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(p. A13) Venezuela said it will take majority stakes in the local units of Cemex SAB, Lafarge SA and Holcim Ltd. as it divulges the first details of a nationalization plan that will affect the world's biggest cement producers.

The nationalization, announced last week, is designed to deflect criticism that the socialist government of Hugo Chávez isn't delivering on its promises of new housing and other infrastructure projects, experts said.

"The Venezuelan state will take control of these companies. We told them all three will be subject to this [nationalization] measure," Oil Minister Rafael Ramirez said on state television.

. . .

Mr. Chávez's nationalizations have resulted in efficiency declines in the past. For instance, Venezuelan oil production has fallen since major foreign oil-field operators were nationalized.

For the full story, see:

JOEL MILLMAN, RAUL GALLEGOS and DARCY CROWE. "Venezuela Will Take Control of Top Cement Producers." The Wall Street Journal (Tues., April 8, 2008): A13.

(Note: ellipsis added.)

(Note: the title of the online version is "Venezuela Will Take Control of Top Cement Producers.")

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"It may not look like much, but the opening of this casino, for one day only, let its owner keep a crucial zoning designation." Source of the caption and photo: online version of the NYT article quoted and cited below.

(p. A11) For eight hours on Tuesday, Station Casinos opened a nondescript 40-by-10-foot trailer on a vacant 26-acre plot about six miles east of the Strip with just 16 slot machines. The sole purpose was to comply with a state law that requires public gambling to occur on a property for at least one shift every two years in order for the landowner to retain the valuable zoning designation needed to conduct wagering.

. . .

As of midday, nobody but reporters had turned out for the event, which had been publicized by only a few bloggers on the Internet. The biggest payout on the bank of video poker and blackjack machines was $2.50.

. . .

The opening of the nameless temporary casino, which the local newspaper dubbed Trailer Station, was rich in red tape, including seven permits, approvals from the City Council and the Nevada Gaming Control Board, and a certificate of occupancy.

As required by the city code, the trailer, brought onto the land just for the day, came complete with a portable toilet outside and, to comply with the Americans With Disabilities Act, a wheelchair-accessible entrance. A casino floor manager sat at one end of the narrow room ready to pay out winnings should there be any, a security guard patrolled outside, and two city zoning officers visited for 20 minutes to inspect and fill out paperwork.

For the full story, see:

STEVE FRIESS. "If This Happens in Vegas, It Can Sure Stay in Vegas." The New York Times (Weds., January 9, 2008): A11.

(Note: ellipses added.)

"A floor manager watched over 16 slot machines Tuesday, but there was hardly a rush on them." Source of the caption and photo: online version of the NYT article quoted and cited above.

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

(p. A3) The sweeping patent initiative -- backed by a business coalition dominated by technology companies such as Cisco Systems Inc. and Microsoft Corp. -- would . . . shift the balance of power of the U.S. patent system. It would make it a bit harder for holders to protect patents.  Advocates of the legislation contend the current system encourages patent litigation and costly judgments against infringers -- and stifles innovation.  They say the proposals are designed to bring patent rules in line with the rapidly changing U.S. economy, where inventions often reflect hundreds of potentially patentable ideas.

Mark Chandler, Cisco's general counsel, dismissed concerns that non-U.S. companies might gain some advantage by the bill. He said the proposed changes would strengthen companies at "the heart of innovation in the American economy," better positioning them to compete at home and abroad.

Opponents of the legislation argue that it would make it easier for foreign competitors to legally copy patented methods and products.

For the full story, see:

GREG HITT.  "Patent System's Revamp Hits Wall; Globalization Fears Stall Momentum in Congress; AFL-CIO Sends a Letter."  The Wall Street Journal  (Mon., August 27, 2007):   A3.

(Note:  ellipsis added.)

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

The innovation described in the article excerpted below is credited as arising from a 'skunk works' project.  There's a neat book called Skunk Works that describes how Lockheed set up an autonomous unit to develop the first stealth air force technology.  (Their plant was in a smelly part of town, so it was dubbed the 'Skunk Works.')

Clayton Christensen has recommended that established incumbent companies set up skunk works operations in order to develop disruptive technologies that would not survive if they were developed within the main corporate culture and infrastructure. 

(In the article excerpted below, it is puzzling to read that Alaska Air went to the trouble to take out a patent, even though they apparently have no intention of enforcing it.) 

(p. B1)  ANCHORAGE, Alaska -- When the Ted Stevens Anchorage International Airport was planning a new concourse, prime tenant Alaska Airlines insisted on a counterintuitive design: "The one thing we don't want is a ticket counter," said Ed White, the airline's vice president of corporate real estate.

So the 447,000-square-foot Concourse C, which opened in 2004, has only one small, traditional ticket counter, even though the carrier's 1.2 million Anchorage passengers checked in through that area last year. This unconventional approach -- which uses self-service check-in machines and manned "bag drop" stations in a spacious hall that looks nothing like a typical airport -- has doubled Alaska's capacity here, halved its staffing needs and cut costs, while speeding travelers through the building in far less time.

. . .

(p. B4)  Alaska's design in Anchorage has turned heads in the industry, and in 2006 the airline was awarded a U.S. patent for the check-in process, something it calls the two-step flow-through. Mr. White says his company isn't trying to keep competitors from going down the same path, but pursued the patent more to reward the many employees who helped to bring the idea to fruition.

Other airlines quickly sent scouts up to Anchorage to check out the new concourse, including a team from Delta Air Lines Inc., Mr. White says. A few months ago, Delta completed a $26 million renovation of its check-in hall at Hartsfield-Jackson Atlanta International Airport, and the finished product looks remarkably similar to that of Alaska Airlines. Greg Kennedy, Delta's vice president for customer service there, says the new layout has enabled the airline to process passengers checking in during the peak spring break travel period in 20 to 30 minutes at most, compared with two or three hours three years ago -- and all in the same amount of square footage but 50% more usable space. Mr. Kennedy says he isn't aware of a visit to Anchorage but doesn't dispute it.

