January 2011 – Page 3 – artdiamondblog.com

The Fragility of China’s Red Capitalism

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

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

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

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

London’s Albion Mills Was “Likely” Destroyed By Millers’ Arson

(p. 187) The Albion Mills, as it would be called, was built on a scale hitherto unimagined. The largest flour mill in London in 1783 used The Albion Mills, as it would be called, was built on a scale hitherto unimagined. The largest flour mill in London in 1783 used four pairs of grinding stones; Albion was to have thirty, driven by three steam engines, each with a 34-inch cylinder. Within months after its completion, in 1786, those engines were driving mills that produced six thousand bushels of flour every week–which both fed a lot of Londoners and angered a lot of millers.

The Albion Mills was London’s first factory, and its first great symbol of industrialization; its construction inaugurated not only great age of steam-driven factories, but also the doomed though poignant resistance to them. That resistance took the shape of direct action–no one knows how the fire that destroyed the Albion Mills in 1791 began, but arson by millers threatened by its success seems likely– . . .

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

U.S. Sets Capital Requirement Too High for Entrepreneurs’ Visas

“Brian Wong, above at his company’s office in San Francisco, is a Canadian citizen hoping for a rule change that would ease U.S. visa restrictions.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B7) San Francisco entrepreneur Brian Wong has already hired two employees and secured $300,000 in funding for his start-up, and hopes to have a staff of 40 or more full-time workers by this time next year.

But there’s at least one red flag in his business plan: Mr. Wong isn’t American; he’s Canadian.
. . .
. . . foreign entrepreneurs have long played an outsized role in the U.S. start-up sector, especially in the tech industry. Immigrants are nearly 30% more likely to start a business than nonimmigrants, the Small Business Administration says. University of California researchers estimate about a third of Silicon Valley technology firms were started by Indian or Chinese entrepreneurs, while a joint study with Duke University found at least one immigrant founder in over a quarter of all engineering and technology firms launched in the U.S. since the mid 1990s, together generating nearly 450,000 jobs by 2005. Google Inc., Intel Corp., Yahoo Inc. and eBay Inc. all had at least one immigrant founder.
Yet many of these companies were also started on a shoestring, leading some tech industry insiders to say the bill’s capital requirements are far too high.
. . .
. . . , the start-up visa’s high capital requirement is certain to filter out sole-proprietorships, while ensuring it attracts innovative, mostly tech-savvy entrepreneurs, says Bob Litan, a researcher at the Kauffman Foundation. The downside, he says, is that only a handful of immigrant entrepreneurs will qualify.
“Hardly any businesses get venture capital in a given year,” Mr. Litan says. “This isn’t going to have much of an impact on the U.S. economy and I suspect that’s why so few people are opposed to it.”
. . .
Without a visa, Mr. Wong says he’ll be forced to launch his start-up back in Canada, taking the new jobs with him.

For the full story, see:
ANGUS LOTEN. “New Pitch for Start-Up Visas; Senate Bill Would Make for Smoother U.S. Entry for Foreign Entrepreneurs .” The Wall Street Journal (Thurs., December 16, 2010): B7.
(Note: ellipses added.)

Longfellow Created a “Hero Whose Bravery Can Inspire”

(p. C13) When it comes to the galloping meter of a narrative poem with a message, Longfellow has no equal.

Unfortunately, this poetic tradition has fallen on hard times. Academics have come to prefer different forms–mainly lyrical verse on personal topics more suited to the tastes of intellectuals than the masses. In recent years, many of Longfellow’s works have fallen out of literary anthologies. The reputations of his contemporaries Emily Dickinson and Walt Whitman have eclipsed his own.
In his day, however, Longfellow was America’s most widely read poet–and his most widely read poem was interpreted as both a warning cry and a call to action on the eve of the Civil War. Yet Longfellow achieved a larger purpose, creating a national hero whose bravery can inspire his fellow citizens down the generations: “For, borne on the night wind of the past / Through all our history, to the last / In the hour of darkness and peril and need / The people will waken and listen to hear / The hurrying hoofbeats of that steed / And the midnight message of Paul Revere.”

