Books – Page 177 – artdiamondblog.com

Distorted Incentives in Medicine

Source of book image: http://www.harpercollins.com/books/9780061130298/The_End_of_Medicine/index.aspx

The problem right now, as Mr. Kessler sees it, is that we fight the "big three" — cancer, stroke and heart attack — with treatment rather than early detection. Cancer cells and blood-vessel plaque can be handled much more easily in the early stages, but we spend most of our money on the later ones. More than 80% of health-care dollars are paid by insurance companies and the government, and neither is especially interested in detecting disease when it first appears. Doctors, regulators, researchers and payers of all kinds are locked into what Mr. Kessler calls — a bit ungenerously — the "cholesterol and cancer conspiracies."

A complicated system of mutual dependency distorts the incentives. "The FDA is like the FCC and Big Pharma is like the regional Bells" is what Mr. Kessler hears from Don Listwin, a former Cisco executive who now heads the Canary Foundation, a Silicon Valley-based effort to promote preventive medicine. In other words, in medicine as in telecom, the big players end up exploiting regulations more than opposing them, if only to preserve their monopolies. The Food and Drug Administration — understandably but narrow-mindedly — wants "cures" for cancer and other diseases. Thus tens of thousands of chemicals are screened, only a handful make it even to Phase I trials, and by the time a new drug is approved a billion dollars has been spent. Even then the new drug may help only 10% of patients.

Yet if someone were to invent a device with a wide, preventive usefulness — say, a nanotech implant that would spot the proteins that indicate the first minute presence of cancer — it would have to go through the same process of billion-dollar testing. Since the government and insurance companies are reluctant to add anything to their repertoire of coverage — and since such a device would be targeted at the much broader pool of people who are not sick — research might well stall in its earliest phases for lack of reimbursement-funding.

For the full review, see:

WILLIAM TUCKER. "Bookshelf; The Art of Navigating Arteries." Wall Street Journal (Tues., July 18, 2006): D6.

A full reference to the book reviewed, is:

Kessler, Andy. The End of Medicine: How Silicon Valley (and Naked Mice) Will Reboot Your Doctor. HarperCollins, 2006.

Eleven-Year-Old Crippled for Life by Mao Supporters

Source of book image: http://www.holtzbrinckpublishers.com/henryholt/Search/SearchBookDisplayLarge.asp?BookKey=1524294

(p. B29) This improbable journey, from Maoist orthodoxy to the entrepreneurial quasicapitalism officially described as “socialism with Chinese characteristics,” is the main theme of “Chinese Lessons,” but Mr. Pomfret, a reporter for The Washington Post, gives his tale a twist. He tells it not only through his own experiences as a student and journalist but through the life stories of five university classmates, who suffered through the Cultural Revolution as children, found inspiration and hope in the growing democracy movement and lived to see a China that neither they nor their parents could have imagined. . . .

All the lives Mr. Pomfret explores are extraordinary, and each sheds its own light on recent Chinese history. Perhaps the most endearing of his characters is Guan Yongxing, better known as Little Guan, who as an 11-year-old suffered social ostracism after accidentally using a piece of paper with “Long Live Chairman Mao!” on it to wipe herself in the bathroom.

After classmates threw her to the ground, no doctor would treat her dislocated shoulder, leaving her crippled for life. Her father’s job as a schoolteacher made the Guan family a prime target for abuse, and Little Guan, rather than endure ridicule and torment at school, picked cotton and sprayed fertilizer on the fields, her back constantly burned by chemicals leaking from the tank on her back. Tough, determined and highly intelligent, she survives and eventually prospers in the new China.

. . .

Zhou Lianchun, called Book Idiot Zhou by a contemptuous Communist Party official, meted out insults and torture as part of a Red Guard brigade. “I did what I was told and, being 11, I liked it,” he tells Mr. Pomfret.

. . .

More even than sex, students want just a little bit of the good life that seems to be in reach as China’s rulers relax their economic policies. To get it they master a strange kind of doublethink, pledging allegiance to the party and Communist ideals while scheming to start a business.

