Common Measures Aid Transparent Transactions

Source of book image: http://www.amazon.com/gp/product/customer-reviews/0743216768/ref=cm_cr_dp_2_1/104-9985403-1047968?%5Fencoding=UTF8&customer-reviews.sort%5Fby=-SubmissionDate&n=283155
The Measure of All Things is an interesting book for several reasons. It shows how hard it is to stay focused on noble pursuits in the face of revolution, war, disease, and peasant ignorance. It raises questions about where common standards of measurement should and do come from; and makes useful points about the value of common standards of measurement for free trade. It tells us how hard it was to do science 200 years ago, and tells us of the devotion of those who tried.
Here is a useful passage on why common standards of measurement matter for the free market:

(p. 137) Prieur believed that uniform measures would make France a great nation, smoothly administered from the center and united through trade. The metric system would transform France into “a vast market, each part exchanging its surplus.” It would make exchanges “direct, healthy, and rapid,” diminishing the “frictions” which impeded the wheels of commerce. These frictions included anything that masked the true price of an item, such as the variable measures of the Ancien Regime. The price of an item, Prieur argued, necessarily depended on many factors: its scarcity, the work necessary to produce it, the quality of the product. But in the final analysis, price was whatever people agreed it should be. This meant that when people agreed on a price they needed to know what they were getting, not be baffled by secret shifts in the quantity being exchanged. Those who claimed that differences in measures aided commerce were just talking about their personal profits. “The French Republic,” he wrote, “can no longer tolerate men who earn their living by mystery.” Worse, those who profited from the diversity of measures, said Prieur, corrupted those who tried to conduct honest and transparent exchanges by “complicating commerce, spoiling good faith, and sowing error and fraud among the nations.” Until commerce was carried out with complete probity, the common people would doubt the advantages of free trade. Only if price were the sole variable in exchange would these exchanges be based on clear understanding between parties.

Alder, Ken. The Measure of All Things: The Seven-Year Odyssey and Hidden Error That Transformed the World. Paperback Reprint ed: Free Press, 2003.

Contrasting Planners with Searchers in Economic Development



Source of book image: http://www.amazon.com/gp/product/1594200378/sr=8-1/qid=1143511279/ref=pd_bbs_1/102-0403843-7507349?%5Fencoding=UTF8

A professor at New York University and a senior fellow at the Center for Global Development, Easterly spent most of his career as an economist at the World Bank. He had to leave that job after publishing his iconoclastic 2001 book, “The Elusive Quest for Growth,” which skillfully combined a history of economists’ growth theories with a devastating empirical analysis of the failure of international efforts to spur third world development. The book’s theme was “incentives matter.”
In “The White Man’s Burden,” Easterly turns from incentives to the subtler problems of knowledge. If we truly want to help the poor, rather than just congratulate ourselves for generosity, he argues, we rich Westerners have to give up our grand ambitions. Piecemeal problem-solving has the best chance of success.
He contrasts the traditional “Planner” approach of most aid projects with the “Searcher” approach that works so well in the markets and democracies of the West. Searchers treat problem-solving as an incremental discovery process, relying on competition and feedback to figure out what works.
. . .
“The White Man’s Burden” does not match “The Elusive Quest for Growth” as a tour de force. Easterly is doing something harder here: not merely cataloging past failures but trying to suggest a more promising approach. Unfortunately, his alternative is still underdeveloped, devolving at times into slogans.
After all, Searchers plan, too. The question is not whether to plan, but who makes the plans, how they are changed and where feedback comes from. “The White Man’s Burden” underplays the essential role of competition, not only in markets but between political jurisdictions.

For the full review, see:
VIRGINIA POSTREL. “The Poverty Puzzle.” The New York Times, Section 7 (Sun., March 19, 2006): 12.
For Easterly’s latest book, see:
Easterly, William. The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. The Penguin Press, 2006. 436 pp. $27.95.

“The world we have lost was ripe for rejection”

   The source for the image of the book cover is: http://img.textbookx.com/images/large/91/0521633591.jpg

 

Roche delineates minimal light and exiguous fires, chilblains and miasmas, the distinction of white linen, the rare treat of sweetness, the still rarer taste of coffee that made its drinkers sparkle, and the hankerings they inspired. Limited access to water affected drinking habits, cooking, hygiene, and sartorial practices. Housewives and laundresses coped with mountains of dirty linen by river or by pond; the great sent their laundry to the American islands for a whiter wash; the poor rioted for soap as well as bread. Society moved from an economy of scarcity and salvation to one of plenty and prodigality. But the move was slow and spotty. The world we have lost was ripe for rejection.

