Main


December 17, 2013

Stem Cells Used to Create Tiny, Simple Human Livers



LiverBudsMadeFromStemCells2013-10-27.jpg "Researchers from Japan used human stem cells to create "liver buds," rudimentary livers that, when transplanted into mice, grew and functioned." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. A3) Researchers in Japan have used human stem cells to create tiny human livers like those that arise early in fetal life. When the scientists transplanted the rudimentary livers into mice, the little organs grew, made human liver proteins, and metabolized drugs as human livers do.

They and others caution that these are early days and this is still very much basic research. The liver buds, as they are called, did not turn into complete livers, and the method would have to be scaled up enormously to make enough replacement liver buds to treat a patient. Even then, the investigators say, they expect to replace only 30 percent of a patient's liver. What they are making is more like a patch than a full liver.

But the promise, in a field that has seen a great deal of dashed hopes, is immense, medical experts said.

"This is a major breakthrough of monumental significance," said Dr. Hillel Tobias, director of transplantation at the New York University School of Medicine. Dr. Tobias is chairman of the American Liver Foundation's national medical advisory committee.



For the full story, see:

GINA KOLATA. "Scientists Fabricate Rudimentary Human Livers." The New York Times (Thurs., July 4, 2013): A3.

(Note: the online version of the story has the date July 3, 2013.)


The research article is:

Takebe, Takanori, Keisuke Sekine, Masahiro Enomura, Hiroyuki Koike, Masaki Kimura, Takunori Ogaeri, Ran-Ran Zhang, Yasuharu Ueno, Yun-Wen Zheng, Naoto Koike, Shinsuke Aoyama, Yasuhisa Adachi, and Hideki Taniguchi. "Vascularized and Functional Human Liver from an iPSC-Derived Organ Bud Transplant." Nature (July 3, 2013) DOI: 10.1038/nature12271.






July 30, 2013

The French and Japanese Believe Water Cleans the Anus Better than Dry Paper



TheBigNecessityBK2013-07-21.jpg

















Source of the book image: http://jacketupload.macmillanusa.com/jackets/high_res/jpgs/9780805090833.jpg



(p. C34) Ms. George's book is lively . . . . It is hard not to warm to a writer who can toss off an observation like this one: "I like engineers. They build things that are useful and sometimes beautiful -- a brick sewer, a suspension bridge -- and take little credit. They do not wear black and designer glasses like architects. They do not crow."


. . .


In Japan, where toilets are amazingly advanced -- most of even the most basic have heated seats and built-in bidet systems for front and rear -- the American idea of cleaning one's backside with dry paper is seen as quaint at best and disgusting at worst. As Ms. George observes: "Using paper to cleanse the anus makes as much sense, hygienically, as rubbing your body with dry tissue and imagining it removes dirt."



For the full review, see:

DWIGHT GARNER. "BOOKS OF THE TIMES; 15 Minutes of Fame for Human Waste and Its Never-Ending Assembly Line." The New York Times (Fri., December 12, 2008): C34.

(Note: ellipses added.)

(Note: the online version of the review has the date December 11, 2008.)


The book under review, is:

George, Rose. The Big Necessity: The Unmentionable World of Human Waste and Why It Matters. New York: Metropolitan Books, 2008.






October 12, 2011

If Truman Had Not Used the Bomb, Hundreds of Thousands More American Soldiers Would Have Died



MostControversialDecisionBK2011-08-10.jpg












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






(p. A15) . . . , the author reminds us of the hundreds of thousands of Japanese who had died in the conventional bombings of places like Tokyo and Kyoto while Roosevelt was president, but with relatively little opprobrium attaching to FDR. Father Miscamble cites as well the horrific massacre of innocents for which the Japanese were responsible, a savagery still being unleashed in the summer of 1945, and the awful cost of battle in the Pacific, including 6,000 American dead and 20,000 wounded at Iwo Jima and 70,000 casualties suffered while capturing Okinawa. With these precedents, Herbert Hoover warned Truman that an invasion of the Japanese home islands could result in the loss of between half a million and a million American lives. Marshall, Leahy and Gen. Douglas MacArthur each had his own projected figures, none of them wildly different from Hoover's.

Under these circumstances, it was inconceivable that Truman would not have ordered the use of a potentially war-winning weapon the moment it could be deployed. It is impossible to imagine the depth of the public's fury if after the war Americans had discovered that their president, out of concern for his own conscience, had not used the weapons but instead condemned hundreds of thousands of American soldiers to certain death on the beaches and in the cities of mainland Japan.



For the full review, see:

ANNE JOLIS. "BOOKSHELF; In Defense Of 'Little Boy'; Herbert Hoover warned President Truman that invading Japan would cost at least half a million American lives." The Wall Street Journal (Weds., July 13, 2011): A15.

(Note: ellipsis added.)


Book reviewed:

Miscamble, Wilson D. The Most Controversial Decision: Truman, the Atomic Bombs, and the Defeat of Japan, Cambridge Essential Histories. New York: Cambridge University Press, 2011.






October 1, 2010

Japanese "Longevity" Due Partly to Government Over-Counting Centenarians



WataseMitsueJapanCentenerian2010-09-10.jpg"A Kobe city official, left, visited Mitsue Watase, 100, at her home last week as Japanese officials started a survey on the whereabouts of centenarians." Source of caption and photo: online version of the NYT article quoted and cited below. Source of caption and photo: online version of the NYT article quoted and cited below.


Oskar Morgenstern is mainly known as the co-author with John von Neumann of the book that started game theory. But it may be that his most important contribution to economics is a little known book called On the Accuracy of Economic Observations. In that book he gave examples of social scientists theorizing to explain 'facts' that turned out not to be true (such as the case of the 14 year-old male widowers).