For the full review, see:
JOHN J. MILLER. “MASTERPIECE; Spotty History, Maybe, but Great Literature.” The New York Times Book Review (Sat., December 18, 2010): C13.

Trade Stats Count iPhone as Chinese Export, Despite Only 3.6% of iPhone Costs from China

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

(p. B1) . . . two academic researchers estimate that Apple Inc.’s iPhone–one of the best-selling U.S. technology products–actually added $1.9 billion to the U.S. trade deficit with China last year.

How is this possible? The researchers say traditional ways of measuring global trade produce the number but fail to reflect the complexities of global commerce where the design, manufacturing and assembly of products often involve several countries.
“A distorted picture” is the result, they say, one that exaggerates trade imbalances between nations.
Trade statistics in both countries consider the iPhone a Chinese export to the U.S., even though it is entirely designed and owned by a U.S. company, and is made largely of parts produced in several Asian and European countries. China’s contribution is the last step–assembling and shipping the phones.
So the entire $178.96 estimated wholesale cost of the shipped phone is credited to China, even though the value of the work performed by the Chinese workers at Hon Hai Precision Industry Co. accounts for just 3.6%, or $6.50, of the total, the researchers calculated in a report published this month.

For the full story, see:
ANDREW BATSON. “Not Really ‘Made in China’; The iPhone’s Complex Supply Chain Highlights Problems With Trade Statistics.” The Wall Street Journal (Thurs., December 16, 2010): B1 & B2.
(Note: ellipsis added.)
(Note: the online version of the article is dated DECEMBER 15, 2010nd that were not in the print version.)

The research report breaking down iPhone costs by country is:

Xing, Yuqing, and Neal Detert. “How the Iphone Widens the United States Trade Deficit with the People’s Republic of China.” ADBI Working Paper Series, no. 257, December 2010.

Supervising a Talented Inventor

(p. 180) Anyone who has ever supervised a talented subordinate with a tendency to set his own priorities will find Watt’s letters familiar: “I wish William could be brought to do as we do, to mind the business in hand, and let such as Symington [William Symington, the builder of the Charlotte Dundas, one of the world’s first steam-engine boats] and Sadler [James Sadler, balloonist and inventor of a table steam engine] throw away their time and money, hunting shadows.”

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.
(Note: italics and bracketed words in original.)

Chinese Communist Oligarchs Unfriend the World

“The Facebook friendship map, created by Paul Butler.” Source of caption and map: online version of the WSJ article quoted and cited below.

(p. B7) The contrast between Facebook’s spreading global network of users and its effective absence from China is starkly illustrated by a map, produced by a Facebook intern and flagged on the Economist’s website earlier this month, that has lately become a point of fascination of the Chinese Internet.

Described by its creator Paul Butler as “a social graph of 500 million people,” the map represents the worldwide volume of Facebook friendships across geographic locations using lines of varying intensity. Butler’s methodology is interesting in its own right, but what appeared to most interest China’s netizens was how China appears on the map. Or, rather, how it doesn’t.
. . .
Since Facebook is blocked in China, the number Facebook friendship lines flowing in and out of the country is essentially negligible, making China almost impossible to see.”

For the full story, see:
Josh Chin. “Facebook Gets Back Into China (Sort of…).” The Wall Street Journal (Tues., December 21, 2010): B7.
(Note: ellipsis added.)
(Note: the online version of the article has the title “Facebook Gets Back Into China (Sort of…)” and includes paragraphs at the end that were not in the print version.)

Bronson Alcott’s Environmentalist Utopia Failed from Too Much Verbal Manure and Too Little Real Manure

(p. 21) Like many educational theorists, Bronson Alcott found his own children hard to manage. And, again like many visionaries, he also found it hard to hold down a job. As a result, the family moved 29 times in as many years. In 1843 Bronson helped found Fruitlands, a utopian community 15 miles west of Boston. Members of the commune, which numbered 13 people at its height, advocated abolitionism, environmentalism, feminism and anarchism, forswearing meat, alcohol, neckcloths, haircuts, cotton (because it was grown by slaves) and leather (because it was harvested from animals). Their rejection of one more animal product, manure, helps explain why Fruitlands failed after only eight months: this new Eden remained barren in the absence of fertilizer.

