Of 176 Countries, 171 Are More Democratic Than Communist China

(p. A12) . . . the University of Würzburg in Germany, . . . ranks countries based on variables like independence of the judiciary, freedom of the press and integrity of elections. The most recent put China near the bottom among 176 countries. Only Saudi Arabia, Yemen, North Korea and Eritrea rank lower. Denmark is first; the United States 36th.

In China, the Communist Party controls the courts and heavily censors the media. It has suppressed Tibetan culture and language, restricted religious freedom and carried out a vast detention campaign in Xinjiang.

What’s more, China’s vigorous defense of its system in recent months has done nothing to moderate its prosecution of dissent.

Two of China’s most prominent human rights lawyers, Xu Zhiyong and Ding Jiaxi, are expected to face trial at the end of this year on charges that they called for more civil liberties, according to Jerome Cohen, a law professor specializing in China at New York University. A Chinese employee of Bloomberg News in Beijing has remained in detention for a year, as of Tuesday, with almost no word about the accusations against her.

Under Mr. Xi’s rule, intellectuals are now warier of speaking their minds in China than at practically any time since Mao Zedong died in 1976.

“This is an extraordinary time in the Chinese experience,” Mr. Cohen said. “I really think that the totalitarianism definition applies.”

For the full story, see:

Keith Bradsher and Steven Lee Myers. “Beijing Claims China Uses Its Own Variety Of Democracy to Govern.” The New York Times (Wednesday, December 8, 2021): A6.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 7, 2021, and has the title “Ahead of Biden’s Democracy Summit, China Says: We’re Also a Democracy.”)

The most recent (2020) University of Würzburg ranking can be found at:

https://www.democracymatrix.com/ranking

“Unanticipated Tragedies Are Unpreventable, No Matter How Many Regulations”

(p. A15) Dr. Offit acknowledges the limits of regulatory fixes, noting that, while regulatory guidelines are important, “unanticipated tragedies are unpreventable, no matter how many regulations, training programs, fines, and penalties are put in place.” He contrasts the tragic death in 1999 of 18-year-old Jesse Gelsinger in an early gene-therapy study—aimed at remediating a rare enzyme deficiency—with the triumphant experience of Emily Whitehead, a girl with leukemia treated 11 years later at the same university with genetically manipulated T-cells. Gelsinger’s death has been ascribed to protocol deficiencies, conflicts of interest and inadequate regulation, but “a closer look,” Dr. Offit writes, “shows that the only difference between the outcomes of Emily Whitehead and Jesse Gelsinger were luck and timing.” The specific supportive approach used by Whitehead’s doctors to address a life-threatening complication of her T-cell infusion stemmed directly from the lessons learned during Gelsinger’s ordeal. We recognize successes, Dr. Offit laments, but “never the failures that made those successes possible.”

One anxiety suffusing every page of “You Bet Your Life” is what to make of the Covid-19 vaccines. Dr. Offit, a member of the FDA’s vaccine advisory committee, has been described in The Wall Street Journal as “an outspoken advocate of the science and value of vaccinations,” including the Covid-19 vaccine. He has described its clinical-trial data as “enormously reassuring” and has seen little evidence of “a very rare, serious side effect that would be something that would cause a long term problem.” Yet his review of the history of vaccination and of its complexities evokes surprising empathy for the vaccine-hesitant. He recounts the early days of the Salk polio vaccine, which saved lives yet also tragically transmitted the disease to some patients when the product was inadequately prepared by one of its manufacturers. He notes that “the first vaccines aren’t always the best, safest, and last” and regrets the “disturbing show of hubris” by the Covid vaccine developers.

Ultimately, Dr. Offit emphasizes, we need to come to terms with the fact that all medical technologies carry risk—as does the decision not to avail oneself of them. “A choice not to get a vaccine is not a risk-free choice,” Dr. Offit notes. Either way, he says, “you’re gambling”—so “choose the lesser risk.”

For the full review, see:

David A. Shaywitz. “BOOKSHELF; The Dangers Of Finding a Cure.” The Wall Street Journal (Tuesday, Nov. 09, 2021): A15.

