Books – Page 140 – artdiamondblog.com

“The Individual Dominates the Story of American Innovation and Is Insufficiently Honored”

When an innovator is overlooked or an innovation misrepresented it is not simply a question of equity; it distorts our perception of the essence of innovation and the essential qualities of an innovator. It clouds our perception of what it takes to survive in global competition.

The individual dominates the story of American innovation and is insufficiently honored in our histories — to say nothing of the abysmal history courses in schools and colleges. Only recently did Columbia University honor Armstrong with a plaque in his laboratory, and Rutgers University is still short of funds to catalog properly the immeasurable riches of Thomas Edison’s papers — all five million pages of them.

The research departments of major corporations have not been unproductive — one thinks of the Bell Labs for the transistor and today Monsanto in biotechnology — but can anyone have had more impact on our world than the 23-year-old trucker who got frustrated at the day he spent on the noisy pier in Hoboken, N.J., waiting to have his cotton bales unloaded from his truck, loaded onto the cargo ship, and then unloaded and loaded again at the other end?

For nearly 20 years, Malcom McLean did nothing about his inspiration that it would have saved everyone a lot of time and trouble if he had just been able to drive his truck on to the ship. Why didn’t anybody facilitate that before he organized the sailing of the Ideal X from Port Newark, N.J., on April 26, 1956? Might as well ask why it took us so long to put wheels on luggage.

For the full commentary, see:

HAROLD EVANS. "The American Way." The Wall Street Journal (Sat., February 17, 2007): A9.

Evans is the author of a huge, very interesting book:

Evans, Harold. They Made America: Two Centuries of Innovators from the Steam Engine to the Search Engine. New York: Little, Brown and Co., 2004.

“The Least Hospitable Environment on Earth”

Source of the book image: http://images.usatoday.com/money/_photos/2007/03/26/cubicle-bookx-large.jpg

Office humor is an oxymoron. At least that was the prevailing view until Scott Adams’s "Dilbert" comic strip and, more recently, British television import "The Office" opened up this fertile ground for mainstream ridicule. The latest entry in the growing corpus of workplace-whacking is "The Cubicle Survival Guide: Keeping Your Cool in the Least Hospitable Environment on Earth," by first-time author and Web-site production coordinator James F. Thompson.

Mr. Thompson’s target: the cubicle, or "cube," as it is not so fondly known. It’s surprising to learn that this ubiquitous steel-and-fabric prison was not invented until the 1960s, the dubious brainstorm of a Colorado fine-arts professor named Bob Probst. His goal, according to Mr. Thompson, was to encourage co-workers to "freely exchange ideas and inspiration" — and not, as commonly believed, to breed a legion of the undead who feel they are somehow unworthy of, say, a door.

For the full review, see:

MARTIN KIHN. "BOOKS; The Best Way to Labor Away in Our Little Boxes." The Wall Street Journal (Weds., March 14, 2007): D9.

The reference to the book, is:

James F. Thompson. THE CUBICLE SURVIVAL GUIDE. (Villard, 216 pages, $12.95)

Neglect of the Important Issues, Is the Opportunity Cost of Pursuing the Cutely Clever

The Wall Street Journal summarizes an April 2, 2007 article by Noam Scheiber in The New Republic:

A new generation of economists has become so addicted to cleverness that dull but genuinely useful research is under threat.

"Freakonomics," the 2005 best seller that sought to explain the mysteries of everyday life through economics, is only partly to blame, writes Noam Scheiber. The deeper roots lie in a 1980s crisis of faith over economists’ ability to reliably crunch numbers. Influential economist H. Gregg Lewis kicked it off by demonstrating that a host of broad, worthwhile empirical surveys of unions’ impact on wages came to opposite conclusions, mostly thanks to the differing original assumptions by the studies’ authors.

As a result, some economists retrenched, opting to focus on finding "solid answers to modest questions."

For the full summary, see:

"Informed Reader; Economics; How ‘Freakonomics’ Quashes Real Debates." The Wall Street Journal (Weds., March 28, 2007): B11.

