Art Diamond's web log
An invaluable reminder that all human progress derives from innovation, entrepreneurship and inventiveness. Wealth creation depends on creative destruction.
Stephen Moore, economist at the Heritage Foundation, economics commentator on CNN. Co-author of It’s Getting Better All the Time, and other works.
Moore’s advance praise is for:
Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, forthcoming June 2019.
(p. B1) PRAGUE — When Zbynek Frolik needed new employees to handle surging orders at his cavernous factories in central Bohemia, he fanned advertisements across the Czech Republic. But in a prosperous economy where nearly everyone had work, there were few takers.
Raising wages didn’t help. Nor did offers to subsidize housing.
So he turned to the robots.
“We can’t find enough humans,” said Mr. Frolik, whose company, Linet, makes state-of-the art hospital beds sold in over 100 countries. “We’re trying to replace people with machines wherever we can.”
Such talk usually conjures visions of a future where employees are no longer needed. In many major economies, companies are experimenting with replacing factory workers, truck drivers and even lawyers with artificial intelligence, raising the specter of a mass displacement of jobs.
But in Eastern Europe, robots are being enlisted as the solution for a shortage of workers. Often they are helping to create new types of jobs as businesses in the Czech Republic, Hungary, Slovakia and Poland try to stay agile and competitive. Growth in these countries, which became low-cost manufacturing hubs for Europe after the fall of Communism, has averaged 5 percent in recent years, buoyed by the global recovery..
For the full story, see:
Alderman, Liz. “Humans Wanted, But Robots Work.” The New York Times (Tuesday, April 17, 2018): B1 & B8.
(Note: the online version of the story has the date April 16, 2018, and has the title “Robots Ride to the Rescue Where Workers Can’t Be Found.”)
(p. A13) Fifty years ago this month, Mr. Ehrlich published “The Population Bomb.” In it he portended global cataclysm–unless the world could be persuaded to stop producing so many . . . well . . . people. The book sketched out possible scenarios of the hell Mr. Ehrlich believed imminent: hundreds of millions dying from starvation, England disappearing by the year 2000, India doomed, the average American’s lifespan falling to 42 by 1980, and so on.
Mr. Ehrlich’s book sold three million copies, and his crabbed worldview became an unquestioned orthodoxy for the technocratic class that seems to welcome such scares as an opportunity to boss everyone else around.
. . .
Enter Julian Lincoln Simon.
Simon was a professor of business and economics at the University of Illinois at Urbana-Champaign. In 1981, when this columnist first met him, Julian would smile and say the doom-and-gloomers had a false understanding of scarcity that led them to believe resources are fixed and limited.
. . .
In 1981 he put his findings together in a book called “The Ultimate Resource.” It took straight aim at Mr. Ehrlich. In contrast to the misanthropic tone of “The Population Bomb” (its opening sentence reads, “The battle to feed all humanity is over”), Julian was optimistic, recognizing that human beings are more than just mouths to be fed. They also come with minds.
. . .
. . . , human beings constantly find new and creative ways to take from the earth, increase the bounty for everyone and expand the number of seats at the table of plenty. Which is one reason Paul Ehrlich is himself better off today than he was when he wrote his awful book–notwithstanding all those hundreds of millions of babies born in places like China and India against his wishes.
For the full commentary, see:
William McGurn. “MAIN STREET; The Population Bomb Was a Dud; Paul Ehrlich got it wrong because he never understood human potential.” The Wall Street Journal (Tuesday, May 1, 2018): A13.
(Note: ellipses in first quoted paragraph, in original; ellipses in rest of quotes, added.)
(Note: the online version of the commentary has the date April 30, 2018.)
The Julian Simon book, mentioned above, is:
Simon, Julian L. The Ultimate Resource. Princeton, NJ: Princeton University Press, 1981.
(p. A1) SACRAMENTO — A full-fledged housing crisis has gripped California, marked by a severe lack of affordable homes and apartments for middle-class families. The median cost of a home here is now a staggering $500,000, twice the national cost. Homelessness is surging across the state.
