Property Rights – Page 9 – artdiamondblog.com

Morales Slaughters Snow-White Llama to Celebrate Nationalization of Tin Smelter

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.)

Communists Import Giant Rabbits to End Starvation in North Korea

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

Middendorf “Studied Under Joseph Schumpeter”

Source of book image: http://basicbooks.com/perseus/book_detail.jsp?isbn=0465045731

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.

To Help Poor: “Allow Entrepreneurs to Flourish”

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.

The Poignant Nobility of Katalimata

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

Intellectual Property Rights in Toilet

CHICAGO (AP) — The gunman who fatally shot three people in a law firm’s high-rise office before he was killed by police felt cheated over an invention, authorities said Saturday.

Joe Jackson forced a security guard at gunpoint to take him up to the 38th floor offices of Wood, Phillips, Katz, Clark & Mortimer, which specialized in intellectual property and patents. He carried the revolver, a knife and a hammer in a large manila envelope and chained the office doors behind him, police said.

Jackson, 59, told witnesses before he was shot that he had been cheated over a toilet he had invented for use in trucks, Police Superintendent Phil Cline said.

For the full story, see:

"Shooter felt cheated over toilet, police say." Omaha World-Herald (Sun., 12/10/2006): 4A.

The Entrepreneur Versus the Government

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.

Cheap, Easy, Transparent Property Rights Institutions Are Key to Developing Long Tail

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.

In Egypt: The Authorities Versus the Entrepreneur

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.

Hernando de Soto Creates Buzz in Clinton Hallways

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.)