 

For the full review, see:

Weber, Eugen. "Recommended Reading." The Key Reporter 67, no. 2 (Winter 2002): 12.

 

The reviewed book is:

Roche, Daniel. A History of Everyday Things: The Birth of Consumption in France, 1600-1800. Cambridge University Press, 2000.

 

Welch: Importance of Taking and Spreading Best Employee Ideas

Sam Walton may have been the grand master of absorbing good ideas of others and then spreading the ideas across the company. Another master was Jack Welch:

 

(p. 383) Getting every employee’s mind into the game is a huge part of what the CEO job is all about. Taking everyone’s best ideas and transferring them to others is the secret. There’s nothing more important. I tried to be a sponge, absorbing and questioning every good idea. The first step is being open to the best of what everyone , everywhere, has to offer. The second is transferring that learning across the organization.

 

Source:

Welch, Jack. Jack: Straight from the Gut. New York: Warner Business Books, 2001.

See also pp. 197-198 for Welch’s description of the specifics of how Wal-Mart got this job done.

For even more details, see: Walton, Sam. Made in America: Doubleday, 1992.

 

Jefferson Believed: “redemption lay in education, discovery, innovation, and experiment”


Source of book image: http://images-eu.amazon.com/images/P/0060598964.01.LZZZZZZZ.jpg

(p. 43) Jefferson was not a man of the Enlightenment only in the ordinary sense that he believed in reason or perhaps in rationality. He was very specifically one of those who believed that human redemption lay in education, discovery, innovation, and experiment. There were many such in the American Revolution. Thomas Paine spent much of his career designing a new form of iron bridge to aid transportation and communication. Dr. Joseph Priestley, another man who fled royalist and Anglican persecution and who removed himself from England to Philadephia after a “Church and King” mob had smashed his laboratory, was a chemist and physician of great renown. Benjamin Franklin would be remembered for his de- (p. 44) ductions about the practical use of electricity if he had done nothing else. Jefferson, too, considered himself a scientist. He studied botany, fossils, crop cycles, and animals. He made copious notes on what he saw. He designed a new kind of plow, which would cut a deeper furrow in soil exhausted by the false economy of tobacco farming. He was fascinated by the invention of air balloons, which he instantly saw might provide a new form of transport as well as a new form of warfare. He enjoyed surveying and prospecting and, when whaling became an important matter in the negotiation of a commercial treaty, wrote a treatise on the subject himself. He sent horticultural clippings from Virginia to the brilliant French consul Crevecoeur in New York, comparing notes on everything from potatoes to cedars. As president, he did much to further Dr. Edward Jenner’s novel idea of cowpox vaccination as an insurance against the nightmare of smallpox, helping Dr. Benjamin Waterhouse of Boston—the initiator of the scheme in America—to overcome early difficulties in transporting the vaccine by suggesting that it lost its potency when exposed to wamth. Henceforward carried in water-cooled vials, the marvelous new prophylactic was administred to all at Monticello. (Not everything that Jeffrson did on his estate was exploitation.) For a comparison in context, we might note that Dr. Timothy Dwight, then president of Yale and to this day celebrated as an American Divine, was sternly opposed to vaccination as a profane interference with God’s beneficent design.

Christopher Hitchens. Thomas Jefferson: Author of America (Eminent Lives). New York: HarperCollins Publishers, 2005. ISBN: 0060598964

Fascism’s “Most Notable Achievement Was that It Survived as Long as it Did”





Source of image of book cover: Amazon.com.





Some experts on National Socialism have concluded that its economy was not as efficient as usually believed. According to a recent expert, facism also was not a very efficient economic system (in spite of its oft-mentioned reputation for the trains running on time):


(p. B36) Yet for all the personality cult, the regime’s most notable achievement, as Mr. Bosworth sees it, was that it survived as long as it did. Virtually irrespective of where it set its sights — culture, science, economics, let alone the military — its performance persistently fell short of its discredited Liberal predecessor’s.





