April 2012 – Page 2 – artdiamondblog.com

“Dematerialization” Means More Goods from Fewer Resources

(p. C4) Economic growth is a form of deflation. If the cost of, say, computing power goes down, then the users of computing power acquire more of it for less–and thus attain a higher standard of living. One thing that makes such deflation possible is dematerialization, the reduction in the quantity of stuff needed to produce a product. An iPhone, for example, weighs 1/100th and costs 1/10th as much as an Osborne Executive computer did in 1982, but it has 150 times the processing speed and 100,000 times the memory.
Dematerialization is occurring with all sorts of products. Banking has shrunk to a handful of electrons moving on a cellphone, as have maps, encyclopedias, cameras, books, card games, music, records and letters–none of which now need to occupy physical space of their own. And it’s happening to food, too. In recent decades, wheat straw has shrunk as grain production has grown, because breeders have persuaded the plant to devote more of its energy to making the thing that we value most. Future dematerialization includes the possibility of synthetic meat–produced in a lab without brains, legs or guts.
Dematerialization is one of the reasons that Peter Diamandis and Steven Kotler give for the future’s being “better than you think” in their new book, “Abundance.”

For the full commentary, see:
MATT RIDLEY. “MIND & MATTER; The Future Is So Bright, it’s Dematerializing.” The Wall Street Journal (Sat., February 25, 2012): C4.

The book mentioned by Ridley is:
Diamandis, Peter H., and Steven Kotler. Abundance: The Future Is Better Than You Think. New York: Free Press, 2012.

“Scratch a White Liberal and You’ll Find a Bigot”

Source of book image: http://www.mediabistro.com/fishbowldc/files/2011/10/my-long-trip-home.jpg

(p. C1) As a social studies major in his junior year at Harvard, Mark Whitaker attended a debate on the subject of ethnicity. One participant was the chairman of the department. Mr. Whitaker stood up to raise some questions.

“What would you tell someone who didn’t have a clear ethnic identity?” he asked. “For example, what would you tell someone who had one parent who was black and another who was white? Who had one parent who was American and another who was European? Who had moved dozens of times as a child and didn’t have a specific place to call home?” Everyone in the room knew that Mr. Whitaker was talking about himself.
“I guess I would say that that’s too bad,” the professor answered. “In the future I hope we don’t have too many more people like you.”
Mr. Whitaker recounts this story in “My Long Trip Home,” a book filled with as much family tumult as Jeannette Walls described in “The Glass Castle” and a racial factor to boot. It’s a story that registers not only for its shock value but also for the perspective and wisdom with which it can now be told.
The episode did not anger him, he said. He saw it as his professor’s Freudian slip, “exposing a wish to hold on to a sense of certainty about his roots in the face of a gathering demographic storm that threatened to wash them away.” But Mr. Whitaker’s troubled and combative black father, who is the book’s central figure through sheer force of personality, had a more heated reaction. “As I always say, scratch a white liberal and you’ll find a bigot,” Cleophaus Sylvester Whitaker Jr. told his son.

For the full review, see:
JANET MASLIN. “BOOKS OF THE TIMES; Born Along the Racial Fault Line.” The New York Times (Mon., November 7, 2011): C1 & C4.
(Note: the online version of the review is dated November 6, 2011.)

The book under review is:
Whitaker, Mark. My Long Trip Home: A Family Memoir. New York: Simon & Schuster, 2011.

“Mark Whitaker” Source of caption and photo: online version of the NYT article quoted and cited above.