The point is that truth would be served by economists spending a higher percent of their time in improving the quality of data.

One can imagine Morgenstern sadly smiling at the case of the missing Japanese centenarians:


(p. 1) TOKYO -- Japan has long boasted of having many of the world's oldest people -- testament, many here say, to a society with a superior diet and a commitment to its elderly that is unrivaled in the West.

That was before the police found the body of a man thought to be one of Japan's oldest, at 111 years, mummified in his bed, dead for more than three decades. His daughter, now 81, hid his death to continue collecting his monthly pension payments, the police said.

Alarmed, local governments began sending teams to check on other elderly residents. What they found so far has been anything but encouraging.

A woman thought to be Tokyo's oldest, who would be 113, was last seen in the 1980s. Another woman, who would be the oldest in the world at 125, is also missing, and probably has been for a long time. When city officials tried to visit her at her registered address, they discovered that the site had been turned into a city park, in 1981.

To date, the authorities have been unable to find more than 281 Japanese who had been listed in records as 100 years old or older. Facing a growing public outcry, the (p. 6) country's health minister, Akira Nagatsuma, said officials would meet with every person listed as 110 or older to verify that they are alive; Tokyo officials made the same promise for the 3,000 or so residents listed as 100 and up.

The national hand-wringing over the revelations has reached such proportions that the rising toll of people missing has merited daily, and mournful, media coverage. "Is this the reality of a longevity nation?" lamented an editorial last week in The Mainichi newspaper, one of Japan's biggest dailies.


. . .


. . . officials admit that Japan may have far fewer centenarians than it thought.

"Living until 150 years old is impossible in the natural world," said Akira Nemoto, director of the elderly services section of the Adachi ward office. "But it is not impossible in the world of Japanese public administration."



For the full story, see:

MARTIN FACKLER. "Japan, Checking on Its Oldest People, Finds Many Gone, Some Long Gone." The New York Times, First Section (Sun., August 15, 2010): 1 & 6.

(Note: ellipses added.)

(Note: the online version of the article is dated August 14, 2010 and has the somewhat shorter title "Japan, Checking on Its Oldest, Finds Many Gone"; the words "To date" appear in the online, but not the print, version of the article.)


The Morgenstern book is:

Morgenstern, Oskar. On the Accuracy of Economic Observations. 2nd ed. Princeton: Princeton University Press, 1965.





June 28, 2010

China Exports to U.S. Are Smaller than Trade Stats Imply



ImportedContentInExportsGraph2010-05-20.gif












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





(p. A2) The WTO says world trade fell 12.2% in 2009. On Friday, the organization predicted that trade would bounce back sharply this year, rising 9.5%.

But these figures don't tell the whole truth about trade.

According to some economists, trade in finished products--the things consumers actually buy, such as cars, computers and iPods--declined by much less than 12.2% last year. That is because as much as two-thirds of the value of goods that go into trade statistics represent intermediate parts, which are imported from other countries and used to make finished products that then get re-exported. Economists call this the "valued-added effect." If the value of imported parts were stripped out, however, global trade would have declined by between 4% and around 8% last year, economists say.

By ignoring the multinational composition of goods, conventional trade data also make trade imbalances between some trading partners seem larger than they really are.

China imports a huge quantity of parts from places like Japan and South Korea, but when those components are assembled into finished goods and shipped to the U.S., all the pieces count as Chinese exports, inflating the U.S. trade imbalance with its most polarizing trade partner.

A study by the Sloan Foundation in 2007, for example, found that only $4 of an iPod that costs $150 to produce is made in China, even though the final assembly and export occurs in China. The remaining $146 represents parts imported to China. If only the value added by manufacturers in China were counted, the real U.S.-China trade deficit would be as much as 30% lower than last year's gap of at $226.8 billion, according to a number of economists.

At the same time, the U.S. trade deficit with Japan would have been 25% higher than the $44.8 billion reported last year, because many goods that China and others export to the U.S. contain parts purchased in Japan.



For the full story, see:

JOHN W. MILLER. "THE NUMBERS GUY; Some Say Trade Numbers Don't Deliver the Goods ." The Wall Street Journal (Sat., MARCH 27, 2010): A2.





January 6, 2010

Replication Easier than "Sweat and Anguish" of First Discovery



(p. 137) No one will deny that Japan's triumph in semiconductors depended on American inventions. But many analysts rush on to a further theory that the Japanese remained far behind the United States until the mid- 1970s and caught up only through a massive government program of industrial targeting of American inventions by MITI.

Perhaps the leading expert on the subject is Makoto Kikuchi, a twenty-six-year veteran of MITI laboratories, now director of the Sony Research Center. The creator of the first transistor made in Japan, he readily acknowledges the key role of American successes in fueling the advances in his own country: "Replicating someone else's experiment, no matter how much painful effort it might take, is nothing compared with the sweat and anguish of the men who first made the discovery."

Kikuchi explains: "No matter how many failures I had, I knew that somewhere in the world people had already succeeded in making a transistor. The first discoverers . . . had to continue their work, their long succession of failures, face-to-face with the despairing possibility that in the end they might never succeed. . . . As I fought my own battle with the transistor, I felt this lesson in my very bones." Working at MITI's labs, Kikuchi was deeply grateful for the technological targets offered by American inventors.




Source:

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

(Note: ellipses in original.)