(Note: the online version of the review has the date November 8, 2021, and has the title “BOOKSHELF; ‘You Bet Your Life’ Review: The Dangers of Finding a Cure.”)

The book under review is:

Offit, Paul A. You Bet Your Life: From Blood Transfusions to Mass Vaccination, the Long and Risky History of Medical Innovation. New York: Basic Books, 2021.

MIT Cancels Chicago Professor for Saying Merit Matters

(p. A13) I am a professor at the University of Chicago. I was recently invited to give an honorary lecture at the Massachusetts Institute of Technology. The lecture was canceled because I have openly advocated moral and philosophical views that are unpopular on university campuses.

Here are those views:

I believe that every human being should be treated as an individual worthy of dignity and respect. In an academic context, that means evaluating people for positions based on their individual qualities, not on membership in favored or disfavored groups. It also means allowing them to present their ideas and perspectives freely, even when we disagree with them.

I care for all of my students equally. None of them are overrepresented or underrepresented to me: They represent themselves. Their grades are based on a process that I define at the beginning of the quarter. That process treats each student fairly and equally. I hold office hours for students who would like extra help so that everyone has the opportunity to improve his or her grade through hard work and discipline.

Similarly, I believe that admissions and faculty hiring at universities are best focused on academic merit, with the goal of producing intellectual excellence. We should not penalize hard-working students and faculty applicants simply because they have been classified as belonging to the wrong group. It is true that not everyone has had the same educational opportunities. The solution is improving K-12 education, not introducing discrimination at late stages.

. . .

. . ., the university has a duty to encourage students and faculty to offer their opinions and insight on the widest possible range of topics.

. . .

. . . hurt feelings are no reason to ban certain topics. We are all responsible for our own feelings. We cannot control things that are external to us, such as the comments of others, but we can control how we respond to them.

For the full commentary, see:

Dorian Abbot. “The Views That Made Me Persona Non Grata at MIT.” The Wall Street Journal (Saturday, Oct. 30, 2021): A13.

(Note: ellipses added.)

(Note: the online version of the commentary was updated Oct. 29, 2021, and has the same title as the print version.)

Firm Founders May Be More Innovative Than Professional Managers

(p. B11) In tech, there is often a visionary premium and it is at least somewhat justified. Tracking public companies’ performance over 25 years, Bain & Co. found the companies that best maintained profitable growth over the long term were disproportionately those at which the founder was still running the business, was still involved or where the founders’ operational focus was still in place. Based on an analysis of S&P 500 companies done in 2014, Bain found that founder-led companies generated over three times the indexed total shareholder return of other companies in the preceding 15 years. One wonders how much the study is affected by survivorship bias, though—those who flopped early aren’t in the sample.

Founders certainly are bolder. A 2016 study out of the Krannert School of Management at Purdue University found that founder CEOs are more likely to take their companies in a new technological direction, providing evidence that innovations of founder CEO-managed firms create more financial value than the innovations of professional CEO-managed firms.

Apple, which languished as a computer company in the years after its co-founder Steve Jobs was ousted, offers a twist on this phenomenon. Mr. Jobs returned as a savior. Among other things, he changed the company’s name from Apple Computer Inc. to Apple Inc., signaling an expansion of focus to a legacy that now includes the likes of the iPod, iPhone, Apple TV and more.

. . .

Mr. Dorsey’s major shortcoming at Twitter actually was a lack of such bold innovation. Activist investors who began calling for his departure years before it came have long pushed for faster product development and bigger revenue and user targets. They also took issue with the fact that Mr. Dorsey split his time as the chief of two publicly traded companies. When questioned at a shareholder meeting about his split time, Mr. Dorsey responded that it wasn’t a function of time, but of prioritization. During his second stint as chief executive over the course of more than six years, Twitter’s stock rose just one-fifth as much as the S&P 500.

Perhaps he prioritized his payments company, which is around 20 times as valuable today than it was in late 2015 when it went public. There are many current examples of tech companies still excelling with a founder or co-founder at the top. Nvidia and Shopify, which have returned more than 80,000% and nearly 6,000% to shareholders, respectively, since their public debuts, come to mind.

