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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.

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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.

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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.

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(p. A15) Ronald Reagan, who grew up during the Coolidge presidency, admired "Silent Cal," even going so far as to read a biography of the 30th president as he recovered from a surgery in 1985 and to praise him in letters to his constituents. To Reagan, Coolidge wasn't silent, but was silenced by New Deal supporters, whose intellectual heirs control much of Washington today.

. . .

Unlike President Obama, President Coolidge didn't want to "spread the wealth around," but to grow it. He didn't call for "shared sacrifice"--Americans had sacrificed enough during the great war--but for good character.

There "is no surer road to destruction than prosperity without character," he said in a speech at the University of Pennsylvania in 1921. And from the White House lawn in 1924 he said, "I want the people of America to be able to work less for the Government and more for themselves. I want them to have the rewards of their own industry. That is the chief meaning of freedom."

. . .

As Coolidge saw things in 1924, "A government which lays taxes on the people not required by urgent public necessity and sound public policy is not a protector of liberty, but an instrument of tyranny. It condemns the citizen to servitude." Coolidge helped Americans prosper by letting them be free.

For the full commentary, see:

CHARLES C. JOHNSON. "How Silent Cal Beat a Recession; The late president inherited a bad economy, and he cut taxes and slashed spending to spur growth." The Wall Street Journal (Thurs., August 4, 2011): A15.

(Note: ellipses added.)

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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.

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(p. A1) Now that the last space shuttle has landed back on Earth, a new generation of space entrepreneurs would like to whip up excitement about the prospect of returning to the Moon.

. . .

(p. A3) "It's probably the biggest wealth creation opportunity in modern history," said Barney Pell, a former NASA computer scientist turned entrepreneur and now a co-founder of Moon Express. While Moon Express might initially make money by sending small payloads, the big fortune would come from bringing back platinum and other rare metals, Dr. Pell said.

"Long term, the market is massive, no doubt," he said. "This is not a question of if. It's a question of who and when. We hope it's us and soon."

Like the aviation prizes that jump-started airplane technology a century ago, the Google Lunar X Prize is meant to rally technologists and entrepreneurs. It is administered by the X Prize Foundation, which handed out $10 million in 2004 to the first private team to build a spacecraft that could carry people 60 miles above the Earth's surface. (The winner, SpaceShipOne, was built by the aerospace designer Burt Rutan with backing from Paul Allen, the software magnate.)

For the full story, see:

KENNETH CHANG. "In a Private Race to the Moon, Flights of Fancy Are in the Air." The New York Times (Fri., July 22, 2011): A1 & A3.

(Note: the online version of the story is dated July 21, 2011 and has the title "Race to the Moon Heats Up for Private Firms.")

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"Paul Holland and Molly Davis, producers of a new documentary, "Something Ventured," that gives an admiring look at innovators and investors from the past." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B3) The film, "Something Ventured," is a frankly admiring look at those who went out on a limb to back upstarts like Atari, Cisco Systems, Genentech and Apple.

. . .

But the film's beating heart is captured by Tom Perkins, whose Kleiner Perkins Caufield & Byers company backed the gene-splicing technology of Genentech, among other things. "It's great if you can make money and change the world for the better at the same time," said Mr. Perkins, . . .

Other stars of "Something Ventured" include Nolan Bushnell of Atari; Sandy Lerner of Cisco; Jimmy Treybig of Tandem Computers; and a string of venture capitalists, among them Don Valentine, Dick Kramlich, and Arthur Rock.

Many who appear joined dozens of other business people to finance the picture's roughly $700,000 cost with contributions of a few thousand dollars each, Mr. Holland said.

In becoming involved, several participants said they wanted to rekindle an entrepreneurial spirit that had either waned or changed since the rough-and-tumble years when, by the film's telling, Atari was started with $250 but needed capital to push Pong, and Mr. Bushnell passed up a chance to own a third of Apple, started by his employee Steve Jobs, for $50,000.

. . .

Mr. Valentine, . . . , said entrepreneurship had not ended -- his company was a force behind Google -- but it is less often coming from those born in the United States.

"You don't understand what you have here" is a constant refrain, he said, from Southeast Asian and Indian innovators who are sometimes mystified by an American disdain for its own business culture.

For the full story, see:

MICHAEL CIEPLY . "A Film About Capitalism, and (Surprise) It's a Love Story." The New York Times, Week in Review Section (Sun., March 8, 2011): 8.

(Note: ellipses added.)

(Note: the online version of the story is dated March 7, 2011.)

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(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.

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(p. C1) Ralph Nader, the scourge of American business and onetime presidential candidate, has found his next corporate demon: Cisco Systems Inc.

Mr. Nader isn't calling for a router recall or claiming the company's networks are unsafe at any speed. Instead, he wants the tech company to pay a bigger dividend to boost its shares.

The consumer advocate's motives are far from altruistic. He is a longtime disgruntled Cisco investor who called the company's share performance "appalling." In a private letter to Cisco Chief Executive John Chambers sent June 13, Mr. Nader blasted the CEO for not doing enough to lift shares of the technology company and said "it is time for a long overdue Cisco shareholder revolt against a management that is oblivious to building or even maintaining shareholder value," according to the letter.

. . .

The 77-year-old Mr. Nader, who rose to fame in the 1960s on his claims that American automobiles were unsafe, admitted the letter is a departure from his typical antibusiness stance. He said he has been an "adversary of corporate capitalism," but he is a believer in capitalism, so long as shareholders have a voice. He wrote the letter to Mr. Chambers, he said, because he objects to the "powerlessness of owner shareholders."

For the full story, see:

SUSAN PULLIAM. "Nader Kindles Fires of Revolt." The Wall Street Journal (Fri., JUNE 24, 2011): C1-C2.

(Note: ellipsis added.)

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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.

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"Kim Ima and Kenny Lao parked their food trucks on Front Street in Dumbo." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. D4) FOOD trucks, those rolling symbols of New York City's infatuation with haute casual food, are suddenly being chased from Midtown Manhattan. In the last 10 days, the Treats Truck, which has sold cookies and brownies for four years during lunchtime at West 45th Street near Avenue of the Americas, has been told by police officers that it is no longer welcome there, nor at its late-afternoon 38th Street and Fifth Avenue location. The Rickshaw Dumpling truck, a presence for three years at West 45th Street near the Treats Truck, has been shooed away as well.

The police "have told us they no longer want food trucks in Midtown," said Kim Ima, the owner of the Treats Truck, a pioneer of the city's new-wave food-truck movement, who began cultivating customers on West 45th Street in 2007.

. . .

Mr. Lao and other food-truck operators said they suspect that the police are responding to complaints by brick-and-mortar businesses that resent competition. Such was the case last year, when store merchants on the Upper East Side complained about Patty's Taco Truck, which sold tortas, tacos de lengua and cemitas on Lexington Avenue. The truck was towed several times and the operator arrested, prompting the Street Vendor Project, an advocate for vendors based at the Urban Justice Center, to file the lawsuit that resulted in Judge Wright's ruling, which said food is merchandise that can be regulated.

For the full story, see:

GLENN COLLINS. "Food Trucks Shooed From Midtown." The New York Times (Weds., June 29, 2011): D4.

(Note: ellipsis added.)

(Note: the online version of the story is dated June 28, 2011.)

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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].

The diversity of hammers, part 2. Source of graphic: page 5 of the Basalla book quoted and cited somewhere above.

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(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.

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(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.

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(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.

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(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 $200,000 more than an identical dwelling from which children would attend the troubled schools of Prince George's County or Arlington County. In turn, SAT scores rise in tandem with family income--each $10,000 increment of increase in family income adds twenty to thirty points to a child's total SAT scores, studies show. Why does family income raise SAT scores? Partly because a high income enables parents to give children extra advantages, partly because low income parents or parents in broken families may shirk their responsibility for helping children succeed in school, but mostly (p. 131) because the higher a family's income the better a school district it can buy into, via the housing market. Since education is closely linked to success in later life, the nation has an interest in preventing exclusionary housing prices. That means there must be more sprawl and more growth to increase the housing supply and thereby reduce prices.

Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

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(p. 101) Many elites love writers such as Jean-Paul Sartre, who viewed all human action as meaningless, or Thomas Pynchon, whose novels, such as Gravity's Rainbow purport to present hard-science arguments that ours is a pointless universe doomed to meaningless demise. Pynchon's grasp of physics is debatable; what matters is that when he claimed to have found scientific proof the universe is pointless, many of a certain ilk were eager to believe him. Eighty years ago, elites of the United Stares and Europe gushed in praise over the social historian Oswald Spen-(p. 102)gler's work The Decline of the West, which argued not only that American and European civilization "one day will lie in fragments, forgotten" but that the downfall of Western civilization was imminently at hand. Similarly, William Butler Yeats in the early twentieth century was praised by Western intellectuals for predicting pending social disintegration through his famed phrase, "Things fall apart; the centre cannot hold." Spengler even maintained that the collapse of Western civilization would be a beneficial development, because America and Europe were contemptible. Eight decades later, the West is far stronger, richer, more secure, more diverse, and more free than when Spengler declared it a decaying relic about to vanish. Nevertheless, his work and similar predictions of impending Western collapse are still spoken of reverentially among intellectual elites, a portion of whom delight to hear anything American and European called bad.

If elites like bad news, then the eagerness of intellectuals, artists, and tastemakers to embrace claims of ecological doomsday, population crash, coming global plagues, economic down fall, cultural wars, or the end of this or that become, at least, comprehensible.

Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

(Note: italics in original.)

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(p. 92) America is a car culture and has been for almost a century, the phrase "traffic jam" dating to 1910, meaning we're stuck with car culture for the time being. In the United States, the number of trips taken on public transportation has since 1998 been rising more rapidly than trips taken in cars. But public transportation nevertheless cannot be a cure-all for traffic congestion, since only a total of 1 percent of all U.S. trips occur on public transit. Double the share, which would require notable effort and capital expense, and it's still only 2 percent. A car culture with a rising population and rising prosperity has little choice but to keep investing in roads and parking.

Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

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Source of book image:
http://2.bp.blogspot.com/_ZnmbvrcWaFQ/TQDZppbZS6I/AAAAAAAAAoM/CjtOtOuGYAM/s1600/ayn-rand-and-the-world-she-made.jpg

For Rand, adopting the dollar sign as a symbol was an ironic gesture--an elegant and graceful way of thumbing her nose at those who attacked the innovation and creativity of capitalism. They criticized a caricatured version of capitalism, and she threw the caricature back at them.

But at her most serious, money was never an end-in-itself for her, but rather a reward for achieving creative innovation, and a means for accomplishing even more ambitious creative innovation.

Remember that in Rand's pure and lyrical Anthem, the hero is willing to give his invention away, and even be killed, as long as the Council agrees to allow the light he invented to keep shining.

In that wonderful moment with Bennett Cerf, Ayn Rand lived up to the hero she had created:

(p. 8) When Bennett Cerf, a head of Random House, begged her to cut Galt's speech, Rand replied with what Heller calls "a comment that became publishing legend": "Would you cut the Bible?" One can imagine what Cerf thought -- he had already told Rand plainly, "I find your political philosophy abhorrent" -- but the strange thing is that Rand's grandiosity turned out to be perfectly justified.

In fact, any editor certainly would cut the Bible, if an agent submitted it as a new work of fiction. But Cerf offered Rand an alternative: if she gave up 7 cents per copy in royalties, she could have the extra paper needed to print Galt's oration. That she agreed is a sign of the great contradiction that haunts her writing and especially her life.

. . .

Yet while Rand took to wearing a dollar-sign pin to advertise her love of capitalism, Heller makes clear that the author had no real affection for dollars themselves. Giving up her royalties to preserve her vision is something that no genuine capitalist, and few popular novelists, would have done.

For the full review, see:

ADAM KIRSCH. "Capitalist With a $." The New York Times Book Review (Sun., November 1, 2009): 1 & 8.

(Note: ellipsis added.)

(Note: the online version of the review is dated October 29, 2009 and has the title "Ayn Rand's Revenge.")

Book reviewed:

Heller, Anne C. Ayn Rand and the World She Made. New York: Nan A. Talese/Doubleday, 2009.

Here is what the hero says in the key passage of Anthem:

"Our brothers! Your are right. Let the will of the Council be done upon our body. We do not care. But the light? What will you do with the light?" (p. 72)

Source:

Rand, Ayn. Anthem. Caldwell, Idaho: The Caxton Printers, Ltd., 1946.

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(p. 89) Cars are the primary reason for the ever increasing "personal area" of Western life. As Jesse Ausubel of Rockefeller University has shown, "personal area"--the volume of territory through which someone moves in a typical day--has risen tenfold in the West since 1950, mainly because "personal speed" has tripled. Before general ownership of cars, most people were limited on most days to destinations to which the could walk, or that were close to bus or streetcar lines. Now most people head to whatever destination they wish, so long as traffic jams don't intervene. Ausubel has found that the "personal speed" of typical Americans has been rising at about 2.7 percent per annum for a generation; at that rate, the "personal area" the typical individual covers per day doubles every twenty-five years. Racing around from one destination to the next--job, school, stores, gym, restaurant, church--may be stressful. But the fact that people are increasingly able to choose where they want to be, and choose when they want to be there, ¡s an addition to personal (p. 90) freedom. Cars are what make "personal speed" and "personal area" possible, and we wouldn't love them so much were they not so damn convenient in this regard.

