Month: April 2019

Plastic Bags Better for Environment Than Cotton Bags

(p. A25)  Back in 2011, Britain’s Environment Agency conducted a life-cycle assessment of various bag options, looking at every step of the production process.

. . .

That same British analysis also looked into reusable options, like heavier, more durable plastic bags or cotton bags. And it found that these are only sustainable options if you use them very frequently.

Making a cotton shopping bag is hardly cost-free. Growing cotton requires a fair bit of energy, land, fertilizer and pesticides, which can have all sorts of environmental effects — from greenhouse gas emissions to nitrogen pollution in waterways.

The study found that an avid shopper would have to reuse his or her cotton bag 131 times before it had a smaller global warming impact than a lightweight plastic bag used only once. And, depending on the make, more durable plastic bags would have to be used at least 4 to 11 times before they made up for their heftier upfront climate costs.

So if you’re going to opt for a reusable bag for environmental reasons, make sure you actually reuse it — often.

For the full story, see:

Erica Komisar.  “Paper or Plastic? Your Choice of Bag Matters Less Than What’s Inside.”  The New York Times (Saturday, March 30, 2019):  A25.

(Note:  ellipsis added.)

(Note:  the online version of the story has the date March 29, 2019, and has the title “Plastic Bags, or Paper? Here’s What to Consider When You Hit the Grocery Store.”)

“Seek Truth from Facts”

(p. A15)  . . . 2019 . . .  marks the anniversary of the result of a . . . defiant protest—one that will receive little attention in or out of China, even though it launched the economic reforms that kick-started the country’s rise.

Forty years ago this spring, corn farmers in Xiaogang village, in the central province of Anhui (where Pearl Buck set “The Good Earth”), reported a grain yield of 66 metric tons. This single harvest equaled the village’s total output between 1955 and 1970—but for once the figure was not exaggerated. In fact, villagers underreported their actual yield by a third, fearing officials would not believe their record haul.

What caused this massive spike in production? A new fertilizer or hybrid seed? Better equipment? A catchy, rhymed propaganda slogan? No; Xiaogang’s farmers were starving. After taking power in 1949, China’s Communist Party had effectively abolished private land ownership, grouping farms into “people’s communes” subservient to the state. By 1978 villages were crippled by quotas that seized most of what they grew for redistribution.

Continue reading ““Seek Truth from Facts””

Private Property Unleashed Innovation

(p. A17)  Enlightenment philosophers recognized that the crown, guild, church and village sometimes acted as rent-seekers stripping away the rewards for work, thrift and innovation, and in the process inhibiting productive effort and progress. The Enlightenment established the principle that labor and capital are private property and not communal assets subject to involuntary sharing, and thus unleashed the explosion of knowledge and production that drives human flourishing to this day.

Extraordinarily in America, the crown jewel and greatest beneficiary of the Enlightenment, political movements are afoot that seek to overturn the individual economic rights secured in the Enlightenment and return to a medieval world of subjects and subjugation.

For the full commentary, see:

Phil Gramm and Michael Solon.  “Enemies of the Economic Enlightenment.”  The Wall Street Journal  (Tuesday, 9):  A17.

(Note:  the online version of the commentary has the date 9.)

Peter Boettke Offers Advance Praise for Openness to Creative Destruction

Prometheus didn’t ask permission for Zeus to bring fire to the humans. It cost him dearly, as Zeus punished him in a rather vicious manner. But human beings were made infinitely better off with fire. Art Diamond relays this story to us precisely because he wants us to understand the great benefits that entrepreneurial innovation deliver for mankind, and yet how the true innovator is often despised and disrespected by the prevailing orthodox establishment. If Prometheus had to get permission before giving fire to man, then man would have never gotten the benefits of fire. Similarly, if our entrepreneurial innovators had to get permission prior to introducing their innovation, we would still be walking around or perhaps at best riding on the backs of beasts but I doubt we would have seen the benefits of automobiles, let alone planes, and we would very well not have modern conveniences such as indoor plumbing, let alone air travel, cell phones, and the world wide web.

Peter Boettke, Professor of Economics & Philosophy, George Mason University; Director F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center.

Boettke’s advance praise is for:
Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, forthcoming June 2019.

Janet Yellen Values Non-Ph.D.s at Fed

(p. A2)  Sen. Ben Sasse, a Nebraska Republican, nicely captured this sentiment by saying about Mr. Moore, an advocate for lower taxes and other conservative causes: “Steve’s nomination has thrown the card-carrying members of the Beltway establishment into a tizzy, and that says little about Steve and his belief in American ingenuity, but a lot about central planners’ devotion to groupthink.”

Anti-elitism is an odd look for Mr. Sasse, Ph.D. (Yale) and former college president (Midland University), but he’s hardly alone.

. . .