December 29, 2009

Intel's Computer-on-a-Chip "Was Achieved Largely by Immigrants from Hungary, Italy, Israel, and Japan"



(p. 111) By launching the computer-on-a-chip, Intel gave America an enduring advantage in this key product in information technology--an edge no less significant because it was achieved largely by immigrants from Hungary, Italy, Israel, and Japan. Intel's three innovations of 1971--plus the silicon gate process that made them the smallest, fastest, and best-selling devices in the industry--nearly twenty years later remain in newer versions the most powerful force in electronics.




Source:

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





December 25, 2009

After Lab Accident, Chip Innovator Shima Was Resilient



The incident recounted below is from the story of the development of the 4004 microprocessor (which was the first commercially available microprocessor). Hoff and Shima played important roles in the development of the chip.

I am not sure that the main "lesson" from the incident is about the importance of details. (After all, many entrepreneurs, including Simplot, embark on big projects without a clear idea of how to accomplish the details.) A bigger and sounder lesson may be the usefulness of resilience for successful inventors and entrepreneurs.


(p. 104) Hoff's counterpart at Busicom was a young Japanese named Masatoshi Shima who also had been thinking about problems of computer architecture. An equally formidable intellect, Shima came to the project through a series of accidents, beginning with a misbegotten effort to launch a small rocket using gunpowder he made by hand in his high school chemistry laboratory. As he carefully followed the formula, he claims to have had the mixture exactly right, except for some details that he overlooked. The mixture exploded, and as he pulled away his right hand, it seemed a bloody stump. At the local hospital (p. 105) a doctor with wide experience treating combat wounds felt lucky to save the boy's thumb alone,

This ordeal taught the teen-aged Shima that "details are very important." In the future he should "pay attention to all the details." But the loss of his fingers convinced his parents--and later several key Japanese companies--that the boy should not become a chemical engineer, even though he had won his degree in chemical engineering. Thus Shima ended up at Busicom chiefly because it was run by a friend of one of his professors.





Source:

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





November 22, 2009

World Trade Barriers Are Increasing



ProtectionistMeasuresBarGraph2009-10-28.gifThe small dark blue squares indicate the "number of nations that have imposed protectionist measures on each country" and the light blue squares indicate the "number of measures imposed on each category of goods." Source of quotations in caption and of graph: online version of the WSJ article quoted and cited below.


(p. A5) BRUSSELS -- This weekend's U.S.-China trade skirmish is just the tip of a coming protectionist iceberg, according to a report released Monday by Global Trade Alert, a team of trade analysts backed by independent think tanks, the World Bank and the U.K. government.

A report by the World Trade Organization, backed by its 153 members and also released Monday, found "slippage" in promises to abstain from protectionism, but drew less dramatic conclusions.

Governments have planned 130 protectionist measures that have yet to be implemented, according to the GTA's research. These include state aid funds, higher tariffs, immigration restrictions and export subsidies.


. . .


According to the GTA report, the number of discriminatory trade laws outnumbers liberalizing trade laws by six to one. Governments are applying protectionist measures at the rate of 60 per quarter. More than 90% of goods traded in the world have been affected by some sort of protectionist measure.



For the full story, see:

JOHN W. MILLER. "Protectionist Measures Expected to Rise, Report Warns." The Wall Street Journal (Tues., SEPTEMBER 15, 2009): A5.

(Note: ellipsis added.)





September 17, 2009

Electric Mitsubishis and Nissans May Leapfrog Hybrid Toyotas



(p. B6) Both Nissan and Mitsubishi have their own reasons for rushing out an all-electric car. Having invested little in hybrids, they hope to leapfrog straight to the next technology.


. . .


"You don't see many competing technologies survive in a key market for very long," said Mr. Shimizu, the Keio University professor.

And more often than not in the history of innovation, a change in the dominant technology means a change in the market leader.

"Electric cars are a disruptive technology, and Toyota knows that," Mr. Shimizu said. "I wouldn't say Toyota is killing the electric vehicle. Perhaps Toyota is scared."



For the full story, see:

HIROKO TABUCHI. "The Electric Slide." The New York Times (Thursday, August 20, 2009): B1 & B6.

(Note: The online version of the article had the title: "Toyota, Hybrid Innovator, Holds Back in Race to Go Electric.")

(Note: ellipsis added.)





June 24, 2009

"Clear Relationship in Rice Farming Between Effort and Reward"



(p. 236) What redeemed the life of a rice farmer, however, was the nature of that work. It was a lot like the garment work done by the Jewish immigrants to New York. It was meaningful. First of all, there is a clear relationship in rice farming between effort and reward. The harder you work a rice field, the more it yields. Second, it's complex work. The rice farmer isn't simply planting in the spring and harvesting in the fall. He or she effectively runs a small business, juggling a family workforce, hedging uncertainty through seed selection, building and managing a sophisticated irrigation system, and coordinating the complicated process of harvesting the first crop while simultaneously preparing the second crop.

And, most of all, it's autonomous. The peasants of Europe worked essentially as low-paid slaves of an aristocratic landlord, with little control over their own destinies. But China and Japan never developed that kind of oppressive feudal system, because feudalism simply can't work in a rice economy. Growing rice is too complicated and intricate for a system that requires farmers to be coerced and bullied into going out into the fields each morning. By the fourteenth and fifteenth centuries, landlords in central and Southern China had an almost completely hands-off relationship with their tenants: they would collect a fixed rent and let farmers go about their business.