Aspects of car culture are unsettling, however. Speed and convenience in transit, for example, don't necessarily translate into a more pleasing life. "The mobility of the private car has the paradoxical effect of lengthening how far people go rather than saving them time," Alan Durning has written.

Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

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(p. 80) Consider a thought experiment. If the means existed, would you exchange places with a typical person living in any year before your birth? Exchange places permanently--not, say observe the Battle of Hastings and then rematerialize in the present. You could pick the year and place in the past, but could not specify trading places with someone specific like Catherine the Great or Leonardo da Vinci, and you could not specify that you would he a lord or lady or hold some similar advantage. In this deal you'd he transported back to the year and society of your choosing to live out the rest of your life as an ordinary person.

A good guess is that hardly anyone in the United States or the European Union today would accept a one-way ticket to the everyday life of the past. The physical beauty of the world would be greater then, before the mixed blessing of development. And most moments in the past would be quieter than ours, though not necessarily less stressful--the lives of pioneer farmers for whom a crop loss meant destitution, or of seamstresses working fourteen-hour days in early industrial-era sweatshops and unable to afford more than tea and bread, were hardly (p. 81) serene. Nor was the quiet, small-town atmosphere of the past, which many today idealize, necessarily ideal. Everyone knew your name, but everyone also knew your secrets; men and especially women enjoyed much less personal freedom in small-town life of the past than is typical today.

For essentially all of human history until the last few generations, the typical person's lot has been unceasing toil, meager living circumstances, uncertainty about food, rudimentary health care, limited education, little travel or entertainment; all followed by early death. (Keep in mind these remain the conditions under which more than a billion people live in the developing world today.) Even if you could somehow carry the benefits of modern medicine with you into the past--health care alone would make almost everyone decline the one-way ticket backward--the toil, low living standards, and isolated lives of past generations would seem awful to us compared to the sorts of things we complain about today.

Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

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Source of book image: http://images.bookbyte.com/isbn.aspx?isbn=9780060747664

(p. 16) Various scolds and worrywarts have exclaimed, with Wordsworth, that "getting and spending, we lay waste our powers." To such Jeremiahs, Lindsey provides an essentially cheerful, although not altogether so, counterpoint: affluence has made America a more libertarian, and hence a nicer, place.

First came material improvement. Until very recently, he notes, when people prayed for their daily bread, they often were praying for just that. Not so long ago, many ordinary lives of quiet desperation ended especially dismally: about 10 percent of burials in New York City in 1889 were in potter's fields. In 1900, 1.75 million children between the ages of 10 and 15 -- almost one-fifth of all children in that age cohort -- were in the work force. Children provided one-fourth to one-third of the incomes for working-class families, which spent more than 90 percent of their household earnings on food, shelter and clothing. In 1900, Americans spent nearly twice as much on funerals as on medicine, and less than 2 percent of Americans took vacations.

. . .

Affluence, Lindsey writes, has provided "a mad proliferation of choices -- and what, in the end, is freedom but the ability to choose?"

For the full review, see:

GEORGE F. WILL. "Land of Plenty." The New York Times Book Review (Sun., June 10, 2007): 16-17.

(Note: ellipsis added.)

Book reviewed:

Lindsey, Brink. The Age of Abundance: How Prosperity Transformed America's Politics and Culture. New York: HarperCollins, 2007.

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Source of book image: http://www.tower.com/tycoons-how-andrew-carnegie-john-d-rockefeller-jay-charles-r-morris-paperback/wapi/100346776?download=true&type=1

(p. 24) Judging by Charles R. Morris's new book, "The Tycoons," it takes about 100 years for maligned monopolists and "robber barons" to morph into admirable innovators.

Morris skillfully assembles a great deal of academic and anecdotal research to demonstrate that Andrew Carnegie, John D. Rockefeller, Jay Gould and J. P. Morgan did not amass their fortunes by trampling on the downtrodden or ripping off consumers - . . .

. . .

Though Morris only hints at it, the truth is that the real heroes of the American industrial revolution were not his four featured tycoons, but the American people themselves. I don't mean this to sound like a corny burst of patriotism. In the 19th century, the United States was still young. Most families had either been booted out of Europe or fled it, and they didn't care about tradition or the Old Guard. With little to lose, they were willing to bet on a roll of the dice, even if it was they who occasionally got rolled. Europe was encrusted with guilds, unions and unbendable rules. Britons took half a day to make a rifle stock, because 40 different tradesmen poked their noses into the huddle. American companies polished off new rifle stocks in 22 minutes.

The United States still holds an edge in its openness to innovation. In 1982, French farmers literally chased the French agriculture minister, Edith Cresson, off their fields with pitchforks because she suggested reform. By contrast, back in the late 1850's, Abraham Lincoln was a hot after-dinner speaker. Was he discussing slavery? No. The title of his talk was "Discoveries and Inventions." The real root of economic growth is not natural resources or weather or individual genius. It's attitude, not latitude. The Austrian economist Joseph Schumpeter called innovations gales of "creative destruction." Americans, not Europeans, had the gall to stare into those gales - with optimism.

For the full review, see:

TODD G. BUCHHOLZ . "'The Tycoons': Benefactors of Great Wealth." The New York Times Book Review (Sun., October 2, 2005): 24.

(Note: ellipses added.)

(Note: the online version of the review has the title "'The Tycoons': Benefactors of Great Wealth.")

Book under review:

Morris, Charles R. The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy. New York: Times Books, 2005.

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(p. 80) In his extraordinary book Mapping Human History, the science writer Steve Olson estimates that 80 billion "modern" humans--from the first beings recognizable as our forebears to the advent of Homo sapiens sapiens, our official name--have walked the earth down through the millennia. Supposing this number is correct, the men and women at middle-class standards or above in the United States and the European Union now live better than 99.4 percent of the human beings who have ever existed.

Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

The Olson book mentioned is:

Olson, Steve. Mapping Human History: Discovering the Past through Our Genes. New York: Houghton Mifflin Company, 2002.

(Note: italics in original.)

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(p. 16) Two generations ago in the United States,most families lacked a car; by our parents' generation, most families had one car while the two-car lifestyle was a much-sought ideal; today a third of America's families own three cars or more. The United States now contains just shy of one automobile per licensed driver, and is on track to having more cars than licensed drivers. Cars are a mixed blessing, as a future chapter will detail: But there is no doubt they represent convenience, freedom, and, for women, personal security, when compared to standing on street corners waiting for buses or lingering on dark subway platforms. Cars would not he so infuriatingly popular if the did not make our lives easier. Today all but the bottom-most fraction of the impoverished in the United States do most of their routine traveling by car: 100 auto trips in the United States for every one trip on a bus or the subway, according to the American Public Transit Association. The portion of routine trips made in private cars is rising toward overwhelming in the European Union, too. Two generations ago, people dreamed of possessing their own cars. Now almost everyone in the Western world who desires a car has one--and vehicles that are more comfortable, better-equipped, lower-polluting, and much safer than those available only a short time ago.

Source:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

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Source of book image: http://grigr.com/

Greg Easterbrook's book has been out for several years, but I am a slow reader and have a long "to read" list. I enjoyed the first half or so of the book very much, and also enjoyed some parts of the second half. Roughly speaking, the first half is devoted to illustrating how much better life is now than before, and here (the West) than there (the less-developed countries). Roughly speaking, the second half of the book asks why we aren't happier, and complains about areas of life where Easterbrook sees room for improvement.

Some of the part I like has now been updated, or written with better argument or more panache, by Matt Ridley in The Rational Optimist. But even so, Easterbrook often gives examples, or arguments, that complement Ridley's case.

And even though Ridley is on average more eloquent than Easterbrook, the latter is eloquent plenty often enough to be worth reading. (And maybe my judgment about eloquence is colored by my agreeing with Ridley 90% of the time, and only agreeing with Easterbrook 75% of the time.)

On the less-satisfying second half of the book: worthwhile questions are often asked, but the answers are few and not very satisfying.

In the next few weeks, I'll occasionally be quoting a few of the more illuminating or edifying passages in the Easterbrook book.

Easterbrook's book:

Easterbrook, Gregg. The Progress Paradox: How Life Gets Better While People Feel Worse. Paperback ed. New York: Random House, 2004.

The Ridley book that I mention:

Ridley, Matt. The Rational Optimist: How Prosperity Evolves. New York: Harper, 2010.

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(p. A5) MOSCOW -- Early results in Estonia's parliamentary election on Sunday showed the ruling coalition headed for a victory, in a remarkable show of support for a government that has imposed harsh austerity measures to lift the country out of recession.

. . .

The vote reflects approval for a government that continued to embrace laissez-faire capitalism during the painful months after the global downturn. After Estonia's economy shrank nearly 15 percent, the state reduced its budget by the equivalent of 9 percent of gross domestic product. Demand fell steeply, and unemployment crept up, early in 2010, to 19.8 percent.

But in contrast to their neighbors in Latvia, where economic troubles led to riots and the government's collapse, Estonians stoically absorbed the suffering. These sacrifices allowed Estonia to join the euro zone in January, a move its leaders hailed as a sign that the country was on its way to achieving Western European standards of living. Meanwhile, the economy has been projected to grow by 4 percent this year, and unemployment has dropped to around 10 percent, according to the Estonian Unemployment Insurance Fund.

For the full story, see:

ELLEN BARRY. "After Cuts, Voters Back Ruling Bloc in Estonia." The New York Times (Mon., March 7, 2011): A5.

(Note: ellipsis added.)

(Note: the online version of the article is dated March 6, 2011.)

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If you were standing amongst a herd of antelope when a dangerous predator arrived, you would not see the antelope defending themselves against the predator. What you would see would be their white rear ends disappearing in the distance.

Last July in Wichita I heard some executives from Koch Industries talking about Market-Based Management. A couple of them mentioned Koch's stands in defense of the free market. As a result of these efforts, Koch Industries has become the target of many agencies of the government and of groups opposed to the free market. Once or twice I heard an executive say something like: 'it would have been a lot easier if we had just painted our butts white and run with the antelope.'

Schumpeter thought that those in business would not defend the fortress of capitalism (CSD, p. 142). And the evidence suggests that Schumpeter was mainly right. But we can hope that there are enough exceptions, in unpretentious places like Wichita, to keep the fortress standing.

(p.A15) Years of tremendous overspending by federal, state and local governments have brought us face-to-face with an economic crisis. Federal spending will total at least $3.8 trillion this year--double what it was 10 years ago. And unlike in 2001, when there was a small federal surplus, this year's projected budget deficit is more than $1.6 trillion.

Several trillions more in debt have been accumulated by state and local governments. States are looking at a combined total of more than $130 billion in budget shortfalls this year. Next year, they will be in even worse shape as most so-called stimulus payments end.

For many years, I, my family and our company have contributed to a variety of intellectual and political causes working to solve these problems. Because of our activism, we've been vilified by various groups. Despite this criticism, we're determined to keep contributing and standing up for those politicians, like Wisconsin Gov. Scott Walker, who are taking these challenges seriously.

For the full commentary, see:

CHARLES G. KOCH. "Why Koch Industries Is Speaking Out; Crony capitalism and bloated government prevent entrepreneurs from producing the products and services that make people's lives better." The Wall Street Journal (Tues., MARCH 1, 2011): A15.

Koch's book is:

Koch, Charles G. The Science of Success: How Market-Based Management Built the World's Largest Private Company. Hoboken, NJ: Wiley & Sons, Inc., 2007.

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(p. 78) . . . the intelligence of humans, though immensely strengthened by articulation, nonetheless contains a large component of tacit understanding by individuals who know more than they can say. If this is also true with respect to the sorts of knowledge relevant to our economic activities, then no comprehensive planning agency could obtain the sort of knowledge necessary for economic planning, for it would lie buried deep in the minds of millions of persons.

Source:

Lavoie, Don. National Economic Planning: What Is Left? Washington, DC: Cato Institute, 1985.

(Note: ellipsis added.)

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Source of book image: http://media.wiley.com/product_data/coverImage300/63/04708258/0470825863.jpg

Red Capitalism is scheduled for release on February 15, 2011. I have not read it, but from early reports it would appear to be a credible account that updates and supports concerns about China's economy expressed by David Smick (The World Is Curved) and others.

The reference is:

Walter, Carl E., and Fraser J. T. Howie. Red Capitalism: The Fragile Financial Foundation of China's Extraordinary Rise. Hoboken, NJ: Wiley, 2011.

The Smick book mentioned, is:

Smick, David M. The World Is Curved: Hidden Dangers to the Global Economy. New York: Portfolio Hardcover, 2008.

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Source of book image: http://ecx.images-amazon.com/images/I/512M5Z648JL.jpg

(p. C7) . . . as Suzanne Loebl rightly emphasizes in "America's Medicis," the Rockefellers' patronage has been notable not only for its generosity but also for its deliberativeness. By founding such diverse institutions as MoMA, Colonial Williamsburg, the Cloisters, Riverside Church and the Asia Society--as well as by commissioning the distinguished artworks that enliven the office complex at Rockefeller Center--various members of the family have been guided by a perception that a moral responsibility comes with the possession of great wealth.

John D. Rockefeller, Sr. (1839-1937), the founder and chairman of Standard Oil, was routinely vilified in the press as a ruthless monopolist who crushed competition the way a giant might crush a bug.     . . .     . . . yet he was not the cold-hearted miser that some supposed. A devout Baptist, he donated substantial sums every year to one or more of the congregations he attended, as well as to associated causes, such as the American Baptist Education Society, which founded the University of Chicago with his support in 1890.

. . .

