Books – Page 148 – artdiamondblog.com

Alert Street Vendor Hero Saves the Day

“Lance Orton, center, who sells T-shirts, said that as a veteran he was proud of his actions. But he spurned most questions.” Source of caption and photo: online version of the NYT article quoted and cited below.

Hernando de Soto has shown that entrepreneurial street-vending is an important path for the very poor to constructively improve their lives. And yet governments around the world, including ours, consistently make it hard for street vendors to ply their trade.
Yet, on balance, street vendors make our lives better, not only through their products and services, but also through their alert eyes that make our city streets safer. Jane Jacobs made the point that the presence of good people observing the streets is a key ingredient of urban safety, one that was too-often removed by well-intentioned, but ill-conceived city-planners’ urban-renewal projects.
The incident recounted below also adds one more case to the well-documented conclusions of Amanda Ripley, who showed us that our safety in avoiding and being rescued from disasters rests in the alertness, preparation, level-headedness and good will of ordinary citizens on the scene.
There may be professionals who are better trained, but outcomes often depend on what is done quickly, and usually only those who are on the scene are able to act quickly.
And although the politically correct will glower at you for mentioning it, there are obvious implications for the issue of gun control.

(p. A19) Even in Times Square, where little seems unusual, the Nissan Pathfinder parked just off Broadway on the south side of 45th Street — engine running, hazard lights flashing, driver nowhere to be found — looked suspicious to the sidewalk vendors who regularly work this area.

And it was the keen eyes of at least two of them — both disabled Vietnam War veterans who say they are accustomed to alerting local police officers to pickpockets and hustlers — that helped point the authorities to the Pathfinder, illegally and unusually parked next to their merchandise of inexpensive handbags and $2.99 “I Love NY” T-shirts.
Shortly before 6:30 p.m. on Saturday, the vendors — Lance Orton and Duane Jackson, who both served during the Vietnam War and now rely on special sidewalk vending privileges for disabled veterans — said they told nearby officers about the Pathfinder, which had begun filling with smoke and then emitted sparks and popping sounds.
. . .
But in a city hungry for heroes, the spotlight first turned to the vendors. Mr. Orton, a purveyor of T-shirts, ran from the limelight early Sunday morning as he spurned reporters’ questions while gathering his merchandise on a table near where the Pathfinder was parked.
When asked if he was proud of his actions, Mr. Orton, who said he had been selling on the street for about 20 years, replied: “Of course, man. I’m a veteran. What do you think?”
Mr. Jackson, on the other hand, embraced his newfound celebrity, receiving an endless line of people congratulating him while he sold cheap handbags, watches and pashmina scarves all day Sunday.
. . .
As for Mr. Orton, he rested on Sunday at a relative’s house, leaving others to talk on his behalf. “When he was in Vietnam, he said they had to make decisions and judgments from their gut, from their own feelings,” said Miriam Cintron, the mother of Mr. Orton’s son. “His instinct was telling him something’s not right. I guess he was right.”
She said Mr. Orton would mediate disputes between the police and other vendors, and when something did not look right, he would alert the police. “He always said, ‘Downtown is where they’re going to come to, and I’m going to be right there,’ ” Ms. Cintron said.
When Mr. Orton left Times Square about 7 a.m. on Sunday, he did so to a hero’s reception. As he walked down the street, employees from Junior’s restaurant stood outside applauding him. He briefly entered the restaurant before heading toward 44th Street.
Using a cane and wearing a white fedora, Mr. Orton limped away and hopped a cab home to the Bronx, but not before repeating a terror-watch mantra: “See something, say something.”

For the full story, see:
COREY KILGANNON and MICHAEL S. SCHMIDT. “Vendors Who Alerted Police Called Heroes.” The New York Times (Mon., May 3, 2010): A19.
(Note: ellipses added.)
(Note: the online version of the story is dated May 2, 2010 and has the title “Vendors Who Alerted Police Called Heroes.”)

The most relevant Hernando de Soto book is:
Soto, Hernando de. The Other Path: The Invisible Revolution in the Third World. New York: Basic Books, 1989.