"The thing about wet-rice farming is, not only do you (p. 237) need phenomenal amounts of labor, but it's very exacting," says the historian Kenneth Pomerantz. "You have to care. It really matters that the field is perfectly leveled before you flood it. Getting it close to level but not quite right makes a big difference in terms of your yield. It really matters that the water is in the fields for just the right amount of time. There's a big difference between lining up the seedlings at exactly the right distance and doing it sloppily. It's not like you put the corn in the ground in mid-March and as long as rain comes by the end of the month, you're okay. You're controlling all the inputs in a very direct way. And when you have something that requires that much care, the overlord has to have a system that gives the actual laborer some set of incentives, where if the harvest comes out well, the farmer gets a bigger share. That's why you get fixed rents, where the landlord says, I get twenty bushels, regardless of the harvest, and if it's really good, you get the extra. It's a crop that doesn't do very well with something like slavery or wage labor. It would just be too easy to leave the gate that controls the irrigation water open a few seconds too long and there goes your field."




Source:

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

(Note: italics in original.)





May 31, 2009

Entrepreneurs, Not MITI, Decided Japan Outcomes in '60s, '70s and '80s



(p. 164) Ishibashi's regime was followed in the early 1960s by the "income-doubling campaign" of his associate Hayato Ikeda, who assumed power in 1961 and continued the supply-side thrust. The result was a steady upsurge of domestic growth, with firms and industries rapidly gaining experience in intense rivalries at home before entering the global arena as low-cost producers, and with government cutting taxes and increasing revenues and savings.

It is from this domestic crucible of intense competition with normal rates of bankruptcy far above those in the United States, with scores of rivals in every field, that the great Japanese companies have emerged. At various times during the last three decades, for example, there have been 58 integrated steel firms, 50 motorbike companies, 12 auto firms, 42 makers of hand-held calculators, 13 makers of facsimile machines, and 250 producers of robots. Overlooking this welter are always the crested bureaucrats of MITI, sometimes offering useful aid and guidance--but at the center, deciding outcomes, have always been the entrepreneurs.



Source:

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





March 5, 2009

Japan's Stimulus Package Stimulated Debt, but Not Recovery


JapanGovInvestAndDebtGraphs.jpg




















Source of graphs: online version of the NYT article quoted and cited below.


(p. A10) In the end, say economists, it was not public works but an expensive cleanup of the debt-ridden banking system, combined with growing exports to China and the United States, that brought a close to Japan's Lost Decade. This has led many to conclude that spending did little more than sink Japan deeply into debt, leaving an enormous tax burden for future generations.

In the United States, it has also led to calls in Congress, particularly by Republicans, not to repeat the errors of Japan's failed economic stimulus. They argue that it makes more sense to cut taxes, and let people decide how to spend their own money, than for the government to decide how to invest public funds. Japan put more emphasis on increased spending than tax cuts during its slump, but ultimately did reduce consumption taxes to encourage consumer spending as well.



For the full story, see:

MARTIN FACKLER. "Japan's Big-Works Stimulus Is Lesson." The New York Times (Fri., February 5, 2009): A1 & A10.


MarineBridgeHamadaJapan.JPG "The soaring Marine Bridge in Hamada, Japan, built as a public works project, was almost devoid of traffic on a recent morning." Source of caption and photo: online version of the NYT article quoted and cited above.




March 2, 2009

Japan's Huge Stimulus Spending Led to Economic Stagnation


(p. A2) Rep. Paul Ryan of Wisconsin, a young and economically astute Republican leader, has numerous problems with the economic-stimulus package working its way through Congress, but essentially they boil down to this: He fears the U.S. is repeating the mistakes Japan made trying to get out of its own economic ditch in the 1990s.

The Ryan critique is important in part because it's popping up with increasing frequency among congressional Republicans.

. . .

Here's the critique in a nutshell: Japan in the early 1990s, like the U.S. today, saw a real-estate bubble burst, spawning a banking and credit crisis that drove the whole economy down, hard. The Japanese then tried stimulating the economy with giant doses of government spending, which didn't pep things up -- but did bring on deficits that required tax increases later, dragging out Japan's problems for years.



For the full commentary, see:

GERALD F. SEIB. "CAPITAL JOURNAL; Avoiding Japan's Stimulus Miscues." Wall Street Journal (Tues., FEBRUARY 2, 2009): A2.

(Note: ellipsis added.)




July 27, 2008

Solar Energy Costs Soar in Germany



(p. C1) Thanks to its aggressive push into renewable energies, cloud-wreathed Germany has become an unlikely leader in the race to harness the sun's energy. It has by far the largest market for photovoltaic systems, which convert sunlight into electricity, with roughly half of the world's total installations. And it is the third-largest producer of solar cells and modules, after China and Japan.


Now, though, with so many solar panels on so many rooftops, critics say Germany has too much of a good thing -- even in a time of record oil prices. Conservative lawmakers, in particular, want to pare back generous government incentives that support solar development. They say solar generation is growing so fast that it threatens to overburden consumers with high electricity bills.

. . .

(p. C7) At the heart of the debate is the Renewable Energy Sources Act. It requires power companies to buy all the alternative energy produced by these systems, at a fixed above-market price, for 20 years.

. . .

Christian Democrats, . . . , say the law has been too successful for its own good. Utilities, they note, are allowed to pass along the extra cost of buying renewable energy to customers, and there is no cap on the capacity that can be installed -- as exists in other countries to prevent subsidies from mushrooming.

At the moment, solar energy adds 1.01 euros ($1.69) a month to a typical home electricity bill, a modest surcharge that Germans are willing to pay. That will increase to 2.14 euros a month by 2014, according to the German Solar Energy Association.

But the volume of solar-generated energy is rising much faster than originally predicted, and critics contend that the costs will soar. Mr. Pfeiffer, the legislator, said solar power could end up adding 8 euros ($12.32) to a monthly electricity bill, which would alienate even the most green-minded. With no change in the law, he says, the solar industry will soak up 120 billion euros ($184 billion) in public support by 2015.