Unfortunately, not everyone behaved well in the face of Rockefeller munificence. The Mexican painter Diego Rivera, commissioned to create a sprawling mural for the lobby of Rockefeller Center, chose to deviate from his preparatory drawings and place an enormous portrait of Lenin at the center of the finished composition. Refusing to amend this egregious provocation, Rivera was paid in full for his work, which was then duly destroyed. A predictable uproar ensued, garnering the artist abundant publicity, which may have been his objective all along.

. . .

Ms. Loebl's account is well grounded both in the existing literature and in original archival research. She has striven to be comprehensive and done a good job of incorporating lesser-known Rockefeller projects, for example the charming Wendell Gilley Museum of carved birds, in Maine, funded by Nelson's son Steven. But several worthy undertakings, such as Junior's restoration of the châteaux of Versailles and Fontainebleau, receive scant attention--as do Laurance Rockefeller's extensive gifts for the purpose of creating and expanding our national parks.

For the full review, see:

JONATHAN LOPEZ. "BOOKSHELF; The Splendid Spoils of Standard Oil; The Rockefeller family's vast cultural legacy resulted from a sense of civic duty and a love of beautiful things." The Wall Street Journal (Sat., NOVEMBER 20, 2010): C7.

(Note: ellipses added.)

The book being reviewed, is:

Loebl, Suzanne. America's Medicis: The Rockefellers and Their Astonishing Cultural Legacy. New York: HarperCollins, 2010.

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"A Sumerian clay tablet from around 3200 B.C. is inscribed in wedgelike cuneiform with a list of professions." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. C5) CHICAGO -- One of the stars of the Oriental Institute's new show, "Visible Language: Inventions of Writing in the Ancient Middle East and Beyond," is a clay tablet that dates from around 3200 B.C. On it, written in cuneiform, the script language of ancient Sumer in Mesopotamia, is a list of professions, described in small, repetitive impressed characters that look more like wedge-shape footprints than what we recognize as writing.

In fact "it is among the earliest examples of writings that we know of so far," according to the institute's director, Gil J. Stein, and it provides insights into the life of one of the world's oldest cultures.

The new exhibition by the institute, part of the University of Chicago, is the first in the United States in 26 years to focus on comparative writing. It relies on advances in archaeologists' knowledge to shed new light on the invention of scripted language and its subsequent evolution.

The show demonstrates that, contrary to the long-held belief that writing spread from east to west, Sumerian cuneiform and its derivatives and Egyptian hieroglyphics evolved separately from each another. And those writing systems were but two of the ancient forms of writing that evolved independently. Over a span of two millenniums, two other powerful civilizations -- the Chinese and Mayans -- also identified and met a need for written communication. Writing came to China as early as around 1200 B.C. and to the Maya in Mesoamerica long before A.D. 500.

. . .

The Oriental Institute, which opened in 1919, was heavily financed by John D. Rockefeller Jr., who had been greatly influenced by James Henry Breasted, a passionate archaeologist.

. . .

Experts are still struggling to understand just how writing evolved, but one theory, laid out at the Oriental Institute's exhibition, places the final prewriting stage at 3400 B.C., when the Sumerians first began using small clay envelopes like the ones in the show. Some of the envelopes had tiny clay balls sealed within. Archaeologists theorize that they were sent along with goods being delivered; recipients would open them and ensure that the number of receivables matched the number of clay tokens. The tokens, examples of which are also are in the show , transmitted information, a key function of writing.

For the full story, see:

GERALDINE FABRIKANT. "Hunting for the Dawn of Writing, When Prehistory Became History." The New York Times (Weds., October 20, 2010): C5.

(Note: ellipses added.)

(Note: the online version of the article is dated October 19, 2010.)

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(p. 2) In general, life is better than it ever has been, and if you think that, in the past, there was some golden age of pleasure and plenty to which you would, if you were able, transport yourself, let me say one single word: "dentistry."

Source:

O'Rourke, P. J. All the Trouble in the World: The Lighter Side of Overpopulation, Famine, Ecological Disaster, Ethnic Hatred, Plague, and Poverty. paperback ed. New York: Atlantic Monthly Press, 1994.

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Source of book image: http://ffbsccn.files.wordpress.com/2010/07/the-most-powerful-idea-in-the-world.jpg

The range of William Rosen's fascinating and useful book is very broad indeed. He is interested in THE question: why did the singular improvement in living standards known as the industrial revolution happen where and when it did?

The question is not just of historical interest---if we can figure out what caused the improvement then and there, we have a better shot at continuing to improve in the here and now.

I especially enjoyed and learned from William Rosen's discussion, examples and quotations on the difficult issue of whether patents are on balance a good or bad institution.

Deirdre McCloskey taught me that the most important part of a sentence is the last word, and the most important part of a paragraph is the last sentence, and the most important part of a chapter is the last paragraph.

Here are the last couple of sentences of Rosen's book:

(p. 324) Incised in the stone over the Herbert C. Hoover Building's north entrance is the legend that, with Lincoln's characteristic brevity, sums up the single most important idea in the world:

THE PATENT SYSTEM ADDED

THE FUEL OF INTEREST

TO THE FIRE OF GENIUS

In the next few weeks I will occasionally quote a few of the more illuminating passages from Rosen's well-written account.

Book discussed:

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

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We'd all be better off if Warren Buffett listened a little more to his old friend Charlie Munger, and a little less to his new friend, Bill Gates.

(p. 6A) Charlie Munger, the business partner of billionaire philanthropist Warren Buffett, said private investment may advance society more than charity.

"I believe Costco does more for civilization than the Rockefeller Foundation," Munger, 86, told students in a discussion at the University of Michigan on Tuesday, according to a video posted on the Internet. "I think it's a better place. You get a bunch of very intelligent people sitting around trying to do good, I immediately get kind of suspicious and squirm in my seat."

Munger is a director at Costco Wholesale Corp., the largest U.S. warehouse-club chain, and has served as vice chairman of Buffett's Berkshire Hathaway Inc. for more than three decades. Munger's stake in Omaha-based Berkshire's Class A shares is valued at more than $1.6 billion.

. . .

"I've seen so much folly and stupidity on the part of our major philanthropic groups, including the World Bank," Munger said. "I really have more confidence in building up the more capitalistic ventures like Costco."

For the full story, see:

Bloomberg News. "Costco beats charity, Munger Says." Omaha World-Herald (Sat., September 16, 2010): 6A-7A.

(Note: ellipsis added.)

(Note: the online version of the article has the title "Munger: Costco beats charity.")

Munger's comments can be viewed online at: http://rossmedia.bus.umich.edu/rossmedia/SilverlightPlayer/Default.aspx?peid=4d215177cbe44b1e8e94d0dd68f5058f

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In the passage quoted below, Severgnini captures something of the truth. Americans, at their best, have sought to control nature in order to make life longer and happier.

But Severgnini does not see that there is a difference between seeking to control nature and seeking to control other people. At its best, America excels at the former, and refrains from the latter.

(p. W9) A few years ago, Italian journalist Beppe Severgnini recounted his adventures in the U.S. in the book "Ciao, America!" in which he offered up humorous musings on many of the standard European complaints about the American way of living. Mr. Severgnini allows that he rather admires the Yankee "urge to control the outside world," whether that means sending planes off an aircraft carrier or sending out technicians from Carrier.

He notes that the refusal to suffer the sweaty indignity of equatorial heat is "the antithesis of passive resignation," and thus a perfect expression of the can-do American character. "In America, air-conditioning is not simply a way of cooling down a room," Mr. Severgnini writes. "It is an affirmation of supremacy."

For the full commentary, see:

ERIC FELTEN. "DE GUSTIBUS; The Big Chill: Giving AC the Cold Shoulder." The Wall Street Journal (Fri., July 23, 2010): W9.

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Source of photo: http://earthobservatory.nasa.gov/Features/EarthPerspectives/

What is the extended island-country on the right side of the photo above?

OK, if you got that one, here's a harder question: What is the smaller island-country to the left of the extended island-country?

Stumped? Well it's a trick question. The island-country to the left is South Korea.

But, you say, South Korea is no island.

You are right. (But then ponder why it looks like an island.)

Credits:

I first saw a version of the above photo, and heard a version of the above interpretation, in a wonderful presentation by Tony Woodlief at the MBM University at Wichita in July 2010.

The photo is a satellite composite from NASA.

"Lux et Veritas" is the motto of Yale University and is Latin for "Light and Truth." (Three years of high school Latin pay off again---thank you Miss Noble and Miss Rohrer!)

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The Wall Street Journal on 7/12/2010 ran the above photo on the top of its front page and referred to articles inside on the final game of the 2010 World Cup. Their caption was: "120 minutes, a record 13 yellow cards and a single goal: Andrés Iniesta, right, celebrates scoring to beat the Netherlands in the World Cup; Dutch player Gergory van der Wiel, left, buries his face." Source of photo: http://www.zumapress.com/images/SIGMA/IMAGES312/20100711_zaf_d20_347.pre (sic)

What a beautiful picture for illustrating a zero-sum game. Football (or soccer) is a zero-sum game---Spain can only win, if the Netherlands lose.

When Ghiberti and Brunelleschi competed to build the Gates of Paradise, Ghiberti ended up building the doors. But it would be a mistake to see him as the winner and Brunelleschi as the loser. Brunelleschi moved on to build the Duomo, and everyone won.

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

(p. A16) "The euro was supposed to achieve higher productivity and growth by bringing about a deeper integration between economies," says Simon Tilford, chief economist at the Centre for European Reform, a London think tank. "Instead, integration is slowing. The lack of flexibility in labor and product markets raises serious questions about the likelihood of the euro delivering on its potential."

Structural changes are the last great hope in part because euro zone members have few other levers for lifting their economies. Individual members can't tweak interest rates to encourage lending, because those policies are set by the zone's central bank. The shared euro means countries don't have a sovereign currency to devalue, a move that would make exports cheaper and boost receipts abroad.

The remaining prescription, many economists say: chip away at the cherished "social model." That means limiting pensions and benefits to those who really need them, ensuring the able-bodied are working rather than living off the state, and eliminating business and labor laws that deter entrepreneurship and job creation.

That path suits Carlos Bock. The business-studies graduate from Bavaria spent months navigating Germany's dense bureaucracy in order to open a computer store and Internet café in 2004. Before he could offer a Web-surfing customer a mug of filter coffee, he said, he had to obtain a license to run a "gastronomic enterprise." One of its 38 requirements compelled Mr. Bock to attend a course on the hygienic handling of mincemeat.

Mr. Bock closed his store in 2008. Germany's strict regulations and social protections favor established businesses and workers over young ones, he said. He also struggled against German consumers' reluctance to spend, a problem economists blame in part on steep payroll taxes that cut into workers' takehome pay, and on high savings rates among Germans who are worried the country's pension system is unsustainable.

"If markets were freer, there might be chaos to begin with," Mr. Bock said. "But over time we'd reach a better economic level."

Even in France, some erstwhile opponents of reforms are changing their tune. Julie Coudry became a French household name four years ago when she helped organize huge student protests against a law introducing short-term contracts for young workers, a move the government believed would put unemployed youths to work.

With her blonde locks and signature beret, Ms. Coudry gave fiery speeches on television, arguing that young people deserved the cradle-to-grave contracts that older employees enjoy at most French companies. Critics in France and abroad saw the protests as a shocking sign that twentysomethings were among the strongest opponents of efforts to modernize the European economy. The measure was eventually repealed.

Today, the now 31-year-old Ms. Coudry runs a nonprofit organization that encourages French corporations to hire more university graduates. Ms. Coudry, while not repudiating her activism, says she realizes that past job protections are untenable.

"The state has huge debt, 25% of young people are jobless, and so I am part of a new generation that has decided to take matters into our own hands," she says. "We've decided that we can't expect everything from the state."

For the full story, see:

MARCUS WALKER And ALESSANDRA GALLONI. "Europe's Choice: Growth or Safety Net." The Wall Street Journal (Thurs., MARCH 25, 2010): A1 & A16.

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"Laying line in San Francisco for the Trans Bay Cable project, which submerged 33 miles of cable." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B1) Generating 20 percent of America's electricity with wind, as recent studies proposed, would require building up to 22,000 miles of new high-voltage transmission lines. But the huge towers and unsightly tree-cutting that these projects require have provoked intense public opposition.

Recently, though, some companies are finding a remarkably simple answer to that political problem. They are putting power lines under water, in a string of projects that has so far provoked only token opposition from environmentalists and virtually no reaction from the larger public.

. . .

(p. B7) . . . , the underwater approach solves some intractable problems. In San Francisco, for example, old power plants that burn natural gas are about to be retired because a new transmission company has succeeded in running a line 33 miles across the San Francisco Bay.

Mr. Stern said his company's Neptune Cable, which runs from Sayreville, N.J., to Levittown, N.Y., on Long Island, now carries 22 percent of Long Island's electricity. His company is trying to complete a deal for a cable that would run from Ridgefield, N.J., to a Consolidated Edison substation on West 49th Street in Manhattan.

Those two cables were not motivated primarily by environmental goals -- they are meant to connect cheap generation to areas where power prices are high. Mr. Stern's company, PowerBridge, is now considering two renewable energy projects, however. One cable would connect proposed wind farms on the Hawaiian islands of Molokai and Lanai to the urban center on Oahu, and another would bring wind power from Maine along the Atlantic coast to Boston.

For the full story, see:

MATTHEW L. WALD. "A Power Line Runs Through It; Underwater Cable an Alternative to Electrical Towers." The New York Times (Weds., March 17, 2010): B1 & B7.