Note: in the review, “liberal” refers to 19th-century liberals. E.g.:


(p. B36) Like their 19th-century peers from Belgium to Romania, Italian Liberals yearned for a common flag, parliament, economy, identity, even empire. To a point, the truths held to be self-evident north of the Alps worked in Italy, too. But the transition to constitutional government was a work in progress, where progress needed all the help it could get.
By 1914, it was clear that it would take more than a constitutional monarchy, a railroad, a gold-based currency and African colonies to overcome the limits imposed by geography, culture and history. Eager to play with the big powers, Italians were not only poor, illiterate and economically underdeveloped, they were also allergic to any state, modern or otherwise. This would include dictatorship.

For the full review, see:
DAVID SCHOENBAUM. “Books of The Times | ‘Mussolini’s Italy’; Where Fascism Was Stylish and Vicious, if Ineffectual.” The New York Times (Fri., March 3, 2006): B36.

The book is:
R. J. B. Bosworth. MUSSOLINI’S ITALY: Life Under the Fascist Dictatorship, 1915-1945. Penguin Press, 2006. Illustrated. 692 pages. $35. ISBN: 1594200785

BosworthJB.jpg R.J.B. Bosworth. Source of image: NYT book review quoted and cited above.

Occupational Licensing Does More Harm Than Good

Source of book cover image: http://www.upjohninst.org/publications/titles/lo.html

(p. C3) It is well known that doctors, dentists, and lawyers must be licensed to practice their professions. But what about occupational therapists, manicurists and barbers? How about fortune tellers, massage therapists, shampoo assistants, librarians, beekeepers, electrologists and movie projector operators? These are just a sampling of the hundreds of occupations that require a license in at least some states or counties.

In a new book, “Licensing Occupations: Ensuring Quality or Restricting Competition?” (Upjohn Institute, 2006), Morris M. Kleiner, an economist at the University of Minnesota, questions whether occupational licensing has gone too far. He provides much evidence that the balance of occupational licensing has shifted away from protecting consumers and toward limiting the supply of workers in various professions. A result is that services provided by licensed workers are more expensive than necessary and that quality is not noticeably affected.
. . .
Several studies have examined the effect of license requirements on performance in occupations like dentists and teachers. In one study, Professor Kleiner and a colleague, Robert T. Kudrle, found that stricter state licensing requirements for dentists did not noticeably affect the dental health of 464 Air Force recruits. Other studies have found at best weak evidence that students in classes taught by licensed teachers performed better than those taught by unlicensed teachers.
Summarizing the literature, Professor Kleiner concludes, “there is little to show that occupational regulation has a major effect on the quality of service received by consumers.”
At the same time, the hurdles imposed by occupational licensing reduce the supply of workers in many regulated professions, which drives up wages in those jobs and the price of services. Dentists, for example, were found to earn and charge 11 percent more in states with the most restrictive licensing requirements. While tough licensing standards may help higher-income consumers avoid low-quality providers, it also appears to prevent lower-income consumers from gaining access to some services.

For the full commentary, see:
Krueger, Alan B. “Economic Scene; Do You Need a License to Earn a Living? You Might Be Surprised at the Answer.” The New York Times (Thurs., March 2, 2006): C3.
(Note: ellipsis added.)

You want more evidence? OK, here’s more evidence:

(p. A20) BISMARCK, N.D., Oct. 10 (AP) – The State of North Dakota is exploring whether people who sell items on eBay for others must get standrd auctioneers’ licenses, a process that includes taking instruction in talking real fast.

To get a license in the stare, aplicants must pay a $35 fee, obtain a $5,000 bond and undergo training at one of eight approved auction schools, where the curriculum includes rapid-fie speaking, breathing control and reading hand gestures.
“I don’t think it offers any additional protection for the consumer,” said Mark Nichols, who runs a small consignment store in Crosby. “It just creates a lot of red tape for the business, as well as having to put out a lot of money.”

For the full story, see:
“North Dakota Weighs Auction License for Some eBay Sellers.” The New York Times (Tues., Oct. 11, 2005): A20.

For Kleiner’s book, see:
Morris M. Kleiner. Licensing Occupations: Ensuring Quality or Restricting Competition? Upjohn Institute, 2006.