For the full story, see:

MARK LANDLER. "Solar Valley Rises in an Overcast Land." The New York Times (Fri., May 16, 2008): C1 & C7.

(Note: ellipses added.)





February 26, 2008

"Public Works Will Just Keep Going Round and Round and Round"



SuisawaTakuoEnvironmentalist.jpg "Environmentalists like Takuo Sugisawa say that restoring bends to the Kushiro actually might cause more damage." Source of caption and photo: online version of the NYT article quoted and cited below.


(p. A4) KUSHIRO, Japan -- In the early 1980s, engineers straightened out stretches of the Kushiro River, which had meandered some 100 miles under Hokkaido's big sky here in northern Japan, flowing through green hill country and rural towns, winding through the nation's largest wetland and this port city's downtown before emptying into the Pacific Ocean.

Later in November, work is to start again. But this time bulldozers will be moving earth to put curves back in a stretch of the river that had been straightened out, restoring its original, sinuous, shape.

. . .

. . . Trust Sarun Kushiro, a private environmental group that was a member of the committee that endorsed the project but voted against it, said that the reshaping would have little positive effect and that the construction itself would harm the environment. Stanching the flow of sediments from farmland and forests upstream, at their source, is more important, it argued.

And in a case of the left hand's not knowing what the right hand was stirring up, the Ministry of Agriculture had a project farther upriver that was sending mud and sand downstream, where Mr. Yoshimura's ministry is to curve the river, said Takuo Sugisawa, 61, the trust's secretary general. To rehabilitate farmland that had gradually become wetland, the ministry was draining existing land and moving earth there.

"The sediments flowing from upriver will quickly pile up where the river will be curved," Mr. Sugisawa said, adding that they would eventually bury the Kushiro wetland. To prevent that, workers will eventually have to remove the sediments that are bound to pile up in the recurved stretch, he said.

"So in the name of river management alone, they will be able once again to create public works in the form of removing soil," he said, walking along an asphalt road and across a bridge built to let trucks and bulldozers move earth for the curving project. "Public works will just keep going round and round and round."


For the full story, see:

NORIMITSU ONISHI. "KUSHIRO JOURNAL; Forced to Run Straight, a River Must Now Twist." The New York Times (Weds., November 7, 2007): A4.

(Note: ellipses added.)


KushiroRiverJapan.jpg A part of the Kushiro River where curves will be added back. Source of photo: online version of the NYT article quoted and cited above.


KushiroJapanMap.jpg







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





November 12, 2007

Strong Global Support for Free Markets

 

FreeMarketsPositiveViewTable.gif   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. 

 




August 15, 2007

Japanese Engineers Taking Bigger Risks and Getting Bigger Rewards

 

   In front is engineer Kazumitsu Nakamura, retired from Japan's Hitachi, and now working for a Hitachi subsidiary in Taiwan.  Source of photo:  online version of the NYT article cited below.

 

(p. C1)  HSINCHU, Taiwan — One of the hottest exports from Japan these days isn’t video games or eco-friendly cars.

It is engineers.

. . .

. . . , the recent export of job seek-(p. C5)ers is a sign of just how much Japan has changed during a decade of increased competition, corporate belt-tightening and the end of lifetime job guarantees. This harsher new world has forced Japan’s famously conservative salarymen to become more aggressive in their job choices, and to view their careers as something for their own benefit and not simply their companies’, employment experts say.

This shift in mindset also underscores how Japan’s long-closed economy is finally integrating with that of its neighbors. China has already replaced the United States as Japan’s biggest trading partner, and many Japanese now see their nation’s and their own personal future as linked to Asia’s red-hot economies.

“Salarymen are taking bigger risks,” said Mitsuhide Shiraki, a professor of economics at Waseda University in Tokyo. “They’re making a logical decision to work in Asia, where they are being better rewarded than in Japan.”   . . .

. . .

There has also been a growing number of retired engineers wanting to go to less-developed economies where their skills are still highly valued, allowing them to pursue second careers late in life.

“In Asia, we can keep contributing to society,” said Kazumitsu Nakamura, 64, a former engineer for Hitachi who quit to go to Taiwan, and was recently hired by a Hitachi subsidiary to train Taiwanese employees. “In Japan, we would just be collecting pensions.”

. . .

. . .   For Tatsuo Okamoto, a 51-year-old semiconductor engineer, the biggest change was the speed in decision-making at the Taiwanese company, Winbond Electronics, which hired him away from the Tokyo-based chip maker Renesas Technology two years ago.

Dr. Okamoto recalled one instance when a 15-minute chat in the hallway with Winbond’s president was enough to win immediate approval to purchase millions of dollars worth of factory equipment. The same decision in Japan would have taken days of committee meetings, he said.

Dr. Okamoto said the experience opened his eyes to the problems that were hobbling the competitiveness of Japan’s electronics industry.

“Joining a Taiwanese company was a high-risk, high-return decision,” Mr. Okamoto said. “But staying in Japan had become a high-risk, low-return proposition.”

 

For the full story, see: 

MARTIN FACKLER.  "A Japanese Export: Talent  Company; Technologists See Brighter Prospects in Other Parts of Asia." The New York Times  (Thurs., May 24, 2007):  C1 & C5.

(Note:  ellipses added.)

 

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

 




April 4, 2007

Preventing Creative Destruction Slows Economic Growth

 

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

 

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

 

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

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

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

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

 

For the full commentary, see: 

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

 




January 5, 2007

Toyota Turns from Incremental Change to Revolutionary Change

 

ToyotaEfficiencyGraph.gif   Source of graph:  online version of WSJ article cited below.