Economics can be insular, and even Janet Yellen, who chaired the Fed before Mr. Powell, agrees the Fed has been top-heavy with Ph.D. economists like her. “It’s not always been clear that this led to an improvement in policymaking,” she said in a 2012 interview for an oral history of the Fed, released Friday [April 12, 2019]. She praised the contribution of non-economist governors who, she says, are always asking themselves if the arguments of economists are “relevant to the world as I’m experiencing it through my contacts, whether they’re bankers or businesspeople or whatever?”

For the full commentary, see:

Greg Ip.  “What You Need to Be on the Fed…and It Isn’t a Ph.D.”  The Wall Street Journal  (Monday, 9):  A2.

(Note:  ellipsis, and bracketed date, added.)

(Note:  the online version of the commentary has the date 9.)

Chinese “Entrepreneurs Were Like Famished Goats Set Free from a Pen and Allowed to Flourish”

(p. 11) YULIN, China — For months, Zhao Faqi was a folk hero for entrepreneurs in China — an investor who fought the government in court and online, and against the odds, seemed poised to win. He accused officials of stealing his rights to coal-rich land, and ignited a furor by accusing China’s most powerful judge of corruption.
Now, Mr. Zhao has dropped out of sight — and the authorities want to erase his story.
. . .
The state news media has painted him as a cunning schemer. A judge who supported his case was paraded on television. A crusading former talk show host who helped bring the case to light has fallen silent.
Mr. Zhao’s arc from self-declared victim to officially designated villain has been dramatic even for China, where the party controls the courts and businesspeople can abruptly fall from grace. Mr. Zhao’s descent — and possible disappearance — is a demonstration of the hazards that entrepreneurs face in taking on powerful Chinese officials.
“I’ve faced a lot of risks and pressure because of this lawsuit,” Mr. Zhao said in an interview in Beijing a few weeks before he disappeared. Chinese entrepreneurs, he said, yearned for the rule of law to replace arbitrary power. “You can’t say someone is protected one day, and take away protection the next day.”
Mr. Zhao drew support from liberal economists and lawyers who have been unsettled by Mr. Xi’s reverence for communist tradition and support for state-owned companies, which he has urged to grow “stronger, better and bigger.”
. . .
Mr. Zhao, 52, was among the entrepreneurs who plunged into business after Deng Xiaoping, then China’s paramount leader, unleashed market overhauls. At the time, Mr. Zhao said, entrepreneurs were like famished goats set free from a pen and allowed to flourish.
“But we’re seeing this vitality steadily shrink,” he said.
. . .
. . . , Mr. Zhao’s phone has been turned off, and he appears to have gone into hiding or official custody.

For the full story, see:
Chris Buckley. “Chinese Entrepreneur Takes On the System, and Drops Out of Sight.” The New York Times, First Section (Sunday, March 10, 2019): 11.
(Note: ellipses added.)
(Note: the online version of the story has the date March 9, 2019.)

“If You Write a Best-Selling Book, You Can Be a Millionaire, Too”

(p. A14) WASHINGTON — Senator Bernie Sanders, whose $18 million fund-raising haul has solidified his status as a front-runner for the Democratic presidential nomination, said Tuesday [April 9, 2019] that he would release 10 years of tax returns by Tax Day on Monday and acknowledged that he has joined the ranks of the millionaires he has denounced for years.

. . .

Reminded that he is a millionaire, he did not shirk from the description.

“I wrote a best-selling book,” he declared. “If you write a best-selling book, you can be a millionaire, too.”

For the full story, see:

Sheryl Gay Stolberg.  “Sanders Says He’ll Release Tax Returns.”  The New York Times (Wednesday, April 10, 2019):  A14.

(Note:  ellipsis, and bracketed date, added.)

(Note:  the online version of the story has the date April 9, 2019, and has the title “Bernie Sanders, Now a Millionaire, Pledges to Release Tax Returns by Monday.”)

Innovative Entrepreneurs Bring Prosperity to the Poor

(p. A17) As the economist Joseph Schumpeter observed: “The capitalist process, not by coincidence but by virtue of its mechanism, progressively raises the standard of life of the masses.”

For Schumpeter, entrepreneurs and the companies they found are the engines of wealth creation. This is what distinguishes capitalism from all previous forms of economic society and turned Marxism on its head, the parasitic capitalist becoming the innovative and beneficent entrepreneur. Since the 2008 crash, Schumpeter’s lessons have been overshadowed by Keynesian macroeconomics, in which the entrepreneurial function is reduced to a ghostly presence. As Schumpeter commented on John Maynard Keynes’s “General Theory” (1936), change–the outstanding feature of capitalism–was, in Keynes’s analysis, “assumed away.”

Progressive, ameliorative change is what poor people in poor countries need most of all. In “The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty,” Harvard Business School’s Clayton Christensen and co-authors Efosa Ojomo and Karen Dillon return the entrepreneur and innovation to the center stage of economic development and prosperity. The authors overturn the current foreign-aid development paradigm of externally imposed, predominantly government funded capital- and institution-building programs and replace it with a model of entrepreneur-led innovation. “It may sound counterintuitive,” the authors write, but “enduring prosperity for many countries will not come from fixing poverty. It will come from investing in innovations that create new markets within these countries.” This is the paradox of the book’s title.