For the full commentary, see:

Laura Forman. “HEARD ON THE STREET; Many Tech Founders Can’t Stay Too Long.” The Wall Street Journal (Tuesday, December 7, 2021): B11.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Dec. 6, 2021, and has the title “HEARD ON THE STREET; Should Investors Ride Tech Founders to the Moon?”)

I cannot find evidence that the Krannert School of Management paper mentioned above has been published. An abstract appeared as:

Lee, Joon Mahn, Jongsoo Jays Kim, and Bae Joonhyung. “Are Founder CEOs Better Innovators? Evidence from S&P 500 Firms.” Academy of Management Annual Meeting Proceedings 2016.

Demand for Oil and Gas “Will Remain Robust for Years to Come”

(p. B1) The leaders of the world’s largest oil companies said Monday [Dec. 6, 2021] that demand for the products they make will remain robust for years to come even as the world attempts to transition to lower-carbon energy sources.

The chief executives of Exxon Mobil Corp., Chevron Corp. and Saudi Arabian Oil Co., speaking at the World Petroleum Congress in Houston, said that while the world needs to address the risks posed by climate change, global economies cannot function without fossil fuels.

“Oil and gas continue to play a central role in meeting the world’s energy needs, and we play an essential role in delivering them in a lower carbon way,” Chevron CEO Mike Wirth said Monday. “Our products make the world run.”

. . .

(p. B2) Jeff Miller, chief executive of Halliburton Co., said Monday that the world’s underinvestment in oil and gas since 2014—years in which international spending was 50% below historical norms—is leading global markets to an era of scarcity.

. . .

Just a few weeks ago, some market observers had predicted crude prices could soon hit $100 a barrel for the first time in seven years, on the back of a strengthening demand recovery and sluggish growth in oil supplies.

For the full story, see:

Collin Eaton and Christopher M. Matthews. “Demand for Fossil Fuels Seen Lasting for Years.” The Wall Street Journal (Tuesday, December 7, 2021): B1-B2.

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

(Note: the online version of the story was updated Dec. 6, 2021, and has the title “Demand for Oil, Gas to Remain Robust for Years, Energy Leaders Say.”)

Solve Future Crises by Allowing the Nimble to Innovate

Donald Boudreaux, on his Café Hayek blog, quotes a passage from my Openness book, saying that the best way to prepare for unknown future crises is to sustain a society where nimble innovators are allowed to nimbly innovate. Donald posted the quote on Mon., Dec. 6, 2021.

My book is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

Covid-19 Raised Our Blood Pressure

(p. A12) On Monday [Dec. 6, 2021], scientists reported that blood pressure measurements of nearly a half-million adults showed a significant rise last year, compared with the previous year.

These measurements describe the pressure of blood against the walls of the arteries. Over time, increased pressure can damage the heart, the brain, blood vessels, kidneys and eyes. Sexual function can also be affected.

“These are very important data that are not surprising, but are shocking,” said Dr. Donald M. Lloyd-Jones, president of the American Heart Association, who was not involved in the study.

“Even small changes in average blood pressure in the population,” he added, “can have a huge impact on the number of strokes, heart failure events and heart attacks that we’re likely to be seeing in the coming months.”

The study, published as a research letter in the journal Circulation, is a stark reminder that even in the midst of a pandemic that has claimed more than 785,000 American lives and disrupted access to health care, chronic health conditions must still be managed.

. . .

“We observed that people weren’t exercising as much during the pandemic, weren’t getting regular care, were drinking more and sleeping less,” said Dr. Luke Laffin, the lead author, a preventive cardiologist who is co-director of the Center for Blood Pressure Disorders at the Cleveland Clinic. “We wanted to know, was their blood pressure changing during the pandemic?”

The researchers found that blood pressure readings changed little from 2019 to the first three months of 2020, but increased significantly from April 2020 through December 2020, compared with the same period in 2019.

. . .

The new study found that the average monthly change from April 2020 to December 2020, compared with the previous year, was 1.10 mm Hg to 2.50 mm Hg for systolic blood pressure, and 0.14 to 0.53 for diastolic blood pressure.

