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Publishing Pretty Papers Full of Clever Mathematical Tricks

Source of book image: http://images.amazon.com/images/P/0738203491.01.LZZZZZZZ.jpg

In his elegant and thoughtful foreward, physicist, futurist, and guru Freeman Dyson writes:

(p. viii) Before I met Feynman, I had published a number of mathematical papers, full of clever tricks but totally lacking in im-(p. ix)portance. When I met Feynman, I knew at once that I had entered another world. He was not interested in publishing pretty papers. He was struggling, more intensely than I had ever seen anyone struggle, to understand the workings of nature by rebuilding physics from the bottom up.

The reference to the book, is:

Feynman, Richard P. The Pleasure of Finding Things Out: The Best Short Works of Richard P. Feynman. New York: Perseus Books, 1999.

Schumpeter’s “Sarcastic Remark” on Mathematics in Economics

Erich Schneider had been a student of Schumpeter’s at the University of Bonn in the late 1920s. The following sentences are from his lectures on Schumpeter that he published in German in 1970, and that were were translated into English by W.E. Kuhn and published in that form in 1975.

(p. 41) When, after many years of separation, I saw Schumpeter again at Harvard in the fall of 1949 and heard his lectures on economic theory–which he gave at 2 p.m., as in Bonn–I found him to be exactly the same man as before. On that afternoon he talked about the nature of dynamic analysis and about the role of difference equations in the framework of such an analysis.

To the above passage, Schneider adds footnote 3:

(p. 59) He dropped the sarcastic remark: "There are economists who do not know what a difference equation is; but there are also those who know nothing else."

Schneider, Erich. Joseph A. Schumpeter: Leben Und Werk Eines Grossen Sozialokonomen (Life and Work of a Great Social Scientist). Lincoln, Neb.: University of Nebraska–Lincoln Bureau of Business Research, 1975.

Silicon Graphics’ Jim Clark Understood Disruptive Innovation

There’s a great passage in The New, New Thing about Jim Clark trying to convince Silicon Graphics to produce a PC. Clark talks about how hard it is for a company to create a product that competes with itself.

Shades of Clayton Christensen:

Clark thought that Silicon Graphics had to "cannibalize" itself. For a technology company to succeed, he argued, it needed always to be looking to destroy itself. If it didn’t, someone else would. "It’s the hardest thing in business to do," he would say. "Even creating a lower-cost product runs against the grain, because the low-cost products undercut the high-cost, more profitable products." Everyone in a successful company, from the CEO on down, has a stake in whatever the company is currently selling. It does not naturally occur to anyone to find a way to undermine that creative destruction, and he was prepared to do the deed. He wanted Silicon Graphics to operate in the same self-corrosive spirit. (p. 66 of hb edition)

The reference to The New, New Thing is:

Lewis, Michael. The New New Thing: A Silicon Valley Story. New York: W. W. Norton & Company, 2000.

Christensen’s most important book is:

Christensen, Clayton M., and Michael E. Raynor. The Innovator’s Solution: Creating and Sustaining Successful Growth. Boston, MA: Harvard Business School Press, 2003.

“The Referee Should Not Be Too Quick With His Whistle”

I found the following wise comments while reading a short review of an old book by Edgar Monsanto Queeny, who followed his father as CEO of the Monsanto corporation, and who wrote a book called The Spirit of Enterprise which Schumpeter praised in a letter to Queeny.

(The abbreviation T.N.E.C. stands for the Temporary National Economic Committee, which I believe was an ad hoc congressional committee during part of F.D.R.’s presidency.)

Mr. Queeny does not give us a satisfactory analysis of the T.N.E.C. reports but his observations are always commonsensical and suggestive. What emerges, and what is important, is that the positive Liberal State should not aim at too subtle a plan for freedom. The referee should not be too quick with his whistle nor too ready to order players off the field. The rules of the game may well allow for a little hurly-burly. Economists like Professor Hutt, who are working out the rules of the game of free enterprise, deserve the highest praise. But they should realize that refinement has its price as well as simplicity, and of the two simplicity costs the less.