Add to Your List of Marketing Mistakes

(p. 142) The consumer products arm of Disney–the group responsible for licensing toys and other tie-ins–was also slow to see the potential of Toy Story. It was a case of out of sight, out of mind: Toy Story was in production hundreds of miles away. Preoccupied with two other forthcoming releases, Pocahontas and The Hunchback of Notre Dame, Disney Consumer Products left the Pixar film on the back burner. When Guggenheim met with one of the division’s senior licensing executives in December 1994, he was alarmed to discover that she saw no licensing potential in the film.
“We put together a presentation reel of scenes from the film that we’d already completed, and material on how the film was being made” Guggenheim said. “We were taking that around the company so people could get a feeling of what this film was all about.”
The executive told him, I don’t know how we’re going to do toys for this.
“What do you mean?” Guggenheim queried. “It’s Toy Story. You know, Toy . . . Story.”
Yes, she said, but you have all these toys that already exist–Mr. Potato Head, Speak & Spell, all that stuff. How are we ever going to make money off that?
“But you have all these original characters. You’ve got Buzz, you’ve got Woody.”

Source:
Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.
(Note: ellipsis and italics in original.)
(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)

“Mind-Your-Own-Business Cowboy Libertarianism”

“Gov. Matt Mead at a meeting in the Capitol in Cheyenne. A portrait of his grandfather Clifford P. Hansen, a former governor, hangs behind him.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A15) If Washington is broken and unable to lead — as millions of Americans believe, according to polls — then who is left to fill the void? Mr. Mead’s answer: States functional enough to soldier on through a time of dystopian crisis should be given the room to run. Whether they are led by conservatives or liberals does not matter so much, he said, as the ability to get things done.

“There certainly have to be national policies, and national rules and regulations — I understand that,” Mr. Mead, 49, a Republican and former prosecutor, said in an interview in his office here. “But I am in part a states’ rights guy because I think we can do so many things better.”
Better or not, Wyoming’s way — always idiosyncratic in the windblown, rural grain that mixes mind-your-own-business cowboy libertarianism and fiscal penny-pinching — is getting its moment in the spotlight.

For the full story, see:

KIRK JOHNSON. “STATEHOUSE JOURNAL; Idiosyncrasy Runs Deep in the Soil of Wyoming.” The New York Times (Fri., November 25, 2011): A15.
(Note: the online version of the story is dated November 24, 2011.)

Regulation Sunset Would Aid Entrepreneurs

John Mackey is the entrepreneur behind the Whole Foods Market.

(p. A17) The success of economic freedom in increasing human prosperity, extending our life spans and improving the quality of our lives in countless ways is the most extraordinary global story of the past 200 years.
. . .
Economic freedom is declining in the U.S. In 2000, the U.S. was ranked third in the world behind only Hong Kong and Singapore in the Index of Economic Freedom, published annually by this newspaper and the Heritage Foundation. In 2011, we fell to ninth behind such countries as Australia, New Zealand, Canada and Ireland.
The reforms we need to make are extensive.
. . .
According to the Small Business Administration, total regulatory costs amount to about $1.75 trillion annually, nearly twice as much as all individual income taxes collected last year. While some regulations create important safeguards for public health and the environment, far too many simply protect existing business interests and discourage entrepreneurship. Specifically, many government regulations in education, health care and energy prevent entrepreneurship and innovation from revolutionizing and re-energizing these very important parts of our economy.
A simple reform that would make a monumental difference would be to require all federal regulations to have a sunset provision. All regulations should automatically expire after 10 years unless a mandatory cost-benefit analysis has been completed that proves the regulations have created significantly more societal benefit than harm. Currently thousands of new regulations are added each year and virtually none ever disappear.

For the full commentary, see:
JOHN MACKEY. “OPINION; To Increase Jobs, Increase Economic Freedom; Business is not a zero-sum game struggling over a fixed pie. Instead it grows and makes the total pie larger, creating value for all of its major stakeholders, including employees and communities..” The New York Times (Fri., November 16, 2011): A15.
(Note: ellipses added.)