The increases held true for both men and women, and in all age groups. Larger increases in both systolic and diastolic blood pressure were seen in women.

The average age of the study participants was just over 45, and slightly more than half were women.

. . .

The causes of an overall increase in blood pressure are not clear, Dr. Laffin and his colleagues said. The reasons may include an increase in alcohol consumption, a decline in exercise, rising stress, a drop in doctors’ visits and less adherence to a medication regimen.

The researchers dismissed a possible effect of weight gain, known to raise blood pressure, saying that the men in the study had lost weight and that the women had not gained more weight than usual.

For the full story, see:

Roni Caryn Rabin. “Does the Pandemic Have Your Blood Pressure Rising? You’re Not Alone.” The New York Times (Tuesday, December 7, 2021): A12.

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

(Note: the online version of the story has the date Dec. 6, 2021, and has the title “The Pandemic Has Your Blood Pressure Rising? You’re Not Alone.”)

The study summarized above is:

Laffin, Luke J., Harvey W. Kaufman, Zhen Chen, Justin K. Niles, Andre R. Arellano, Lance A. Bare, and Stanley L. Hazen. “Rise in Blood Pressure Observed among Us Adults During the Covid-19 Pandemic.” Circulation (2021) Published online: https://doi.org/10.1161/CIRCULATIONAHA.121.057075.

Climate Change Infrastructure Subsidies Mainly Benefit the Rich

(p. A9) Mr. Biden has insisted that at least 40 percent of the benefits of federal climate spending will reach underserved places, which tend to be low income, rural, communities of color, or some combination of the three.

But historically, it is wealthier, white communities — with both high property values and the resources to apply to competitive programs — that receive the bulk of federal grants. And policy experts say it’s unclear whether, and how quickly, federal bureaucracy can level the playing field.

. . .

The new climate provisions in the infrastructure bill inject billions of dollars into competitive grant programs. These are pots of money that towns, cities and counties can access only by submitting applications, which federal agencies then rank, with funds going to applicants with the highest scores.

That system is designed to ensure that funding goes to the most worthwhile projects.

But it also hinges on something outside the control of the federal government: The ability of local officials to use sophisticated tools and resources to write successful applications. The result is a process that has widened the gap between rich communities and their less affluent counterparts, experts say.

The disparity begins even before the application process begins. That’s because local governments must be aware of the grant programs in the first place, which means having dedicated staff to track those programs. Then they need to design proposals that will score highly, and correctly complete the reams of required paperwork.

Even if they are awarded a grant, communities are required to pay a share of the project — often 25 percent, which is unaffordable for many struggling towns and counties.

Governments that can clear those obstacles face a final hurdle: Demonstrating that the value of the property that would be protected is greater than the cost of the project. That rule often excludes communities of color and rural areas, where property values are usually lower than in white communities.

. . .

The Biden administration has touted the program, called Building Resilient Infrastructure and Communities, or BRIC, as a model that should be expanded. The infrastructure bill provides billions more to the program.

But most of the first round winners were wealthy, predominantly white areas in a handful of coastal states, federal data show.

More than half the money went to California, New Jersey and Washington State. The largest single recipient was a $68 million flood-control project in Menlo Park, Calif., where the median household income is more than $160,000, the typical home costs more than $2 million and only one in five residents are Black or Hispanic. The project is in line to get $50 million from FEMA.

For the full story, see:

Christopher Flavelle. $50 Billion Conundrum: Who Gets Climate Protection?” The New York Times (Saturday, December 4, 2021): A9.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 3, 2021, and has the title “Billions for Climate Protection Fuel New Debate: Who Deserves It Most.”)

Electric Copter Ventures May Soon Provide Better and Cheaper Transportation Than Subsidized Bus and Rail

(p. B5) While urban air travel is currently out of reach for most customers (think: Uber Copter), improvements in battery technology have driven down the cost of developing electric-powered aircraft that are viable as urban passenger transportation. These companies are betting they can bring electric urban and regional air travel to the masses, and have developed new aircraft to compete for a slice of this nascent market within the next few years.