Indiana Almost Legislated Wrong Value of Pi

pi_day1.gif
Yesterday (3/14) was “Pi Day.” Source of image: http://www.mathwithmrherte.com/pi_day.htm
After school yesterday, my daughter Jenny told me that in her sixth grade class with Barbara Jens, they had celebrated “Pi Day.” I didn’t get it until Jen pointed out that the date was 3/14 and the first three digits of pi are 3.14.
Being a hoosier by birth and upbringing, Pi Day reminded me that in 1897 the Indiana House of Representatives unanimously passed a bill legislating the wrong value of pi. It would make a better story if the House had taken this action based on a literal interpretation of the bible, which gives the value of pi as an even 3. But apparently the House action was based on a mistaken “proof” offered by physician Edwin J. Goodwin. Fortunately for the reputation of Indiana government, a mathematician visiting the state capitol for other reasons, convinced Senators of the mistake, and consideration of the bill was postponed indefinitely in the Senate, before it could become law.
For my source, and more details, see Petr Beckmann’s wonderful book:
Beckmann, Petr. A History of Pi. New York: St. Martin’s Press, 1971.

Source of image: http://www.amazon.com/gp/product/0312381859/ref=ed_oe_p/104-6209536-4473568?%5Fencoding=UTF8

Tom Friedman’s The World is Flat, is Worth the Wait


Source of the graphic is page 1 of: MICHAEL O’CONNOR. “Library may help turn borrowers into buyers.” Omaha World-Herald (Saturday, March 4, 2006): 1 & 2.
If you live in Omaha, and want to check out a copy of Thomas Friedman’s pro-trade and globalization best-seller The World is Flat, it looks as though you’re going to have to wait awhile. While you’re waiting, you may want to read his earlier, and in some ways better, The Lexus and the Olive Tree. It is better in its discussion of the importance of Schumpeterian creative destruction, and better in terms of the coherence and flow of the argument.
See:
Friedman, Thomas L. The Lexus and the Olive Tree. New York: Anchor Books, 2000. [ISBN # 0-385-49934-5]
Friedman, Thomas L. The World Is Flat: A Brief History of the Twenty-First Century. New York: Farrar, Straus and Giroux, 2005.

French Courage: In Defense of Voltaire and Free Speech

Voltaire.gif   Better known by his nom de plume: Voltaire.  Source of image: WSJ article cited below.

 

There is much to like about Voltaire: he defended reason; his novel Candide is hilarious; and he is reputed to have drunk more than 40 cups of coffee a day.

The enemies of freedom censored Voltaire when he was alive, 250 years ago. In an unintended tribute to the power of his ideas, today’s enemies of freedom still seek to censor him:

 

(p. A1) SAINT-GENIS-POUILLY, France — Late last year, as an international crisis was brewing over Danish cartoons of Muhammad, Muslims raised a furor in this little alpine town over a much older provocateur: Voltaire, the French champion of the 18th-century Enlightenment.

A municipal cultural center here on France’s border with Switzerland organized a reading of a 265-year-old play by Voltaire, whose writings helped lay the foundations of modern Europe’s commitment to secularism. The play, "Fanaticism, or Mahomet the Prophet," uses the founder of Islam to lampoon all forms of religious frenzy and intolerance.

The production quickly stirred up passions that echoed the cartoon uproar. "This play…constitutes an insult to the entire Muslim community," said a letter to the mayor of Saint-Genis-Pouilly, signed by Said Akhrouf, a French-born café owner of Moroccan descent and three other Islamic activists representing Muslim associations. They demanded the performance be cancelled.

Instead, Mayor Hubert Bertrand called in police reinforcements to protect the theater. On the night of the December reading, a small riot broke out involving several dozen people and youths who set fire to a car and garbage cans. It was "the most excitement we’ve ever had down here," says the socialist mayor.

The dispute rumbles on, playing into a wider debate over faith and free-speech. Supporters of Europe’s secular values have rushed to embrace Voltaire as their standard-bearer. France’s national library last week opened an exhibition dedicated to the writer and other Enlightenment thinkers. It features a police file started in 1748 on Voltaire, highlighting efforts by authorities to muzzle him. "Spirit of the Enlightenment, are you there?" asked a headline Saturday in Le Figaro, a French daily newspaper.

 . . .

(p. A10) Now that tempers have calmed, Mayor Bertrand says he is proud his town took a stand by refusing to cave in under pressure to call off the reading. Free speech is modern Europe’s "foundation stone," he says. "For a long time we have not confirmed our convictions, so lots of people think they can contest them."

 

For the full story, see: 

ANDREW HIGGINS.  "Blame It on Voltaire: Muslims Ask French To Cancel 1741 Play; Alpine Village Riles Activists By Letting Show Go On; Calling on the Riot Police."  The Wall Street Journal (Mon., March 6, 2006):  A1 & A10.

(Note:  ellipsis added.)