Books – Page 167 – artdiamondblog.com

Deaths in ‘Natural’ Disasters Caused by Absence of Economic Growth

We are often made to feel guilty for the suffering of other countries in “natural” disasters. But the deaths are more due to the lack of infrastructure, sound buildings and the like, which in turn are due to the countries’ lack of economic growth, which in turn is due to their rejection of the process of capitalist creative destruction.

(p. 90) The simple truth is that money matters more than anything else in most disasters. Which is another way of saying that where and how we live matters more than Mother Nature. Developed nations experience just as many natural disasters as undeveloped nations. The difference is in the death toll. Of all the people who dies from natural disasters on the planet from 1985 to 1999, 65 percent came from nations with incomes below $760 per capita, according to the Intergovernmental Panel on Climate Change. The 1994 Northridge earthquake in California, for example, was similar in magnitude and depth to the 2005 earthquake in Pakistan. But the Northridge earthquake killed only sixty-three people. The Pakistan earthquake killed about a hundred thousand.

People need roofs, roads, and health care before quibbles like personality and risk perception count for much. And the effect is geometric. If a large nation raises its GNP from $2,000 to $14,000 per person, it can expect to save 530 lives a a year in natural disasters, according to a study by Matthew Kahn at Tufts University. And for those who survive, money is a form of liquid resilience: it can bring treatment, stability, and recovery.

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

Regular Citizens Perform Vast Majority of Disaster Rescues

Source of book image: http://www.cleveland.com/arts/index.ssf/2008/06/the_book_the_unthinkable_expla.html

The most important message of this book is a very important message indeed. That message is that overwhelmingly, disaster survival and rescue depends on the actions of regular people, not the actions of professional lifesavers. (Very often, the professionals cannot get there quickly enough, or in sufficient numbers, to get the job done.)
This message, is itself worth the price of the book—if it were sufficiently understood, it would have enormous implications for individual preparedness, and government policy. (Think about the implications, for instance, for whether individual regular people should be allowed to carry guns.)

(p. xiii) These days, we tend to think of disasters as acts of God and government. Regular people only feature into the equation as victims, which is a shame. Because regular people are the most important people at a disaster scene, every time.

In 1992, a series of sewer explosions caused by a gas leak ripped through Guadalajara, Mexico’s second largest city. The violence came from below, rupturing neighborhoods block by block. Starting at 10:30 A.M., at least nine separate explosions ripped open a jagged trench more than a mile long. About three hundred people died. Some five thousand houses were razed. The Mexican Army was called in. Rescuers from California raced to help. Search-and-rescue dogs were ordered up.
But first, before anyone else, regular people were on the scene saving one another. They did incredible things, these regular people. They lifted rubble off survivors with car jacks. They used garden hoses to force air into voids where people were trapped. In fact, as in most disasters, the vast majority of rescues were done by ordinary folks. After the first two hours, very few people came out of the debris alive. The search and rescue dogs did not arrive until twenty-six hours after the explosion.

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

Amateur Leeuwenhoek Made Huge Contribution to Science

(p. 40) Antoni van Leeuwenhoek was a scientific superstar. The greats of Europe traveled from afar to see him and witness his wonders. It was (p. 41) not just the leading minds of the era—Descartes, Spinoza, Leibnitz, and Christopher Wren—but also royalty, the prince of Liechtenstein and Queen Mary, wife of William III of Orange. Peter the great of Russia took van Leeuwenhoek for an afternoon sail on his yacht. Emperor Charles of Spain planned to visit as well but was prevented by a strong eastern storm.

It was nothing that the Dutch businessman had ever expected. He came from an unknown family, had scant education, earned no university degrees, never traveled far from Delft, and knew no language other than Dutch. At age twelve he had been apprenticed to a linen draper, learned the trade, then started his own business as a fabric merchant when he came of age, making ends meet by taking on additional work as a surveyor, wine assayer, and minor city official. He picked up a skill at lens grinding along the way, a sort of hobby he used to make magnifying glasses so he could better see the quality of fabrics he bought and sold. At some point he got hold of a copy of Micrographia, a curious and very popular book by the British scientist Robert Hooke. Filled with illustrations, Micrographia showed what Hooke had sen through a novel instrument made of two properly ground and arranged lenses, called a “microscope.” . . . Micrographia was an international bestseller in its day. Samuel Pepys stayed up until 2:00 A.M. one night poring over it, then told his friends it was “the most ingenious book that I ever read in my life.”

