June 2009 – artdiamondblog.com

“Entrepreneurs Must Be Allowed to Retain the Wealth They Create”

(p. 305) Entrepreneurs seek money chiefly for positive reasons: to perform their central role in economic growth. Just as a sociologist needs free time and access to libraries and research aides, and a scientist needs a laboratory and assistants, and a doctor needs power to prescribe medicine and perform surgery–just as intellectuals need freedom to write and publish–capitalists need economic freedom and access to capital to perform their role in launching and financing enterprise. Entrepreneurs must be allowed to retain the wealth they create because only they, collec- (p. 306) tively, can possibly know who to give it to–how to invest it productively among the millions of existing businesses and the innumerable visions of new enterprise in the world economy.

Source:
Gilder, George. Recapturing the Spirit of Enterprise: Updated for the 1990s. updated ed. New York: ICS Press, 1992.

To Cure Fatal Diseases We Need More Financial Incentives and Fewer F.D.A. Restrictions

“JOSHUA THOMPSON with his sons, Wyatt and Jordan, after his diagnosis, top, and before, with his wife, Joy, and Wyatt.” Source of the photos and caption: online version of the NYT article quoted and cited below.

(p. 1) VIRGINIA BEACH — As Lou Gehrig’s disease sapped Joshua Thompson of his ability to move and speak last fall, he consistently summoned one question from within the prison of his own body. “Iplex,” he asked, in a whisper that pierced his mother’s heart. “When?”

Iplex had never been tested in people with amyotrophic lateral sclerosis, the formal name for the fatal disease that had struck Joshua, 34, in late 2006. Developed for a different condition and banished from the market by a patent dispute, it was not for sale to the public anywhere in the world.
But Kathy Thompson had vowed to get it for her son. On the Internet, she had found enthusiastic reviews from A.L.S. patients who had finagled a prescription for Iplex when it was available, along with speculation by leading researchers as to why it might slow the progressive paralysis that marks the disease. And for months, as she begged and bullied biotechnology companies, members of Congress, Italian doctors and federal drug regulators, she answered Joshua the same way:
“Soon,” she said. “Soon.”
At a time when terminally ill patients have more access to medical research than ever before, and perhaps a deeper conviction in its ability to cure them, many are campaigning for the chance to be treated with drugs whose safety and effectiveness is not yet known.
. . .
(p. 19) “Josh’s sadness is unbearable,” his mother wrote one night in her journal, nearly a year after her son’s diagnosis.
Unexpected encouragement came in a Mother’s Day note from her ex-husband. “You have given me some peace of mind that all potential options for Josh are being researched and acted upon,” Bruce wrote. “Thank you.”
Kathy’s boyfriend accompanied her to Insmed’s headquarters in Richmond, Va., offering to raise several million dollars to underwrite a compassionate use program for Iplex in the United States with A.L.S. patients. But the couple came away with a new understanding: F.D.A. regulations, they were told, prohibit any company from profiting on compassionate use. Even if Insmed could wriggle free of restrictions in the patent agreement, there was little financial incentive for it to invest in making the drug solely for compassionate use by A.L.S. patients.
. . .
On Jan. 16, when Dr. Werwath called to tell her the application had been rejected, she stood up in disbelief.
“How could that be?” she asked, dazed.
Kathy’s friend Mrs. Reimers had received a call with the same news.
“He said they had safety concerns,” Mrs. Reimers said. “This for a drug that was approved for children!”
“Safety,” Kathy repeated. “And what, exactly, is safe about A.L.S.?”

Appealing an F.D.A. Denial
Before the F.D.A.’s decision, Kathy had spared little thought for any broader meaning of her quest for Joshua. But when she met with Richard A. Samp, a lawyer with the Washington Legal Foundation a week later, her outrage went beyond her son, and beyond Iplex.
“The F.D.A. is supposed to protect American citizens,” Kathy fumed over an iced tea in Williamsburg, Va. “How does denying dying patients access to this drug serve the common good?”
Mr. Samp had handled a lawsuit by a patient advocacy group, the Abigail Alliance, that had sought to establish a constitutional right for terminally ill patients to use experimental drugs. In the case, which the group had lost on appeal in 2007, the F.D.A. claimed that it granted “nearly all” requests for compassionate use.
They would first make an administrative appeal, Mr. Samp told Kathy, asserting that the F.D.A. had violated its own guidelines. If that failed, they could pursue litigation that might allow them to raise the constitutional question again in a federal court in Virginia.
. . .
Kathy was pouring milk for her cereal on the morning of March 10 when Dr. Werwath’s number flashed on her phone. The F.D.A. had just reversed itself, he said.
Before she could take a breath, Senator Mark Warner’s office called. E-mail bleeped in as the news seeped out.
In the weeks after the appeal, Kathy learned, the F.D.A. had reached out to Insmed. The agency had persuaded the company to run a clinical trial for Iplex with several dozen A.L.S. patients, and permitted it to recoup the hefty costs directly from participants. In the trial, some of the participants would get a placebo. That way, the F.D.A. wrote on its Web site, the next wave of A.L.S. patients would learn whether the drug was in fact beneficial or harmful.
But for now, the agency had ruled, Joshua and 12 other patients would be given Iplex outside of the trial, on a compassionate use basis, if they agreed to read all the data about the risks.