. . .  

Alaska, the nation's ninth-largest carrier by traffic, started a "skunk works" lab a decade ago to figure out how to use technology to make air travel less of a hassle for passengers. Out of that effort came the airline's ground-breaking ability to sell tickets on the Internet and allow fliers to check in online, developments other carriers quickly followed.

For the full story, see: 

SUSAN CAREY.  "Case of the Vanishing Airport Lines; Alaska Air Speeds Up Flow Of Passengers by Jettisoning Traditional Ticket Counters."  The Wall Street Journal  (Thurs., August 9, 2007):  B1 & B4.

  Source of graphic:  online version of the WSJ article cited above.

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  "Liu Jun leaving his home in Miaohe, China, near the Three Gorges Dam.  All of the village's residents are being relocated."  Source of caption:  p. A1 of print version of the NYT article quoted and cited below.  Source of photo:  online version of the NYT article quoted and cited below. 

(p. A1)  JIANMIN VILLAGE, China — Last year, Chinese officials celebrated the completion of the Three Gorges Dam by releasing a list of 10 world records. As in: The Three Gorges is the world’s biggest dam, biggest power plant and biggest consumer of dirt, stone, concrete and steel. Ever. Even the project’s official tally of 1.13 million displaced people made the list as record No. 10.

Today, the Communist Party is hoping the dam does not become China’s biggest folly. In recent weeks, Chinese officials have admitted that the dam was spawning environmental problems like water pollution and landslides that could become severe. Equally startling, officials want to begin a new relocation program that would be bigger than the first.

The rising controversy makes it easy to overlook what could have been listed as world record No. 11: The Three Gorges Dam is the world’s biggest man-made producer of electricity from renewable energy.

. . .

(p. A12)  The Communist Party leaders who broke ground on the Three Gorges project in 1994 had promised that China could build the world’s biggest dam, manage the world’s biggest human resettlement and also protect the environment.

. . .

(p. A13)  In the isolated mountain villages above the reservoir, farmers have heard nothing about a new resettlement plan. For many farmers, the immediate concern is the land beneath their feet. Landslides are striking different hillsides as the rising water places more pressure on the shoreline, local officials say.  . . .

. . .

Around daybreak on June 22, Lu Youbing awoke to the screams of her brother-in-law and the sickening sensation of the earth collapsing. Her mountain farmhouse in Jianmin Village buckled as a landslide swept it downhill. In all, 20 homes were demolished. Five months later, Ms. Lu is living in a tent, fending off rats and wondering where her family can go.

“We have nothing left,” she said. “Not a single thing.”

Winter is approaching, and she is trying to block out cold air — and rats — by pinning down the tent flaps with rocks. Villagers have been told that more landslides are possible. Ms. Lu lives with her second husband and their two children. They are too poor to buy an apartment in the city or to build a new home on higher ground. Local officials gave them the tent. Villagers have donated clothes.

The tents are pitched on the only available flat land — a terrace with a monument celebrating efforts by local officials to improve the environment.

“We don’t know about winter,” she said. “This is the only option we have. What else can we do?”

For the full story, see:

JIM YARDLEY.  "At China's Dams, Problems Rise With Water."   The New York Times  (Mon., November 19, 2007):  A1, A12-A13. 

(Note:  ellipses added.)

(Note:  online the title of the article is "Chinese Dam Projects Criticized for Their Human Costs.")

   "The Three Gorges Dam is projected as an anchor in a string of hydropower “mega-bases” planned for the middle and upper reaches of the Yangtze River."  Source of caption and photo:  online version of the NYT article quoted and cited above.

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Mr. Lessig has become the standard-bearer for those who see copyright law as too protective of original creators and too stifling of the artists who follow them. That position has made him the darling of those who want a relatively unfettered Internet, whether it be music sharers or online poem reprinters.

But it has also made him an opponent of many big media companies, including the Walt Disney Company, whose signature creation, Mickey Mouse, would have passed into the public domain years ago if not for a series of well-timed extensions to the law.

. . .

. . . , it might surprise many of Mr. Lessig’s supporters to find that his inspiration for his copyright work was Ronald Reagan.

“I heard George Shultz give a talk in Berlin on the 20th anniversary of Reagan’s ‘tear down this wall’ speech,” Mr. Lessig said. “It was very moving to be at this event. Many of the Germans in the audience were moved to tears. They said that at the time this happened, it was impossible to see this change happening.”

In recalling his thoughts on the possibility of communism falling, he said, “When I heard Reagan’s speech, I remember thinking, ‘boy, he is crazy,’ ” he said.

It is fair to say you can quote him on that.

For the full story, see: 

NOAM COHEN.  "LINK BY LINK; Taking the Copyright Fight Into a New Arena."  The New York Times   (Mon., July 2, 2007):  C3.

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Wu Ping's house stands as a testament to her tenacity in defending her private property.  Source of the photo:  online version of the NYT article cited below.

CHONGQING, China, March 23 — For weeks the confrontation drew attention from people all across China, as a simple homeowner stared down the forces of large-scale redevelopment that are sweeping this country, blocking the preparation of a gigantic construction site by an act of sheer will.

Chinese bloggers were the first to spread the news, of a house perched atop a tall, thimble-shaped piece of land like Mont-Saint-Michel in northern France, in the middle of a vast excavation.

Newspapers dived in next, followed by national television. Then, in a way that is common in China whenever an event begins to take on hints of political overtones, the story virtually disappeared from the news media after the government, bloggers here said, decreed that the subject was suddenly out of bounds.

. . .

What drove interest in the Chongqing case was the uncanny ability of the homeowner to hold out for so long. Stories are legion in Chinese cities of the arrest or even beating of people who protest too vigorously against their eviction and relocation. In one often-heard twist, holdouts are summoned to the local police station and return home only to find their house already demolished. How did this owner, a woman no less, manage? Millions wondered.