Van Leeuwenhoek, too was fascinated. He tried making his own microscopes and, as it turned out, had talent as a lens grinder. His lens were better than anyone’s in Delft; better than any Hooke had access to; better, it seemed, than any in the world. . . .

(p. 42) Then, in the summer of 1675, he looked deep within a drop of water from a barrel outside and became the first human to see an entirely new world. In that drop he could make out a living menagerie of heretofore invisible animals darting, squirming, and spinning.

Source:
Hager, Thomas. The Demon under the Microscope: From Battlefield Hospitals to Nazi Labs, One Doctor’s Heroic Search for the World’s First Miracle Drug. New York: Three Rivers Press, 2007.
(Note: ellipses added.)

The example above is consistent with Baumol’s hypotheses about formal education mattering less, in the initial stages of great discoveries. (And maybe even being a hindrance).
See:
Baumol, William J. “Education for Innovation: Entrepreneurial Breakthroughs Versus Corporate Incremental Improvements.” In Innovation Policy and the Economy, edited by Adam B. Jaffe, Josh Lerner and Scott Stern, 33-56. Cambridge, Mass.: MIT Press, 2005.

The example is also consistent with Terence Kealey’s claim that important science can often arise as a side-effect of the pursuit of business activity.
See:
Kealey, Terence. The Economic Laws of Scientific Research. New York: St. Martin’s Press, 1996.

The Benefits from the Discovery of Sulfa, the First Antibiotic

I quoted a review of The Demon Under the Microscope in an entry from October 12, 2006. I finally managed to read the book, last month.
I don’t always agree with Hager’s interpretation of events, and his policy advice, but he writes well, and he has much to say of interest about how the first anti-bacterial antibiotic, sulfa, was developed.
In the coming weeks, I’ll be highlighting a few key passages of special interest. In today’s entry, below, Hager nicely summarizes the importance of the discovery of antibiotics for his (and my) baby boom generation.

(p. 3) I am part of that great demographic bulge, the World War II “Baby Boom” generation, which was the first in history to benefit from birth from the discovery of antibiotics. The impact of this discovery is difficult to overstate. If my parents came down with an ear infection as babies, they were treated with bed rest, painkillers, and sympathy. If I came down with an ear infection as a baby, I got antibiotics. If a cold turned into bronchitis, my parents got more bed rest and anxious vigilance; I got antibiotics. People in my parents’ generation, as children, could and all too often did die from strep throats, infected cuts, scarlet fever, meningitis, pneumonia, or any number of infectious diseases. I and my classmates survived because of antibiotics. My parents as children, and their parents before them, lost friends and relatives, often at very early ages, to bacterial epidemics that swept through American cities every fall and winter, killing tens of thousands. The suddenness and inevitability of these epidemic deaths, facts of life before the 1930s, were for me historical curiosities, artifacts of another age. Antibiotics virtually eliminated them. In many cases, much-feared diseases of my grandparents’ day—erysipelas, childbed fever, cellulitis—had become so rare they were nearly extinct. I never heard the names.

More Choice is a Robust Result of The Long Tail

I’ve discussed in a previous entry, why The Long Tail is a worthy read. The article quoted below, praises a Harvard Business Review article that disagrees. I haven’t had a chance to read the HBR article yet.
Yet on a fundamental level, I am confident that The Long Tail is right. New technologies such as Amazon and YouTube, reduce the cost of content diversity. If the supply curve of diversity moves right, then (ceteris paribus) the quantity of diverse content will increase. Hence, we can robustly expect more diverse content.
And for us free market libertarians, more choice is good.