For the full version of a very long story, see:
AMY HARMON. “Months to Live; Fighting for a Last Chance at Life; One Family’s Tenacious Campaign for Access to an Unproven Drug.” The New York Times, First Section (Sun., May 17, 2009): 1, 18-19.
(Note: ellipses added.)

“IN MARCH, Joshua Thompson received his first Iplex injection, from Dr. David L. Werwath. Thereafter Joshua’s wife, Joy, left, and mother, Kathy, took over the daily duties.” Source of the photo and caption: online version of the NYT article quoted and cited above.

“Don’t Kill the Goose”

(p. A11) I think there are two major but not fully formed or fully articulated fears among thinking Americans right now, and the deliberate obscurity of official language only intensifies those fears.

The first is that Mr. Obama’s government, in all its flurry of activism, may kill the goose that laid the golden egg. This is as dreadful and obvious a cliché as they come, but too bad, it’s what people fear. They see the spending plans and tax plans, the regulation and reform hunger, the energy proposals and health-care ambitions, and they–we–wonder if the men and women doing all this, working in their separate and discrete areas, are being overseen by anyone saying, “By the way, don’t kill the goose.”
The goose of course is the big, messy, spirited, inspiring, and sometimes in some respects damaging but on the whole brilliant and productive wealth-generator known as the free-market capitalist system. People do want things cleaned up and needed regulations instituted, and they don’t mind at all if the very wealthy are more heavily taxed, but they greatly fear a goose killing. Economic freedom in all its chaos and disorder has kept us rich for 200 years, and allowed us as a nation to be generous and strong at home and in the world. But the goose can be killed–by carelessness, hostility, incrementalism, paralysis, and by no one saying, “Don’t kill the goose.”

For the full commentary, see:
PEGGY NOONAN. “What’s Elevated, Health-Care Provider? Economy of language would be good for the economy.” Wall Street Journal (Sat., MAY 15, 2009): A11.

“Flock of Intellectuals” Called Eiffel Tower “Dizzily Ridiculous”

(p. W12) The tower is so beloved that few today remember the storm of vitriol, mockery and lawsuits provoked by its selection as the startling centerpiece of the 1889 Paris Exposition Universelle. (One of the losing entries was a gigantic working guillotine!) Even as Eiffel was breaking ground by the Seine River in February 1887, 47 of France’s greatest names decried in a letter to Le Temps the “odious column of bolted metal.” What person of good taste, this flock of intellectuals asked, could endure the thought of this “dizzily ridiculous tower dominating Paris like a black and gigantic factory chimney, crushing [all] beneath its barbarous mass”? The revered painters Ernest Meissonier and William-Adolphe Bouguereau, writers Guy de Maupassant and Alexandre Dumas fils, composer Charles Gounod and architect Charles Garnier all signed this epistolary call to arms, stating that “the Eiffel Tower, which even commercial America would not have, is without a doubt the dishonor of Paris.”

Gustave Eiffel, a self-made millionaire whose firm constructed much-admired bridges all over the world, happily twitted his critics: “They begin by declaring that my tower is not French. It is big enough and clumsy enough for the English or Americans, but it is not our style, they say. We are more occupied by little artistic bibelots. . . . Why should we not show the world what we can do in the way of great engineering projects?”

For the full commentary, see:
JILL JONNES. “MASTERPIECE; ‘Odious Column’ of Metal; The Eiffel Tower wasn’t always a beloved icon.” Wall Street Journal (Tues., MAY 9, 2009): W12.
(Note: ellipsis in original.)

There’s Still Space in Diamond’s Fall Seminar on the Economics of Entrepreneurship at the University of Nebraska at Omaha

Environmentalists Lay Guilt on Rafael for His New Set of Legos

“David Batker with his son Rafael de la Torre Batker, 9, who worried it might hurt the environment if he bought a new set of Legos.” Source of photo and caption: online version of the NYT article quoted and cited below.

(p. A1) The thick-lined drawings of the Earth, a factory and a house, meant to convey the cycle of human consumption, are straightforward and child-friendly. So are the pictures of dark puffs of factory smoke and an outlined skull and crossbones, representing polluting chemicals floating in the air.