Book Idiot Zhou, a history teacher by day, jumps into a business partnership to process urine for the pharmaceutical industry. “Several days a week, he taught Marxism, Leninism and Maoist thought and railed against the exploitation of the capitalist class,” Mr. Pomfret writes. “The rest of the time he spent as a budding entrepreneur, employing dozens at rock-bottom wages, working the system to enrich himself, his partners and his family.”

. . .

His classmates have done well. But their lives, and the China described in “Chinese Lessons,” bear a heavy load of suppressed grief, terrible compromises and boundless cynicism. At a new drive-in called the Happy Auto Movie Palace, Mr. Pomfret notices something strange about the concrete slabs underneath his feet. They show the marks of tank treads. The drive-in owner bought them after the government repaved Tiananmen Square.

This strikes Mr. Pomfret as bizarre, but not the owner. “It was a good deal,” he says.

For the full review, see:

WILLIAM GRIMES. "Books of The Times; Twisting Along China’s Sharp Curves." The New York Times (Fri., August 4, 2006): B29.
(Note: ellipses added.)

U.S. Economy Can Prosper, Even if G.M. Does Not

The fragility of success for large corporations is documented in the early chapters of the Foster and Kaplan book that is mentioned below.

(p. 1) THE announcement last week that General Motors would cut 25,000 jobs and close several factories is yet another blow to the Goliath of automakers and its workers. But only if you work for G.M. is the company’s decline a worry. For consumers, the decline can be seen as a symbol of healthy competition.

G.M.’s sales, market share and work force have all been falling for a generation, even as the quality of its vehicles has gone up. Why? Because its competitors’ products have improved even more. Today’s auto buyers enjoy an unprecedented array of well-built, well-equipped, reasonably priced vehicles offered by many manufacturers.

. . .

(p. 3) . . . even if a new generation is drawn to G.M.’s products, recovery of its former position seems unlikely.  Other brands have improved, too:  J.D. Power estimates that for the auto industry overall, manufacturing defects declined 32 percent since 1998 alone.

There is also great pressure to hold prices down, which is bad for companies like G.M. with vast amounts of overhead.  According to the consumer price index, new cars and light trucks today cost less in real-dollar terms than in 1982, despite having air bags, antilock brakes, CD players, power windows and other features either unavailable or considered luxury options back then.

This means that during the very period that General Motors has declined, American car buyers have become better off.  Competition can have the effect of ”creative destruction,” in the economist Joseph Schumpeter’s famous term, harming workers in some places, while everyone else comes out ahead.

. . .

As it continues to shrink, G.M. may serve as an exemplar of what the world economy will do in many arenas — knock off established leaders, while improving quality and cutting prices. In their 2001 book ”Creative Destruction,” Richard Foster and Sarah Kaplan, analysts at McKinsey & Company, documented how even powerhouse companies that are ”built to last” usually succumb to competition.

Competition can be a utilitarian force that brings the greatest good to the greatest number. Someday when the remaining divisions of General Motors are bought by some start-up company that doesn’t even exist yet, try to keep that in mind.

For the full commentary, see:

GREGG EASTERBROOK. "What’s Bad for G.M. Is . . ." The New York Times, Section 4 (Sunday, June 12, 2005): 1 & 3.

(Note: the ellipsis in the title is in the original title; the ellipses in the article, were added.)

The full reference to the Foster and Kaplan book, is:

Foster, Richard and Sarah Kaplan. Creative Destruction: Why Companies that Are Built to Last Underperform the Market—and How to Successfully Transform Them. New York: Currency Books, 2001.

Life Has Improved; And Can Continue to Improve

Source of graphic: online version of the NYT article cited below.

(p. 1) New research from around the world has begun to reveal a picture of humans today that is so different from what it was in the past that scientists say they are startled. Over the past 100 years, says one researcher, Robert W. Fogel of the University of Chicago, humans in the industrialized world have undergone “a form of evolution that is unique not only to humankind, but unique among the 7,000 or so generations of humans who have ever inhabited the earth.”

. . .

(p. 19) . . . stressful occupations added to the burden on the body.