“We want to create something that is available to a lot of people, that can do the job of a high-speed train without requiring the infrastructure,” said Daniel Wiegand, chief executive and founder of Lilium, based in Germany. “We won’t be at the ticket price of a high-speed train in Germany on our first day, but if we don’t get there within 15 years I would consider our mission failed.”

. . .

Adam Goldstein, the co-chief executive of Archer Aviation, said his company hopes to offer fares in the range of three to four dollars per mile traveled. That would make the trip from Manhattan to Kennedy, typically 17 miles, between $50 and $80. Several experts predicted the price of regional flights would be around the same cost as the luxury car service Uber Black.

“The biggest cost is the batteries,” said Mr. Goldstein, which are “expensive, but get cheaper everyday.”

. . .

The largest area of investment is into electric vehicles that takeoff and land vertically, like helicopters or Harrier jets. Known as electric vertical takeoff and landing or eVTOLs, these aircraft can usually seat between two and 10 passengers and can travel up to 200 miles, making them ideally suited for traversing a metropolitan area or connecting two cities.

Mr. Wiegand of Lilium had a light bulb moment in 2014 when he watched a video of a military aircraft that took off vertically and realized that an electric version could solve all the traditional problems with using aircraft in dense urban areas: eliminating noise and air pollution, as well as the need for runways.

. . .

Mayor Francis Suarez of Miami said his city is embracing eVTOLs as a cost-effective, environmentally friendly alternative to legacy modes of transportation like buses and light rail, which are costly to build and rely on older technology. He said the city is looking at parking garages, rooftops and other potential takeoff and landing locations.

“We feel that one of the flaws in transportation planning and funding has been retreading yesterday’s ideas,” he said in an interview. “The sky obviously has multiple dimensions and gives you the ability to be creative.”

Mr. Suarez added that he has pushed Secretary of Transportation Pete Buttigieg to embrace urban air mobility rather than focusing on older modes of transport.

For the full story, see:

Gautham Nagesh. “Flight Instead of a Ride? Electric Craft May Alter Urban Area Commuting.” The New York Times (Saturday, December 4, 2021): B5.

(Note: ellipses added.)

(Note: the online version of the story was updated Nov. 26, 2021, and has the title “Taxi! To the Airport — by Air, Please.” The print version of the first paragraph quoted above starts with the word “although,” instead of the word “while.”)

Pandemic Results in “Historic” Increase in Free-Agent Entrepreneurs

In my book Openness to Creative Destruction, I distinguish between free-agent entrepreneurs and innovative entrepreneurs. Free-agent entrepreneurs work for themselves mostly doing what has been done before. Innovative entrepreneurs work for themselves mostly doing something new. (The dividing line is not sharp.) During the pandemic we have seen a large increase in free-agent entrepreneurs. The number of innovative entrepreneurs is hard to measure, but I believe that the loss of health capital, the increase in transaction costs, and the growth of government regulations and lockdowns has reduced their number.

(p. A1) The pandemic has unleashed a historic burst in entrepreneurship and self-employment. Hundreds of thousands of Americans are striking out on their own as consultants, retailers and small-business owners.

The move helps explain the ongoing shake-up in the world of work, with more people looking for flexibility, anxious about covid exposure, upset about vaccine mandates or simply disenchanted with pre-pandemic office life. It is also aggravating labor shortages in some industries and adding pressure on companies to revamp their employment policies.

The number of unincorporated self-employed workers has risen by 500,000 since the start of the pandemic, Labor Department data show, to 9.44 million. That is the highest total since the financial-crisis year 2008, except for this summer. The total amounts to an increase of 6% in the self-employed, while the overall U.S. employment total remains nearly 3% lower than before the pandemic.

Entrepreneurs applied for federal tax-identification numbers to register 4.54 million new businesses from January through October this year, up 56% from the same period of 2019, Census Bureau data show. That was the largest number on records that date back to 2004. Two-thirds were for businesses that aren’t expected to hire employees.