Which is one reason “The Story of Stuff,” a 20-minute video about the effects of human consumption, has become a sleeper hit in classrooms across the nation.
. . .
. . . many children who watch it take it to heart: riding in the car one day with his parents in Tacoma, Wash., Rafael de la Torre Batker, 9, was worried about whether it would be bad for the planet if he got a new set of Legos.
“When driving by a big-box store, you could see he was struggling with it,” his father, David Batker, said. But then Rafael said, “It’s O.K. if I have Legos because I’m going to keep them for a very long time,” Mr. Batker recalled.
. . .
(p. A12) “There was not one positive thing about capitalism in the whole thing,” Mr. Zuber said.
Corporations, for example, are portrayed as a bloated person sporting a top hat and with a dollar sign etched on its front.

For the full story, see:
LESLIE KAUFMAN. ” In Schools, a Cautionary Video About America and Its ‘Stuff’.” The New York Times (Mon., May 11, 2009): A1 & A12.
(Note: ellipses added; the online version of the title is: “A Cautionary Video About America’s ‘Stuff’.”)

“A section of the video on toxic chemicals and production.” Source of image and caption: online version of the NYT article quoted and cited above.

“Clear Relationship in Rice Farming Between Effort and Reward”

(p. 236) What redeemed the life of a rice farmer, however, was the nature of that work. It was a lot like the garment work done by the Jewish immigrants to New York. It was meaningful. First of all, there is a clear relationship in rice farming between effort and reward. The harder you work a rice field, the more it yields. Second, it’s complex work. The rice farmer isn’t simply planting in the spring and harvesting in the fall. He or she effectively runs a small business, juggling a family workforce, hedging uncertainty through seed selection, building and managing a sophisticated irrigation system, and coordinating the complicated process of harvesting the first crop while simultaneously preparing the second crop.

And, most of all, it’s autonomous. The peasants of Europe worked essentially as low-paid slaves of an aristocratic landlord, with little control over their own destinies. But China and Japan never developed that kind of oppressive feudal system, because feudalism simply can’t work in a rice economy. Growing rice is too complicated and intricate for a system that requires farmers to be coerced and bullied into going out into the fields each morning. By the fourteenth and fifteenth centuries, landlords in central and Southern China had an almost completely hands-off relationship with their tenants: they would collect a fixed rent and let farmers go about their business.
“The thing about wet-rice farming is, not only do you (p. 237) need phenomenal amounts of labor, but it’s very exacting,” says the historian Kenneth Pomerantz. “You have to care. It really matters that the field is perfectly leveled before you flood it. Getting it close to level but not quite right makes a big difference in terms of your yield. It really matters that the water is in the fields for just the right amount of time. There’s a big difference between lining up the seedlings at exactly the right distance and doing it sloppily. It’s not like you put the corn in the ground in mid-March and as long as rain comes by the end of the month, you’re okay. You’re controlling all the inputs in a very direct way. And when you have something that requires that much care, the overlord has to have a system that gives the actual laborer some set of incentives, where if the harvest comes out well, the farmer gets a bigger share. That’s why you get fixed rents, where the landlord says, I get twenty bushels, regardless of the harvest, and if it’s really good, you get the extra. It’s a crop that doesn’t do very well with something like slavery or wage labor. It would just be too easy to leave the gate that controls the irrigation water open a few seconds too long and there goes your field.”

Source:
Gladwell, Malcolm. Outliers: The Story of Success. New York, NY: Little, Brown, and Co., 2008.
(Note: italics in original.)

“Evidence Suggests” that Bangladesh Can “Cheaply and Safely” Protect Itself Against Global Warming

“In Beel Bhaina, a low-lying 600-acre soup bowl of land on the banks of the Hari River, in Bangladesh, land that was once under water is now full of greenery.” Source of photo and caption: online version of the NYT article quoted and cited below.

(p. A6) BEEL BHAINA, Bangladesh — The rivers that course down from the Himalayas and into this crowded delta bring an annual tide of gift and curse. They flood low-lying paddies for several months, sometimes years, at a time. And they ferry mountains of silt and sand from far away upstream.

Most of that sediment washes out into the roiling Bay of Bengal. But an accidental discovery by desperate delta folk here may hold clues to how Bangladesh, one of the world’s most vulnerable countries to climate change, could harness some of that dark, rich Himalayan muck to protect itself against sea level rise.
Instead of allowing the silt to settle where it wants, Bangladesh has begun to channel it to where it is needed — to fill in shallow soup bowls of land prone to flooding, or to create new land off its long, exposed coast.
The efforts have been limited to small experimental patches, not uniformly promising, and there is still ample concern that a swelling sea could one day soon swallow parts of Bangladesh. But the emerging evidence suggests that a nation that many see as indefensible to the ravages of human-induced climate change could literally raise itself up and save its people — and do so cheaply and simply, using what the mountains and tides bring.

For the full story, see:
SOMINI SENGUPTA. “In Silt, Bangladesh Sees Potential Shield Against Sea Level Rise.” The New York Times (Fri., March 20, 2009): A6.

