discussion is:

Arum, Richard, and Josipa Roksa. Academically Adrift: Limited Learning on College Campuses. Chicago: University of Chicago Press, 2011.





May 8, 2011

Hillary Clinton Blasted "Materialism" in Others and Bought a $1.7 Million House for Herself



(p. 145) . . . , it is standard to denounce materialism in others while lusting for it ourselves. At the end of the 1990s, Hillary Rodham Clinton decried "a consumer-driven culture that promotes values that undermine democracy" and blasted "materialism that undermines our spiritual centers." Shortly thereafter, she bought a $1.7 million home and signed an $8 million book contract. As the novelist Daniel Akst has noted, Rodham Clinton thus joined the long line of commentators "bent on saving the rest of us from the horrors of consumption" while taking care to make themselves rich and comfy.


Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

(Note: ellipsis added.)





May 5, 2011

"When We Get 'Out of Book,' We Are at Our Most Human"



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Source of book image: http://www.turingfilm.com/wp-content/uploads/2011/03/11-3-18-The-Most-Human-Human.jpg




To be an innovative entrepreneur is to "get out of book" in the language well-expressed below.


(p. A17) In chess, computers are strongest in the parts of the game in which human players rely most on memory: the opening and closing sequences. (Serious players learn strategies by rote, and the early stages of even grandmaster games contain few surprises for the cognoscenti.) Knowledge of these tried and tested moves is called "the book." By the middle section of a game, however, the number of permutations of moves is too vast for memorization to help. Here players need to get "out of book" and act unexpectedly, which is why computers--even Deep Blue--can struggle.

Mr. Christian elaborates on this distinction and applies it to human intelligence in general. For isn't it precisely when people refuse to get "out of book"--just following orders or playing their role--that we find them least human? Likewise, when we get "out of book," we are at our most human. Think of the difference between the waiter who runs through the usual routine and the one who responds to your order with a witticism. Remaining alive to what is mechanical or original in our own behavior can preserve a sense of human difference.



For the full review, see:

JULIAN BAGGINI. "BOOKSHELF; More Than Machine; No computer has yet to pass the Turing Test, fooling judges into believing its responses come from a person." Wall Street Journal (Tues., MARCH 8, 2011): A17.





May 4, 2011

Limits to "Sprawl" Add to House Prices Which Benefits the "Already Entrenched"



(p. 130) If 50 percent more Americans are on the way that means there must be 50 percent more suburban subdivisions, 50 percent more malls, 50 percent more of everything--unless anyone thinks it is fair to deny to newcomers the physical space and comfort that current Americans enjoy.

Sprawl may he managed well or poorly, and "smart growth" is better than dumb growth. But when people object to development per se, what they almost always mean is that they have achieved a nice lifestyle and now wish to pull up the ladders against others--and, not coincidentally, to make their own properties more valuable by artificially limiting supply. California real estate prices in particular have shot up in the last decade because slow-growth ordinances and no-growth judicial rulings have artificially restricted housing supply. Opposing sprawl can be a financial boon to anyone who's already entrenched.

Anything that runs up housing prices is of particular concern to educational equality, since today, in many parts of the United States, the housing market in effect regulates access to the best public schools. Buyers pay significant premiums for homes in the districts of high-quality public schools; in the Washington, D.C., suburbs, a home in the excellent Fairfax County or Montgomery County school systems may sell for $200,