(p. B5) The Long Tail theory, as explained by its creator, Wired magazine editor Chris Anderson, holds that society is “increasingly shifting away from a focus on a relatively small number of ‘hits’ (mainstream products and markets) at the head of the demand curve and toward a huge number of niches in the tail.”
The reason involves the abundance of easy choice that the Web makes possible. A record store has room for only a set number of titles. ITunes, though, can link to all of the millions of songs that its servers can store. Thus, said Mr. Anderson, “narrowly-targeted goods and services can be as economically attractive as mainstream fare.” Managers were urged to adopt their business plans accordingly.
Since appearing two years ago, the book has been something of a sacred text in Silicon Valley. Business plans that foresaw only modest commercial prospects for their products cited the Long Tail to justify themselves, as it had apparently proved that the Web allows a market for items besides super-hits. If you demurred, you were met with a look of pity and contempt, as though you had just admitted to still using a Kaypro.
That might now start to change, thanks to the article (online at tinyurl.com/3rg5gp), by Anita Elberse, a marketing professor at Harvard’s business school who takes the same statistically rigorous approach to entertainment and cultural industries that sabermetricians do to baseball.
Prof. Elberse looked at data for online video rentals and song purchases, and discovered that the patterns by which people shop online are essentially the same as the ones from offline. Not only do hits and blockbusters remain every bit as important online, but the evidence suggests that the Web is actually causing their role to grow, not shrink.
Mr. Anderson responded on his Long Tail blog, thelongtail.com, saying much of the difference between his analysis and hers involved how hits and non-hits, or “head” and “tail” in the book’s lingo, are measured. Aside from that, he was generous in praising the article, and said he welcomed the sort of rigorous scrutiny the theory was getting.

For the full commentary, see:
LEE GOMES. “PORTALS; Study Refutes Niche Theory Spawned by Web.” The Wall Street Journal (Weds., JULY 2, 2008): B5.

The full information on The Long Tail, is:
Anderson, Chris. The Long Tail. New York: Hyperion, 2006.

The HBR article that is critical of the long tail, is:
Elberse, Anita. “Should You Invest in the Long Tail?” Harvard Business Review 86, no. 7/8 (2008): 88-96.

Companies “Once as Strong as Dinosaurs But Now Just as Extinct”

From McCraw’s discussion of Schumpeter’s legacy:

(p. 496) No country, regardless of how long it has been prosperous, can take permanent affluence for granted. Nor can any company assume its continued existence—as names such as Digital Equipment, Pan American Airways, Pullman, Douglas Aircraft, and the Pennsylvania Railroad remind us. Each of these companies once epitomized the cutting edge not only of its own industry but of American business as a whole. And all are now in the dustbin of history, along with hundreds of thousands of other businesses of all sizes—once as strong as dinosaurs but now just as extinct.

Source:
McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.

Microsoft Still Risks Becoming “Road Kill on the Information Highway”

“Steve Ballmer is the second Microsoft chief executive to butt his head against the view that a new era in technology brings a new market leader.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 4) The Yahoo affair obscures the larger story: Microsoft’s long, long struggle — since 1993 — to maintain its leadership position while the Internet grew ubiquitous. Mr. Ballmer, who joined Microsoft in 1980 as its 15th employee, and Bill Gates, his mentor who will retire next month as a full-time Microsoft employee, have certainly tried their best to avert the inevitable decline of the company’s influence.

In 2000, Mr. Ballmer credited Mr. Gates for noting that no company in the computer business had ever stayed on top through what Mr. Gates called “a major paradigm shift.” The two men wanted Microsoft to be the first company to achieve that goal. An interesting challenge, but some problems are of a size that dwarf the abilities of multibillionaire mortals.
In a 1995 internal memo, “The Internet Tidal Wave,” Mr. Gates alerted company employees to the Internet’s potential to be a disruptive force. This was two years before Clayton M. Christensen, the Harvard Business School professor, published “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail” (1997). The professor presented what would become a widely noted framework to explain how seemingly well-managed companies could do most everything to prepare for the arrival of disruptive new technology but still lose market leadership.
It’s Google, of course, that has developed the musculature to step forward and lay claim to being Microsoft’s successor as industry leader in the Internet era. If there had been any way Microsoft could have prepared for this day, it had ample time to do so. In 1993, fully five years before Google’s founding and two years before Mr. Gates’s memo, Nathan P. Myhrvold, then Microsoft’s chief technology officer, wrote his own memo, “Road Kill on the Information Highway.” It spelled out in prescient detail how each of many industries would be flattened by the build-out of digital networks, and it said that the PC software business would be no exception.

For the full commentary, see:
RANDALL STROSS. “Digital Domain; The Computer Industry Comes With Built-In Term Limits.” The New York Times, SundayBusiness Section (Sun., May 18, 2008): 4.