People would work until they died or were so disabled that they could not continue, Dr. Fogel said. “In 1890, nearly everyone died on the job, and if they lived long enough not to die on the job, the average age of retirement was 85,” he said. Now the average age is 62.

A century ago, most people were farmers, laborers or artisans who were exposed constantly to dust and fumes, Dr. Costa said. “I think there is just this long-term scarring.”

For the full story, see:

Kolata, Gina. "The New Age; Older and Better; So Big and Healthy Grandpa Wouldn’t Even Know You." The New York Times, Section 1 (Sunday, July 30, 2006): 1 & 18-19.

Source of graphic: online version of the NYT article cited above.

Source of graphic: online version of the NYT article cited above. Source of book image: http://www.cambridge.org/us/catalogue/catalogue.asp?isbn=0521808782

Fogel’s book is a primary academic source for much of what is interesting in the New York Times article. Fogel predicts that if we don’t screw things up, half of today’s college students will live to be 100. He shows that academics in the past have consistently and significantly underestimated the maximum lifespans that would be attainable in the future.

The full reference for the Fogel book is:

Fogel, Robert William. The Escape from Hunger and Premature Death, 1700-2100, Cambridge Studies in Population, Economy and Society in Past Time. Cambridge, UK: Cambridge University Press, 2004.

“Capitalism has Not Corrupted Our Souls; It has Improved Them”

Source of book image: http://www.amazon.com/gp/product/0226556638/sr=8-1/qid=1153708722/ref=pd_bbs_1/104-2835260-2878345?ie=UTF8

Deirdre McCloskey’s unfashionable, contrarian and compelling manifesto in favor of what she calls the bourgeois virtues starts with an uncompromising "apology" for how private property, free labor, free trade and prudent calculation are the fount of most ethical good in modern society, not a moral threat to it.

The intelligentsia — in thrall for centuries to religion and now to socialism — has for a long time snobbishly despised the bourgeoisie that practices capitalism. Ms. McCloskey calls such people the "clerisy." Their values and virtues, like those of the proletariat and the aristocracy, are widely admired. But almost nobody admires the bourgeoisie. Yet it was for anti-bourgeois ideologies, she notes, that "the twentieth century paid the butcher’s bill."

As Ms. McCloskey explains: "Anyone who after the twentieth century still thinks that thoroughgoing socialism, nationalism, imperialism, mobilization, central planning, regulation, zoning, price controls, tax policy, labor unions, business cartels, government spending, intrusive policing, adventurism in foreign policy, faith in entangling religion and politics, or most of the other thoroughgoing nineteenth-century proposals for government action are still neat, harmless ideas for improving our lives is not paying attention." By contrast, she argues, "capitalism has not corrupted our souls. It has improved them."

For the full review, see:

MATT RIDLEY. "Capitalism Without Tears; Fashionable thinkers sneer at the free market and its practitioners, but economic liberty may actually be a force for personal goodness." The Wall Street Journal (Sat., July 22, 2006): P10.

(Note: in the passage above, I took the liberty of correcting a misspelling of "Deirdre.")

The full citation to the McCloskey book is:

McCloskey, Deirdre N. The Bourgeois Virtues: Ethics for an Age of Commerce. Chicago: University of Chicago Press, 2006. (616 pages, $32.50)

Tom Peters: Over-the-Top Schumpeterian

Source of book image: http://www.amazon.com/gp/product/customer-reviews/078949647X/ref=cm_cr_dp_2_1/104-2835260-2878345?ie=UTF8&customer-reviews.sort%5Fby=-SubmissionDate&n=283155

Tom Peters became famous as the co-author of the business classic In Search of Excellence (1982). His Re-imagine! is exuberant, optimistic, exaggerated, and stylistically over-the-top. I find it fun, bracing, entertaining, and sometimes edifying. If you like the prose of The Cluetrain Manifesto and Gilder’s Telecosm, then you may also like Re-imagine!