Libertarian Law Professor Defends Free Choice in Health Care

“Randy E. Barnett has argued against the health care law.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) WASHINGTON — When Congress passed legislation requiring nearly all Americans to obtain health insurance, Randy E. Barnett, a passionate libertarian who teaches law at Georgetown, argued that the bill was unconstitutional.
. . .
. . . over the past two years, through his prolific writings, speaking engagements and television appearances, Professor Barnett has helped drive the question of the health care law’s constitutionality from the fringes of academia into the mainstream of American legal debate and right onto the agenda of the United States Supreme Court.
. . .
. . . the challenge championed by Professor Barnett: that Congress’s power to set rules for commerce does not extend to regulating “inactivity,” like choosing not to be insured.
. . .
(p. A14) He is a fierce advocate of economic freedom who is accustomed to being a legal underdog. In 2004, in his first (and, he says, probably his last) appearance before the Supreme Court, he argued that Congress could not criminalize the production of home-grown marijuana for personal medical use. There again, critics said he would lose 8 to 1. He did lose, but took satisfaction in the actual vote, 6 to 3.
. . .
Professor Barnett’s work on the health care law fits into a much broader intellectual project, his defense of economic freedom. He has long argued that the Supreme Court went too far in upholding New Deal economic laws — a position that concerns his liberal critics.
Even a close friend and fellow Georgetown law professor, Lawrence B. Solum, says that Professor Barnett is aware of the “big divide between his views and the views of lots of other people,” and that his political philosophy is “much more radical” than his legal argument in the health care case. Professor Barnett, for his part, insists that if the health law is struck down, it will not “threaten the foundation of the New Deal.” But, he allowed, it would be “a huge symbolic victory for limited government.”

For the full story, see:
SHERYL GAY STOLBERG and CHARLIE SAVAGE. “Libertarian’s Pet Cause Reaches Supreme Court.” The New York Times (Tues., March 27, 2012): A1 & A14.
(Note: ellipses added.)
(Note: the online version of the story is dated March 26, 2012 and has the title “Vindication for Challenger of Health Care Law.”)

Myhrvold Left Work with Hawking for the Excitement of Entrepreneurship

(p. 139) Microsoft was represented ¡n the discussion by its senior vice president for advanced technology, a thirty-five-year-old Nathan Myhrvold. After finishing his Ph.D. at Princeton at age twenty-three, Myhrvold had worked for a year as a postdoctoral fellow with the physicist Stephen Hawking at Cambridge, tackling theories of (p. 140) gravitation and curved space-time, before taking a three-month leave of absence to help some friends in the Bay Area with a software project. He became caught up in the excitement of personal computer software and entrepreneurship and never went back. In Berkeley, he co-founded a company called Dynamical Systems to develop operating system for personal computers, which struggled for two years until Microsoft bought it in 1986. At Microsoft, he persuaded Bill Gates to let him establish a corporate research center, Microsoft Research, with Myhrvold himself in charge.

Source:
Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.
(Note: italics in original.)
(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)

Benefits of Driverless Cars Justify Changing Liability Laws

“The car is driven by a computer that steers, starts and stops itself. A 360 degrees laser scanner on top of the car, a GPS system and other sensors monitor the surrounding traffic.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p A13) Expect innovations that change the nature of driving more than anything since the end of the hand-crank engine–so long as the legal and regulatory systems don’t strangle new digital technologies before they can roll off the assembly line.
. . .
Mr. Ford outlined a future of what the auto industry calls “semiautonomous driving technology,” meaning increasingly self-driving cars. Over the next few years, cars will automatically be able to maintain safe distances, using networks of sensors, V-to-V (vehicle-to-vehicle) communications and real-time tracking of driving conditions fed into each car’s navigation system.
This will limit the human error that accounts for 90% of accidents. Radar-based cruise control will stop cars from hitting each other, with cars by 2025 driving themselves in tight formations Mr. Ford describes as “platoons,” cutting congestion as the space between cars is reduced safely.
. . .
Over the next decade, cars could finally become true automobiles. Our laws will have to be updated for a new relationship between people and cars, but the benefits will be significant: fewer traffic accidents and fewer gridlocked roads–and, perhaps best of all, young people will be in self-driving cars, not teenager-driven cars.

For the full commentary, see:
L. GORDON CROVITZ. “INFORMATION AGE; The Car of the Future Will Drive You; A truly auto-mobile is coming if liability laws don’t stop it.” The Wall Street Journal (Mon., March 5, 2012): A13.
(Note: ellipses added.)