In Los Angeles, booming with construction and signs of prosperity, some people have given up on finding a place and have moved into vans with makeshift kitchens, hidden away in quiet neighborhoods. In Silicon Valley — an international symbol of wealth and technology — lines of parked recreational vehicles are a daily testimony to the challenges of finding an affordable place to call home.
Heather Lile, a nurse who makes $180,000 a year, commutes two hours from her home in Manteca to the San Francisco hospital where she works, 80 miles away. “I make really good money and it’s frustrating to me that I can’t afford to live close to my job,” said Ms. Lile.
. . .
Now here in Sacramento, lawmakers are considering extraordinary legislation to, in effect, crack down on communities that have, in their view, systematically delayed or derailed housing construction proposals, often at the behest of local neighborhood groups.
The bill was passed by the Senate last month and is now part of a broad package of housing proposals under negotiation that Gov. Jerry Brown and Democratic legislative leaders announced Monday was likely to be voted on in (p. A13) some form later this summer.
“The explosive costs of housing have spread like wildfire around the state,” said Scott Wiener, a Democratic senator from San Francisco who sponsored the bill. “This is no longer a coastal, elite housing problem. This is a problem in big swaths of the state. It is damaging the economy. It is damaging the environment, as people get pushed into longer commutes.”
. . .
The bill sponsored by Mr. Wiener, one of 130 housing measures that have been introduced this year, would restrict one of the biggest development tools that communities wield: the ability to use zoning, environmental and procedural laws to thwart projects they deem out of character with their neighborhood.
For the full story, see:
Adam Nagourney and Conor Dougherty. “Housing Costs Put California In Crisis Mode.” The New York Times (Tuesday, July 18, 2017): A1 & A13.
(Note: ellipses added.)
(Note: the online version of the story has the date July 17, 2017, and has the title “The Cost of a Hot Economy in California: A Severe Housing Crisis.”)
(p. C2) A study published in Cerebral Cortex in July [2015] shows that unusual activity in specific neural areas can predict how easily musicians learn their chops.
. . .
The data . . . point to a distinct starting advantage in some people–and where that advantage might reside in the brain. A retroactive examination of the first fMRI images predicted who would be the best learners.
Those with a hyperactive Heschl’s gyrus (part of the cerebral cortex that is associated with musical pitch) and with lots of reactivity in their right hippocampus (an area linked to auditory memory) turned out to be more likely to remember tunes they had heard before and, after some practice, play them well.
The “kicker,” said Dr. Zatorre, was finding that neural head start. “That gives you an advantage when you’re learning music, and it’s a completely different system from the parts of the brain that show learning has taken place. It speaks to the idea of 10,000 hours.” In his book “Outliers,” Malcolm Gladwell called 10,000 hours of practice “the magic number of greatness.” Dr. Zatorre disagrees, saying, “Is it really fair to say that everyone’s brain is structured the same way, and that if you practice, you will accomplish the same thing?”
For the full commentary, see:
Susan Pinker. “Practice Makes Some Perfect, Others Maybe Not.” The Wall Street Journal (Saturday, Aug. 29, 2015): C2.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the commentary has the date Aug. 26, 2015.)
The print version of the Cerebral Cortex article discussed above, is:
Herholz, Sibylle C., Emily B. J. Coffey, Christo Pantev, and Robert J. Zatorre. “Dissociation of Neural Networks for Predisposition and for Training-Related Plasticity in Auditory-Motor Learning.” Cerebral Cortex 26, no. 7 (July 1, 2016): 3125-34.
The Gladwell book mentioned above, is:
Gladwell, Malcolm. Outliers: The Story of Success. New York, NY: Little, Brown, and Co., 2008.
(p. C6) In August [2018], Mayor Bill de Blasio signed a package of bills capping the number of cars driving in New York City for companies like Uber and Lyft and setting minimum pay for drivers. The mayor had long wanted such restrictions, but for years Uber had successfully pushed back, thanks in large part to strategist and venture capitalist Bradley Tusk.
“The problem is not only did this happen in New York, but now it’s going to happen everywhere,” laments Mr. Tusk, who worked as a consultant for Uber Technologies from 2010 to 2015, earning equity that was eventually worth around $100 million. Under his guidance, Uber mobilized its users to lobby against the legislation and made the case that its service provided transportation to people in the outer boroughs and jobs to immigrants and minorities.