 

(p. A1)  TOYOTA CITY, Japan -- The world sees Toyota Motor Corp. as an unstoppable profit juggernaut, overtaking rivals one by one as it rolls toward replacing General Motors Corp. as the world's largest auto maker.

Not Katsuaki Watanabe.  Toyota's chief executive officer is a worried man.  He thinks Toyota is losing its competitive edge as it expands around the world.  He frets that quality, the foundation of its U.S. success, is slipping.  He grouses that Toyota's factories and engineering practices aren't efficient enough.  Within the company, he has even questioned a core tenet of Toyota's corporate culture -- kaizen, the relentless focus on incremental improvement.

U.S. and European car makers have spent years struggling to overhaul outdated operations and work practices to better compete with Toyota.  By some measures, some of those companies are catching up.  Now, driven by a severe dose of institutional paranoia, Mr. Watanabe is trying to move the target.

Mr. Watanabe, 64 years old, wants kakushin, or revolutionary change in how Toyota designs cars and factories.  He is pushing Toyota to reduce the number of components it uses in a typical vehicle by half -- a radical idea that would usher in a new chapter in car design.  He also wants to create new fast and flexible plants to assemble these simplified cars.

 

For the full story, see:

NORIHIKO SHIROUZU.  "Paranoid Tendency As Rivals Catch Up,Toyota CEO Spurs Big Efficiency Drive Culture of Institutional Worry Drives Mr. Watanabe; How Paint Is Like 'Fondue' Finding Limits to Improvement."  Wall Street Journal   (Sat., December 9, 2006):  A1 & A6.

(I thank Aaron Brown for bringing this article to my attention.)

 




November 16, 2006

Milton Friedman, Freedom's Friend, RIP

 

A week or so ago my mother and I were sharing our disappointment at the firing of Donald Rumsfeld, who we both thought was a good man.  She told me that she had thought he would have made a good President.  I told her that she was in good company, because in his memoirs, Milton Friedman had expressed the same thought (p. 391).

We were in very good company while Milton Friedman was with us, and I feel a sense of loss, both personally, and for the broader world. 

By chance, I sat behind Milton Friedman, and his wife and son, at the Rockefeller Chapel memorial service to honor Milton Friedman's good friend George Stigler.  I can't remember if Friedman spoke it at the service, or wrote it later, but I remember him saying (or writing) that the world was a darker place without Stigler in it. 

And it is darker yet, without Friedman in it.  (It is reported that he died of heart failure sometime early this morning at the age of 94.)

My first memory of meeting Milton Friedman was in the early 1970s at Wabash College.  My Wabash professor, Ben Rogge, was a friend of Friedman's.  They attended Mount Pelerin Society meetings together, and Rogge, along with his senior colleague John van Sickle, had invited Friedman to deliver a series of lectures at Wabash College, that became the basis of what remains Friedman's meatiest defense of freedom:  Capitalism and Freedom.  (Free to Choose is better known, broader, and important, but Capitalism and Freedom is more densely packed with stimulating argument, and provocative new ideas.)

The members of the small, libertarian Van Sickle Club were gathered around Friedman in a lounge at Wabash, and I remember Rogge asking Friedman:  'If there was a button sitting in front of you, that would instantly abolish the Food and Drug Administration, would you push it?'  I remember Friedman smiling his incredibly delighted smile, and saying simply, with gusto:  "yes!"

I remember attending some meetings at the University of Chicago, I think the first History of Economics Society meetings, with Rogge in attendance.  (This was in my first couple of years as a Chicago graduate student, when I was mainly doing philosophy.)  Stigler invited Rogge up for a drink, and Rogge said said 'sure' as long as Diamond could come along.  (E.G. West, the Adam Smith biographer, was also there, I think at Rogge's behest.)  The apartment had been Milton Friedman's for many years.  In fact I think he had built the several story apartment building, because he wanted convenient, comfortable living quarters close to his Chicago office.  Friedman's apartment occupied the top floor, and I vaguely recall, afforded a nice view of the campus. 

I lived for a year at International House, next to the Friedman apartment building.  I remember on Sunday morning's seeing Friedman dash into International House to buy his copy of the Sunday New York Times.  ("Dash" is too strong, but he certainly moved with more vigor than I ever have on Sunday mornings.)

When Friedman left Chicago for the Hoover Institute in California, he sold, or sublet his apartment to Stigler, who apparently used it on evenings when he did not want to drive out to his modest home in the Chicago suburb of Flossmoor.

I was stunned to be in the presence of Stigler in Milton Friedman's former abode.  (I seem to remember E.G. West seeming almost equally overwhelmed.)  I remember much of the time being spent with Stigler trying to convince Rogge to join him for golf the following day.  Rogge demurred because he was wanting to see, for the first time, I think, a newly born grandchild in the Chicago area.  (Family was extremely important to Rogge, both in theory, and in practice.)

I also remember Stigler asking Rogge about Rogge's having convinced Friedman to give a speech at a fund-raiser at Wabash.  Stigler said something to the effect that this was the level of favor that he could not ask often of Friedman, and did the cause really justify it.  (I think one of Stigler's sons had been a Wabash student while Rogge was Dean of Students at Wabash.)  Rogge seemed to appreciate Stigler's point, but seemed to believe that solidifying Wabash's endowment was a worthy enough cause.

(This, by the way, is ironic, since Rogge agreed with Adam Smith that endowments were apt to be used for purposes different from the donor's intent.  In the founding of Liberty Fund, Rogge had tried to persuade Pierre Goodrich to have the Fund spend all of its funds in some modestly finite number of years.)

After I gradually made the switch from philosophy to economics, at Chicago, I got to know Stigler fairly well, but unfortunately did not know Friedman, personally, as well.