Part of the answer, which on meeting her takes only a moment to discover, is that Wu Ping is anything but an ordinary woman. With her dramatic lock of hair precisely combed and pinned in the back, a form-flattering bright red coat, high cheekbones and wide, excited eyes, the tall, 49-year-old restaurant entrepreneur knows how to attract attention — a potent weapon in China’s new media age, in which people try to use public opinion and appeals to the national image to influence the authorities. 

. . .  

“I have more faith than others,” she began. “I believe that this is my legal property, and if I cannot protect my own rights, it makes a mockery of the property law just passed. In a democratic and lawful society a person has the legal right to manage one’s own property.”

Tian Yihang, a local college student, spoke glowingly of her in an interview at the monorail station. “This is a peculiar situation,” he said, with a bit of understatement. “I admire the owner for being so persistent in her principles. In China such things shock the common mind.”

. . .  

With the street so choked with onlookers that traffic began to back up, Ms. Wu’s brother, Wu Jian, began waving a newspaper above the crowd, pointing to pictures of Ms. Wu’s husband, a local martial arts champion, who was scheduled to appear in a highly publicized tournament that evening. “He’s going into our building and will plant a flag there,” Mr. Wu announced.

Moments later, as the crowd began to thin, a Chinese flag appeared on the roof with a hand-painted banner that read: “A citizen’s legal property is not to be encroached on.”

Asked how his brother-in-law had managed to get inside the locked site and climb the escarpment on which the house is perched, he said with a wink, “Magic.”  

For the full story, see: 

HOWARD W. FRENCH.  "CHONGQING JOURNAL; Homeowner Stares Down Wreckers, at Least for a While."  The New York Times  (Tues., March 27, 2007):  A4.

(Note:  ellipses added.)

   On left, Wu Ping, with her tall brother in the background.  On right, a map showing the location of Chongqing in China.  Source of photo and map:  online version of the NYT article cited above.

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Johnson's wonderful book is part mystery, part history, part philosophy of science, and part musing on political philosophy.  The passage below warms the heart (and stimulates the brain) of the libertarian.  Against great odds, Dr. Snow persisted in presenting ever-more convincing evidence for his correct water-borne theory of cholera.  Meanwhile Chadwick, the main advocate of government public health activities, continued to direct policy on the basis of the mistaken theory that cholera was spread by foul vapors in the air. 

 

(p. 120) Herein lies the dominant irony of the state of British public health in the late 1840s.  Just as Snow was concocting his theory of cholera as a waterborne agent that had to be ingested to do harm, Chadwick was building an elaborate scheme that would deliver the cholera bacteria directly to the mouths of Londoners.  (A modern bioterrorist couldn't have come up with a more ingenious and far-reaching scheme.)  Sure enough, the cholera returned with a vengeance in 1848-1849, the rising death toll neatly following the Sewer Commission's cheerful data on the growing supply of waste deposited in the river.  By the end of the outbreak, nearly 15,000 Londoners would be dead.  The first defining act of a modern, centralized public-health authority was to poison an entire urban population.  (There is some precedent to Chadwick's folly, however.  During the plague years of 1665-1666, popular lore had it that the disease was being spread by dogs and cats.  The Lord Mayor promptly called for a mass extermination of the city's entire population of pets and strays, which was dutifully carried out by his minions.  Of course, the plague turned out to be (p. 121) transmitted via the rats, whose numbers grew exponentially after the sudden, state-sponsored demise of their only predators.)

Why would the authorities go to such lengths to destroy the Thames?  All the members of these various commissions were fully aware that the waste being flushed into the river was having disastrous effects on the quality of the water.  And they were equally aware that a significant percentage of the population was drinking the water.  Even without a waterborne theory of cholera's origin, it seems like madness to celebrate the ever-increasing tonnage of human excrement being flushed into the water supply.  And, indeed, it was a kind of madness, the madness that comes from being under the spell of a Theory.  If all smell was disease, if London's health crisis was entirely attributable to contaminated air, then any effort to rid the houses and streets of miasmatic vapors was worth the cost, even if it meant turning the Thames into a river of sewage.

Source: 

Johnson, Steven. The Ghost Map: The Story of London's Most Terrifying Epidemic - and How It Changed Science, Cities, and the Modern World. New York: Riverhead Books, 2006.

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   A snow-white llama that has not yet been symbolically sacrificed by Bolivian President Evo Morales.  Source of the photo:  http://www.staff.stir.ac.uk/f.r.wheater/images/25%20Llama%205_8_04.JPG

Picture it, in President Evo Morales' Bolivia:  a peaceful, innocent-looking, snow-white llama slaughtered in homage to a barbaric mystical ritual, and in celebration of the slaughter, through nationalization, of private property and economic growth.  And afterwards, one imagines the visitng French brass band played on. 

VINTO, Bolivia: The ritual sacrifice of a snow-white llama provided a symbolic completion Friday to President Evo Morales' nationalization of Bolivia's lone operating tin smelter.

Swiss mining giant Glencore International AG owned the plant until last week and has threatened to seek compensation through international arbitration. Morales still says his government will not compensate Glencore for the Feb. 9 nationalization of the Vinto plant, located on a high Andean plain 180 kilometers (110 miles) southeast of the capital of La Paz.

. . .

After the ceremony, Morales hosted plant workers, a troupe of Andean pipers and a visiting French brass band to an outdoor supper of fried chicken and chuno, a traditional Bolivian dish of dehydrated potatoes.

While the nationalization retained all but a handful of smelter employees, workers remained divided over the change in management. Some rushed to greet "Companero Evo" as he toured the plant; others hung back and wondered about the future.

"Anywhere in the world they'll tell you the government can't be a good administrator," said plant employee Oscar Leyton. "But we'll just have to wait and see how they do it. If they screw up here, they'll screw up the whole country."

For the full story, see: 

"In Bolivia, llama sacrifice completes Morales' tin smelter nationalization."  International Herald Tribune  February 16, 2007.

(Note:  ellipsis added.) 

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   "Robert" is a 23 pound giant German rabbit.  Source of photo:  online version of the Washington Post article cited below.