“An influx of silt after a flood made Beel Bhaina higher.” Source of map and caption: online version of the NYT article quoted and cited above.

French People Sleep More Than Those in Other Industrialized Countries

My hypothesis is not that the French are lazier than others, but that their labor policies give them less incentive to work.

(p. A8) PARIS — When he won the presidential election two years ago, Nicolas Sarkozy urged the French to get up early and work more to earn more.

A study released Monday suggests they missed the wake-up call.
France is the industrialized country where people spend the longest periods sleeping, according to a series of surveys on social habits conducted by the Paris-based Organization for Economic Cooperation & Development.
The French sleep a daily average of 530 minutes, compared with 518 for Americans and 469 for Koreans — the OECD’s “most awake” nation, according to the study.

For the full story, see:
DAVID GAUTHIER-VILLARS. “France Wrests Title of Sleeping Giant.” Wall Street Journal (Tues., MAY 5, 2009): A8.

“Save a Red, Eat a Gray!”

(p. D1) With literally millions of squirrels rampaging throughout England, Scotland and Wales at any given time, squirrels need to be controlled by culls. This means that hunters, gamekeepers, trappers and the Forestry Commission (the British equivalent of forest rangers) provide a regular supply of the meat to British butchers, restaurants, pâté and pasty makers and so forth.

The situation is more than simply a matter of having too many squirrels. In fact, there is a war raging in Squirreltown: invading interlopers (gray squirrels introduced from North America over the past century or more) are crowding out a British icon, the indigenous red squirrel immortalized by Beatrix Potter and cherished by (p. D5) generations since. The grays take over the reds’ habitat, eat voraciously and harbor a virus named squirrel parapox (harmless to humans) that does not harm grays but can devastate reds. (Reports indicate, though, that the reds are developing resistance.)
“When the grays show up, it puts the reds out of business,” said Rufus Carter, managing director of the Patchwork Traditional Food Company, a company based in Wales that plans to offer squirrel and hazelnut pâté on its British Web site, patchwork-pate.co.uk.
Enter the “Save Our Squirrels” campaign begun in 2006 to rescue Britain’s red squirrels by piquing the nation’s appetite for their marauding North American cousins. With a rallying motto of “Save a red, eat a gray!” the campaign created a market for culled squirrel meat.
British bon vivants suddenly couldn’t get enough squirrel. Television chefs were preparing it, cookbooks were extolling it, farmers’ markets were selling out of it and restaurants in many places were offering it on the menu.

For the full story, see:

MARLENA SPIELER. “Saving a Squirrel by Eating One.” The New York Times (Weds., January 7, 2009): D1 & D5.

“Squirrel is appearing on more menus, as at Fergus Henderson’s restaurant St. John, in London.” Source of photo and caption: online version of the NYT article quoted and cited above.

“Hard Work is a Prison Sentence Only if it Does Not Have Meaning”

(p. 149) When Borgenicht came home at night to his children, he may have been tired and poor and overwhelmed, but he was alive. He was his own boss. He was responsible for his own decisions and direction. His work was complex: it engaged his mind and imagination. And in his work, there was a relationship between effort and reward: the longer he and Regina stayed up at night sewing aprons, the more money they made the next day on the streets.

Those three things — autonomy, complexity, and a connection between effort and reward–are, most people agree, the three qualities that work has to have if it is to be satisfying. It is not how much money we make (p. 150) that ultimately makes us happy between nine and five. It’s whether our work fulfills us. If I offered you a choice between being an architect for $75,000 a year and working in a tollbooth every day for the rest of your life for $100,000 a year, which would you take? I’m guessing the former, because there is complexity, autonomy, and a relationship between effort and reward in doing creative work, and that’s worth more to most of us than money.
Work that fulfills those three criteria is meaningful. Being a teacher is meaningful. Being a physician is meaningful. So is being an entrepreneur, and the miracle of the garment industry–as cutthroat and grim as it was–was that it allowed people like the Borgenichts, just off the boat, to find something meaningful to do as well.”” When Louis Borgenicht came home after first seeing that child’s apron, he danced a jig. He hadn’t sold anything yet. He was still penniless and desperate, and he knew that to make something of his idea was going to require years of backbreaking
labor. But he was ecstatic, because the prospect of those endless years of hard labor did not seem like a burden to him. Bill Gates had that same feeling when he first sat down at the keyboard at Lakeside. And the Beatles didn’t recoil in horror when they were told they had to play eight hours a night, seven days a week. They jumped at the chance. Hard work is a prison sentence only if it does not have meaning. Once it does, it becomes the kind of thing that makes you grab your wife around the waist and dance a jig.

Source:
Gladwell, Malcolm. Outliers: The Story of Success. New York, NY: Little, Brown, and Co., 2008.
(Note: italics in original.)