The most relevant Jane Jacobs book is:
Jacobs, Jane. The Death and Life of Great American Cities. New York: Random House, 1961.

The Amanda Ripley book mentioned is:
Ripley, Amanda. The Unthinkable: Who Survives When Disaster Strikes – and Why. New York: Crown Publishers, 2008.

Profits on Economics Documentary May Not Be Dismal

(p. B6) If Steven D. Levitt and Stephen J. Dubner, the authors of “Freakonomics,” were to examine the movie business, they might ask: Why do documentary filmmakers keep doing it?

It can’t be the money, because the world is awash in documentaries that make little at the box office or are not distributed at all. Occasionally, though, a documentary makes a buck for those involved — and the new documentary based on “Freakonomics” could do just that.
Magnolia Pictures is expected to announce on Monday that it has acquired domestic distribution rights to the film, which was produced by the Green Film Company and directed, in parts, by a series of well-known documentarians. Those include Alex Gibney (“Taxi to the Dark Side”), Rachel Grady and Heidi Ewing (“Jesus Camp”), Morgan Spurlock (“Super Size Me”), Eugene Jarecki (“Why We Fight”) and Seth Gordon (“The King of Kong”).
“Freakonomics,” the film, got started when Chad Troutwine, a producer who worked on an earlier multidirector movie, “Paris, Je T’aime,” became interested in the best-selling book, which looks into matters like the socioeconomic implications of baby naming.

For the full story, see:
MICHAEL CIEPLY. “‘Freakonomics’ Documentary May Be a Rarity: Profitable.” The New York Times (Mon., April 5, 2010): B6.
(Note: the online version of the story is dated April 4, 2010.)

The source information on the revised edition of the Freakonomics book is:
Levitt, Steven D., and Stephen J. Dubner. Freakonomics: A Rogue Economist Explores the Hidden Side of Everything. Revised and Expanded ed. New York: William Morrow, 2006.

Maddison Showed Per Capita Income Stagnation from 1000 AD – 1820 AD

Angus Maddison. Source of photo: http://www.ggdc.net/maddison/

I neither met Angus Maddison, nor ever heard him speak, but I have often seen his work praised by those whom I respect.
One example is the praise given to Maddison by Brad DeLong in his wonderful “Cornucopia” essay that documents the benefits from the process of creative destruction.

(p. B10) Professor Maddison, a British-born economic historian with a compulsion for quantification, spent many of his 83 years calculating the size of economies over the last three millenniums. In one study he estimated the size of the world economy in A.D. 1 as about one five-hundredth of what it was in 2008.

He died on April 24 at a hospital in Paris after a long illness, his daughter, Elizabeth Maddison, said.
. . .
In his research, he tried to reconstruct thousands of years’ worth of economic data, most notably in his 2007 book “Contours of the World Economy 1-2030 A.D..” He argued that per capita income around the globe had remained largely stagnant from about 1000 to 1820, after which the world became exponentially richer and life expectancies surged.
. . .
In his archaeological excavation of the economies of other eras, he was “trying to explain why some countries achieved faster growth or higher income levels than others,” he wrote in an autobiographical essay, “Confessions of a Chiffrephile” published in 1994. He wanted to know what some countries did right and what others did wrong, and to figure out how growth influenced culture, and was influenced by it.
Professor Maddison often referred to himself as a “chiffrephile,” or lover of numbers, a term he invented to characterize economists and economic historians like himself who were prone to quantifying the world.
While macroeconomic research in the last few decades was dominated by elegant mathematical models and technical wizardry, his focus on meat-and-potatoes data and cross-country historical comparisons has come back into vogue in recent years, especially in the wake of the financial crisis.

For the full obituary, see:

CATHERINE RAMPELL. “Angus Maddison, 83, Who Quantified Ancient Economies.” The New York Times (Mon., May 3, 2010): B10.
(Note: ellipses added.)
(Note: the online version of the obituary is dated April 30, 2010 and has the title “Angus Maddison, Economic Historian, Dies at 83.”)