Apparently the North Korean Communist government's plan to end starvation in North Korea, is to import and breed giant German rabbits.  If they were really serious, they would do better by respecting property rights, and embracing the free market.

EBERSWALDE, Germany -- Few people raise bigger bunny rabbits than Karl Szmolinsky, who has been producing long-eared whoppers since 1964.  His favorite breed, German gray giants, are the size of a full-grown beagle and so fat they can barely hop.

Last year, after the retired chauffeur entered some of his monsters in an agricultural fair, word of his breeding skills spread to the North Korean Embassy in Berlin.  Diplomats looked past the cute, furry faces with the twitching noses and saw a possible solution to their nation's endemic food shortage:  an enormous bunny in every Korean pot.

The North Koreans approached Szmolinsky in November and asked whether he'd advise them on how to start a rabbit breeding program to help "feed the population," the 67-year-old pensioner recalled in an interview at his home in Eberswalde, an eastern German town a few miles from the Polish border.  Sympathetic to the Koreans' plight, he agreed to sell some of his best stock at a steep discount and volunteered to travel to the hermetic nation as a consultant.

. . .

In December, Szmolinsky stuffed six of his rabbits into modified dog carriers and took them to the airport in Berlin, where they boarded a flight for Pyongyang, via Frankfurt, Germany, and Beijing.  Robert, a 23-pounder, was the largest of the bunch, which included four female rabbits and one other male carefully selected for their breeding potential.

How, exactly, the Democratic People's Republic of Korea intends to parlay the small herd of German Flopsies into hunger relief for its 23 million citizens is unclear.

For the full story, see: 

Craig Whitlock.  "A Colossal Leap of Faith In Fight Against Famine North Koreans See Potential in German Breeder's Giants."  The Washington Post  (Friday, February 2, 2007):  A10.

(Note:  ellipsis added.)

    A giant German rabbit.  Source of photo:  http://www.spiegel.de/img/0,1020,774187,00.jpg

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William Middendorf was important in the Goldwater campaign for president.  Here is a brief excerpt from his recent book about the campaign:

(p. 8)  . . ., I became a disciple of the Austrian libertarian school of economics, having studied under Joseph Schumpeter (an odd-man-out at Harvard, later named by the Wall Street Journal as the most important economist of the twentieth century) and Ludwig Von Mises (at New York University).  Schumpeter and Von Mises saw entrepreneurship as a major driving force in economic development, considered private property---protected by an independent judiciary---essential to the efficient use of resources, and held that government intereference in market processes was usually counterproductive.

The reference to the book is: 

Middendorf, J. William, II. Glorious Disaster: Barry Goldwater's Presidential Campaign and the Origins of the Conservative Movement. New York: Basic Books, 2006.

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Of the three "views" discussed in Wessel's original commentary, the following excerpt just includes the one that I share:

With the billions of dollars they are spending, Bill Gates, Warren Buffett, Bill Clinton and Bono are likely to make progress in their quest to prevent treatable diseases from killing millions of people.  Nearly all of these people live or will live in poor countries.

That worries economist Simon Johnson.  He doesn't doubt the moral imperative to fight disease.  Still, he wonders:  "Do we really know how to help the poor people -- the increasing number of poor people?  Do we really know how to help them out of poverty?"

Such questions haunt academics, governments, international institutions and global do-gooders.  They are impressed with China's rapid modernization, though puzzled that it has done so well without following standard precepts.  They are disappointed and puzzled that Latin America nations haven't done better, especially because so many did take the advice of the experts.  They are depressed and puzzled by the continued widespread misery in Africa.

With intellectual humility, Mr. Johnson, a professor at Massachusetts Institute of Technology's Sloan School of Management, faced a roomful of peers at the annual meeting of the American Economics Association last weekend and said, "Public health had the germ theory of disease.  Economics has made great progress, but it's still waiting for its 'germ theory of disease.'"  That probably overstates the challenges remaining to public-health warriors -- avian flu, AIDS/HIV, malaria and all -- but not the shortcomings of economic understanding of what poor countries should do to achieve sustained growth.

. . .

A third view is that earlier economists focused on the wrong thing.  Mr. Johnson, among others, argues that what really matters is having solid political, legal and economic institutions -- courts, central banks, honest bureaucrats, private-property rights -- that allow entrepreneurs to flourish.  Imposing what seem to be sound economic policies on corrupt, incompetent or myopic governments is doomed.  Building strong institutions is a necessary prerequisite.  In this camp, there is a running side argument about which comes first:  the institutions or the educated people who create them.  Was the Constitution key to U.S. success, or was it Jefferson, Madison and Hamilton?

For the full commentary, see:

DAVID WESSEL.  "CAPITAL; Why Economists Are Still Grasping For Cure to Global Poverty."  The Wall Streeet Journal  (Thurs.,  January 11, 2007):  A7.

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  Source of book image:  the web site cited below.

Years ago I saw a program on the History Channel that has stuck in my mind.  (But, alas, I do not remember the title.)  Near the end, I think, they discussed an ancient horde of invaders that created a dark age in the Mediterranean region.  An on-sight scholar discussed a tiny cliff-side settlement that a family of natives had retreated to, to defend what little they had.

Attacking the tiny enclave would have been difficult.  It was a long way up a treacherous and visible trail.  But for the same reasons, living there would have been difficult too.

How human these unknown ancients were who defended their family and property; how poignantly noble.

When I watched the program, I jotted down a single word, the name of the site:  Katalimata.

In doing a web search, I encountered the book (a monograph in the Aegean series), whose image appears above.  I'm guessing that the book discusses the site I saw in the program, since the book description says that its author participated in digs at Katalimata.

The reference to the book is:

Nowicki, Krzysztof.  "Defensible Sites in Crete C.1200 - 800 B.C."  Aegaeum Vol. 21, 2000.