Continue reading “Innovative Entrepreneurs Bring Prosperity to the Poor”

Variability of Wind and Solar Increase Costs of Reliable Energy Sources

(p. A17) President Trump mocked the Democrats’ Green New Deal and its renewable-energy aspirations in a recent speech: “When the wind stops blowing, that’s the end of your electric.” But the most destructive consequence of wind and solar power result from periods of oversupply.
Coal and gas generating plants have to be kept on standby and ramped up to cover the shortfall resulting from still air and darkness. That forces them to operate less efficiently and pushes their costs up. During periods of low demand, wind and solar can produce too much electricity, creating gluts and driving wholesale prices negative, meaning grid operators have to pay consumers to burn unwanted energy. That makes nuclear, coal and gas generators unprofitable, necessitating extra subsidies to save the power stations needed to keep the lights on.

For the full commentary, see:
Rupert Darwall. “When There’s Too Much Sun and Wind; The biggest danger of renewable energy is overproduction.” The Wall Street Journal (Monday, March 11, 2019): A17.
(Note: the online version of the commentary has the date March 10, 2019.)

Private Firms Build Costly Complex Cable Infrastructure

(p. B1) Nearly 750,000 miles of cable already connect the continents to support our insatiable demand for communication and entertainment. Companies have typically pooled their resources to collaborate on undersea cable projects, like a freeway for them all to share.
But now Google is going its own way, in a first-of-its-kind project connecting the United States to Chile, home to the company’s largest data center in Latin America.
. . .
(p. B7) Inside the ship, workers spool the cable into cavernous tanks. One person walks the cable swiftly in a circle, as if laying out a massive garden hose, while others lie down to hold it in place to ensure it doesn’t snag or knot. Even with teams working around the clock, it takes about four weeks before the ship is loaded up with enough cable to hit the open sea.
The first trans-Atlantic cable was completed in 1858 to connect the United States and Britain. Queen Victoria commemorated the occasion with a message to President James Buchanan that took 16 hours to transmit.
While new wireless and satellite technologies have been invented in the decades since, cables remain the fastest, most efficient and least expensive way to send information across the ocean. And it is still far from cheap: Google would not disclose the cost of its project to Chile, but experts say subsea projects cost up to $350 million, depending on the length of the cable.
. . .
Poor weather is inevitable. Swells reach up to 20 feet, occasionally requiring the ship captain to order the subsea cable to be cut so the ship can seek safer waters. When conditions improve, the ship returns, retrieving the cut cable that has been left attached to a floating buoy, then splicing it back together before continuing.
Work on board is slow and plodding. The ship, at sea for months at a time, moves about six miles per hour, as the cables are pulled from the giant basins out through openings at the back of the ship.
. . .
“It really is management of a very complex multidimensional chess board,” said Ms. Stowell of Google, who wears an undersea cable as a necklace.
Demand for undersea cables will only grow as more businesses rely on cloud computing services. And technology expected around the corner, like more powerful artificial intelligence and driverless cars, will all require fast data speeds as well. Areas that didn’t have internet are now getting access, with the United Nations reporting that for the first time more than half the global population is now online.
“This is a huge part of the infrastructure that’s making that happen,” said Debbie Brask, the vice president at SubCom, who is managing the Google project. “All of that data is going in the undersea cables.”

For the full story, see:
ADAM SATARIANO. “Underwater Freeways for Your Puppy Posts.” The New York Times (Tuesday, MARCH 12, 2019): B1 & B6-B7.
(Note: ellipses added.)
(Note: the online version of the story has the date MARCH 10, 2019, and has the title “How the Internet Travels Across Oceans.”)

Universal Basic Income Increases Taxes and Does Not Increase Work Among Unemployed

(p. 13) HELSINKI, Finland — A basic income made recipients happier than they were on unemployment benefits, a two-year government experiment in Finland has found. But it did not, as proponents had hoped, make them more likely to work.
. . .
The basic income has been controversial, however, with leaders of the main Finnish political parties keen to streamline the benefits system but wary of offering “money for nothing,” especially ahead of parliamentary elections due in April [2019].
. . .
The higher taxes that the Organization for Economic Cooperation and Development says would be needed to pay for basic income schemes might also be off-putting for voters.
In a review of the Finnish scheme last year, the organization warned that implementing it nationally and cost-neutrally for the state would imply significant income redistribution, especially toward couples from single people, and increase poverty.
The researchers have acknowledged that the Finnish pilot was less than realistic because it did not include any tax clawback once participants found work and reached a certain income level.
Swiss voters rejected a similar scheme in 2016.

For the full story, see:
Reuters. “Experiment Explores Income, Jobs and Happiness.” The New York Times, First Section (Sunday, Feb. 10, 2019): 13.
(Note: ellipses, and bracketed year, added.)
(Note: the online version of the story has the date Feb. 9, 2019, and has the title “Finland’s Basic Income Trial Boosts Happiness, but Not Employment.”)