“Roosevelt Warned us of Fearing Fear Itself; Now We Fear Life Itself”

Source of book image: http://ec1.images-amazon.com/images/P/159523005X.01._SCLZZZZZZZ_V46468787_SS500_.jpg

I saw Todd Buchholz on C-Span and on CNBC, and I enjoyed hearing his views, so I decided to buy his Bringing the Jobs Home. I don’t like the title, because it sort of implies that the job market is a zero-sum-game, in which one country’s gain implies another country’s loss. Us true-blue free marketers believe that the market is a non-zero-sum game in which everyone everywhere can have jobs, and have better ones over time.

But Buchholz’s little book is fun to read, and says much that is plausible about how the government hurts the worker and reduces the efficiency of the labor market.

Read the following excerpt for part of his rousing conclusion to the book.

(And, Aaron, I agree with you that Buchholz is wrong to say the American spirit is "innate.")

(p. 177) . . . : Since the 1960s, each year we’ve lost a little nerve, gained another bureaucrat, another lawyer, another layer of protection against life’s uncertainties. We have gotten used to a government that aims to coddle us but ends up both preventing us from growing and dampening the innate American spirit. The spirit still stirs but gets buried under the weight of the nanny state.

. . .

(p. 178) American government officials today cannot put our standard of living in a lockbox to preserve, protect and defend us. Franklin D. Roosevelt warned us of fearing fear itself; now we fear life itself.

. . .

(p. 179) To paraphrase Churchill, Americans did not sail the perilous Atlantic, scale the Appalachians and struggle past the Rockies because we were made of cotton candy.

Source:

Buchholz, Todd G. Bringing the Jobs Home: How the Left Created the Outsourcing Crisis–and How We Can Fix It. New York: Sentinel, 2004.

“Unlikely Collection of French Socialists” Liberated Global Capital Flows?

Source of book graphic: http://www.hup.harvard.edu/catalog/ADBCAP.html

Rawi Abdelal, a Harvard Business School professor, has advanced a novel theory in "Capital Rules: The Construction of Global Finance." Drawing on extensive documentary evidence, as well as dozens of interviews with high-level finance officials and midlevel bureaucrats, he tells a fascinating (and largely unknown) tale: how a clutch of French socialists helped to upend economic orthodoxy and lead the charge for lifting restrictions on capital flows within Europe and throughout the world.

. . .

Mr. Abdelal’s story heats up with the election of Francois Mitterrand in 1981. The new president, together with his majority Socialist Party, set out to storm the Bastille of the economy. He announced plans to nationalize the banks and restrict cross-border capital flows to such a degree that French citizens could take the equivalent of only $427 with them for leisure travel outside France (and were prohibited from using credit cards during such travel). Rather than create a socialist Shangri-La, the moves led to economic chaos. The French had to devalue the franc three times in two short years. Mitterrand then made what the French would elegantly refer to as a tournant but we may bluntly call a U-turn.

This painful episode provided a powerful lesson to a number of senior French officials. Said one: "We recognized, at last, that in an age of interdependence capital would find a way to free itself, and we were obliged to liberate the rest." And so in a Nixon-goes-to-China move, an unlikely collection of French socialists set out to liberalize the country’s controls on cross-border capital flows with a determination that gave new meaning to laissez-faire.

. . .

Mr. Abdelal is unequivocal about the value of Europe’s action: "Global financial markets are global primarily because the process of European financial integration became open and uniformly liberal." He also highlights how free capital flows got a boost from the two primary credit-rating agencies, Standard & Poor’s and Moody’s. In the 1990s, both began to give higher ratings to government-backed debt when the country in question had an open capital account.

For the full review, see:

MATTHEW REES. "Business Bookshelf: Why Money Can Now Make Its Way Around the World." The Wall Street Journal (Weds., February 14, 2007): D12.

(Note: ellipses added.)

Boof reference:

Rawi Abdelal. CAPITAL RULES. Harvard University Press, 304 pages, $49.95.

The Importance of Entrepreneurial Innovation

The U.S. in the midst of the most entrepreneurial era in its history, with more than 500,000 Americans involved in launching their own companies each year and an estimated 10% to 15% of all working adults engaged in some kind of entrepreneurial activity. And among these entrepreneurs, it is the innovators who matter most.