Shenfield, A. A. "Review of the Spirit of Enterprise by Edgar M. Queeny." Economica 12, no. 48 (November 1945): 264.

The reference to Queeny’s book is:

Queeny, Edgar M. The Spirit of Enterprise. New York: Charles Scribner’s Sons, 1943.

Feynman: What Biology Needs is Not More Math, But to See Better at the Atomic Level

A very bright, and very mathematically competent, fellow, grants that math is not the source of all knowledge. So is economics more like physics, or more like biology?

(p. 124) We have friends in other fields–in biology, for instance. We physicists often look at them and say, "You know the reason you fellows are making so little progress?" (Actually I don’t know any field where they are making more rapid progress than they are in biology today.) "You should use more mathematics, like we do." They could answer us–but they’re so polite, so I’ll answer for them: "What you should do in order for us to make more rapid progress is to make the electron microscope 100 times better."

What are the most central and fundamental problems of biology today? They are questions like: What is the sequence of bases in the DNA? What happens when you have a mutation? How is the base order in the DNA connected to the order of amino acids in the protein? What is the structure of the RNA: is it a single-chain or double-chain, and how is it related in its order of bases to the DNA? What is (p. 125) the organization of the microsomes? How are proteins synthesized? Where does the RNA go? How does it sit? Where do the proteins sit? Where do the amino acids go in? In photosynthesis, where is the chlorophyll; how is it arranged; where are the carotenoids involved in this thing? What is the system of the conversion of light into chemical energy?

It is very easy to answer many of these fundamental biological questions; you just look at the thing! You will see the order of bases in the chain; you will see the structure of the microsome. Unfortunately, the present microscope sees at a scale which is just a bit too crude. Make the microscope one hundred times more powerful, and many problems of biology would be made very much easier. I exaggerate, of course, but the biologists would surely be very thankful to you–and they would prefer that to the criticism that they should use more mathematics.

Source:

Feynman, Richard P. The Pleasure of Finding Things Out: The Best Short Works of Richard P. Feynman. New York: Perseus Books, 1999.

The Entrepreneur Versus the Government

A great story about Jim Clark, who founded Silicon Graphics:

(p. 46) Just a few years back, before the Internet boom, Clark’s house in Atherton had been surrounded by empty fields. Now he was surrounded by new houses, many of them bigger than his own. One morning he looked up from his kitchen table and saw the neighbors looking (p. 47) back. He requested, and was denied, a permit to build a fence tall enough to screen them from his view. The city of Atherton, California, had strict rules about fences, and the fence Clark wanted to build was declared too high. So Clark built a hill, and put the fence on top of the hill. It did not occur to him that there was anything unusual about this.

(page numbers above are from the Norton hardback edition; the full quote is on p. 31 of the paperback edition)

The reference to the hardback edition, is:

Lewis, Michael. The New New Thing: A Silicon Valley Story. New York: W. W. Norton & Company, 2000.

“If Everyone Were Patient, There’d Be No New Companies”

Source of book image: http://www.austinchronicle.com/gyrobase/Issue/review?oid=oid%3A74686

Michael Lewis’ book provides some interesting stories and insights into the important information technology (IT) entrepreneur, Jim Clark, who founded Silicon Graphics, and had a hand in many other IT startups, such as Netscape.

For example, here is more evidence against Buddhism; dissatisfaction drives improvement:

Impatience might be a social vice but, to Clark, it was a commercial virtue. "If everyone was patient," he’d say, "there’s be no new companies." (p. 42 of hardback edition; p. 26 of paperback edition)

The reference for the book is:

Lewis, Michael. The New New Thing: A Silicon Valley Story. New York: W. W. Norton & Company, 2000.

Bush on Entrepreneurship

Source of book image: http://www.harpercollins.com/harperimages/isbn/large/8/9780060841638.jpg

At lunchtime today (11/27/06) I heard part of a C-Span broadcast of a Heritage Foundation event in which Carl J. Schramm gave a presentation based on his new book (see above). It sounded as though Schramm has some useful thoughts about the impact of entrepreneurship, and on how the institutions of higher education are very unentrepreneurial.