“Three Generations from Overalls to Overalls”

(p. 156) Because it proceeds by competitively destroying old businesses and hence the existences dependent upon them, there always corresponds to it a process of decline, of loss of caste, of elimination. This fate also threatens the entrepreneur whose powers are declining, or his heirs who have inherited his wealth without his ability. This is not only because all individual profits dry up, the competitive mechanism tolerating no permanent surplus values, but rather annihilating them by means of just this stimulus of the striving for profits which is the mechanism’s driving force; but also because in the normal case things so happen that entrepreneurial success embodies itself in the ownership of a business; and this business is usually carried on further by the heirs on what soon become traditional lines until new entrepreneurs supplant it. An American adage expresses it: three generations from overalls to overalls. And so it may be. Exceptions are rare, and are more than compensated for by cases in which the descent is still faster. Because there are always entrepreneurs and relatives and heirs of entrepreneurs, public opinion and also the phraseology of the social struggle readily overlook these facts. They constitute “the rich” a class of inheritors who are removed from life’s battle. In fact, the upper strata of society are like hotels which are indeed always full of people, but people who are forever changing.

Source:
Schumpeter, Joseph A. The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Translated by Redvers Opie. translation of 2nd German edition that appeared in 1926; translation first published by Harvard in 1934 ed. London: Oxford University Press, 1961.

Kronman Thinks It’s Good that We Die (and Charles Murray Applauds)

Over the weekend of August 16-17, 2008, I caught a few minutes of an interview on one of the C-SPAN channels. Charles Murray was handing softball questions to an academic philosopher named Kronman. Kronman was pontificating that life could only be meaningful because there was death. He suggested that those pursuing longevity research were misguided.
I sat there appalled, pondering how many wonderful, amazing projects we could get done, if only we had more time.
Some wise philosopher once said that you can only have useful dialogue with someone if the two of you have some shared assumptions. I don’t expect to be dialoguing with Anthony Kronman anytime soon. And that is just as well, since life is way too short to waste much time worrying about the Anthony Kronman’s of the world.
(In case you think I’m making this up, I quote below, from Kronman.)

(p. 229) The spiritual emptiness of our civilization has its source in the technology whose achievements we celebrate and on whose powers we all now depend.

Technology relaxes or abolishes the existing limits on our powers. There is no limit to this process itself. Indeed, every step forward is merely a provocation to go further. This might be called the (p. 230) technological “imperative.” . . .
. . .
(p. 230) If we lived forever, our powers, however great, would have no significance. How could it possibly matter whether we exercised them one way or another, sooner rather than later? This can matter to us only within the framework of a lifetime, that is, within the boundaries of a mortal existence. That we sometimes imagine (or think we imagine) that we want to have and use limitless powers in a limitless life is an illusion that always depends on our covertly smug-(p. 231)gling into our imagined picture of such an existence some essential feature of the human mortality we can never escape. In reality, the idea of immortality is for us quite unimaginable. It remains an empty abstraction.

PS: The following sentence appears on the copyright page of Kronman’s book: “The paper in this book meets the guidelines for permanence and durability of the Committee on Production Guidelines for Book Longevity of the Council on Library Resources.”
So the longevity of books is pompously praised, while the longevity of humans is belittled?

Don’t waste time on:
Kronman, Anthony T. Education’s End: Why Our Colleges and Universities Have Given up on the Meaning of Life. New Haven, CT: Yale University Press, 2007.
(Note: ellipses added.)

Shaw: “All Progress Depends on the Unreasonable Man”

The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.

attributed to George Bernard Shaw
Source:
Elkington, John, and Pamela Hartigan. The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World. Boston, MA: Harvard Business School Press, 2008.
(Note: Elkington and Hartigan cite Shaw’s Man and Superman as the location of the Shaw quote.)

A Schumpeterian Policy Program Promotes Innovation and Creative Destruction

McCraw on the nature of “a Schumpeterian program” :

(p. 169) Yet it is not difficult to identify a Schumpeterian program—at whatever level of analysis one chooses: the individual entrepreneur, the business firm, the industry, or even the country. At all levels, Schumpeter’s litmus test is whether the players are pursuing innovation and bringing about creative destruction. If they are, then the program is Schumpeterian.

Source:
McCraw, Thomas K. Prophet of Innovation: Joseph Schumpeter and Creative Destruction. Cambridge, Mass.: Belknap Press, 2007.