Their enterprises are the ones which create the jobs and industries of the future — as they have lifted the economy’s productivity in the past. The automobile, the airplane, the telephone, air conditioning, the personal computer and its software, and Internet search engines — all were launched by innovative entrepreneurs rather than large companies.

For the full commentary, see:

ROBERT E. LITAN. "Innovators Matter Most." The Wall Street Journal (Sat., February 24, 2007): A8.

Mexican Federal Taxi “Charters” Increase Taxi Prices

A non-federally-chartered taxi leaves the Cancun Hilton, headed for the Cancun airport, charging $23. An identical, but federally-chartered cab, making the reverse trip, charges $40. (Photo by Art Diamond.)

When we arrived at the Cancun airport we faced a chaotic environment where many Mexicans were yelling at us to buy taxi tickets. After buying a ticket for $40, someone escorted us to a crowded, chaotic place to wait for a cab. We waited and waited in the noise and the heat. At some point, my daughter Jenny commented, "These people need to get organized."

Yes, Jenny they sure do! And you might think that what they need in order to get organized, is for the government to come in to organize them.

But it turns out that the government has already come in. Only federally charged taxis are allowed to take passengers from the airport to the hotel zone. The price is fixed at $40. On the other hand, any taxi may take passengers back to the airport, from the hotel zone. The base price for a return trip was $23 . (I added a $2 tip out of sympathy for the cabbie not driving a federally anointed cab.)

So, yes, these people need to get organized, and the best way to do that is to get their government out of their way, so that they can organize themselves through the free market.

Note: relevant guide book passage: "[Returning to the airport] the rate will be much less for the trip from the airport. (Only federally chartered taxis may take fared from the airport, but any taxi may bring passengers to the airport.)" (p. 78)

Note: italics in original; bracketed phrase added.

Source:

Baird, David, and Lynne Bairstow. Frommer’s Cancun, Cozumel & the Yucatan 2007. Hoboken, NJ: Wiley Publishing, Inc., 2006.

A Public Choice Theory of the Absence of Evidence of the Exodus of the Israelites

The excavation of a fort from roughly the time and place of the biblical exodus of the Israelites from Egypt. Source of photo: the online version of the NYT article cited below.

The economic theory of public choice is often viewed as having begun with Buchanan and Tullock’s The Calculus of Consent. The theory seeks to explain the behavior of government, and government officials, as arising from the same self-interested motives as are used by economists to explain the behavior of free markets, firms, and consumers.

It didn’t look like much — some ancient buried walls of a military fort and a few pieces of volcanic lava. The archaeologist, Dr. Zahi Hawass, often promotes mummies and tombs and pharaonic antiquities that command international attention and high ticket prices. But this bleak landscape, broken only by electric pylons, excited him because it provided physical evidence of stories told in hieroglyphics. It was proof of accounts from antiquity.

That prompted a reporter to ask about the Exodus, and if the new evidence was linked in any way to the story of Passover. The archaeological discoveries roughly coincided with the timing of the Israelites’ biblical flight from Egypt and the 40 years of wandering the desert in search of the Promised Land.

“Really, it’s a myth,” Dr. Hawass said of the story of the Exodus, as he stood at the foot of a wall built during what is called the New Kingdom.

. . .

Recently, diggers found evidence of lava from a volcano in the Mediterranean Sea that erupted in 1500 B.C. and is believed to have killed 35,000 people and wiped out villages in Egypt, Palestine and the Arabian Peninsula, officials here said. The same diggers found evidence of a military fort with four rectangular towers, now considered the oldest fort on the Horus military road.

But nothing was showing up that might help prove the Old Testament story of Moses and the Israelites fleeing Egypt, or wandering in the desert. Dr. Hawass said he was not surprised, given the lack of archaeological evidence to date. But even scientists can find room to hold on to beliefs.

Dr. Mohamed Abdel-Maqsoud, the head of the excavation, seemed to sense that such a conclusion might disappoint some. People always have doubts until something is discovered to confirm it, he noted.

Then he offered another theory, one that he said he drew from modern Egypt.

“A pharaoh drowned and a whole army was killed,” he said recounting the portion of the story that holds that God parted the Red Sea to allow the Israelites to escape, then closed the waters on the pursuing army.