Here is an early, very brief passage:

(p. 9) My overall vision, in brief: Business is cool. It’s about Creativity and Invention and Growth and Service. It’s about Adam Smith’s "hidden hand." And Nobel laureate Frederick Hayek’s "spontaneous discovery process." And economist Joseph Schumpeter’s "gales of creative destruction." At its best, it’s about building things that make life less burdensome than it was in medieval times. About getting us beyond—far, far, far beyond—the quasi-slavery of the Middle Ages, the indentured servitude of the first 150 years of the Industrial Revolution, and the cubicle slavery of the last three-quarters of a century.

Yes, business is cool.

(Or at least it can be.)

The citation to the book is:

Peters, Tom. Re-Imagine! London: DK, 2003.

(Note: the italics in the above passage appears that way in the original.)

“a jobs program for people who couldn’t make it in the private sector”

Source of book image: http://www.amazon.com/gp/product/1400065526/sr=8-1/qid=1153368329/ref=sr_1_1/104-2835260-2878345?ie=UTF8

The levees are built by the Army Corps of Engineers, with the Orleans Levee District enjoying local control. It is instructive to learn that the former president of the levee district bought himself an inflatable rubber craft a decade ago. As Mr. Horne writes, some levees gave way "even before water reached the heights the walls were meant to contain and, in some cases, after it had begun to ebb."

Beset by outsourcing, brain drains and budget cuts, the Army Corps has been skimping for years. This spring, its commanding officer conceded that there had been problems with flood-wall engineering. But the government hardly has a monopoly on blame. As Mr. Horne notes, the corps had intended to build a flood barrier at the mouth of Lake Pontchartrain on the city’s northern border ("an idea that would, after Katrina, suddenly seem like the highest sort of wisdom"), but the plan was scrapped when environmentalists sued.

By the mid-1970s, "the completion date for the upgraded flood defense that Congress had mandated for New Orleans had already been pushed back thirteen years," Mr. Horne writes, and one section was still unfinished as Katrina hit. Apathy and indifference "turned government work into a jobs program for people who couldn’t make it in the private sector or who couldn’t be bothered to try."

Government handouts of a different sort followed the hurricane: After a slow start with its relief effort, FEMA helped countless hurricane victims who were truly in need, but the agency also began cutting checks for almost anyone who asked. "An initial $2000 would turn up in the mail within a few days of registering online or placing a call," Mr. Horne writes. In fact, the agency "rolled over for millions in fraudulent or duplicate claims without checking to see that the applicant had offered a vacant lot or a nonexistent address as his or her residence." Perhaps that was easier than risking further accusations of bias.

For the full review, see:

TOM BETHELL. "Books; Levying the Blame; Nearly a year after a hurricane ravaged a city and the finger-pointing began, two books dissect the destruction and the government’s response." The Wall Street Journal (Sat., July 15, 2006): P8.

The citation for the Horne book is:

Horne, Jed. Breach of Faith. Random House, 2006. (412 pages, $25.95)

Environmental Bureaucrats Ignore Local Knowledge

Source of book image: http://yalepress.yale.edu/yupbooks/book.asp?isbn=0300106211

From a useful review of a book on environmental policy:

(p. D8) The striking aspect of his new book is the story he tells of his own journey from supporter to critic of the Spaceship Earth theory of environmental law. His first step toward disenchantment was seeing, as an NRDC lawyer, the EPA’s personnel up close. "The EPA had not come from Starfleet Academy," he notes, "but rather was an amalgam of the federal government’s preexisting environmental programs," then part of the Department of Health, Education and Welfare. In short, the bureaucrats were real people with real incentives, just like politicians and voters—but unanswerable to the public.

The next educational step, for him, was the decision to buy a farm in upstate New York. Mr. Schoenbrod was surprised by the wisdom of his rural neighbors. He movingly describes how a local logger changed his mind about forestry practices by showing him, among much else, that sometimes cutting down particular trees can benefit the forest. (It sounds like a simple observation, but it is the kind of thing that bureaucrats, with their sweeping mandates, often don’t allow for.) Mr. Schoenbrod also looks at the local reaction to a number of environmental decisions, such as the EPA’s ordered dredging of the Hudson River because of the small risk of PCBs. The intent was to protect the health of local communities, but upstate landowners opposed the dredging by a ratio of more than 2 to 1.