. . .
Since working for Uber, Mr. Tusk has helped other tech companies in similar political battles. As he sees it, politicians too often sacrifice their constituents’ economic interests for their own political gain. “What’s good for politician X isn’t necessarily good for the businesses in his or her district,” he says. “Without at least some people like us, innovation gets crushed by politics and corruption and that’s really bad for the economy and for society.”
. . .
After serving as campaign manager of Mr. Bloomberg’s reelection effort, in 2010 Mr. Tusk founded Tusk Strategies with the goal of running campaigns for companies and institutions rather than politicians. At the time, Walmart was looking for a way to enter markets without pushback from powerful unions. Mr. Tusk urged city councils, including New York’s, to stop blocking its entry by polling customers, launching television ads and mobilizing constituents who wanted the choice of shopping at Walmart.
Then one of Mr. Bloomberg’s former deputy mayors called him with a proposition: “There’s this guy with a small transportation startup. He’s having some regulatory problems. Would you mind talking to him?” It was Uber. The New York City Taxi and Limousine Commission had sent Uber a cease and desist letter, and its then-CEO Travis Kalanick needed someone who understood New York politics. Mr. Tusk mounted successful campaigns on behalf of the company in New York and other cities, including Washington, D.C., and Los Angeles.
. . .
Does he see himself as an example of the revolving door between politics and business? “I’m absolutely using the savvy I learned in the political world–just in a different way than most,” he says. But he has no intentions of ever returning to government. “I felt like I could force more change on the system from the outside,” he says. “Not only am I not doing politics, but most of my work is making politicians crazy.”
For the full interview, see:
Alexandra Wolfe, interviewer. “”WEEKEND CONFIDENTIAL; Bradley Tusk from Political Insider to ‘Fixer’ for Tech.” The Wall Street Journal (Saturday, Sept. 1, 2018): C6.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the interview has the date Aug. 31, 2018, and the title “WEEKEND CONFIDENTIAL; How Bradley Tusk Went from Political Insider to ‘Making Politicians Crazy’.”)
The book under discussion above, is:
Tusk, Bradley. The Fixer: My Adventures Saving Startups from Death by Politics. New York: Portfolio, 2018.
(p. C2) A key tenet of modern feminism is that women will have achieved equity only when they fill at least 50% of the positions once filled by men. In some fields, women have already surpassed that target–now comprising, for example, 50.7% of new American medical students, up from just 9% in 1965, and 80% of veterinary students. But the needle has hardly moved in many STEM fields–such as the physical sciences, technology, engineering and math, in which barely 20% of the students are female.
A new study suggests some surprising reasons for this enduring gap. Published last month in the journal Psychological Science, the study looked at nearly a half million adolescents from 67 countries who participated in the Program for International Student Assessment, the world’s largest educational survey. Every three years, PISA gauges the skills of 15-year-olds in science, reading and math reasoning. In each testing year, the survey focuses in depth on one of those categories.
. . .
Some fascinating gender differences surfaced. Girls were at least as strong in science and math as boys in 60% of the PISA countries, and they were capable of college-level STEM studies nearly everywhere the researchers looked. But when they examined individual students’ strengths more closely, they found that the girls, though successful in STEM, had even higher scores in reading. The boys’ strengths were more likely to be in STEM areas. The skills of the boys, in other words, were more lopsided–a finding that confirms several previous studies.
For the full commentary, see:
Susan Pinker. “Why Don’t More Women Choose STEM Careers?” The Wall Street Journal (Saturday, March 3, 2018): C2.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date March 1, 2018, and has the title “Why Aren’t There More Women in Science and Technology?”)
The print version of the Psychological Science article discussed above, is:
Stoet, Gijsbert, and David C. Geary. “The Gender-Equality Paradox in Science, Technology, Engineering, and Mathematics Education.” Psychological Science 29, no. 4 (April 2018): 581-93.
(p. A18) BUFFALO — More than six years ago, Gov. Andrew M. Cuomo announced his bold vision for New York’s second largest and perhaps longest-suffering city.