“This is a crisis for Egypt, and Egyptians do not document their crises.”

For the full story, see:

MICHAEL SLACKMAN. "North Sinai Journal Did the Red Sea Part? No Evidence, Archaeologists Say." The New York Times (Tues., April 3, 2007): A4.

(Note: ellipsis added.)

A female skelaton buried near the fort (above). Source of photo: the online version of the NYT article cited above.

Communist Dictator Chavez Destroys Freedom of the Press in Venezuela

Supporters of freedom in Venezuela protesting communist dictator Chavez’s shutting down the television network that dared to criticize him. Source of photo: online version of the NYT article that is quoted and cited below.

My Wabash College economics professor, Ben Rogge, used to say that political freedom ultimately depended on economic freedom: how could you depend on a socialist government to provide a printing press to those who seek to undermine socialism?

(In his article "The Case for Economic Freedom" published in his Can Capitalism Survive? Rogge gives credit for the argument to his friend Milton Friedman in his Capitalism and Freedom, which was based on lectures given at Wabash.)

Well, if there is a heaven, I can imagine Rogge there, reading the following passages, and reacting with his sad, knowing, half-smile.

(p. A3) CARACAS, Venezuela, May 27 — With little more than an hour to go late Sunday until this country’s oldest television network was to be taken off the air after 53 years of broadcasting, the police dispersed thousands of protesters by firing tear gas into demonstrations against the measure.

. . .

The president has defended the RCTV decision, saying that the network supported a coup that briefly removed him from office in 2002.

RCTV’s news programs regularly deride Mr. Chávez’s Socialist-inspired transformation of Venezuelan society. “RCTV lacks respect for the Venezuelan people,” said Onán Mauricio Aristigueta, 46, a messenger at the National Assembly who showed up to support the president.

Mr. Chávez has left untouched the operations of other private broadcasters who were also critical of him at the time of the 2002 coup but who have changed editorial policies to stop criticizing his government. That has led Mr. Chávez’s critics to claim that the move to allow RCTV’s license to expire amounts to a stifling of dissent in the news media.

“The other channels don’t say anything,” said Elisa Parejo, 69, an actress who was one of RCTV’s first soap opera stars. “What we’re living in Venezuela is a monstrosity,” she said at RCTV’s headquarters on Sunday, as employees gathered for an on-air remembrance of the network’s history. “It is a dictatorship.”

For the full story, see:

SIMON ROMERO. "Dueling Protests Over Shutdown of Venezuela TV Station." The New York Times (Mon., May 28, 2007): A3.

(Note: the excerpts above are from the updated online version of the article that appeared online under the title: "Venezuela Police Repel Protests Over TV Network’s Closing.")

(Note: ellipsis added.)

On 5/28/07 CNN broadcast a Harris Whitbeck report on students protesting the Chavez censorship under the title "Hear No Evil, See No Evil."

Monica Herrero protests Chavez closing down the television network that dared to criticize his government. Source of photo: screen capture from the CNN report at http://www.cnn.com/video/partners/clickability/index.html?url=/video/world/2007/05/28/whitbeck.chavez.tv.affl

As Online Book Sales Increase, So Do Total Book Sales

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

The graph on the left would not surprise Chris Anderson of The Long Tail. Selling books online supplies greater variety, so that when online sales grow, overall book sales grow too.

(p. B1) For six years, Borders Group Inc. has pursued a distinctly unfashionable strategy: betting big on bricks and mortar while paying little attention to the online world. But with online sales capturing an ever-increasing share of the book business, the No. 2 book retailer is reversing course.

Today, Borders announced its intention to reopen its own branded e-commerce Web site in early 2008, ending an alliance with Amazon.com Inc. that had been the core of its online strategy.

For the full story, see:

JEFFREY A. TRACHTENBERG. "Borders Business Plan Gets a Rewrite; It Will Reopen Web Site, Give Up Most Stores Abroad, Close Many Waldenbooks." The Wall Street Journal (Thurs., March 22, 2007): B1 & B2.

Photo on left is a Borders store; image on right is of Borders CEO George Jones. Source of photo and image: online version of the WSJ article cited above.