For the full review, see:

John Berlau. "Bookshelf; A Law Unto Themselves." The Wall Street Journal (Thurs., August 18, 2005): D8.

The full reference to the Schoenbrod book:

Schoenbrod, David. Saving Our Environment from Washington: How Congress Grabs Power, Shirks Responsibility, and Shortchanges the People. Yale University Press, 2005.

Global Warming Ranked at Bottom of World Priorities by Economists and Ambassadors

Bjorn Lomborg. Source of image: online version of WSJ article cited below.

(p. A10) Bjorn Lomborg busted — and that is the only word for it — onto the world scene in 2001 with the publication of his book "The Skeptical Environmentalist." A one-time Greenpeace enthusiast, he’d originally planned to disprove those who said the environment was getting better. He failed. And to his credit, his book said so, supplying a damning critique of today’s environmental pessimism. Carefully researched, it offered endless statistics — from official sources such as the U.N. — showing that from biodiversity to global warming, there simply were no apocalypses in the offing. "Our history shows that we solve more problems than we create," he tells me. For his efforts, Mr. Lomborg was labeled a heretic by environmental groups — whose fundraising depends on scaring the jeepers out of the public — and became more hated by these alarmists than even (if possible) President Bush.

Yet the experience left Mr. Lomborg with a taste for challenging conventional wisdom. In 2004, he invited eight of the world’s top economists — including four Nobel Laureates — to Copenhagen, where they were asked to evaluate the world’s problems, think of the costs and efficiencies attached to solving each, and then produce a prioritized list of those most deserving of money. The well-publicized results (and let it be said here that Mr. Lomborg is no slouch when it comes to promoting himself and his work) were stunning. While the economists were from varying political stripes, they largely agreed. The numbers were just so compelling: $1 spent preventing HIV/AIDS would result in about $40 of social benefits, so the economists put it at the top of the list (followed by malnutrition, free trade and malaria). In contrast, $1 spent to abate global warming would result in only about two cents to 25 cents worth of good; so that project dropped to the bottom.

"Most people, average people, when faced with these clear choices, would pick the $40-of-good project over others — that’s rational," says Mr. Lomborg. "The problem is that most people are simply presented with a menu of projects, with no prices and no quantities. What the Copenhagen Consensus was trying to do was put the slices and prices on a menu. And then require people to make choices."

Easier said than done. As Mr. Lomborg explains, "It’s fine to ask economists to prioritize, but economists don’t run the world." . . .

So all the more credit to Mr. Lomborg, who several weeks ago got his first big shot at reprogramming world leaders. His organization, the Copenhagen Consensus Center, held a new version of the exercise in Georgetown. In attendance were eight U.N. ambassadors, including John Bolton. (China and India signed on, though no Europeans.) They were presented with global projects, the merits of each of which were passionately argued by experts in those fields. Then they were asked: If you had an extra $50 billion, how would you prioritize your spending?

Mr. Lomborg grins and says that before the event he briefed the ambassadors: "Several of them looked down the list and said ‘Wait, I want to put a No. 1 by each of these projects, they are all so important.’ And I had to say, ‘Yeah, uh, that’s exactly the point of this exercise — to make you not do that.’" So rank they did. And perhaps no surprise, their final list looked very similar to that of the wise economists. At the top were better health care, cleaner water, more schools and improved nutrition. At the bottom was . . . global warming.

For the full interview, see:

KIMBERLEY A. STRASSEL. "The Weekend Interview with Bjorn Lomborg; Get Your Priorities Right." The Wall Street Journal (Sat., July 8, 2006): A10.

(Note: first ellipsis is added; the second ellipsis is in the original.)