(Note: ellipses added.)

(Note: the online version is dated March 16, 2010 and has the shorter title "Underwater Cable an Alternative to Electrical Towers.")

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"Yang Jinlu, 18, left, and Zhang Yinghua, 37." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A10) KUNMING, China -- Chen Mingjing's entrepreneurial instincts vaulted him from a peasant upbringing to undreamed-of wealth, acquired in ventures ranging from making electric meters to investing in real estate. But when he was 44, the allure of making money for money's sake began to wane. He wanted to run a business that accomplished some good.

And so last September, Mr. Chen did what any socially aware entrepreneur might do: He opened a theme park of dwarfs, charging tourists about $9 a head to watch dozens of dwarfs in pink tutus perform a slapstick version of "Swan Lake" along with other skits.

Mr. Chen has big plans for his Kingdom of the Little People. Imagine a $115 million universe in miniature, set amid 13,000 acres of rolling hills and peaceful lakes in southern China's Yunnan Province, with tiny dogs, tiny fruit trees, a 230-foot-high performance hall that looks like the stump of a prehistoric tree and standard-size guest cabins.

Also, a black BMW modified to resemble a flying saucer, from which dwarfs will spill forth to begin their performances.

"It will be like a fairy tale," Mr. Chen said. "Everything here I have designed myself."

. . .

Critics say displaying dwarfs is at best misguided and at worst immoral, a throwback to times when freak shows pandered to people's morbid curiosity.

"Are they just going there to look at curious objects?" asked Yu Haibo, who leads a volunteer organization for the disabled in Jilin Province in the northeast.

"I think it is horrible," said Gary Arnold, the spokesman for Little People of America Inc., a dwarfism support group based in California. "What is the difference between it and a zoo?" Even the term "dwarf" is offensive to some; his organization prefers "person of short stature."

. . .

But there is another view, and Mr. Chen and some of his short-statured workers present it forcefully. One hundred permanently employed dwarfs, they contend, is better than 100 dwarfs scrounging for odd jobs. They insist that the audiences who see the dwarfs sing, dance and perform comic routines leave impressed by their skills and courage.

Many performers said they enjoyed being part of a community where everyone shares the same challenges, like the height of a sink. "Before, when we were at home, we didn't know anyone our size. When we hang out together with normal-size people, we can not really do the same things," said Wu Zhihong, 20. "So I really felt lonely sometimes."

. . .

Supporters and critics agree on one point: the fact that the park is awash in job applications shows the disturbing dearth of opportunities for the disabled in China. Cao Yu, Mr. Chen's assistant, says she receives three or four job inquiries a week.

"Under the current social situation in China, they really will not be able to find a better employment situation," she said.

. . .

Mr. Chen said his employees had gained self-respect and self-sufficiency. "It doesn't really matter to me what other people say," he said. "The question is whether meeting me has changed their lives."

For the full story, see:

SHARON LaFRANIERE. "Kunming Journal; A Miniature World Magnifies Dwarf Life." The New York Times (Thurs., March 4, 2010): A10.

(Note: ellipses added.)

(Note: the online version of the article is dated March 3, 2010.)

"Workers relaxed in the dormitories." Source of caption and photo: online version of the NYT article quoted and cited above.

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Chamber of Commerce President Tom Donohoe. Source of caricature: online version of the WSJ article quoted and cited below.

(p. A13) The White House's war on the Chamber has come just as the group is launching a new $100 million campaign promoting free enterprise.

"We want to encourage and promote and educate and get a bunch of enthusiasm behind . . . the free enterprise system with free capital markets and free trade and the ability to fail and fall right on your ass and get up and do it again!" he says.

The belief in that system, Mr. Donohue says, has been eroded by the recession and subsequent criticism of the free market. "The purpose of this is to get out of the doldrums! Quit sulking and worrying." He hopes the campaign will remind Americans that "We created 20 million jobs in the '90s, we can do it again. We don't have to do it exactly like that--Adam Smith didn't have a BlackBerry--but we ought to pay attention to what made it work."

For the full interview, see:

KIMBERLEY A. STRASSEL. "OPINION: THE WEEKEND INTERVIEW with Tom Donohue; Business Fights Back; His organization under attack by the White House, the president of the Chamber of Commerce stands by his defense of free enterprise." The Wall Street Journal (Sat., October 24, 2009): A13.

(Note: the online version of the article has the date October 23, 2009.)

(Note: ellipsis in original.)

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"In Venezuela, which faces power shortages, blackouts have spurred protests like this demonstration in Caracas." Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. A11) CARACAS -- Venezuela, a country with vast reserves of oil and natural gas, as well as massive rushing waterways that cut through its immense rain forests, strangely finds itself teetering on the verge of an energy crisis.

. . .

The government has forced draconian electricity rationing on certain sectors, which could make matters worse for an economy already racked by recession. Critics say the socialist government is trying to snuff out capitalist-driven sectors with the rationing, while allowing government-favored industries in good standing to continue with business as usual.

Shopping malls, which analysts say use less than 1% of the power consumed in Venezuela, have nonetheless been a main focus for the government.

Malls have been told most stores can only be open between 11 a.m. and 9 p.m.

"In a certain way, Chávez is attacking capitalism with the orders on shopping malls," said Emilio Grateron, mayor of Caracas's Chacao municipality, a bastion of those opposed to Mr. Chávez. "By limiting the hours we can go to malls, he is trying to slowly take away liberties, to create absolute control over things such as shopping."

In Venezuela, whose capital Caracas is consistently ranked among the world's most dangerous cities, residents see shopping malls as one of few havens in the country.

The government's rationing efforts are also hitting metal producers. Their production has already been cut as much as 40%. Mr. Rodriguez, the electricity minister, said they may have to be completely closed to save more electricity.

For the full story, see:

DAN MOLINSKI. "Energy-Rich Venezuela Faces Power Crisis." The Wall Street Journal (Fri., JANUARY 8, 2009): A11.

(Note: ellipsis added.)

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(p. 113) Firms that win by the curve of mind often abandon it when they establish themselves in the world of matter. They fight to preserve the value of their material investments in plant and equipment that embody the ideas and experience of their early years of success. They begin to exalt expertise and old knowledge, rights and reputation, over the constant learning and experience of innovative capitalism. They get fat.

A fat cat drifting off the curve, however, is a sitting duck for new nations and companies getting on it. The curve of mind thus tends to favor outsiders over establishments of all kinds. At the capitalist ball, the blood is seldom blue or the money rarely seasoned. Microcosmic technologies are no exception. Capitalism's most lavish display, the microcosm, is no respecter of persons.

The United States did not enter the microcosm through the portals of the Ivy League, with Brooks Brothers suits, gentleman Cs, and warbling society wives. Few people who think they are in already can summon the energies to break in. From immigrants and outcasts, street toughs and science wonks, nerds and boffins, the bearded and the beer-bellied, the tacky and uptight, and sometimes weird, the born again and born yesterday, with Adam's apples bobbing, psyches (p. 114) throbbing, and acne galore, the fraternity of the pizza breakfast, the Ferrari dream, the silicon truth, the midnight modem, and the seventy-hour week, from dirt farms and redneck shanties, trailer parks and Levittowns, in a rainbow parade of all colors and wavelengths, of the hyperneat and the sty high, the crewcut and khaki, the pony-tailed and punk, accented from Britain and Madras, from Israel and Malaya, from Paris and Parris Island, from Iowa and Havana, from Brooklyn and Boise and Belgrade and Vienna and Vietnam, from the coarse fanaticism and desperation, ambition and hunger, genius and sweat of the outsider, the downtrodden, the banished, and the bullied come most of the progress in the world and in Silicon Valley.

Gilder, George. Microcosm: The Quantum Revolution in Economics and Technology. Paperback ed. New York: Touchstone, 1990.

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"Josef Janicek, 61, was on the keyboard for a concert in Prague last week by the band Plastic People of the Universe." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A10) PRAGUE -- It has been called the Velvet Revolution, a revolution so velvety that not a single bullet was fired.

But the largely peaceful overthrow of four decades of Communism in Czechoslovakia that kicked off on Nov. 17, 1989, can also be linked decades earlier to a Velvet Underground-inspired rock band called the Plastic People of the Universe. Band members donned satin togas, painted their faces with lurid colors and wrote wild, sometimes angry, incendiary songs.

It was their refusal to cut their long, dank hair; their willingness to brave prison cells rather than alter their darkly subversive lyrics ("peace, peace, peace, just like toilet paper!"); and their talent for tapping into a generation's collective despair that helped change the future direction of a nation.

"We were unwilling heroes who just wanted to play rock 'n' roll," said Josef Janicek, 61, the band's doughy-faced keyboard player, who bears a striking resemblance to John Lennon and still sports the grungy look that once helped get him arrested. "The Bolsheviks understood that culture and music has a strong influence on people, and our refusal to compromise drove them insane."

. . .

In 1970, the Communist government revoked the license for the Plastics to perform in public, forcing the band to go underground. In February 1976, the Plastic People organized a music festival in the small town of Bojanovice -- dubbed "Magor's Wedding" -- featuring 13 other bands. One month later, the police set out to silence the musical rebels, arresting dozens. Mr. Janicek was jailed for six months; Mr. Jirous and other band members got longer sentences.

Mr. Havel, already a leading dissident, was irate. The trial of the Plastic People that soon followed became a cause célèbre.

Looking back on the Velvet Revolution they helped inspire, however indirectly, Mr. Janicek recalled that on Nov. 17, 1989, the day of mass demonstrations, he was in a pub nursing a beer. He argued that the revolution had been an evolution, fomented by the loosening of Communism's grip under Mikhail Gorbachev and the overwhelming frustration of ordinary people with their grim, everyday lives. "The Bolsheviks knew the game was up," he said, "when the sons of the Communists themselves wanted to become capitalists and entrepreneurs."

For the full story, see:

DAN BILEFSKY. "Czechs' Velvet Revolution Paved by Plastic People." The New York Times (Mon., November 16, 2009): A10.

(Note: the online version of the article is dated November 15, 2009.)

(Note: ellipsis added.)

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"Wu Jinglian helped to create China's market economy, and now he is defending it against conservative hardliners in the Communist Party." Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 1) AT 79, Wu Jinglian is considered China's most famous economist.

In the 1980s and '90s, he was an adviser to China's leaders, including Deng Xiaoping. He helped push through some of this country's earliest market reforms, paving the way for China's spectacular rise and earning him the nickname "Market Wu."

Last year, China's state-controlled media slapped him with a new moniker: spy.

Mr. Wu has not been interrogated, charged or imprisoned. But the fact that a state newspaper, The People's Daily, among others, was allowed to publish Internet rumors alleging that he had been detained on suspicions of being a spy for the United States hints that he is annoying some very important people in the government.

He denied the allegations, and soon after they were published, China's cabinet denied that an investigation was under way.

But in a country that often jails critics, Mr. Wu seems to be testing the limits of what Beijing deems permissible. While many economists argue that China's growth model is flawed, rarely does a prominent Chinese figure, in the government or out, speak with such candor about flaws he sees in China's leadership.

Mr. Wu -- who still holds a research post at an institute affiliated with the State Council, China's cabinet -- has white hair and an amiable face, and he appears frail. But his assessments are often harsh. In books, speeches, interviews and television appearances, he warns that conservative hardliners in the Communist Party have gained influence in the government and are trying to dismantle the market reforms he helped formulate.

He complains that business tycoons and corrupt officials have hijacked the economy and manipulated it for their own ends, a system he calls crony capitalism. He has even called on Beijing to establish a British-style democracy, arguing that political reform is inevitable.

Provocative statements have made him a kind of dissident economist here, and revealed the sharp debates behind the scenes, at the highest levels of the Communist Party, about the direction of China's half-market, half-socialist economy.

In many ways, it is a continuation of the debate that has been raging for three decades: What role should the government play in China's hybrid economy?

Mr. Wu says the spy rumors were "dirty tricks" employed by his critics to discredit him.

"I have two enemies," he said in a recent interview. "The crony capitalists and the Maoists. They will use any means to attack me."

. . .

(p. 7) In interviews, Mr. Wu says he feels compelled to speak out because conservatives and "old-style Maoists" have been gaining influence in the government since 2004. These groups, he said, are pressing for a return to central planning and placing blame for corruption and social inequality on the very market reforms he championed.

At the same time, Mr. Wu says, corrupt bureaucrats are pushing for the state to take a larger economic role so they can cash in on their positions through payoffs and bribes, as well as by steering business to allies.

"I'm not optimistic about the future," Mr. Wu said. "The Maoists want to go back to central planning and the cronies want to get richer."

For the full story, see:

DAVID BARBOZA. "China's Mr. Wu Keeps Talking." The New York Times, SundayBusiness Section (Sun., September 26, 2009): 1 & 7.

(Note: ellipsis added.)

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

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

(p. C6) Ayn Rand poses theatrically in her signature cape and gold dollar-sign pin on the cover of a groundbreaking new biography. Rand also poses theatrically in this same Halloween-ready costume (Rand impersonators have been known to wear it) on the cover of another groundbreaking new biography. The two books are being published a week apart. And both have gray covers that make them look even more interchangeable. Yet Rand, whose Objectivist philosophy is enjoying one of its periodic resurgences, loathed the very idea of grayness. She preferred dichotomies that were strictly black and white.

. . .

Ms. Heller's book is worth its $35 price, which is not the kind of detail that Rand herself would have been shy about trumpeting. When Russian Bolshevik soldiers commandeered and closed the St. Petersburg pharmacy run by Zinovy Rosenbaum, they made a lifelong capitalist of his 12-year-old daughter, Alissa, who would wind up fusing the subversive power of the Russian political novel with glittering Hollywood-fueled visions of the American dream.