For more information on the book, see:

http://www.ulg.ac.be/archgrec/aegaeum21.html

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A great story about Jim Clark, who founded Silicon Graphics:

(p. 46)  Just a few years back, before the Internet boom, Clark's house in Atherton had been surrounded by empty fields.  Now he was surrounded by new houses, many of them bigger than his own.  One morning he looked up from his kitchen table and saw the neighbors looking (p. 47) back.  He requested, and was denied, a permit to build a fence tall enough to screen them from his view.  The city of Atherton, California, had strict rules about fences, and the fence Clark wanted to build was declared too high.  So Clark built a hill, and put the fence on top of the hill.  It did not occur to him that there was anything unusual about this.

(page numbers above are from the Norton hardback edition; the full quote is on p. 31 of the paperback edition) 

The reference to the hardback edition, is: 

Lewis, Michael.  The New New Thing: A Silicon Valley Story.  New York:  W. W. Norton & Company, 2000.

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Chris Anderson points out that the main thing currently holding back the long tail, are legal restrictions in the form of clearing copyrights.  This is somewhat analogous to how the legal restrictions to starting up a small business, end up protecting the larger incumbent companies, a la Hernando de Soto's The Other Path. 

Figuring out how to quickly and cheaply process small intellectual property rights claims is the key.  The assumption that this could and would be done was an underpinning of Bill Gates' prediction of the key importance of content in his The Road Ahead.

If Gates' vision could be realized, it would provide the consumer much greater variety (and much closer matches between what is sought and what is found); and it would provide many more producers of content, the opportunity to support themselves through their productive activities.  (As opposed to the current situation where most such producers must produce as a part-time, labor-of-love, while they support themselves by their unrelated 'day job.')

Books mentioned:

Anderson, Chris. The Long Tail. New York: Hyperion, 2006.

Gates, Bill. The Road Ahead. New York: Viking Penguin, 1995.

Soto, Hernando de. The Other Path. New York: Harper and Row, 1989.

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  Cairo entrepreneur serves good food to willing customers.  Source of image:  online version of the NYT article quoted and cited below.

In The Other Path, Hernando de Soto wrote about how governments in much of the world make it nearly impossible for the poor to legally get a start as entrepreneurs.  Here is a perfect example of de Soto's point:

CAIRO, Oct. 2 — With his cart tucked beneath a highway overpass, just beside the railroad tracks and behind a parked taxi, Farouk Salem darted his eyes back and forth nervously as he awaited customers.

On most days, except during Ramadan, the sun has barely risen and worshipers are shuffling out of the nearby mosque after morning prayers as the first customers make their way to Mr. Salem.  A few quick flicks of a ladle, the shaking of a bottle or two, and breakfast is ready.

Mr. Salem sells ful, the fava bean stew that is a staple of Egyptian cuisine, as a cheap, hearty breakfast for just 20 cents.  But he is an unlicensed street vendor, one of the many hundreds of thousands of Egyptians who make their living in what economists here describe as Egypt’s informal work force:  selling, delivering, cooking, cleaning, serving, ferrying, shoeshining, anything that will provide income.

Dr. Rashad Abdou, a professor of economics at Cairo University, estimated that the informal sector might account for as much as 60 percent of Egypt’s economy.

“As long as I keep a low profile, they don’t bother me,” Mr. Salem said on a recent day, as his brother worked behind the parked metal cart, dishing out bowls of ful.  The police have forced him to move many times and have even confiscated his cart.  But it is hard to keep a really low profile when the food is good and the prices are cheap.

As the sun began to heat up the morning air, customers showed up in a steady stream, some still in their pajamas.

“It’s good,” said Muhammad Abbadi.  “It’s clean.  And the most important thing is it’s cheap.  We are poor.  You see how poor we are in Egypt.”

. . .

“If the authorities want to chase me away, they will do it,” he says, his face tight and nervous.  “If they want to put me in prison, they can.  If they want to take my cart away, they can.”

He walked over to get some more bread as Muhammad kept ladling.

For the full story, see:

MICHAEL SLACKMAN.  "CAIRO JOURNAL; A Hand on the Ladle, and an Eye Out for the Law."  The New York Times (Tues., October 3, 2006):  A4.

(Note: ellipses added.)

  Ful is a fava bean stew that is popular in Cairo.  Source of image:  online version of the NYT article cited above.

The reference to the de Soto book is: 

Soto, Hernando de. The Other Path: The Invisible Revolution in the Third World. 1st ed: HarperCollins, 1989.

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  Hernando de Soto and Bill Clinton at the second annual Clinton Global Initiative.  Source of photo:  online version of the WSJ article cited below.

. . . the buzz in the hallways centered on a topic that until recently most philanthropists all but ignored:  registering poor people's property so they could borrow against it to build businesses, pay taxes or for other purposes.  Many citizens of developing countries don't formally have title to their land, and many economists -- including Peruvian economist Hernando de Soto, another conference attendee -- see this as a key source of urban poverty.  According to Mr. de Soto's research, the value of unregistered land in developing countries totals over $9 trillion.  Mr. Clinton told the audience that these assets "cannot be converted into collateral for loans -- wealth locked-up and locked-down -- keeping people in grinding poverty instead of being an asset that can lift them up."  Up to 85% of urban land parcels in the developing world are unregistered, Mr. Clinton said, citing Mr. de Soto's research.

But standing in the way of widespread land-ownership records are insufficient legal frameworks, confusing procedures and corrupt property registries.  And establishing land ownership is all but impossible in communist and socialist countries, where property usually is owned by the state, said John Bryant, chief executive of Operation Hope, a nonprofit in Los Angeles that provides financial services to the poor.

For the full article, see: 

SALLY BEATTY. "GIVING BACK; Helping the Poor Register Land." Wall Street Journal (Fri., September 29, 2006): W2.

(Note:  ellipsis added.)

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  Red-cockaded woodpecker.  Source of image:  http://www.fws.gov/athens/images/Red-cockaded%20woodpecker%20120%20KB%205x7.jpg

BOILING SPRING LAKES, N.C., Sept. 23 (AP) — Over the past six months, landowners here have been clear-cutting thousands of trees to keep them from becoming homes for the endangered red-cockaded woodpecker.