Source of book image: http://www.amazon.com/gp/product/customer-reviews/0521010683/ref=cm_cr_dp_2_1/104-0101568-2686373?ie=UTF8&customer-reviews.sort%5Fby=-SubmissionDate&n=283155

Toffler Fear of Future Changes to “worry that the future will arrive too late”

Source of book image: http://www.randomhouse.com/catalog/display.pperl?isbn=9780307265555

The titular wealth they speak of comes from substituting "ever-more-refined knowledge for the traditional factors of industrial production — land, labor and capital." The United States is producing more stuff than ever with fewer workers. The Tofflers write that only 20 percent of the work force is now in the manufacturing sector, while some 56 percent (and growing) is engaged in what they call "knowledge work" — managerial, financial, sales-related, clerical and professional tasks. Even activities like agriculture have gone high-tech, through biotechnology and increasingly sophisticated use of global-positioning satellites to customize irrigation and fertilization down to the individual acre. Knowledge-based wealth, they argue, is revolutionary not just because it gets more output from fewer inputs. Unlike such physical resources as oil, knowledge can be shared by an infinite number of people, and its value and benefits are generally increased by wider circulation. (A network, after all, is only as powerful as the number of participants.) Just as important, the Third Wave wealth system "demassifies production, markets and society," creating space for unending experimentation, innovation and individuation.

. . .

Despite visionary passages about nanotechnology (the manipulation of objects at the atomic level) and potential moon-based helium energy, "Revolutionary Wealth" is less interesting for its specifics (most of which will be familiar to readers of publications like Wired, The Economist and Red Herring) than for its evidence of how far we’ve come since the 70’s, when politics, economics and culture all seemed as played out as Richard Nixon’s denials of criminality. In "Future Shock," the Tofflers warned that many people "will find it increasingly painful to keep up with the incessant demand for change that characterizes our time. For them, the future will have arrived too soon." These days, from Baghdad to Bangalore to Boston, it seems more likely that people worry that the future will arrive too late. That’s no small change, and it’s one on which the Tofflers have been shining a light for years.

For the full review, see:

NICK GILLESPIE. "The Future Is Now." The New York Times Book Review, Section 7 (Sun., May 14, 2006): 9.

The full reference to the Toffler book is:

Toffler, Alvin, and Heidi Toffler. Revolutionary Wealth. Alfred A. Knopf, 2006.

Middle Class Living Standards Have Risen

(p. C1) ONE of the most influential political books of the last few years has been ”What’s the Matter With Kansas?” by Thomas Frank. Published during the 2004 campaign, it neatly captured the Republicans’ success in using social issues to attract blue-collar Kansans who don’t really benefit from Republican economic policies.

”All they have to show for their Republican loyalty,” Mr. Frank writes, ”are lower wages, more dangerous jobs, dirtier air, a new overlord class that comports itself like King Farouk,” and a culture in ”moral free fall.”

The book was a New York Times best seller for 35 weeks.

But close inspection uncovers a big problem with Mr. Frank’s economic analysis. Wages haven’t been falling in Kansas. Up and down the economic spectrum, they have been higher in the last few years than they were at any point in the 1980’s or 90’s, according to inflation-adjusted numbers from the Economic Policy Institute. The median Kansas worker made $13.43 an hour in 2004, 11 percent more than in 1979, which might help explain why many people don’t vote on bread-and-butter issues anymore.

Now, an 11 percent raise over the course of a generation — which is similar to the national increase — is (p. C10) not especially impressive. It’s certainly smaller than the increase workers received in the 25 years leading up to 1979, and for the last few years, wages have not risen at all. But they did rise during the 1990’s boom, and pretending otherwise does not jibe with most people’s experiences.

More to the point, some other improvements have accelerated recently. In just the last 15 years, the murder rate has been cut almost in half. Many big cities are far more vibrant places than they used to be. About 33 percent of young adults get a bachelor’s degree these days, up from 25 percent in the early 1990’s. The gap between men’s and women’s pay reached its lowest ever last year. The divorce rate has stopped rising.

Many luxuries of earlier generations — owning a three-bedroom house, flying across the country, calling relatives who live overseas — are staples of middle-class life. If all this doesn’t add up to a rise in living standards, I’m not sure what the phrase means.

For the full commentary, see:

DAVID LEONHARDT. "This Glass Is Half Full, Probably More." The New York Times (Wednesday, May 24, 2006): C1 & C10.