. . .

Crucially, both authors understand the reasons that Rand's popularity has endured, not only among college students dazzled (and thronged into packs) by her triumphant individualism but also by entrepreneurs. From the young Ted Turner, who rented billboards to promote the "Who is John Galt?" slogan from "Atlas Shrugged," to the founders of Craigslist and Wikipedia, who have found self-contradictory new ways to mix populism with individual enterprise, it is clear that (in Ms. Burns's words) "reports of Ayn Rand's death are greatly exaggerated."

For the full review, see:

JANET MASLIN. "Books of The Times; Twin Biographies of a Singular Woman, Ayn Rand." The New York Times (Thurs., October 21, 2009): C6.

(Note: ellipses added.)

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Luigi Zingales, Robert C. McCormack Professor of Entrepreneurship and Finance at the University of Chicago. Source of photo and information in caption: http://faculty.chicagobooth.edu/luigi.zingales/research/date.html.

(p. A21) Luigi Zingales points out that the legitimacy of American capitalism has rested on the fact that many people, like Warren Buffett and Bill Gates, got rich on the basis of what they did, not on the basis of government connections. But over the years, business and government have become more intertwined. The results have been bad for both capitalism and government. The banks' growing political clout led to the rule changes that helped create the financial crisis.

For the full commentary, see:

DAVID BROOKS. "The Bloody Crossroads." The New York Times (Tues., September 8, 2009): A21.

(Note: the online version of the commentary is dated Sept. 7.)

The reference for the Zingales article is:

Zingales, Luigi. "Capitalism after the Crisis." National Affairs, no. 1 (Fall 2009): 22-35.

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Whole Foods CEO John Mackey. Source of the caricature: online version of the WSJ interview quoted and cited below.

(p. A11) "I honestly don't know why the article became such a lightning rod," says John Mackey, CEO and founder of Whole Foods Market Inc., as he tries to explain the firestorm caused by his August op-ed on these pages opposing government-run health care.

. . .

. . . his now famous op-ed incited a boycott of Whole Foods by some of his left-wing customers. His piece advised that "the last thing our country needs is a massive new health-care entitlement that will create hundreds of billions of dollars of new unfunded deficits and move us closer to a complete government takeover of our health-care system." Free-market groups retaliated with a "buy-cott," encouraging people to purchase more groceries at Whole Foods.

. . .

What Mr. Mackey is proposing is more or less what he has already implemented at his company--a plan that would allow more health savings accounts (HSAs), more low-premium, high-deductible plans, more incentives for wellness, and medical malpractice reform. None of these initiatives are in any of the Democratic bills winding their way through Congress. In fact, the Democrats want to kill HSAs and high-deductible plans and mandate coverage options that would inflate health insurance costs.

. . .

Mr. Mackey's latest crusade involves traveling to college campuses across the country, trying to persuade young people that business, profits and capitalism aren't forces of evil. He calls his concept "conscious capitalism."

What is that? "It means that business has the potential to have a deeper purpose. I mean, Whole Foods has a deeper purpose," he says, now sounding very much like a philosopher. "Most of the companies I most admire in the world I think have a deeper purpose." He continues, "I've met a lot of successful entrepreneurs. They all started their businesses not to maximize shareholder value or money but because they were pursuing a dream."

Mr. Mackey tells me he is trying to save capitalism: "I think that business has a noble purpose. It's not that there's anything wrong with making money. It's one of the important things that business contributes to society. But it's not the sole reason that businesses exist."

What does he mean by a "noble purpose"? "It means that just like every other profession, business serves society. They produce goods and services that make people's lives better. Doctors heal the sick. Teachers educate people. Architects design buildings. Lawyers promote justice. Whole Foods puts food on people's tables and we improve people's health."

Then he adds: "And we provide jobs. And we provide capital through profits that spur improvements in the world.

. . .

"I don't think anybody's too big to fail," he says. "If a business fails, what happens is, there are still assets, and those assets get reorganized. Either new management comes in or it's sold off to another business or it's bid on and the good assets are retained and the bad assets are eliminated. I believe in the dynamic creativity of capitalism, and it's self-correcting, if you just allow it to self-correct."

That's something Washington won't let happen these days, which helps explain why Mr. Mackey felt compelled to write that the Whole Foods health-insurance program is smarter and cheaper than the latest government proposals.

For the full interview, see:

STEPHEN MOORE. "The Conscience of a Capitalist; The Whole Foods founder talks about his Journal health-care op-ed that spawned a boycott, how he deals with unions, and why he thinks CEOs are overpaid." The Wall Street Journal (Sat., OCTOBER 3, 2009): A11.

(Note: ellipses added.)

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(p. A19) In "A Journey to the Western Islands of Scotland," an account of his travels with James Boswell through the Hebrides in 1773, Johnson vividly described the desolation of a feudal land, untouched by commercial exuberance. He was struck by the utter hopelessness in a country where money was largely unknown, and the lack of basic material improvements--the windows, he noticed, did not operate on hinges, but had to be held up by hand, making the houses unbearably stuffy.

He was even more struck by the contrast between places where markets thrived and those where they didn't. In Old Aberdeen, where "commerce was yet unstudied," Johnson found nothing but decay, whereas New Aberdeen, which "has all the bustle of prosperous trade," was beautiful, opulent, and promised to be "very lasting."

Johnson also understood that what Smith would later call the division of labor was instrumental for human happiness and progress. "The Adventurer 67," which he wrote in 1753 at the height of a commercial boom (and 23 years before Smith published "The Wealth of Nations"), delights in the sheer number of occupations available in a commercial capital like London.

For the full commentary, see:

ELIZA GRAY. "Samuel Johnson and the Virtue of Capitalism; The great 18th century writer on commerce and human happiness." The Wall Street Journal (Fri., Sept. 11, 2009): A19.

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

(p. W6) . . . "Rich" contains an interesting argument, if only one can find it. Mr. Samuel contends that the 20th century has seen the creation of a distinctly American "wealth culture" that is more democratic and more diverse than anything the world has seen before, and consequently more resilient.

. . .

The Reagan revolution, thanks to its lowered taxes and deregulated economy, ­produced a flood of new ­millionaires; it also removed some of the guilt that had come to cling to wealth. ­(President ­Reagan said that he wanted America to remain a country in which people could dare to be rich.) More than the ­Reaganauts, though, it was the computer geeks of Silicon ­Valley who both stimulated and legitimized wealth- ­creation. They not only ­pioneered a productivity ­miracle, they also embodied the "American" values of ­meritocracy and democracy, earning big rewards for big ­innovations and scattering stock options among their ­employees. America Online, Mr. Samuel ­observes, created 2,000 ­millionaires during the 1990s.

The road from the top-­hatted John D. Rockefeller to the be-chinoed Bill Gates is undoubtedly a long one, and yet, remarkably, much of the landscape of American wealth remains the same. The U.S. has a genius for producing entrepreneurs who can turn the latest technology into piles of gold. Less than 10% of today's rich inherited their wealth, for example, and many are ­"instapreneurs," transformed in an instant from ­penury to prosperity.

For the full review, see:

ADRIAN WOOLDRIDGE. "Review; The Evolution of Wealth; Discerning a distinctly American style of affluence." The Wall Street Journal (Fri., July 31, 2009): W6.

(Note: ellipses added.)

Reference to the reviewed book:

Samuel, Larry. Rich: The Rise and Fall of American Wealth Culture. New York: AMACOM, 2009.

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(p. A11) I think there are two major but not fully formed or fully articulated fears among thinking Americans right now, and the deliberate obscurity of official language only intensifies those fears.

The first is that Mr. Obama's government, in all its flurry of activism, may kill the goose that laid the golden egg. This is as dreadful and obvious a cliché as they come, but too bad, it's what people fear. They see the spending plans and tax plans, the regulation and reform hunger, the energy proposals and health-care ambitions, and they--we--wonder if the men and women doing all this, working in their separate and discrete areas, are being overseen by anyone saying, "By the way, don't kill the goose."

The goose of course is the big, messy, spirited, inspiring, and sometimes in some respects damaging but on the whole brilliant and productive wealth-generator known as the free-market capitalist system. People do want things cleaned up and needed regulations instituted, and they don't mind at all if the very wealthy are more heavily taxed, but they greatly fear a goose killing. Economic freedom in all its chaos and disorder has kept us rich for 200 years, and allowed us as a nation to be generous and strong at home and in the world. But the goose can be killed--by carelessness, hostility, incrementalism, paralysis, and by no one saying, "Don't kill the goose."

For the full commentary, see:

PEGGY NOONAN. "What's Elevated, Health-Care Provider? Economy of language would be good for the economy." Wall Street Journal (Sat., MAY 15, 2009): A11.

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"David Batker with his son Rafael de la Torre Batker, 9, who worried it might hurt the environment if he bought a new set of Legos." Source of photo and caption: online version of the NYT article quoted and cited below.

(p. A1) The thick-lined drawings of the Earth, a factory and a house, meant to convey the cycle of human consumption, are straightforward and child-friendly. So are the pictures of dark puffs of factory smoke and an outlined skull and crossbones, representing polluting chemicals floating in the air.

Which is one reason "The Story of Stuff," a 20-minute video about the effects of human consumption, has become a sleeper hit in classrooms across the nation.

. . .

. . . many children who watch it take it to heart: riding in the car one day with his parents in Tacoma, Wash., Rafael de la Torre Batker, 9, was worried about whether it would be bad for the planet if he got a new set of Legos.

"When driving by a big-box store, you could see he was struggling with it," his father, David Batker, said. But then Rafael said, "It's O.K. if I have Legos because I'm going to keep them for a very long time," Mr. Batker recalled.

. . .

(p. A12) "There was not one positive thing about capitalism in the whole thing," Mr. Zuber said.

Corporations, for example, are portrayed as a bloated person sporting a top hat and with a dollar sign etched on its front.

For the full story, see:

LESLIE KAUFMAN. " In Schools, a Cautionary Video About America and Its 'Stuff'." The New York Times (Mon., May 11, 2009): A1 & A12.

(Note: ellipses added; the online version of the title is: "A Cautionary Video About America's 'Stuff'.")

"A section of the video on toxic chemicals and production." Source of image and caption: online version of the NYT article quoted and cited above.

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Schumpeter would have loved the passage quoted below---it is a wonderful example for his argument that capitalism mainly benefits ordinary people of modest means.

(p. 147) Listen to how Borgenicht describes his decision to expand beyond aprons:

From my study of the market I knew that only three men were making children's dresses in 1890. One was an East Side tailor near me, who made only to order, while the other two turned out an expensive product with which I had no desire at all to compete. I wanted to make "popular price" stuff--wash dresses, silks, and woolens. It was my goal to produce dresses that the great mass of the people could afford, dresses that would--from the business angle--sell equally well to both large and small, city and country stores. With Regina's help--she always had excellent taste, and judgment--I made up a line of samples. Displaying them to all my "old" customers and friends, I hammered home every point--my dresses would save mothers endless work, the materials and sewing were as good and probably better than anything that could be done at home, the price was right for quick disposal.

Source:

Gladwell, Malcolm. Outliers: The Story of Success. New York, NY: Little, Brown, and Co., 2008.

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John Steele Gordon, the author of the sagacious commentary below, has also written a wonderful book called A Thread Across the Atlantic, which tells the story of how entrepreneur Cyrus Field persevered in his attempts to lay telegraphic cable across the Atlantic Ocean.

(p. A17) The Obama administration is bent on becoming a major player in -- if not taking over entirely -- America's health-care, automobile and banking industries. Before that happens, it might be a good idea to look at the government's track record in running economic enterprises. It is terrible.

In 1913, for instance, thinking it was being overcharged by the steel companies for armor plate for warships, the federal government decided to build its own plant. It estimated that a plant with a 10,000-ton annual capacity could produce armor plate for only 70% of what the steel companies charged.

When the plant was finally finished, however -- three years after World War I had ended -- it was millions over budget and able to produce armor plate only at twice what the steel companies charged. It produced one batch and then shut down, never to reopen.

Or take Medicare. Other than the source of its premiums, Medicare is no different, economically, than a regular health-insurance company. But unlike, say, UnitedHealthcare, it is a bureaucracy-beclotted nightmare, riven with waste and fraud. Last year the Government Accountability Office estimated that no less than one-third of all Medicare disbursements for durable medical equipment, such as wheelchairs and hospital beds, were improper or fraudulent. Medicare was so lax in its oversight that it was approving orthopedic shoes for amputees.

. . .

It is government's job to make and enforce the rules that allow a civilized society to flourish. But it has a dismal record of regulating itself. Imagine, for instance, if a corporation, seeking to make its bottom line look better, transferred employee contributions from the company pension fund to its own accounts, replaced the money with general obligation corporate bonds, and called the money it expropriated income. We all know what would happen: The company accountants would refuse to certify the books and management would likely -- and rightly -- end up in jail.

But that is exactly what the federal government (which, unlike corporations, decides how to keep its own books) does with Social Security. In the late 1990s, the government was running what it -- and a largely unquestioning Washington press corps -- called budget "surpluses." But the national debt still increased in every single one of those years because the government was borrowing money to create the "surpluses."

Capitalism isn't perfect. Indeed, to paraphrase Winston Churchill's famous description of democracy, it's the worst economic system except for all the others. But the inescapable fact is that only the profit motive and competition keep enterprises lean, efficient, innovative and customer-oriented.