The Maddison book mentioned in the obituary is:
Maddison, Angus. Contours of the World Economy, 1-2030 AD: Essays in Macro-Economic History. Oxford and New York: Oxford University Press, 2007.

FDR’s NRA Price-Fixing Helped Big Firms “Ruin” Little Firms

(p. 50) Among those damaged was Carl Pharis, the general manager of Pharis Tire and Rubber Company in Newark, Ohio. Pharis employed over one thousand people, mainly in the Newark area. His company grew because, in Pharis’s words, “we would make the best possible rubber tire and sell it at the lowest price consistent with a modest but safe profit.” He and his employees had survived the grim Great Depression years because they had lower prices, a good tire, and solid support in central Ohio from buyers who knew the company because it was local and because it priced its tires lower than the larger firms. As Pharis said, “It is obvious that they cannot make as good a tire as we make and sell it at the price at which we can sell at a profit:”

Then came the NRA with its high fixed prices for tires. As Pharis said, “Since the industry began to formulate a Code under the N. R. A., in June, 1933, we have at all times opposed any form of price-fixing. We believe it to be illegal and we know it to be oppressive.” He added, “We quite understand that, if we were compelled to sell our tires at exactly the same price as they sell their tires, their great national consumer acceptance would soon capture our purchasers and ruin us. Since we have so little of this consumer publicity when compared with them, our only hope is in our ability (p. 51) to make as good or a better tire than they make and to sell it at a less[er] price. . . . ”
Since Pharis and other small companies were no longer allowed to sell tires at discounted rates, Goodyear and Firestone “could go out just as they have gone out,” Pharis noted, “and say to prospective customers that, since they had to pay the same price, it would be wiser if they bought the nationally advertised lines.”
In a nutshell, Pharis put it this way: “The Government deliberately raised our prices up towards the prices at which the big companies wanted to sell, at which they could make a profit, . . . where more easily, with much less loss, they could come down and ‘get us’ and where, bound by N. R. A. decrees, we could not use lower prices, although we could have lowered them and still made a decent profit.”
Pharis was on the verge of closing down and having to lay off all of his one thousand employees. His company, with its low prices and quality tires, could weather the Great Depression, but not the NRA. “If we were asking favors from the Government,” Pharis concluded, “there would be little justice in our complaints. . . . And so, if the big fellows, with their too-heavy investments and high costs of manufacturing and selling, cannot successfully compete with us little fellows without Government aid, they should quit.”

Source:
Folsom, Burton W., Jr. New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America. New York: Threshold Editions, 2008.
(Note: ellipses in original.)

Folsom Shows How FDR Lied, Bought Votes and Deepened the Depression

Source of book image: http://mises.org/misesreview_detail.aspx?control=347

FDR has never been one of my heroes. But in the last few years, I have read two books that have revealed him to have been much worse than I expected. In earlier posts, I have praised Amity Shlaes’ The Forgotten Man.
Here I praise Burt Folsom’s New Deal or Raw Deal?
Folsom documents how the economic policies of Roosevelt lengthened and deepened the Great Depression.
But what I think I will remember most about the book, is the example after example of how FDR lied to both friend and foe; and the example after example of how FDR used government spending programs to buy votes.
I found this book very unpleasant. Rather than listen to another chapter in the car, I sometimes found myself playing music.
But we need to read this book. We need to know what really happened, so we can guard against it happening again.
In the next few weeks, I will quote a few of the more memorable and significant passages in Folsom’s book.

Book discussed:
Folsom, Burton W., Jr. New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America. New York: Threshold Editions, 2008.