I smiled when Schramm mentioned that George W. Bush had once said that: "The problem with the French is that they don’t know the meaning of the word "entrepreneur." To those who don’t "get" the joke: it is another of those Bush-is-stupid jokes, based on the word "entrepreneur" being of French origins.

A web site devoted to "urban legends" identifies the Bush quote as one of these legends:

Yet another "George W. Bush is dumb" story has been taken up by those who like their caricatures drawn in stark, bold lines. According to scuttlebutt that emerged in the British press in July 2002, President Bush, Britain’s Prime Minister Tony Blair, and France’s President Jacques Chirac were discussing economics and, in particular, the decline of the French economy. "The problem with the French," Bush afterwards confided in Blair, "is that they don’t have a word for entrepreneur."

The source was Shirley Williams, also known as the Baroness Williams of Crosby, who claimed "my good friend Tony Blair" had recently regaled her with this anecdote in Brighton.

Lloyd Grove of The Washington Post was unable to reach Baroness Williams to gain her confirmation of the tale, but he did receive a call from Alastair Campbell, Blair’s director of communications and strategy. "I can tell you that the prime minister never heard George Bush say that, and he certainly never told Shirley Williams that President Bush did say it," Campbell told The Post. "If she put this in a speech, it must have been a joke."

The main reference relied on by the Urban Legend web site for this entry, was:

Grove, Lloyd. "The Reliable Source." The Washington Post. 10 July 2002 (p. C3).

The most obvious interpretation of the joke is that it is ridiculing W. But, more subtly, it could be taken to be giving just a bit of a jab to the French too. (Just because the French invented the word, doesn’t mean that they couldn’t have forgotten its meaning, through lack of use.)

The reference on the Schramm book is:

Schramm, Carl J. The Entrepreneurial Imperative: How America’s Economic Miracle Will Reshape the World (and Change Your Life). New York: Collins, 2006.

“Atlas May Actually Decide to Shrug”

(p. A16) During the recent off-year elections, the president repeatedly pointed to the booming economy and noted that his tax cuts were responsible. With growth strong and unemployment low despite the ending of the stock-market bubble, terrorist attacks and the war in Iraq, he had every reason to be proud. Moreover, both economic theory and the actual timing of the economic revival support his claims regarding the tax cuts.

That is why it is so odd that rumors swarm around Washington that the president may be willing to raise taxes as part of a "deal" on entitlement reform. In particular, the rumors suggest the president might be willing to get rid of the provision that caps the income level used to compute Social Security taxes and benefits. These rumors aren’t without substance; last year the president would not rule out raising the cap when asked.

Doing so would raise the marginal tax rate on the entrepreneurs that Mr. Bush credits for having led the economic recovery by more than 10 percentage points. The new effective rate would be five percentage points above the level when he took office. Moreover, in 2011, the rate would go up a further 4.3 percentage points to an effective 53% marginal rate on entrepreneurial income. The president would thus be not just raising taxes on entrepreneurs to well above the levels that prevailed in the Clinton administration, but to a rate higher than that which prevailed in the Carter administration. Most of the improved incentives for entrepreneurship and work brought about under Reagan would be repealed.

. . .

Last year an entrepreneur similar to me would have paid federal taxes equal to 33.9% of total income.

. . .

Don’t make it too tough on him, or Atlas may actually decide to shrug.

For the full commentary, see:

LAWRENCE B. LINDSEY. "Compromised." Wall Street Journal (Mon., November 20, 2006): A16.

(Note: the ellipses are added.)

The last line of the commentary is a not-so-veiled allusion to:

Rand, Ayn. Atlas Shrugged. New York: Random House, 1957.