For the full commentary, see:

JOHN STEELE GORDON. "Why Government Can't Run a Business; Politicians need headlines. Executives need profits." Wall Street Journal (Weds., MAY 21, 2009): A17.

(Note: ellipsis added.)

The wonderful book, I mentioned, is:

Gordon, John Steele. A Thread across the Ocean: The Heroic Story of the Transatlantic Cable. New York: Walker & Co., 2002.

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

(p. A13) One of the more interesting ideas found in this somewhat rambling book contends that "philanthropic" business activity is in fact at odds with what is best about capitalism itself and thus counterproductive.

Lawrence Summers, the former Harvard president and former Treasury secretary, states the difficulty succinctly: "It is hard in this world to do well. It is hard to do good. When I hear a claim that an institution is going to do both, I reach for my wallet. You should too." He offers as an example Fannie Mae and Freddie Mac, government-created corporations that were supposed to achieve a social goal -- affordable housing -- while operating as businesses. They did neither well, eventually leaving their catastrophic debts for taxpayers to pay.

U.S. Circuit Court Judge Richard Posner, along with other contributors, notes that companies often suffer losses when they set out to address a social problem. If they could really make a profit by doing good works, the argument goes, they would no doubt already be hard at it. But if they do good works at the expense of profit, they will become less efficient, making themselves more vulnerable to competitors. Economist Steven Landsburg suggests that companies sacrificing profit to accomplish philanthropic goals end up betraying their shareholders, who rightly expect the best return on investment. Sometimes acting philanthropically will result in an indirect business benefit, such as improving worker skills. In that case, philanthro-capitalism might be in a company's interest -- but Judge Posner and others of like mind suspect that such instances are rare.

Their skepticism echoes Milton Friedman's objections to "corporate social responsibility," expressed in a 1970 article that is usefully reprinted in the book's appendix.

For the full review, see:

LESLIE LENKOWSKY. "Bookshelf; The Do-Good Marketplace; Reducing poverty, improving lives - maybe 'philanthro-capitalism' is just another name for capitalism." Wall Street Journal (Fri., JANUARY 2, 2009): A13.

The book under review is:

Kinsley, Michael, and Conor Clarke, eds. Creative Capitalism. New York: Simon & Schuster, 2008.

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"Thomas Lee, one of the men featured in the documentary "A Father's Promise," watching a video of himself from 1996." Source of caption and photo: online version of the NYT review quoted and cited below.

(p. C11) The program, with Al Roker as host, follows up a "Dateline NBC" report from 1996 that recorded several births among black women at a Newark hospital and interviewed the unmarried fathers of the children as they earnestly vowed to be there as their babies grew up. The piece was an attempt to look at the alarming rate of fatherless households among blacks.

It is, of course, a problem that has not gone away since 1996, and Mr. Roker's program tracks down three of those newborns and the fathers who promised to stand by them. That none did -- jail, joblessness, depression and general irresponsibility intervened -- somehow isn't surprising.

. . .

. . . the Rev. Eugene F. Rivers of Azusa Community Church in Boston explains in very personal terms why he discounts the easy economic explanations that so often get the blame for fatherless households.

"I had a child out of wedlock," he says. "That was a bad decision. I can't say capitalism did it to me."

For the full review, see:

NEIL GENZLINGER. "Television Review; 'A Father's Promise'; Old Pledges Are Broken, Young Hope Stays Intact." The New York Times (Sat., February 7, 2009): C11.

(Note: ellipses added.)

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(p. 164) The reason the system of capitalism without capitalists is failing throughout most of Europe is that it misconceives the essential nature of growth. Poring over huge aggregations of economic data, economists see the rise to wealth as a slow upward climb achieved through the marginal productivity gains of millions of workers, through the slow accumulation of plant and machinery, and through the continued improvement of "human capital" by advances in education, training, and health. But, in fact, all these sources of growth are dwarfed by the role of entrepreneurs launching new companies based on new concepts or technologies. These gains generate the wealth that finances the welfare state, that makes possible the long-term investments in human capital that are often seen as the primary source of growth.

Source:

Gilder, George. Recapturing the Spirit of Enterprise: Updated for the 1990s. updated ed. New York: ICS Press, 1992.

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(p. 24) Within five years of his speculative note to Collinson, lightning rods had become a common sight on church steeples throughout Europe and America. Franklin's biographer Carl Van Doren aptly describes the astonishment that greeted these events around the world: "A man in Philadelphia in America, bred a tradesman, remote from the learned world, had hit upon a secret which enabled him, and other men, to catch and tame the lightning, so dread that it was still mythological."

Source:

Johnson, Steven. The Invention of Air: A Story of Science, Faith, Revolution, and the Birth of America. New York: Riverhead Books, 2008.

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(p. A7) Ayn Rand died more than a quarter of a century ago, yet her name appears regularly in discussions of our current economic turmoil. Pundits including Rush Limbaugh and Rick Santelli urge listeners to read her books, and her magnum opus, "Atlas Shrugged," is selling at a faster rate today than at any time during its 51-year history.

. . .

Rand . . . noted that only an ethic of rational selfishness can justify the pursuit of profit that is the basis of capitalism -- and that so long as self-interest is tainted by moral suspicion, the profit motive will continue to take the rap for every imaginable (or imagined) social ill and economic disaster. Just look how our present crisis has been attributed to the free market instead of government intervention -- and how proposed solutions inevitably involve yet more government intervention to rein in the pursuit of self-interest.

Rand offered us a way out -- to fight for a morality of rational self-interest, and for capitalism, the system which is its expression. And that is the source of her relevance today.

For the full commentary, see:

YARON BROOK. "Is Rand Relevant?" Wall Street Journal (Sat., MARCH 14, 2009): A7.

(Note: ellipses added.)

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(p. 144) The reason the system of capitalism without capitalists is failing throughout most of Europe is that it misconceives the essential nature of growth. Poring over huge aggregations of economic data, economists see the rise to wealth as a slow upward climb achieved through the marginal productivity gains of millions of workers, through the slow accumulation of plant and machinery, and through the continued improvement of "human capital" by advances in education, training, and health. But, in fact, all these sources of growth are dwarfed by the role of entrepreneurs launching new companies based on new concepts or technologies. These gains generate the wealth that finances the welfare state, that makes possible the long-term investments in human capital that are often seen as the primary source of growth.

Source:

Gilder, George. The Spirit of Enterprise. 1 ed. New York: Simon and Schuster, 1984.

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(p. 131) . . . suffusing all the most visionary and idealistic prose of leftist economics is the same essential dream of the same static and technocratic destiny: capitalism without capitalists. Wealth without the rich, choice without too many things to choose, political and intellectual freedom without a vulgarian welter of individual money and goods, a social revolution every week of so without all this disruptive enterprise.

Source:

Gilder, George. The Spirit of Enterprise. 1 ed. New York: Simon and Schuster, 1984.

(Note: ellipsis added.)

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The comments of Maart Laar, former prime minister of Estonia, are worth considering:

(p.A13) It is said that the only thing that people learn from history is that people learn nothing from history. Looking at how the world is handling the current economic crisis, this aphorism appears sadly true.

World leaders have forgotten how the collapse of Wall Street in 1929 developed into a world-wide depression. It happened not thanks to market failures but as a result of mistakes made by governments which tried to protect their national economies and markets. The market was not allowed to make its corrections. Government interventions only prolonged the crisis.

We may hope that, even as we see several bad signs of neo-interventionist attitude, all the mistakes of the 1930s will not be repeated. But it is clear that the tide has turned again. Capitalism has been declared dead, Marx is honored, and the invisible hand of the market is blamed for all failures. This is not fair. Actually it is not markets that have failed but governments, which did not fulfill their role of the "visible hand" -- creating and guaranteeing market rules. Weak regulation of the banking sector and extensive lending, encouraged by governments, are examples of this failure.

For the full commentary, see:

MART LAAR. "Economic Freedom Is Still the Best Policy." Wall Street Journal (Fri., FEBRUARY 13, 2009): A13.

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

(p. A8) William O. Perkins III says he turned a $1.25 million profit trading Goldman Sachs Group Inc. stock last week.

You would think that would count as a pretty good paycheck for the Houston energy trader. Instead, the experience left him so angry about the demise of capitalism that he says he has decided to spend his profits on advertisements attacking President George W. Bush's planned $700 billion Wall Street bailout.

. . .

So he says he bought Goldman Sachs at $129 a share. The stock fell, so he bought more at $100 a share. It fell again, and he bought at $90. The next day it rallied and he sold out at an average price of $130 a share, for a net gain of about $1.25 million over three days of trading, he said.

Trouble was, the stock didn't rally because of the fundamental strength of the company, Mr. Perkins said. It rallied because the federal government announced that it would rescue Wall Street from its own subprime follies, he said.

"The stock did OK because the government came in and said, 'No one can fail,'" he said. "It's capitalism on the way up and communism on the way down."

His success left him furious, and he decided that someone had to speak out about the damage such a plan would cause to a system based on the premise that risk can bring failure, as well as rewards.

For the full story, see:

MICHAEL M. PHILLIPS. "Trader Makes a Quick $1.25 Million on Rescue, Then Slams It." The Wall Street Journal (Weds., SEPTEMBER 24, 2008): A10.

(Note: ellipsis added.)

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Source: scan (and crop) of the cover of the May 23, 1983 issue of Forbes .

In the May 23, 1983 issue of Forbes there appeared a now-famous essay by the late and great management guru Peter Drucker in which he pointed out that 1983 was the centennial of the birth of both John Maynard Keynes and Joseph A. Schumpeter. He noted that in the decades since the great economists' passing, the academic and policy worlds worshiped at the feet of Keynes, and all but ignored Schumpeter (hence the many candles in front of the Keynes portrait on the cover, and the single, small candle in front of the Schumpeter portrait).

But Drucker argued that the world had gotten it wrong. Schumpeter was more important because he had understood a crucial truth: the process of creative destruction is indeed the essential fact about capitalism.

The reference for the original Drucker essay is:

Drucker, Peter F. "Modern Prophets: Schumpeter or Keynes?" Forbes, May 23, 1983, 124-28.

The reference to the reprint of the Drucker essay is:

Drucker, Peter F. "Modern Prophets: Schumpeter or Keynes?" In The Frontiers of Management New York: Penguin Putnam, Inc., 1999, 104-15.

A typo-laden version of the essay has been posted on the web at:

http://www.peterdrucker.at/en/texts/proph_01.html

(Note: I thank Aaron Brown for alerting me to the neat cover that appears at the top of this entry).

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(p. W1) The 2000 film "Billy Elliot" was a surprise hit. It's an absorbing drama about personal transformation and the power of art to ennoble the human spirit. "Billy Elliot: The Musical" -- the noise is supplied by Sir Elton John -- is a depressing spectacle about partisan politics and the ephemeral power of schlock.

. . .

The musical, a campy, anticapitalist confection, is just one of the latest prepackaged exercises in "transgression." Maybe it's "Corpus Christi," Terrence McNally's play about a gay Jesus Christ. Maybe it's "The Goat," Edward Albee's play celebrating bestiality, or a production (p. W4) of "The Flying Dutchman" in which the heroine sports posters of Che Guevara and Martin Luther King on her bedroom wall. The point about these unpleasant offerings is not how outrageous but how common they are.

. . .

In the film, there was one extended reference to Margaret Thatcher. Mrs. Wilkinson's middle-class drink-sodden husband (tellingly made "redundant" -- that is, laid off) praises the prime minister for showing down the miners. He is hardly a sympathetic figure, but he had a point: If it costs more money to get the coal out of the ground then you make from selling it, why keep the pit open?

If there were truth in advertising, the musical would have been called "Billy Elliot, The Musical, Featuring Margaret Thatcher as the Incarnation of Evil." She is roundly abused by several characters in the opening scenes, is the object of casual calumny throughout the show, and features in a Christmas children's song -- replete with gigantic scary Thatcher masks and puppets -- whose refrain is "Merry Christmas, Maggie Thatcher. We all celebrate today because it's one day closer to your death." Nice stuff, eh?

In one sense, "Billy Elliot: The Musical" represents a growth enterprise. Everywhere you turn these days, you are met not only with celebrations of the vulgar but also entertainments that pretend to be brave, challenging "interrogations" of established taste which in fact are simply reflections of established taste. The little sermons about Thatcher and capitalism and bigotry are presented as if they were fresh thoughts designed to disturb the dogmatic slumbers of the audience. In fact, they simply reinforce the left-liberal clichés audiences everywhere internalized decades ago. It's an odd phenomenon. In theaters and museums across the Western world you find audiences applauding sentiments that, were they translated into the real world, would spell their demise.

Perhaps it's an instance of what Lenin was talking about when he said that the bourgeoisie was so rotten that it would sell the rope with which it was to be hanged. The matinee I attended was packed to the last emergency exit with a cheery crowd of nice, middle-class folks who cheered and clapped and whistled and bravoed.

. . .

The impressive thing about "Billy Elliot" the film is its dramatic enactment of serious questions. "Billy Elliot: The Musical" spoofs and sentimentalizes those questions, replacing them with a series of political sermons and distracting gymnastic exhibitions. In 1964, Susan Sontag famously said that the "ultimate Camp statement" was "It's good because it's awful." Sontag wrote as an enthusiast for Camp. I have no doubt that she would have emerged happy from "Billy Elliot: The Musical." "The whole point of Camp," she wrote, "is to dethrone the serious."