“By Far the Greatest Pollution Crisis the Earth Has Ever Endured”

(p. 79) While oxygen is the third most common element in the universe, we know that free oxygen was exceedingly rare in the Earth’s initial atmosphere, until roughly two billion years ago, when an ancestor of modern cyanobacteria hit upon a photosynthetic process that used the energy from the sun to extract hydrogen from the abundant supply of water on the planet. That metabolic strategy was spectacularly successful–the organism quickly covered the surface of the planet–but it had a pollution problem: it expelled free oxygen as a waste product. During this period, now known as the Proterozoic, the oxygen content of the atmosphere exploded from 0.0001 percent to 3 percent, beginning its long march to the current levels of 21 percent. (Even today, Earth’s atmosphere is actually dominated by nitrogen, which makes up 78 percent of its overall volume: other gases. like argon and carbon dioxide, constitute less than a single percent.) The massive increase of oxygen in the atmosphere triggered what has been called “by far the greatest pollution crisis the earth has ever endured,” destroying countless microbes for whom the cocktail of sunlight and oxygen was deadly.

In time, though, organisms evolved that thrived in an oxygen-heavy environment. We are their descendants.

Source:
Johnson, Steven. The Invention of Air: A Story of Science, Faith, Revolution, and the Birth of America. New York: Riverhead Books, 2008.

Britannica Imitates Wikipedia

(p. 209) Britannica had already launched a project called WebShare in April 2008, which was described as “A special program for web publishers, including bloggers, webmasters, and anyone who writes for the Internet. You get complimentary access to the Encyclopaedia Britannica online and, if you like, an easy way to give your readers background on the topics you write about with links to complete Britannica articles.” This was a rather radical move, obviously trying to vie with Wikipedia’s emergence as one of the most linked-to resources on the Internet.

But the latest initiative was something quite astonishing, as Britannica was now inviting users to be part of the team of content creators:

To elicit their participation in our new online community of scholars, we will provide our contributors with a reward system and a rich online home that will enable them to promote themselves, their work, and their services. . . . Encyclopaedia Britannica will allow those visitors to suggest changes and additions to that content.

Source:
Lih, Andrew. The Wikipedia Revolution: How a Bunch of Nobodies Created the World’s Greatest Encyclopedia. New York: Hyperion, 2009.
(Note: ellipsis in original.)

Quants Confused Mathematical Models and Reality

Source of book image: http://seekingalpha.com/article/188632-the-quants-review-when-the-money-grid-went-dark

(p. 7) The virtually exclusive use of mathematical models, Mr. Patterson says, was what separated the younger cohorts of quants from their Wall Street forebears. Unlike Warren Buffett or Peter Lynch, the quants did not focus on so-called market fundamentals like what goods or services a particular company actually produced. Seldom if ever did they act on old-fashioned gut instinct. Instead, they focused on factors like how cheap a stock was relative to the rest of the market or how quickly its price had risen or fallen.

Therein was the quants’ flaw, according to Mr. Patterson. Pioneers like Mr. Thorp understood that while the math world and the financial world have much in common, they aren’t always in sync. The quant traders’ model emphasized the most likely moves a stock or bond price could make. It largely ignored the possibility of big jolts caused by human factors, especially investor panics.
“The model soon became so ubiquitous that, hall-of-mirrors-like, it became difficult to tell the difference between the model and the market itself,” Mr. Patterson declares.
Move ahead to August 2007 and beyond, when markets swooned on doubts about subprime mortgages. Stocks that the model predicted were bound to go up went sharply down, and vice versa. Events that were supposed to happen only once in 10,000 years happened three days in a row.

For the full review, see:

HARRY HURT III. “Off the Shelf; In Practice, Stock Formulas Weren’t Perfect.” The New York Times, SundayBusiness Section (Sun., February 21, 2010): 7.
(Note: the online version of the article is dated February 20, 2010.)

The reference to Patterson’s book, is:
Patterson, Scott. The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It. New York: Crown Business, 2010.

“The GodKing Drives a Hyundai”

(p. 176) As an homage to Wales’s sticking with a low-key style, the community adopted the saying “The GodKing (sic) drives a Hyundai,” making fun of his humble Korean-made car, a brand known more for frugality than flash.

Source:
Lih, Andrew. The Wikipedia Revolution: How a Bunch of Nobodies Created the World’s Greatest Encyclopedia. New York: Hyperion, 2009.