In “Transcendental Wild Oats,” a satiric memoir Louisa based on the diary she kept at Fruitlands, one character asks “Are there any beasts of burden on the place?” and is answered, “Only one woman!” In real life, the expulsion of the lone female convert, probably for helping herself to some fish on the sly, left Louisa’s mother, Abigail, to do all the women’s work and much of the men’s — especially since Bronson and his sidekick, Charles Lane, made a habit of disappearing on recruiting trips at the very moment farm labor was required.

For the full review, see:
LEAH PRICE. “American Girl.” The New York Times Book Review (Sun., December 12, 2010): 21.
(Note: the online version of the review is dated December 10, 2010.)

The books under review are:
Cheever, Susan. Louisa May Alcott: A Personal Biography. New York: Simon & Schuster, 2010.
Francis, Richard. Fruitlands: The Alcott Family and Their Search for Utopia. New Haven, CT: Yale University Press, 2010.

Not Long on Dong—Vietnam’s Proletariat Use American Dollar Instead

“A black-market money exchange in Hanoi trades dong for dollars.” Source of caption and photo: online version of the WSJ article quoted and cited below.

They say that for children, ‘a spoonful of sugar helps the medicine go down.’ Maybe for adults, a spoonful of irony helps the zeitgeist go down?
America lost the war in Vietnam to the Communist Vietcong. Now, the Vietnam government, consisting of the linear descendants of the Communist Vietcong, has so run their currency (the dong) into the ground, that Vietnam’s proletariat are choosing to use the American dollar instead of the Vietnamese dong.

(p. C1) HO CHI MINH CITY, Vietnam–At a time when many emerging markets are trying to stem a destabilizing rise in their local currencies against the dollar, up-and-coming Vietnam is grappling with a rather different problem: Residents can’t get enough of the U.S. greenback, as their own currency, the dong, threatens to spiral lower.
. . .
. . . the Communist-run government’s determination to hit persistently high growth targets, coupled with state-directed lending growth of more than 30% annually in recent years, have flooded Vietnam’s economy with money and created a raft of problems for the local currency. The excess capital has triggered a sharper uptick in inflation than has been seen in other emerging markets, stripping confidence in the dong as residents doubt their government can manage rising costs in the months ahead.
. . .
. . . , the government is projecting an inflation rate of at least 7% a year for the next five years, far higher than its neighbors, in a sign that it intends to pursue its target-driven, growth-at-all-costs policies.
“This isn’t a sustainable way to run an economy,” says Nguyen Quang A, an economist who ran Vietnam’s only independent economic think tank until its founders opted to close it amid tightening government censorship.

For the full story, see:
JAMES HOOKWAY. “Vietnam Battles Dark Side of Boom.” The Wall Street Journal (Thurs., DECEMBER 16, 2010): C1-C2.
(Note: ellipses added.)
(Note: the online version of the article is dated DECEMBER 15, 2010; the last couple of sentences (starting with “the government”) appear in the online, but not in the print, version of the article.)

Suppression of Cistercians Did Not Delay Industrial Revolution

(p. 138) . . . , the Cistercians’ proven ability to produce substantial quantities of high-quality iron not only fails to prove that they were about to ignite an Industrial Revolution when they were suppressed in the early sixteenth century, it actually demonstrates the opposite–and for two reasons. First, the iron of Laskill and Fontenoy was evidence not of industrialization, but of industriousness. The Cistercians owed their factories’ efficiency to their disciplined and cheap workforce rather than any technological innovation; there’s nothing like a monastic brotherhood that labors twelve hours a day for bread and water to keep costs down. The sixteenth-century monks were still using thirteenth-century technology, and they neither embraced, nor contributed to, the Scientific Revolution of Galileo and Descartes.

The second reason is even more telling: For centuries, the Cistercian monasteries (and other ironmakers; the Cistercians were leaders of medieval iron manufacturing, but they scarcely monopolized it) had been able to supply all the high-quality iron that anyone could use, but all that iron still failed to ignite a technological revolution. Until something happened to increase demand for iron, smelters and forges, like the waterpower that drove them, sounded a lot like one hand clapping. It would sound like nothing else for–what else?–two hundred years.

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