For the full commentary, see:

ROGER KIMBALL. "Culture; A Clumsy Mix of Art and Politics; Broadway turns subtle themes into simplistic fare in shows like 'Billy Elliot'." Wall Street Journal (Sat., DECEMBER 13, 2008): W1 & W4.

(Note: ellipses added.)

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Photograph by Art Diamond.

(p. 143) . . . capitalism creates a critical frame of mind which, after having destroyed the moral authority of so many other institutions, in the end turns against its own; the bourgeois finds to his amazement that the rationalist attitude does not stop at the credentials of kings and popes but goes on to attack private property and the whole scheme of bourgeois values.

The bourgeois fortress thus becomes politically defenseless. Defenseless fortresses invite aggression especially if there is rich booty in them. Aggressors will work themselves up into a state of rationalizing hostility---aggressors always do.

Source:

Schumpeter, Joseph A. Capitalism, Socialism and Democracy. 3rd ed. New York: Harper and Row, 1950.

Photograph by Art Diamond.

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Source of book image: http://ecx.images-amazon.com/images/I/51rILrqBegL._SS500_.jpg

(p. A17) . . . other farm alumni make no pretense to continuing the revolution but instead engage in the boomer habit of replacing youthful extremism with a middle-aged version: "We used to think money was the least important thing. Now I can see that it's the most important," says one former commune member, sounding like a budding Randian. "Money buys freedom."

Few of the farm friends are terribly likable or sympathetic -- with the notable exception of Tim, an "alienated citizen" of the farm while he lived there. Tim found the commune's group dynamics stifling. He wanted time to himself and was promised that he could build his own room and work space in the barn, but the objections of others to his solitary plans thwarted him at nearly every turn.

Of the farm's whole New Age mission, Tim remarks: "The error was, I think, imagining that there was somewhere new to go, someone new to be. It became increasingly clear that a closed system of myth did not jibe with the world as it really was." Looking later at the outside world, Tim saw "a system formed less from malice than from a kind of natural order, less from inordinate greed than from longings much like our own for privacy, comfort, individual freedom, and one's familiar or chosen way of life." Unfortunately, "Farm Friends" spends too little time with Tim.

For the full commentary, see:

PAUL BESTON. "Bookshelf; A Look Back at the New Age." Wall Street Journal (Tues., July 22, 2008): A17.

(Note: ellipsis added.)

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(p. 178) It was a bridge across the Niagara that would change life for the nail and wire makers. In 1831 a German engineer had emigrated from Mühlhausen in Saxony to America, where he founded the city (p. 179) of Saxonburg, Pennsylvania (having refused to settle in the American South because of his views on slavery). He then worked as a farmer, as a surveyor on the Pennsylvania Canal and finally as a railway engineer. His name was John Roebling, and he had a strange obsession with wire ropes. Since nobody in America had ever tried to make that kind of rope, the idea was not easy to promote. After failing to interest the firm of Washburn & Company, in Worcester, Massachusetts (we will return to this form in our story), in 1848 Roebling moved to Trenton, New Jersey, and set up on his own.

After practicing his technique on a number of small bridges in Pennsylvania and Delaware, Roebling finally got a contract for the 3,640 wires into a compact, uniformly tensioned wire cable. Then, using a kite to get the cable to the other side of the river, he went on to finish the first-ever wire suspension bridge, 821 feet in length and strong enough to take the full weight of a train. The bridge opened to rail traffic on March 16, 1855.

Because of his success at Niagara, Roebling's cable-spinning technique soon became standard on all suspension bridges. He put his name in the history books with his next job: the Brooklyn Bridge.

Source:

Burke, James. The Pinball Effect: How Renaissance Water Gardens Made the Carburetor Possible - and Other Journeys. Boston: Back Bay Books, 1997.

(Note: ellipsis added.)

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"This terra-cotta vessel, from the Hittite site in Turkey, looks strikingly modern." Source of photo and caption: online version of the WSJ article quoted and cited below.

(p. D7) The show whisks us along on complementary interlocking narratives that take the visitor down a spaghetti junction of cultural confluences. We learn that in the 1950s a prominent Turkish archaeologist excavated a site known locally as Kultepe. It yielded a vast hoard of cuneiform tablets that record in detail the town's trade in copper and numerous aspects of its domestic life, including letters home -- many of which are on display. As a result, we know that Assyrian merchants in the copper trade moved en masse to Central Anatolia and founded the town, and many like it, to feed the burgeoning trade in what Ms. Aruz calls "the luxury goods of the time." She adds that "potentates competed to possess artifacts like these -- the more distant and exotic their origins, the more desirable because their possession denoted power and prestige."

Visitors should, in particular, feast their eyes on the smoothly burnished terra-cotta spouted vessels from Kultepe and Hittite sites in Turkey. Outlandishly geometric and eerily modern, futuristic even, they alone are worth the price of admission.

In following the visual motif of bull-leaping acrobats from Crete to Anatolia to Egypt on everything from Minoan vases to cylinder seals and carved boxes, the show makes the point that commerce in goods brought with it commerce in entertainment, music, ideas, gods and cults. Suddenly images of Sphinxes and Gryphons pop up all over the 15th-century B.C. geosphere, as do toys and board games and educational institutions.

For the full story, see:

SARAH E. NEEDLEMAN. "Doing the Math to Find the Good Jobs; Mathematicians Land Top Spot in New Ranking of Best and Worst Occupations in the U.S." The Wall Street Journal (Tues., Jan. 6, 2008): D2.

For the case for the complementarity between capitalism and culture, see:

Cowen, Tyler. Creative Destruction: How Globalization Is Changing the World's Cultures. Princeton, NJ: Princeton University Press, 2002.

"The cuneiform inscription . . . is the earliest-known written appearance of the word "freedom" (amagi), or "liberty." It is taken from a clay document written about 2300 B.C. in the Sumerian city-state of Lagash." Source of the cuneiform and the caption: http://www.libertyfund.org/aboutlogo.htm

(Note: ellipsis added.)

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We are often made to feel guilty for the suffering of other countries in "natural" disasters. But the deaths are more due to the lack of infrastructure, sound buildings and the like, which in turn are due to the countries' lack of economic growth, which in turn is due to their rejection of the process of capitalist creative destruction.

(p. 90) The simple truth is that money matters more than anything else in most disasters. Which is another way of saying that where and how we live matters more than Mother Nature. Developed nations experience just as many natural disasters as undeveloped nations. The difference is in the death toll. Of all the people who dies from natural disasters on the planet from 1985 to 1999, 65 percent came from nations with incomes below $760 per capita, according to the Intergovernmental Panel on Climate Change. The 1994 Northridge earthquake in California, for example, was similar in magnitude and depth to the 2005 earthquake in Pakistan. But the Northridge earthquake killed only sixty-three people. The Pakistan earthquake killed about a hundred thousand.

People need roofs, roads, and health care before quibbles like personality and risk perception count for much. And the effect is geometric. If a large nation raises its GNP from $2,000 to $14,000 per person, it can expect to save 530 lives a a year in natural disasters, according to a study by Matthew Kahn at Tufts University. And for those who survive, money is a form of liquid resilience: it can bring treatment, stability, and recovery.

Source:

Ripley, Amanda. The Unthinkable: Who Survives When Disaster Strikes - and Why. New York: Crown Publishers, 2008.

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"Investors renovated a terminal at Domodedovo and oversaw construction of a train line to Moscow." Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B9) MOSCOW -- A heated battle for passengers between the Russian capital's main airports offers an unlikely model of competition for the aviation industry.

In most cities, airports are monopolies. Even in cities that have more than one, including New York, Paris and Tokyo, airports are usually owned by the same operator. That means airlines can rarely make the kind of choices passengers take for granted, such as choosing an airport for its efficiency, shopping or lounges.

Not so in Moscow, where two international airports, Domodedovo and Sheremetyevo, owned by rival organizations, battle for business. The result is lower fees, better service and fast-improving facilities all around.

Domodedovo Airport, for example, recently convinced several top airlines to make it their Russian base, thanks to a major modernization that added more than 20 new restaurants, jewelry boutiques and a shop where passengers can rent DVDs to watch in booths.

Sheremetyevo Airport responded by building a fast rail link to Moscow, complete with a Starbucks at the airport station.

Moscow's airport rivalry highlights a paradox of the global aviation industry: Airlines compete fiercely with each other for customers, but they face many monopolist suppliers, such as air-traffic control systems, fuel distributors and airports. Resulting costs and poor services get passed on to travelers.

. . .

During Russia's privatization drive of the 1990s, local investors bought Domodedovo, which was previously Moscow's airport serving Soviet Central Asia. The investors, grouped into an upstart charter-airline operator, East Line Group, renovated a terminal at Domodedovo and oversaw construction of a train line to Moscow.

East Line charged airlines landing and operating fees that undercut Sheremetyevo by around 30%. For passengers, Domodedovo's rail link guaranteed a 40-minute trip to downtown Moscow. Private Russian carriers, largely frozen out of Aeroflot's base at Sheremetyevo, expanded quickly at the spacious Domodedovo.

East Line's big break came in 2003, when British Airways announced it would switch from Sheremetyevo to Domodedovo.

"The authorities were shocked that a major airline would leave the government airport," recalls Daniel Burkard, BA's former country manager for Russia.

For the full story, see:

DANIEL MICHAELS. "Moscow Points the Way With Airport Competition; While Most Nations Sport Monopolies, Rivalry Between Two Russian Gateways Ushers in Improvements for Carriers, Travelers." The Wall Street Journal (Mon., DECEMBER 1, 2008): B9.

(Note: ellipsis added.)

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

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Wabash economics professor Ben Rogge's best lecture focused on a question made famous by Schumpeter: "Can Capitalism Survive?" In some ways, Ben's message was a pessimistic one.

But near the end of his lecture, Rogge included the following quote from Schumpeter's Capitalism, Socialism and Democracy:

(p. xi) This leads to the charge of "defeatism." I deny entirely that this term is applicable to a piece of analysis. Defeatism denotes a certain psychic state that has meaning only in relation to action. Facts in themselves and inference from them can never be defeatist or the opposite whatever that might be. The report that a given ship is sinking is not defeatist. Only the spirit in which this report is received can be defeatist: The crew can sit down and drink. But it can also rush to the pumps.

Source of quote:

Schumpeter, Joseph A. Capitalism, Socialism and Democracy. 3rd ed. New York: Harper and Row, 1950.

Reference to Rogge's collection of essays that includes the title essay mentioned above:

Rogge, Benjamin A. Can Capitalism Survive? Indianapolis: Liberty Fund, Inc., 1979.

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"Andrus Ansip, leader of Estonia, an ex-Soviet Republic." Source of caption and photo: online version of the NYT article quoted and cited below.

An earlier entry suggested that Estonian Prime Minister Andrus Ansip's support for Steve Forbes' flat tax, had helped Estonia achieve a high rate of growth.

Apparently there is some sentiment in Estonia to stay the course:

(p. B6) TALLINN, Estonia -- For nearly two decades, Estonia embraced capitalism with such gusto that it seemed to be channeling the laissez-faire philosophy of Milton Friedman. From its policies meant to attract foreign investors to its flat tax and freewheeling business culture, it stood out as the former Soviet republic most adept at turning post-Communist chaos into a thriving market economy.

Now Estonians, and some of their Baltic neighbors, are slogging through their first serious economic downturn since liberation from the Soviet grip in the early 1990s.

. . .

Whatever happens, government officials say there will be no betrayal of Friedman's philosophy. "We will stay a laissez-faire economy," said Juhan Parts, Estonia's minister of the economy.

. . .

"I'm an optimist," said Marje Josing, director of the Estonian Institute for Economic Research. "Fifteen years ago things looked bad, but they managed. A little real-life pressure won't hurt."

Indeed, so far the downturn has done little to discourage Estonia's ambitious entrepreneurs. If anything, it has made them look more avidly elsewhere for growth.

"Estonia may be a small country," Tarmo Prikk, chief executive of Thulema, an office furniture maker, said with a laugh. "But my ego is bigger."

For the full story, see:

CARTER DOUGHERTY. "Estonia's Let-It-Be Economy Is Rattled by Worldwide Distress." The New York Times (Fri., October 10, 2008): B6.

(Note: ellipses added.)

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From McCraw's summary of a brief Schumpeter essay published in 1943 in Seymour Harris' Postwar Economic Problems:

(p. 424) Schumpeter went on to argue that both in the United States and in capitalist countries abroad, a high rate of public spending during the postwar period would likely evolve into total government control of investment.   . . .    Some industries might be nationalized, and if the government "should try to run the nationalized industries according to the principles of business rationality, Guided Capitalism would shade off into State Capitalism, . . . "

. . .

The overall result would likely be "an amphibial state for the calculable future." The amphibial state might well generate frictions among business, labor, and government and would not benefit from the "motive power" of either capitalism or socialism.

Source:

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

(Note: ellipses added.)

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   Source of table:  "World Publics Welcome Global Trade -- But Not Immigration." Pew Global Attitudes Project, a project of the PewResearchCenter. Released: 10.04.07 dowloaded from: http://pewglobal.org/reports/display.php?ReportID=258

(p. A10) WASHINGTON, Oct. 4 — Buoyed and battered by globalization, people around the world strongly view international trade as a good thing but harbor growing concerns about its side effects: threats to their cultures, damage to the environment and the challenges posed by immigration, a new survey indicates.

In the Pew Global Attitudes Project survey of people in 46 countries and the Palestinian territories, large majorities everywhere said that trade was a good thing. In countries like Argentina, which recently experienced trade-based growth, the attitude toward trade has become more positive.