“We believe in Buffalo. Let’s put our money where our mouth is,” Mr. Cuomo said, announcing an economic development package of $1 billion. “That is a big ‘B’ — standing for Buffalo and standing for billion.”
. . .
“I think the Buffalo Billion sounds better than it probably turned out to be,” said Isaac Ehrlich, a SUNY distinguished professor of economics at the University at Buffalo.
Indeed, while construction work blossomed in early years, economists note broader employment growth in the city and region has consistently lagged behind the nation as a whole, as well as behind other Rust Belt cities, despite gains during the nation’s nine-year recovery. Perhaps more troubling, recent reports suggest that the job market essentially slowed to a crawl last year, as activity in manufacturing, retail and business services sectors flagged.
. . .
George Palumbo, an economics professor at Canisius College in Buffalo, said that the gleaming new buildings at the medical campus “take nice pictures,” but said the development was also illusory.
“You don’t have to go very far from that neighborhood to see Buffalo blight,” he said, “not Buffalo billion.”
For the full story, see:
Jesse McKinley. “Six Years Later, Cuomo’s ‘Buffalo Billion’ Project Yields Uneven Results.” The New York Times (Tuesday, July 3, 2018): A18.
(Note: ellipses added.)
(Note: the online version of the story has the date July 2, 2018, and has the title “‘Cuomo’s ‘Buffalo Billion’: Is New York Getting Its Money’s Worth?”)
(p. A9) In the 1960s, Charles Kao often annoyed his wife, Gwen, by coming home late for dinner.
Dr. Kao, a refugee from the Chinese Communist revolution, told her his research for a British subsidiary of International Telephone & Telegraph Corp. could change the world one day.
. . .
In a 1966 paper written with George Hockham, he outlined the potential for using pulses of light to carry huge volumes of voice and data signals long distances through strands of glass that became known as optical fibers. Few took him seriously until several years later, when Corning Glass Works found ways to do just that.
. . .
Dr. Kao was once asked how long fiber optics would be used. Nothing better was likely to come along for 1,000 years, he said. “But don’t believe what I say,” he added, “because I didn’t believe what experts said either.”
For the full obituary, see:
James R. Hagerty. “‘Early Bet on Optical Fibers Yielded Pipes for Internet.” The New York Times (Saturday, Sept. 29, 2018): A9.
(Note: ellipses added.)
(Note: the online version of the obituary has the date Sept. 28, 2018, and has the title “‘Chinese Refugee Developed Fiber-Optic Technology That Made the Internet Possible.”)
Source of graph: online version of the WSJ article quoted and cited below.
(p. B1) SAN FRANCISCO–Since Apple Inc. launched the iPhone in June 2007, the smartphone revolution it unleashed has changed the way people work and socialize while reshaping industries from music to hotels.
It also has transformed the company in ways that co-founder Steve Jobs could hardly have foreseen.
Ten years later, the iPhone is one of the best-selling products in history, with about 1.3 billion sold, generating more than $800 billion in revenue. It skyrocketed Apple into the business stratosphere, unlocking new markets, spawning an enormous services business and helping turn Apple into the world’s most valuable publicly traded company.
. . .
(p. B8) . . . , Apple didn’t open the device to application developers until 2008, when it added the App Store and began taking 30% of each app purchase.
Since then, app sales have generated roughly $100 billion in gross revenue as Apple has registered more than 16 million app developers world-wide.
. . .
As sales surged, Apple staffed up. The company hired about 100,000 people in the 10-year span, bringing its global workforce to 116,000 from 18,000 in 2006. New workers were brought on to manage relationships with cellphone carriers, double the number of retail stores and maintain an increasingly complex supply chain.
Source of graph: online version of the WSJ article quoted and cited below.
For the full story, see:
Tripp Mickle. “‘How iPhone Decade Reshaped Apple.” The Wall Street Journal (Wednesday, June 21, 2017): B1 & B8.
(Note: ellipses added.)
(Note: the online version of the story has the date June 20, 2017, and has the title “Among the iPhone’s Biggest Transformations: Apple Itself.”)