Jeffrey Sachs “Has Apparently Spent More Time Studying the Economic Thinking of Salma Hayek than that of Friedrich”

Salma Hayek. Source of image: http://www.imdb.com/gallery/granitz/0273-spe/Events/0273-spe/hayek_sa.lma?path=pgallery&path_key=Hayek,%20Salma

(p. A18) Scientific American, in its November 2006 issue, reaches a "scientific judgment" that the great Nobel Prize-winning economist Friedrich Hayek "was wrong" about free markets and prosperity in his classic, "The Road to Serfdom." The natural scientists’ favorite economist — Prof. Jeffrey Sachs of Columbia University — announces this new scientific breakthrough in a column, saying "the evidence is now in." To dispel any remaining doubts, Mr. Sachs clarifies that anyone who disagrees with him "is clouded by vested interests and by ideology."

This sounds like one of those moments in which the zeitgeist of mass confusion about national poverty, world poverty and prosperity comes together in one mad tragicomic brew.

. . .

Mr. Sachs, who is currently best known for his star-driven campaign to end world poverty, has apparently spent more time studying the economic thinking of Salma Hayek than that of Friedrich.

. . .

Mr. Sachs’s empirical analysis purports to show that Nordic welfare states are outperforming those states that follow the "English-speaking" tradition of laissez-faire, like the U.K. or the U.S. Poverty rates are indeed lower in the Nordic countries, although the skeptical reader (probably an ideologue) might wonder if the poverty outcome in, say, the U.S., with its tortured history of a black underclass and its de facto openness to impoverished but upwardly mobile immigrants, is really comparable to that of Nordic countries.

Then there is the big picture, where those laissez-faire Anglophones in, first, the U.K. and, then, the U.S., just happened to have been the leaders of the ongoing global industrial revolution that abolished far more poverty over the past two centuries than a few modest Scandinavian redistribution schemes. Mr. Sachs apparently thinks the industrial revolution was led by IKEA. Lastly, let’s hear from the Nordics themselves, who have been busily moving away from the social welfare state back toward laissez-faire. According to the English-speaking ideologues that composed the Heritage Foundation/Wall Street Journal Index of Economic Freedom, Denmark, Finland and Sweden were all included in the 20 countries classified as "free" in 2006 (with Denmark actually ranked ahead of the U.S.). Only Norway missed the cut — barely.

Mr. Sachs is wrong that Hayek was wrong. In his own global antipoverty work, he is unintentionally demonstrating why more scientists, Hollywood actors and the rest of us should go back and read "The Road to Serfdom" if we want to know what will not work to achieve "The End of Poverty." Hayek gave the best exposition ever of the unpopular ideas of economic freedom that somehow triumph anyway, alleviating far more national and global poverty than more fashionable Scandinavia-envy and grandiose plans to "make poverty history."

For the full commentary, see:

WILLIAM EASTERLY. "Dismal Science." Wall Street Journal (Weds., November 15, 2006): A18.

(Note: ellipses added.)

Hayek’s courageous masterpiece is:

Hayek, Friedrich A. Von. The Road to Serfdom. Chicago: Univ of Chicago Press, 1944.

Easterly’s great book on how to encourage economic development in poor countries, is:

Easterly, William. The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. Cambridge, MA: The MIT Press, 2002.

Cheap, Easy, Transparent Property Rights Institutions Are Key to Developing Long Tail

Chris Anderson points out that the main thing currently holding back the long tail, are legal restrictions in the form of clearing copyrights. This is somewhat analogous to how the legal restrictions to starting up a small business, end up protecting the larger incumbent companies, a la Hernando de Soto’s The Other Path.

Figuring out how to quickly and cheaply process small intellectual property rights claims is the key. The assumption that this could and would be done was an underpinning of Bill Gates’ prediction of the key importance of content in his The Road Ahead.

If Gates’ vision could be realized, it would provide the consumer much greater variety (and much closer matches between what is sought and what is found); and it would provide many more producers of content, the opportunity to support themselves through their productive activities. (As opposed to the current situation where most such producers must produce as a part-time, labor-of-love, while they support themselves by their unrelated ‘day job.’)

Books mentioned:

Anderson, Chris. The Long Tail. New York: Hyperion, 2006.

Gates, Bill. The Road Ahead. New York: Viking Penguin, 1995.

Soto, Hernando de. The Other Path. New York: Harper and Row, 1989.