The chain saws started in February, when the federal Fish and Wildlife Service put Boiling Spring Lakes on notice that rapid development threatened to squeeze out the woodpecker.

The agency issued a map marking 15 active woodpecker “clusters,” and announced it was working on a new one that could potentially designate whole neighborhoods of this town in southeastern North Carolina as protected habitat, subject to more-stringent building restrictions.

Hoping to beat the mapmakers, landowners swarmed City Hall to apply for lot-clearing permits.  Treeless land, after all, would not need to be set aside for woodpeckers.  Since February, the city has issued 368 logging permits, a vast majority without accompanying building permits.

The results can be seen all over town.  Along the roadsides, scattered brown bark is all that is left of pine stands.  Mayor Joan Kinney has watched with dismay as waterfront lots across from her home on Big Lake have been stripped down to sandy wasteland.

. . .

Like the woodpeckers, humans are also looking to defend their nest eggs.

Bonner Stiller has been holding on to two wooded half-acre lakefront lots for 23 years.  He stripped both lots of longleaf pines before the government could issue its new map.

“They have finally developed a value,” said Mr. Stiller, a Republican member of the state General Assembly.  “And then to have that taken away from you?”

For the full story, see:

"Rare Woodpecker Sends a Town Running for Its Chain Saws."  The New York Times, Section 1 (Sun., September 24, 2006):  20.

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Salt Lake City Mayor Rocky Anderson, whose "xeriscape" yard violates a Salt Lake City zoning ordinance.  Source of photo:  scan from a paper copy of the NYT article cited below.

SALT LAKE CITY, Aug. 21 — Covered as it is by red bark and dotted with ornamental grasses and purple sage shrubs, the front yard of Salt Lake City’s mayor stands out in contrast against the other, uniformly green lawns on the tree-lined street.

Not only is Mayor Rocky Anderson’s yard distinctive, though.  It is also illegal, one of hundreds of drought-friendly yards and gardens here that are in violation of zoning ordinances.

In light of a five-year drought that meteorologists say ended last year, Mr. Anderson is one of a growing number of homeowners in desert cities across the West who have traded in their manicured lawns and colorful flower beds for ground cover and gardens that require little water.

In Salt Lake City, though, all front yards must be completely covered with flat green grass, which needs to be watered often to keep it from turning brown and strawlike.  Although the zoning ordinance is rarely enforced, some Salt Lake City leaders — including the mayor — want to bring the letter of law in line with current landscaping trends.

“I think the zoning ordinance is ridiculous,’’ Mr. Anderson said.  “It clearly needs to be changed.” 

For the full story, see:

MELISSA SANFORD.  "Salt Lake City Moving Toward Less Thirsty Lawns."  The New York Times (Fri., August 25, 2006):  A12.

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Here is the background.  From the earliest days of broadband service, controversy raged over whether the physical networks used to transport data should be allowed to control content.  Thus open access rules, which forced telcos to allow broadband company rivals to use their networks at regulated rates.  Cable TV systems, meanwhile, also provided Internet connections via cable modems, but without any obligation to share their facilities.  If an independent Internet Service Provider (ISP) like Covad or Earthlink wanted to connect customers via Comcast's lines, they could negotiate a deal but had no legal club -- as they did under open access.

There was a vigorous campaign to mandate open access on cable similar to DSL; regulators under both Presidents Clinton and Bush refused.  The inevitable litigation ensued; but the Supreme Court set the matter to rest in FCC v. Brand X (2005).  Its 6-3 decision upheld the FCC's classification of cable broadband as an "information service," placing it beyond the scope of common carrier regulation.

For a number of years, therefore, DSL service was subject to open access while cable was not.  Unsurprisingly, DSL providers were blown away early in the race for market share.  By the end of 2002, cable-modem subscribers numbered 11 million and DSL just 6.1 million, according to Leichtman Research.

Then DSL began its deregulatory trek.  The first critical reform was a surprise FCC decision in February 2003 to end "line sharing" rules.  This dramatically raised the prices which ISPs would have to pay to use phone company facilities to provide retail DSL service, dealing a severe blow to companies like Covad.  Echoing conventional wisdom, the New York Times news story forecast a consumer defeat: "High-Speed Service May Cost More."

It hasn't.  Average DSL rates, according to Kagan Research, dropped from $39.51 per month in 2002 to $34.72 in 2003.  Telcos also expanded the scope, capacity and quality of advanced networks, even improving its endemic customer relations problems.

Consumers responded.  DSL, holding just 35% market share in 2002, pulled even with cable among new subscribers in 2004.  Leichtman Research reports that "DSL providers have added more broadband subscribers than cable providers in each of the last six quarters," and that overall, "the first quarter of 2006 was the best ever for both DSL and cable broadband providers."  Unleashed from open access, DSL is attracting customers like never before -- and the overall growth of broadband subscribers (DSL and cable) is notably higher.

For the full commentary, see:

THOMAS W. HAZLETT.  "RULE OF LAW; Broadbandits."  Wall Street Journal  (Sat., August 12, 2006):  A9.

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Source of book image:  http://www.amazon.com/gp/product/0226556638/sr=8-1/qid=1153708722/ref=pd_bbs_1/104-2835260-2878345?ie=UTF8

Deirdre McCloskey's unfashionable,  contrarian and compelling manifesto in favor of what she calls the bourgeois virtues starts with an uncompromising "apology" for how private property, free labor, free trade and prudent calculation are the fount of most ethical good in modern society, not a moral threat to it.

The intelligentsia -- in thrall for centuries to religion and now to socialism -- has for a long time snobbishly despised the bourgeoisie that practices capitalism.  Ms. McCloskey calls such people the "clerisy."  Their values and virtues, like those of the proletariat and the aristocracy, are widely admired.  But almost nobody admires the bourgeoisie.  Yet it was for anti-bourgeois ideologies, she notes, that "the twentieth century paid the butcher's bill."