“Coase’s Penguin” and the Motives for “Commons-Based Peer Production”

(p. 108) Noted Yale law professor Yochai Benkler has a theory. In a widely circulated and famous essay on the Internet called “Coase’s Penguin,” he offered his thinking on why people participate in efforts such as Linux and other “free” projects. There was already a culture, before Wikipedia, of folks donating their time, effort, and skills to the collective good for no monetary gain or immediate compensation. Benkler observed this part of the hacker ethos and was curious to know what the common thread was.

He dubbed it “commons-based peer production.” It’s a fancy moniker for the phenomenon of people working together toward the same end–creating computer code or content that is free to be copied, distributed, used, and modified by others.
Benkler believes the Internet and the “free culture” movement have allowed individuals to connect and combine their efforts in ways unprecedented in history. The legal academic is not shy to combine scholarship outside his area of training by drawing on economics, sociology, and technology to form his theory.
According to Benkler, if monetary rewards and the creation of corporate firms have been the accepted driving force for human innovation and progress, there has to be something else driving volunteers in Linux, Wikipedia, and other “free” projects that have become so pervasive and monumental in the digital age.
He asserts the motivation comes from two main things other than money: the “socio-psychological” reward of interacting with others, and the “hedonic” personal gratification of the task.
Wikipedia’s magic occurs when these two things come together. One person’s personal affection and indulgence—mapmaking, grammar checking, baseball statistics, history of stamps—easily finds a home in Wikipedia’s amalgam of topics, where it also feeds into and inspires activities by others.

Source:
Lih, Andrew. The Wikipedia Revolution: How a Bunch of Nobodies Created the World’s Greatest Encyclopedia. New York: Hyperion, 2009.

Daniel Pink on What Motivates Workers to Work Well

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

Daniel Pink’s Free Agent Nation was a provocative account of how the entrepreneur benefits from being an entrepreneur. I enjoyed the book, and reference it frequently.
I have not had a chance to read Pink’s recent Drive, but hope to do so soon.

(p. A17) Science, Mr. Pink says, has shown that we are motivated as much intrinsically, by the sheer joy and purpose of certain activities, as extrinsically, by rewards like pay raises and promotions.

The science that Mr. Pink is referring to rests largely on the work of Edward Deci and Richard Ryan at the University of Rochester and Mihaly Csikszentmihalyi at Claremont Graduate University. These three researchers have found that we do our best work when motivated from within, when we have control over our time and decisions and when we feel a deep sense of purpose. Under such conditions, we can achieve real mastery over whatever it is that we do.
The modern workplace, Mr. Pink laments, is too often set up to deny us this opportunity. Firms that hope to optimize efficiency by making their employees clock in and out, attend compulsory meetings, and receive pay for performance are de-motivating through excessive control. What they should be doing, he argues, is giving workers the chance to do their best work by granting them more autonomy and helping them to achieve the mastery that may come with it.
Mr. Pink cites an Australian software firm, Atlassian, that allows its programmers 20% of their time to work on any software problem they like, provided it is not part of their regular job. The programmers turn out to be much more efficient with that 20% of their time than they are with their regular work hours. Atlassian credits the 20% with many of its innovations and its high staff retention. Companies as large as Google and 3M have similar programs that have produced everything from Google News to the Post-It note.
. . .
. . . : Beyond serving our basic needs, money doesn’t buy happiness. We need a greater purpose in our lives. Our most precious resource is time. We respond badly to conditions of servitude, whether the lash of the galley master or the more subtle enslavement of monthly paychecks, quarterly performance targets and the fear of losing health insurance. Work that allows us to feel in control of our lives is better than work that does not. . . . , these lessons are worth repeating, and if more companies feel emboldened to follow Mr. Pink’s advice, then so much the better.

For the full review, see:
PHILIP DELVES BROUGHTON. “More Than a Paycheck; Workers are more efficient, loyal and creative when they feel a sense of purpose–when work has meaning.” The Wall Street Journal (Tues., Feb. 2, 2010): A17.
(Note: ellipses added.)
(Note: the online version of the review is dated Feb. 5, 2010.)