I remember attending a reception at Chicago in honor of Friedman's winning the Nobel Prize in 1976.  (It was at that reception, that I first struck up a conversation with my good friend Luis Locay.)

I registered for Milton Friedman's price theory class the final time he taught it, I think.  It was in a large, dark tiered classroom.  At the beginning of every class, Friedman would almost bounce into the classroom, bursting with pent-up energy.  I do not smile easily, or often, but I always smiled when I saw Friedman.  There was so much good-will, joy in life, enthusiasm for ideas. 

During one of these entrances, I noticed that Friedman, well into his 60s, was wearing the counter-culture-popular 'earth shoes'; apparently he was out-front in footwear, as well as ideas.

One characteristic that came through in class, as well as in his public debates and interviews, was that he was focused on the ideas and not the personalities expressing them.  I remember seeing Friedman debating some union official on television.  He talked at one point about how he and the official had had to work hard in their youth.  Friedman seemed to like the union official; he just disagreed with some of his ideas, and wanted the union official and everyone else, to understand why.  By the end of the "debate", the union official had a warm, amused, expression on his face.

I remember once Friedman saying that more of us should speak out more often on more topics; that the bad consequences to us weren't as bad as we supposed.  Probably he was right; though he had a lot working in his favor---his quick-wittedness, his good will, his sense of humor, and probably his being so short in physical stature---it was probably hard for anyone to feel threatened by him, so they were more apt to let down their guard and listen to what he had to say.

One of the unfair hardships of some of Friedman's years at Chicago, was the constant harassment from a group of Marxist students called, I think, the Spartacus Youth League.  Whenever Friedman was scheduled to speak, they would disrupt the event, and try to prevent his speaking.

So when it was time to tape the discussion half-hours of each hour episode of the original "Free to Choose" series, the discussions were scheduled as invitation-only.  I was in the audience for two or three of the discussions.  (They were fine, but personally, I would have preferred another half hour of pure Friedman.)

 

As a poor graduate student, I counted myself extremely lucky to find an auto-repairman who was a wizard at finding creative ways to keep old cars running, at low repair cost.  He was a man of few words, put he kept the words he gave.

I ran into him and his wife in a little Lebanese restaurant that was run out of the secondary student union just down from I-House.  He invited me to sit with them, which I did.  I remember him telling me that they were gypsies, and him mentioning that people sometimes had the wrong idea about gypsies.  He told me that he had been raised never to go into debt.  He told me how cheap White Castle hamburgers used to be.  When I told him that I was studying economics, he surprised me by saying that Milton Friedman had been a customer of his, and that he really liked Milton Friedman.

This gypsy was a simple, decent, hard-working fellow.  I don't know, but I strongly guess that Friedman saw the good in this fellow, and treasured what he saw.  And the gypsy liked Milton Friedman back.

 

Whenever I saw Friedman interviewed on television, or read one of his letters, or op-ed pieces, in the Wall Street Journal, I would feel a bit more optimistic about freedom, and life.  A lot of people give up, at some point, but Friedman never did---he just kept on observing, and thinking, and speaking.  The last time I had any interaction with him was at the meetings of the Association of Private Enterprise Education (APEE) on April 4, 2005.  He was hooked up with the conference via video camera from an office in California.  He gave a brief presentation, and then spent quite some time answering questions.  (I recorded some of these in grainy, small video clips that can be viewed on my web site, or viewed on the web site of the APEE.)

I asked him a question about whether he agreed with Stigler in Stigler's memoirs that Schumpeter had something important to say about competition.  I wasn't as impressed by his answer to this question, as I was to some of his other answers.

I think that Schumpeter may be remembered as a crucial economist for our understanding of the process of capitalism:  innovative new products through creative destruction.  But if capitalist innovation prospers, part of the credit will belong to Milton Friedman.  

Friedman and Stigler were led into economics in part because of the challenge to capitalism posed by the Great Depression.  If depressions of that magnitude were an essential part of what capitalism was about, then a lot of people would prefer to have nothing to do with capitalism.  Schumpeter's response basically was to say that every once in awhile, really bad depressions will happen as part of the process of capitalism, and we just have to suck it up, and live through them. 

One of Milton Friedman's major contributions to economics, was to show that ill-advised government policies, such as a contraction of the money supply, were responsible for making the depression much deeper, and much longer than it needed to have been.  (See, e.g,  A Monetary History of the United States.)

In other words, he showed that Great Depressions are not an inescapable price we must pay if we choose to embrace the economic freedom, and the creative destruction, of capitalism.

 

When Friedman cleaned out his Chicago office to head for California, he left in the hallway for scavenging, extra copies of some of his books, and offprints of articles various academics had sent him.  So I have a Spanish copy of Capitalism and Freedom (even though I don't read Spanish), and several offprints of articles from distinguished economists who sent "best wishes" to "Milton." 

After the office was cleared out, I remember sticking my head in, and looking around the empty office, one final time, for sentiment's sake.  I was stunned to see a bright red, white and blue silk banner left hanging on the wall.  It was festooned with American flags, and said, in large letters:  "Buy American!" 

I felt anxious and confused:  was one of my heroes inconsistent on such a basic issue?  So I entered the office, and went over to the banner, and examined it more carefully.  It was then that I noticed, in small letters at the bottom of the banner:  "Made in Japan".

 

Some book references relevant to the discussion above:

Friedman, Milton. Capitalism and Freedom. Chicago: The University of Chicago Press, 1962.

Friedman, Milton, and Anna Jacobson Schwartz. A Monetary History of the United States, 1867-1960, Nber Studies in Business Cycles. Princeton: Princeton University Press, 1963.