As Ms. McCloskey explains:  "Anyone who after the twentieth century still thinks that thoroughgoing socialism, nationalism, imperialism, mobilization, central planning, regulation, zoning, price controls, tax policy, labor unions, business cartels, government spending, intrusive policing, adventurism in foreign policy, faith in entangling religion and politics, or most of the other thoroughgoing nineteenth-century proposals for government action are still neat, harmless ideas for improving our lives is not paying attention."  By contrast, she argues, "capitalism has not corrupted our souls.  It has improved them."

For the full review, see:

MATT RIDLEY.  "Capitalism Without Tears; Fashionable thinkers sneer at the free market and its practitioners, but economic liberty may actually be a force for personal goodness."   The Wall Street Journal  (Sat., July 22, 2006):  P10.

(Note:  in the passage above, I took the liberty of correcting a misspelling of "Deirdre.") 

The full citation to the McCloskey book is: 

McCloskey, Deirdre N.  The Bourgeois Virtues:  Ethics for an Age of Commerce. Chicago:  University of Chicago Press, 2006.  (616 pages, $32.50)

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Mike Matthews holding one of the vacuum tubes produced in the Russian factory he owns.  Source of photo:  online version of the NYT article cited below.

(p. C1)  SARATOV, Russia — Mike Matthews, a sound-effects designer and one-time promoter of Jimi Hendrix, bought an unusual Russian factory making vacuum tubes for guitar amplifiers.  Now he has encountered a problem increasingly common here: someone is trying to steal his company.

Sharp-elbowed personalities in Russia's business world are threatening this factory in a case that features accusations of bribery and dark hints of involvement by the agency that used to be the K.G.B.

Though similar to hundreds of such disputes across Russia, this one is resonating around the world, particularly in circles of musicians and fans of high-end audio equipment.

Russia is one of only three countries still making vacuum tubes for use in reproducing music, an aging technology that nonetheless "warms up" the sound of electronic music in audio equipment.

"It's rock 'n' roll versus the mob," Mr. Matthews, 64, said in a telephone interview from New York, where he manages his business distributing the Russian vacuum tubes.  "I will not give in to racketeers."

Yet the hostile takeover under way here is not strictly mob-related.  It is a dispute peculiar to a country where property rights — whether for large oil companies, car dealerships or this midsize factory — seem always open to renegotiation.  It provides a view of the wobbly understanding of ownership that still prevails.

. . .

(p. C4)  If the tube factory dies, so will the future of a rock 'n' roll sound dating back half a century, the rich grumble of a guitar tube amplifier — think of Jimi Hendrix's version of "The Star-Spangled Banner" — that musicians say cannot be replicated with modern technology.

"It's nice and sweet and just pleasing sounding," Peter Stroud, the guitarist for Sheryl Crow, said in a telephone interview from Atlanta.  "It's a smooth, crunchy distortion that just sounds good.  It just feels good to play on a tube amp."

He added:  "It would be a catastrophe for the music industry if something happened to that plant."

For the full story, see: 

ANDREW E. KRAMER.  "From Russia, With Dread; American Faces a Truly Hostile Takeover Attempt at His Factory."  The New York Times   (Tuesday, May 16, 2006):  C1 & C4.

The transistor disrupted the vacuum tube, a case that would usually be described as an episode of creative destruction.  One secondary lesson from the story above is that there may be a previously unremarked symmetry to the process of disruption.  A disruptive technology typically appeals only to a niche in the market, while the incumbent technology dominates the mainstream.  But after the disruptive technology improves sufficiently to capture much of the mainstream market, maybe there often will remain a niche market that still prefers the older disruptive technology?

To use Danny DeVito's example in "Other People's Money," the car may have disrupted horse-and-buggies.  But for some nostalgic "jobs" the horse-and-buggy may still be the better product, so there will likely remain some demand for buggy whips.

To the extent that this phenomenon is significant, it might serve to ease the labor market transition when one technology leapfrogs another.

 A vacuum tube used in guitar amplifiers, that was produced in the factory that Mike Matthews owned.  Source of photo:  online version of the NYT article cited above.

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Bolivian President Morales announcing the nationalization of Bolivia's energy industry.  Source of image: http://www.nytimes.com/2006/05/03/world/americas/03bolivia.html

Bolivia's nationalization of its energy industry, announced Monday by President Evo Morales, was a vivid illustration that the populist policies, championed most prominently by Venezuela, were spreading.

. . .

. . .  while Brazil might feel tremors from Bolivia's decision, it is Bolivia that may be risking its potential as a major natural gas exporter.

Companies had been holding off on investments in Bolivia for some time, unnerved by growing talk of precisely the kind of step that Mr. Morales took this week.  Foreign direct investment, much of which goes to energy and mining, fell to $103 million in 2005, from $1 billion in 1999.

What is more, unlike oil, natural gas is not easily exportable, with costly liquefaction facilities, customized tankers or pipelines needed to take the fuel to markets.  Chile, a potential market for Bolivian gas, may choose instead a project to import the fuel from as far away as Africa.

Even Brazil, while now reliant on Bolivian gas, has recently discovered large offshore gas reserves of its own.  Thus the window of opportunity for Bolivia to become a leading gas exporter may be closing, even as it grows more courageous in its dealings with foreigners.

"If Brazil decides to give the cold shoulder to Bolivia," said Carlos Alberto López, an independent consultant for oil companies in La Paz, "Bolivia will be left with its gas underground."

For the full story, see: 

SIMON ROMERO and JUAN FORERO.  "Bolivia's Energy Takeover:  Populism Rules in the Andes."  The New York Times  (Weds., May 3, 2006):  A8.

  Bolivian soldiers after seizing natural gas facilities.  Source of image: http://www.nytimes.com/2006/05/03/world/americas/03bolivia.html

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Jane Jacobs died on Tues., April 25, 2006 at the age of 89.  ("Jane Jacobs, Author and Activist, Dies."  The Wall Street Journal  (Tues., April 25, 2006), online edition.)