(p. A14) This year, the share of U.S. workers who work for a company with at least 1,000 employees has fallen for the first time since 2004, Labor Department data show. Meanwhile, the percentage of U.S. workers who are self-employed has risen to the highest in 11 years. In October, they represented 5.9% of U.S. workers, versus 5.4% in February 2020.

The self-employment increase coincides with complaints by many U.S. companies of difficulties—in some cases extreme—in finding and retaining enough employees. In September, U.S. workers resigned from a record 4.4 million jobs, Labor Department data show.

Kimberly Friddle, 50 years old, quit her job as head of marketing for a regional mortgage company near Dallas in September 2020.

. . .

. . . when a friend contacted her the next month, she saw an opportunity.

The friend sold home décor items on Amazon.com from his home in Canada, and Covid-related border restrictions were making it difficult to process returns. When he explained what he needed—primarily, someone to examine returned items for damage and ship them back to Amazon—Ms. Friddle felt the work could be a good challenge and a chance for her older daughter, Samantha, to gain some work experience.

They began processing returns for him steadily. When other Amazon sellers he knew needed help with warehouse-related tasks that were also made harder by the pandemic, he referred them to Ms. Friddle.

. . .

Now she runs an Amazon logistics, warehousing and fulfillment business full time from the family’s home outside Houston and rented warehouse space nearby.

. . .

Though the decision to leave that job was an emotional one, she said, a change after 27 years has given her new energy and confidence in addition to the flexibility.

“I didn’t have a plan when I left,” she said. “I wasn’t giving enough attention to the needs of my family. I wasn’t giving enough attention to the job that needed to be done. I felt like I was failing everywhere.”

Now, “I feel so successful and I wake up every day like, ‘I wonder what’s going to happen today.’ ”

. . .

Through the late 19th century, a large share of Americans worked for themselves, as farmers or artisans. With new technology such as electric lighting, manufacturing expanded, and many people left the field for the factory floor. They landed in an environment of strictly defined work hours and hierarchies—workers overseen by managers overseen by executives.

By the time Covid-19 arrived in the U.S., the advent of apps, websites and companies catering to entrepreneurs and freelancers was already giving employees options.

. . .

Marcus Grimm, a 50-year-old in Lancaster, Pa., worked at advertising agencies from the time he finished college. For years, he toyed with freelancing. “I had always considered it, but literally just never had the guts to make the move,” he said. “I was scared I would lose sleep every night worrying about my next dollar.”

Early in the pandemic, Mr. Grimm, a married father of two grown children, was laid off. He logged onto Upwork, a website that connects freelance workers from a wide range of industries with potential clients. He fielded several assignments doing ad campaigns for big companies, charging a low hourly rate.

Business flowed in. He has steadily raised his rate, to $150 an hour. Mr. Grimm said he now earns more than in his old job, which paid $130,000 a year.

His favorite part is not having to deal with corporate politics or any bureaucracy. He can go kayaking in the middle of the day.

“I’m the one who finds the client, I’m the one who does the work, and I’m the one who deals with any of the problems that come up,” he said.

. . .

Part of the current shift to self-employment might prove temporary. The boom in self-employed day traders during the dot-com hoopla of the late 1990s deflated along with the stock bubble.

A sharp rise in savings—boosted by a federal supplement to unemployment benefits, most recently $300 a week, that was paid for as long as 18 months of the pandemic—provides some individuals a financial cushion to pursue self-employment. As they run down those savings, some might again want a regular paycheck, economists say.

In addition, if labor shortages ease, freelancers could face stiffer competition from companies in landing clients. Finally, if the pandemic recedes, so might one piece of the impetus to leave regular work in favor of self-employment. Five percent of unvaccinated adults say they left a job because of a vaccine requirement they opposed, according to a Kaiser Family Foundation survey in October [2021].

For the full story, see:

Josh Mitchell and Kathryn Dill. “Workers Quit Jobs in Droves to Become Their Own Bosses.” The Wall Street Journal (Tuesday, Nov. 30, 2021): A1 & A14.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the story has the date November 29, 2021, and has the same title as the print version.)

My book, mentioned at the top, is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.