But support for trade has decreased in recent years in advanced Western countries, including Germany, Britain, France and Italy — and most sharply in the United States. The number of Americans saying trade is good for the country has dropped by 19 percentage points since 2002, to 59 percent.

“G.D.P. growth hasn’t been as dramatic in these places as in Latin America or Eastern Europe,” said Andrew Kohut, president of the Pew Research Center, referring to gross domestic product, the total value of the goods and services produced in a country. “But worldwide, even though some people are rich and some are poor, support for the basic tenet of capitalism is pretty strong.”

For the full story, see: 

BRIAN KNOWLTON. "Globalization, According to the World, Is a Good Thing. Sort Of."  The New York Times   (Fri., October 5, 2007):  A10. 

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In Kirckcaldy, Gordon Brown, the man on the right, tries to persuade the natives to vote for the Labor Party.  Source of the photo:  online version of the NYT article cited below.

Many years ago, we took the train from Edinburgh to spend a few hours in Kirkcaldy, the birthplace of Adam Smith.  I was surprised at how little there was to honor Smith in the town where he was born and raised.  There was a small cafe/theatre named after Smith.  A small crystal shop sold some shot glasses with Smith's image engraved on them.  And there was a small plaque, above a no-parking sign, on the main street, at the spot where Smith's family home had been. 

I remember asking a very polite young father with two or three small children in tow, why there was so little of Smith in Kirckaldy?  With a twinge of something like regret, he said that everyone in that part of Scotland supported Labor, and they saw Smith as supporting capitalism, and so did not like him much.

It was a crowded Saturday shopping day when Jeanette took my picture in front of the small plaque.  Incredulous passers-by turned and glanced in my direction, probably wondering why the crazy American wanted his picture taken next to a no-parking sign.  

For the sake of Kirkcaldy, and Britain, let us hope that Gordon Brown has read a bit of the work of his fellow Kirkcaldy native son:

(p. A10) KIRKCALDY, Scotland, April 30 — Gordon Brown, Britain’s presumed prime minister-to-be, is usually associated with a somewhat dour manner and a mastery of statistics. But here, he displays other skills — a bolt-on smile and a ready handshake to work sparse crowds between the discount stores on the High Street, asking parents with strollers whether their new babies are keeping them awake at night, and inquiring whether the men support the local Raith Rovers soccer team.

. . .

“This is a big choice on Thursday, between those who want to break up Britain and those who want to build up Scotland,” Mr. Brown, currently Britain’s chancellor of the exchequer, told students at Adam Smith College, named for the 18th-century economist who was born here.

. . .

Mr. Brown, who is not standing in these elections, came to town, alongside the choppy waters of the Firth of Forth, to support the Scottish Labor campaign and resist the nationalists.

“I do not think the Scottish people want to see the breakup of the union” that makes up Britain, he said here in Kirkcaldy (pronounced kerr-CUDDY).

But advocates of independence say it would propel Scotland to a bright future, as viable as any other small European state.

For the full story, see: 

ALAN COWELL.  "Elections in Britain Reveal a Scottish Line in the Sand."  The New York Times  (Weds., May 2, 2007):  A10.

(Note:  ellipses  added.)

    Source of the map:  online version of the NYT article cited above.

   Art Diamond in Kirkcaldy in 1994 at location (I think on High Street) where  Adam Smith's boyhood home used to be.  (Photo by Jeanette Diamond.)

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   Dubai skyline.  Source of photo:  online version of the WSJ commentary quoted and cited below.

(p. A9) Dubai, which is part of the United Arab Emirates, represents turbo-charged free-market capitalism at its purest -- sometimes crass, often over-the-top, and always in motion. Home to more than 1.2 million people, more than 80% of whom are resident aliens, Dubai is as much a multicultural melting pot as New York City was in its late 19th century heyday. And like New York then, Dubai teems with winners and losers, the rich and not-so-rich, and immigrants who often find that life in the glittering metropolis is cold, hard and unfair. But the government maintains order, spends billions on infrastructure and is dedicated to establishing the city-state as a global capital of, well, capital.

. . .

Seeing Dubai as an economic model for other parts of the Arab world is admittedly a challenge: Like Singapore, it has the virtues of a small ruling class, a tiny population and not much territory, and that is not something Egypt or Syria could emulate. But as a cultural model, or an attitude, it does offer an alternate vision of the future, one with its own excesses and vices for sure, but still free of the divisiveness and religious conflict that has become the assumed status quo in other parts of the Middle East.

Dubai should not be written off as little more than an Arab Las Vegas. It deeply challenges the assumption that Muslims, Christians and Jews cannot find common ground and work together to construct a shared future. Dubai is proof, not perfect, but real, that they can.

For the full commentary, see: 

ZACHARY KARABELL. "City of Dreams." The Wall Street Journal  (Sat., March 17, 2007):  A9.

(Note:  ellipsis added.)

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Lots of people are building new IT companies. You can start a company and sell it to Yahoo! or Google in a couple of years. But so can anyone else. Aerospace is different. To paraphrase John F. Kennedy in 1962: We choose to go to the moon not because it's easy, but because it's hard.

That's why, as a long-time investor in IT and Internet start-ups, I'm now spending more and more time on private aviation and commercial space start-ups. I'm trailing an illustrius crew of IT pioneers: Elon Musk (Space-X, rockets, formerly with PayPal), Vern Raburn (Eclipse Aviation, very light jets, formerly at Microsoft, Symantec and Lotus), Jeff Bezos (Blue Origin, rockets, and still at Amazon, too!), Jeff Greason (XCOR, rockets and formerly with Intel) and Ed Iacobucci (DayJet, air taxi operator, and founder of Citrix).

. . .

On the space side, there's a . . . strong parallel with the world of IT. The establishment in "space" is the government and especially the military, just as it once was (along with academia) for the Internet. I remember the days when commerce on the Internet was considered sleazy—but look at the innovations and productivity it unleashed.

In the same way, the current priests of space are dismayed by the privately funded space start-ups—unsafe, sleazy, frivolous. Imagine: Ads on the side of a rocket ship! Well, why not, if it helps pay for the fuel... and the R&D that designed the thing?

For the full commentary, see: 

ESTHER DYSON  "New Horizons for the Intrepid VC."  The Wall Street Journal  (Tues., March 20, 2007):  A19.

(Note:  ellipses added, except for the ellipsis following the word "fuel" which was in the original.)

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In Free to Choose, Milton Friedman compared Hong Kong's free market, with India's state control of the economy.  The dynamism and growth of Hong Kong was a stark contrast to the inertia and stagnation of India.  In the decades since Free to Choose, India has become more free and, alas, Hong Kong less free:   

(p. A14) . . . it was sadly unsurprising to see Hong Kong's current leader, Donald Tsang, last month declare the death of the policy on which the territory's prosperity was built.

The really amazing phenomenon is that, for half a century, his predecessors resisted the temptation to tax and meddle.  Though a colony of socialist Britain, Hong Kong followed a laissez-faire capitalist policy, thanks largely to a British civil servant, John Cowperthwaite.  Assigned to handle Hong Kong's financial affairs in 1945, he rose through the ranks to become the territory's financial secretary from 1961-71.  Cowperthwaite, who died on Jan. 21 this year, was so famously laissez-faire that he refused to collect economic statistics for fear this would only give government officials an excuse for more meddling.  His successor, Sir Philip Haddon-Cave, coined the term "positive noninterventionism" to describe Cowperthwaite's approach.

The results of his policy were remarkable.  At the end of World War II, Hong Kong was a dirt-poor island with a per-capita income about one-quarter that of Britain's.  By 1997, when sovereignty was transferred to China, its per-capita income was roughly equal to that of the departing colonial power, even though Britain had experienced sizable growth over the same period.  That was a striking demonstration of the productivity of freedom, of what people can do when they are left free to pursue their own interests.

For the full commentary, see: 

MILTON FRIEDMAN.  "Hong Kong Wrong."  Wall Street Journal  (Fri., October 6, 2006):  A14.

(Note:  ellipsis added.)

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(p. W11) The main problem with Indian reservations isn't, as some argue, that they were established on worthless tracts of grassland. Consider the case of Buffalo County, S.D., which Census data reveal to be America's poorest county. Some 2,000 people live there. More than 30% of the homes are headed by women without husbands. The median household income is less than $13,000. The unemployment rate is sky high.

Just to the east of Buffalo County lies Jerauld County, which is similar in size and population. Yet only 6% of its homes are headed by women without husbands, the median household income is more than $30,000, and the unemployment rate hovers around 3%. The fundamental difference between these two counties is that the Crow Creek Indian Reservation occupies much of Buffalo County. The place is a pocket of poverty in a land of plenty.

Maybe we should give land back to the rez-dwellers, so that they may own private property the way other Americans do. Currently, the inability to put up land as collateral for personal mortgages and loans is a major obstacle to economic development. This problem is complicated by the fact that not all reservations have adopted uniform commercial codes or created court systems that are independent branches of tribal government -- the sorts of devices and institutions that give confidence to investors who might have the means to fund the small businesses that are the engines of rural economies.

. . .

. . . the real tragedy is that reservations, as collectivist enclaves within a capitalist society, have beaten down their inhabitants with brute force rather than lifting them up with opportunity. As their economies have withered, other social pathologies have taken root: Indians are distressingly prone to crime, alcoholism and suicide. Families have suffered enormously. About 60% of Indian children are born out of wedlock. Although accurate statistics are hard to come by because so many arrangements are informal, Indian kids are perhaps five times as likely as white ones to live in some form of foster care. Their schools are depressingly bad.

Even if casino revenues were able to address these soul-crushing problems -- a doubtful proposition -- most reservations are too isolated geographically to profit from big-dollar gambling. Yet the rise of the casinos may help point the way forward: Their ability to flourish contradicts the tenured Marxists in ethnic-studies departments who claim that communitarian Indian cultures aren't compatible with market capitalism. After all, it takes entrepreneurship to run some of the world's biggest casinos.

What's more, this modern-day entrepreneurship is part of a long tradition: Meriwether Lewis (of Lewis & Clark fame) described the Chinooks as "great hagglers in trade." I once visited Poverty Point, a 3,000-year-old set of earthen mounds in Louisiana; the museum there displayed ancient artifacts found at the site, including copper from the Great Lakes and obsidian from the Rockies. These prehistoric Americans were budding globalizers, and there's no reason why their descendants should remain walled off from the world economy.

For the full story, see:

JOHN J. MILLER. "The Projects on the Prairie." The Wall Street Journal (Saturday, January 27, 2006): W11.(Note: ellipses added.)

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(p. 3) . . . the Gateses were not the first to see that money could sometimes move mountains in public health. They are following in the footsteps of the industrial giants of the late-19th century, said Dr. Howard Markel, director of the University of Michigan's Center for the History of Medicine.

These men also brought their fortunes to bear on social problems, and believed that they could succeed in philanthropy in much the way they had succeeded in business.

The donors of the robber-baron years started their philanthropy while still alive - a novel idea then. Andrew Carnegie, for example, gave away hundreds of millions of dollars to build libraries long before his death.

The largest bequest in American history prior to Carnegie's time was from Johns Hopkins, a Baltimore merchant, who left $7 million to found the eponymous university and hospital in 1873 - after he died.

But the closest parallel to the Gates approach to philanthropy is that of John D. Rockefeller, said Dr. Markel and Robert E. Kohler, a medical historian from the University of Pennsylvania.

Rockefeller built Standard Oil. Like Mr. Gates, he was the richest man of his time, and like him he was reviled as a greedy monopolist.

Rockefeller, like Mr. Gates, hired a professional to run his charities. And he, like Mr. Gates, used his money systematically to identify and attack important public health problems.

Rockefeller hired Frederick T. Gates, a former minister (and no relation to the Microsoft co-founder) as his philanthropic executive. Mr. Gates read an 1892 medical textbook that convinced him that diseases had causes, like germs and worms, that could be fought by science - not a universally accepted idea at the time.

The most famous health campaign he started with Rockefeller money was the drive, begun in 1907, to rid the rural American South of hookworm. Called "the germ of laziness" because it caused anemia and made victims lethargic and dull-witted, hookworm afflicted up to a third of Southerners.

The foundation set up clinics that administered purgatives and - because the worm is shed in feces and picked up by bare feet - taught people to dig deep privies and wear shoes. More Rockefeller money underwrote some of the 20th century's great public health drives, many using research done at Rockefeller University. Clinics were built in 50 other countries to eliminate hookworm worldwide. The effort failed because the worm can survive in soil and reinfect people; but the problem diminished, especially in parts of Asia.

In 1915, the foundation declared war on yellow fever; by 1932, scientists had realized that monkeys were also a reservoir for the virus, making eradication impossible, but by then Rockefeller scientists had invented the vaccine still used today.

Patty Stonesifer, chief executive of the Gates foundation, said she and William H. Gates Sr., the father of the software pioneer and co-chair of the foundation, consider the Rockefeller campaigns especially instructive. "We stood on their shoulders," she said.

. . .

As Ms. Stonesifer said admiringly of the Rockefeller campaign against hookworm: "A lot of people would say, 'you've got to reduce poverty to get rid of hookworm.' But the Rockefellers said, 'You don't need a 20-year intervention. You can use shoes.' "

For the full article, see:

DONALD G. McNEIL Jr. "The Rich, Sometimes, Are the Best Medicine." The New York Times, Section 4 (Sun., December 11, 2005): 3.

(Note: ellipses added.)

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