Jacobs's ideas came from the heart.  Her foray into urban theory was partly inspired by the failed urban renewal efforts of the post-World War II era that displaced tens of thousands of poor and minority residents and resulted in the isolation or destruction of previously vibrant neighborhoods in New York, Chicago, Pittsburgh and elsewhere.

Fundamentally, there is little difference behind the social engineering mentality of those who wrought the disaster of postwar urban renewal and the mindset of today's planners trying to regulate away suburbia in hopes of master-planned urban living for everyone.

More and more, these planners are calling for the centralization of land-use control under state and regional governments, usurping the American tradition of local control over development.  In the view of many planners, this command-and-control bureaucracy is needed because municipal planning is too "uncoordinated" to achieve "societally beneficial" goals like open-space preservation, mass transit and urban densification.

But if they go back and reread "Death and Life," they'll find Jacobs rightly asking, "How is bigger administration, with labyrinths nobody can comprehend or navigate, an improvement over crazy-quilt township and suburban governments?"

She went on to ridicule the idea of regionalism as "escapism from intellectual helplessness" predicated on the delusion that the problems planners are unable to solve at the local level will somehow be more easily addressed on a larger-scale, concluding that "no other expertise can substitute for locality knowledge in planning."

Politicians and planners would do well to commemorate Jacobs by revisiting her work.  Despite the best efforts of well-intentioned planners, you can't "create" a vibrant city or neighborhood.  The best cities and neighborhoods just happen, and the best thing we can do is to step out of the way of innovators and entrepreneurs.

 

For the full commentary, see:

LEONARD GILROY.  "Urban Planners Are Blind To What Jane Jacobs Really Saw."  The Wall Street Journal  (Tues., May 2, 2006):  D8.

The reference to Jacobs' most important book is:

Jacobs, Jane.  The Death and Life of Great American Cities.  New York:  Random House, 1961.

  Source of book image: http://archives.cnn.com/2000/books/news/11/23/jane.jacobs.ap/

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Source of image: http://www.cafepress.com/freestarmedia.24473311

WEARE, N.H. - When we reached Justice David Souter's home, a ramshackle old farmhouse along a dirt road, Keith Lacasse explained his plans for it if he's voted onto the town's Board of Selectmen in the election today.

The first plan, which Lacasse and his friends drew up right after hearing of Souter's vote in the Kelo eminent-domain case last year, was for the town to seize Souter's property and turn it into a park with a monument to the Constitution. But then Lacasse, a local architect, switched to an idea proposed by an activist from California: turning it into the Lost Liberty Hotel.

''Actually, it would be more like a bed and breakfast,'' Lacasse said. ''We'd use the front of the house for a cafe and a little museum. There'd be nine suites, with a black robe in each of the closets.''

. . .

Most Americans have the traditional idea that property can be taken for ''public use'' if it is actually going to be used by the public as, for example, a road or a park. But that definition gradually expanded over the last half-century as the Supreme Court ruled that property could be seized and turned over to private parties if there were special circumstances and an overriding public benefit, like eliminating ''blight'' in a poor Washington neighborhood or breaking up a land oligopoly in Hawaii.

The Kelo case, however, went way beyond those decisions, allowing the town of New London to seize property that wasn't blighted simply because it thought it could find a developer to make a more profitable use of the property. It was a new version of the field of dreams theory: if you tear it down, they will come.

''The Kelo decision wasn't compelled by legal precedents,'' says Richard Epstein, a law professor at the University of Chicago. ''It wasn't a case of eliminating blight or breaking up an oligopoly. There was no precedent for kicking people out of their private homes just to warehouse the land for future development.''

The Kelo case was an opportunity for the justices to put limits on the use of eminent domain -- and to look at how the power had been abused since cities had begun using expanded powers of eminent domain half a century ago. As Clarence Thomas pointed out in his dissenting opinion in Kelo, ''In cities across the country, urban renewal came to be known as 'Negro removal.' ''

For the full commentary, see:

JOHN TIERNEY. "Supreme Home Makeover." New York Times (Tues., March 14, 2006): A31.

A related observation:

Supreme Court Justice David Souter, Writing for the Majority in a Warrantless Search Case Decided by The Court This Week, Possibly Forgetting his Previous Vote in Kelo, to Allow Government to Seize Private Property Under Eminent Domain to Give to Developers:

"We have, after all, lived our whole national history with an understanding of the ancient adage that a man's home is his castle."

Source of the observation:

Center for Individual Freedom, Lunchtime Liberty Update, emailed 3/24/06.

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Environmentalists have hypothesized that there is a link between harvesting old-growth forests and declines in owl populations. But there is reason to believe that the hypothesis may be false, and apparently environmentalists and the federal government do not have much interest in testing it:

. . . , we know little about the relationship between harvesting and owl populations. One such study -- privately funded -- infers an inverse relationship between harvesting and owls. In other words, in areas where some harvesting has occurred, owl numbers are increasing a bit, or at least holding their own, while numbers are declining in areas where no harvesting has occurred.

This news will come as no surprise to Oregon, Washington and California timberland owners who are legally required to provide habitat for owls. Their actively managed lands are home to the highest reproductive rates ever recorded for spotted owls. Why is this?

One possible answer is that the anecdotal evidence on which the listing decision was based is incomplete. No one denies the presence of owls in old-growth forests, but what about the owls that are prospering in managed forests and in forests where little old growth remains? Could it be that spotted owls are more resourceful than we think?

We don't know -- and the reason we don't know is that 16 years ago federal scientists chose to politicize their hypothesis rather than test it rigorously, to flatly reject critiques from biometricians who questioned the statistical validity of the evidence on which the listing decision was based, and to declare with by-god certainty that once the old-growth harvest stopped owl populations would begin to recover.

For the full story, see:

JIM PETERSEN. "RULE OF LAW; Owl Be Damned." The Wall Street Journal (Sat., February 18, 2006): A9.

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