“A Greek, an Italian and a Spaniard Walk into a Bar”

(p. A15) A joke making the rounds: A Greek, an Italian and a Spaniard walk into a bar. Each orders a drink. Who pays? The German.

For the full commentary, see:
DAVID WESSEL. “CAPITAL; For Europe, a Lehman Moment.” The Wall Street Journal (Thurs., December 1, 2011): A15.

James Morrison Was a “Retailing Genius”

Source of book image: online version of the WSJ review quoted and cited below.

(p. A13) Morrison was not an inventor-capitalist but a retailing genius, more Sam Walton than Steve Jobs. He catered to England’s growing consumer class by diversifying his wares and, in his ever-growing network of shops, introducing luxurious showrooms. He was a disciple of volume, seeking “high turnover, small profits, and quick returns.” He sent his traveling men not to find buyers, as was typical, but to find the best suppliers. Advantageously purchased in bulk, goods would sell themselves. Morrison’s buyers were specialists, anticipating the practices of later department stores. He kept his finger on the pulse of fashion and on “market making” events. Legendarily, he was never caught short of black crepe when a member of the royal family was ill. “The Duke of York has died most conveniently,” he once quipped while tallying profits.
The “Napoleon of shopkeepers” went on to found his own merchant bank and accumulate a prodigious investment portfolio, much of it in American bonds. Strategic lending to broke aristocrats greased Morrison’s way into Parliament, where he served as a “radical Whig,” championing political reform and free trade.
. . .
. . . Morrison conducted both his retailing and his banking business with impeccable transparency. The investments he sold were honestly structured, and the risks he ran were his own, backed by sufficient collateral. Morrison’s was an era before bailouts, an era of some moral luck but little moral hazard. Markets rose and fell with reasonably predictable effects. For him and many of his contemporaries, credit remained a personal matter of the highest consequence. In this, alas, a character such as Morrison now seems more alien than familiar.

For the full review, see:

JEFFREY COLLINS. “BOOKSHELF; King of the Shopkeepers; The lessons of a merchant prince and a brilliant retailer whose wool, linen, silk, thread and lace flew off the shelves.” The Wall Street Journal (Mon., March 5, 2012): A13.
(Note: ellipses added.)

The book under review is:
Dakers, Caroline. A Genius for Money: Business, Art and the Morrisons. New Haven, CT: Yale University Press, 2012.

Oswald the Lucky Rabbit Returned to Disney After 78 Years

Do you recognize this rabbit? Source of image: online version of the Omaha World-Herald article quoted and cited below.

The story of Oswald the Lucky Rabbit is one of entrepreneurial resilience. Walt Disney was duped out of his legal rights to Oswald. Instead of fighting it out in court, or giving in to discouragement, he shortened Oswald’s ears and transformed him into a mouse with a new name.

(p. 2E) LOS ANGELES (AP) – One of Walt Disney’s oldest drawings is seeing the light of day after being locked away for nearly 40 years.

A rough 1928 image of Oswald the Lucky Rabbit, the wacky predecessor to Mickey Mouse, was brought out of the Walt Disney Co. archive this week and showcased at an event unveiling “Disney Epic Mickey 2: The Power of Two,” an upcoming action-adventure game for the Wii, PlayStation 3 and Xbox 360 that allows players to control both Mickey and Oswald.
The mischievous Oswald was co-created by Disney before Mickey, but he was lost in a 1928 contract dispute with Universal Studios. Oswald hopped back to Disney in 2006 when CEO Bob Iger brokered a deal that sent sportscaster Al Michaels to Universal-NBC. Oswald’s first appearance since his return came in 2010’s “Epic Mickey” as the ruler of a forgotten realm.

For the full story, see:

DERRIK J. LANG. “Disney image displayed for first time in 40 years.” Omaha World-Herald (Sun., March 18, 2012): 2E.