Friedman, Milton, and Rose D. Friedman. Free to Choose: A Personal Statement. New York: Harcourt Brace Jovanovich, Inc., 1980.

Stigler, George J. Memoirs of an Unregulated Economist. New York: Basic Books, Inc., 1988.

West, E. G. Adam Smith: The Man and His Works: Arlington House, 1969.

 

 In vino veritas.  Photo from Tio Pepe Bodega, Jerez, Spain.  Photographer:  Dagny Diamond.

 

Continue reading "Milton Friedman, Freedom's Friend, RIP" »




March 27, 2006

The Case Against Privatizing the Post Office

 

The free market can be defended with a variety of plausible philosophical arguments. But most people care more about what "works" than what is "right." So in the constant struggle between free markets and the government, it may be useful to maintain the government's monopoly in delivering first class mail. That way when someone suggests a new intervention by the government, the free marketer can refute them with two persuasive words: "post office."

 

When it comes to first-class mail, the U.S. still does things the old-fashioned way, with one Postal Service. Not so in places like New Zealand and Sweden, which have opened their mail systems to private companies. The latest is Britain, where the Royal Mail lost its 350-year monopoly on delivery. At least 14 companies are now competing to sort and transport mail. British regulators believe competition will be good for the mail system. Japan is soon to follow. With the recent rise in U.S. stamp prices, expect more calls for privatization here too.

 

Source:

Lyric Wallwork Winik. "Intelligence Report; Is the Mailman Endangered?" Parade (Sun., March 19, 2006): 25.

 




December 12, 2005

"Fierce" Competition Even When One Firm has Half the Market

 

   Graph source: page C6 of article cited below.

 

(C1) YOKKAICHI, Japan - Nestled in a valley in central Japan, surrounded by forested hills and terraced rice paddies, is one of the world's most sophisticated - and secretive - semiconductor plants. Inside the windowless plant, built by the Japanese electronics maker Toshiba, tiny cranelike robots shuffle along automated production lines, moving stacks of silicon wafers the size of dinner plates. Masked technicians watch as rows of tall machines grind the wafers, etch circuits on their surfaces and cut them into tiny rectangular computer chips. Inside, visitors are allowed to peek through windows at only a small part of the factory floor. Toshiba is anxious to guard the secrets beyond because it needs them to wage one of the most ferocious battles in today's electronics industry, for control of the fast-growing market for the advanced memory chips at the heart of portable music devices like the Apple iPod Nano. The fight pits Toshiba and its partner, SanDisk of Sunnyvale, Calif., a maker of memory cards, against Samsung Electronics of South Korea. Both camps are spending billions to build new factory lines, hire engineers and develop more powerful chips in a bid to gain supremacy. The chips, called NAND flash memory chips, differ from earlier computer memory chips in that data on them can be easily erased and replaced and they can store data even after the power is turned off. That makes them like miniature hard-disk drives, only much more durable because they lack moving parts. The newest flash memory chips are the size of a fingernail and can store two gigabytes, the equivalent of every word and image printed in nine years of a newspaper. While Toshiba invented the chips more than a decade ago, Samsung has seized the lead with bigger production volumes and lower prices. In the three months that ended in September, Samsung had a market share of 50.2 percent of the $2.97 billion in total global NAND sales, ac- (C6) cording to iSuppli, a market research firm based in El Segundo, Calif. Toshiba's share was 22.8 percent. SanDisk is not included in iSuppli's figures because it does not sell its chips, but instead uses them all in its own memory products. . . . At Toshiba's Yokkaichi plant, there is a palpable determination to catch up with the larger Korean rival. Engineers work in shifts around the clock to speed up development and production of new chips. Noriyoshi Tozawa, the plant's manager, said he kept workers on their toes with little reminders of darker times. One is an elevator that has been kept out of use since 2001; a sign on the doors says that it was turned off after a crash in computer chip prices almost forced the closure of the plant, which used to produce DRAM, another type of memory chip. "You have to always be at the leading edge to stay alive in this industry," Mr. Tozawa. "We know what it's like to lose."

To read full article, see: MARTIN FACKLER. "Among Makers of Memory Chips for Gadgets, Fierce Scrum Takes Shape." The New York Times (Mon., December 12, 2005): C1 & C6.

scrum: "a rugby play in which the forwards of each side come together in a tight formation and struggle to gain possession of the ball when it is tossed in among them" Definition source: http://www.m-w.com/cgi-bin/dictionary?book=Dictionary&va=scrum&x=6&y=21

 




September 8, 2005

Higher Return to R&D in U.S than in Japan and Europe

 

The following may be further support for Martin Neil Baily's claim that the U.S. is more productive than Europe and Japan because the U.S. is more open to creative destruction.

 

<615> . . ., most reserachers conclude that the rates of return to R&D are comparable magnitudes in different countries. This is confirmed by our <616> meta-analysis. However, the elasticities are significantly lower in Europe and Japan, as compared with the USA. (pp. 615-616)

 

Source:  Wieser, Robert. "Research and Development Productivity and Spillovers: Empirical Evidence at the Firm Level." Journal of Economic Surveys 19, no. 4 (2005): 587-621.

Also see: Baily, Martin Neil. "Macroeconomic Implications of the New Economy." Proceedings, Federal Reserve Bank of the Kansas City (2001): 201-268. (Especially see graph on p. 220) Martin Feldstein's Jackson Hole presentation, was also supportive of the Baily claim.

 




HP3D5006CropSmall.jpg


















The StatCounter number above reports the number of "page loads" since the counter was installed late on 2/26/08. Page loads are defined on the site as "The number of times your page has been visited."


View My Stats