The American Institute for Economic Research (AIER) premiered on Mon., Jan. 4, 2020, a neat YouTube video they created based on a shortened version of my article “When I Knew More Than Hayek.” [Hayek, Covid & The Use of Knowledge in Society | Kate Wand via @youtube] #Hayek #localknowledge
Category: Books
To Force Gaffney to Retire at Age 65, They Only Let Him Teach Intro Courses; So He Taught Intro Courses Until Age 89
(p. B11) Professor Gaffney died at 96 on July 16 at Loma Linda University Medical Center, not far from the University of California, Riverside, where he taught economics for 37 years. . . .
Taxing land is less intrusive than taxing income or estates, Professor Gaffney taught, drawing on Henry George’s influential 1879 book, “Progress and Poverty: An Inquiry Into the Cause of Industrial Depressions and of Increase of Want With Increase of Wealth: The Remedy,” reportedly the best-selling popular book in America in the 1890s.
. . .
The idea that land creates a natural economic surplus that can be taxed with minimal economic damage has drawn supporters from across the political spectrum.
Winston Churchill declared in 1910 that the “land monopoly is not the only monopoly, but it is by far the greatest of monopolies — it is a perpetual monopoly, and it is the mother of all other forms of monopoly.”
The economist Milton Friedman, another conservative, called the land-value tax “the least bad tax.”
And Tony Blair, the former British prime minister and Labour Party leader, urged a land-only tax as a “fairer and more rational system of property taxation.”
The idea has never been widely embraced by lawmakers, though. Only about 20 communities in Pennsylvania impose a version of the land-value tax concept. It has also been applied in parts of Australia and Taiwan.
. . .
Mason Gaffney enrolled at Harvard University in 1941. Drafted in 1944, he was commissioned a lieutenant in the Army Air Forces and served in radio communications in New Guinea and the Philippines until 1946.
Returning to civilian life, he transferred to Reed College in Oregon to complete his bachelor’s degree, unhappy that his professors at Harvard knew little of Henry George’s work. He then moved to the University of California, Berkeley, to get his doctorate.
. . .
He started teaching at the University of California, Riverside, in 1976. He once said in an interview that as he was about to turn 65 he was pressured to retire. He refused, he said, and was told he had to teach Econ 101.
“I was delighted,” he said. “I got a chance to indoctrinate students about economic theories so they weren’t stunted by the standard neoclassical texts.”
He retired in 2013, at 89.
For the full obituary, see:
(Note: ellipses added.)
(Note: the online version of the obituary has the date July 26, and has the title “Mason Gaffney, Who Argued for Taxing Only Land, Dies at 96.”)
The influential book by Henry George mentioned above is:
George, Henry. Progress and Poverty. 5th ed. New York: D. Appleton and Company, 1881.
Piketty Stands Up to Chinese Communist Censorship
(p. A11) PARIS — With his in-depth critique of Western capitalism, detailed in a 700-page book that enjoyed record sales in 2014, France’s rock-star economist Thomas Piketty was well regarded by Chinese leaders.
That was until he turned his attention to China.
Mr. Piketty said Monday that his follow-up book, “Capital and Ideology,” which broadens his study of the rise of economic inequality to non-Western countries such as China and India, is unlikely to be published in mainland China because he refused requests from Chinese publishers to cut parts of it.
“For the time being, there will be no book in China,” said Mr. Piketty, one of the most high-profile academics to stand up to China, calling the requests “ridiculous” and equating them with censorship.
“They shouldn’t be afraid of a book like that, it’s a sign of weakness,” Mr. Piketty said in a phone interview.
. . .
The requested cuts include parts that point out the “extremely rapid rise of inequality” in China, to levels comparable to those seen in the United States. Others highlight issues like China’s lack of an inheritance tax, which Mr. Piketty says results in a significant concentration of wealth.
“It is truly paradoxical that a country led by a Communist Party, which proclaims its adherence to ‘socialism with Chinese characteristics,’ could make such a choice,” Mr. Piketty wrote in a paragraph that he said Citic Press asked to be cut.
. . .
Among the requested cuts were sections critical of the Chinese government, which Mr. Piketty wrote, “has yet to demonstrate its superiority over Western electoral democracy.”
The appearance of Mr. Piketty’s book comes as China has been confronted with an unprecedented economic slowdown. A trade war with the United States and the effects of the coronavirus crisis have brought China’s nearly half-century-long run of growth to an end.
Mr. Piketty said that censoring his book “seems to illustrate the growing nervousness of the Chinese regime and their refusal of an open debate on the different economic and political systems.”
. . .
“If they’re afraid of a book like this, what are they going to do with the demonstrators in Hong Kong or one day in Beijing or Shanghai, as it will eventually happen?” Mr. Piketty asked.
For the full story, see:
(Note: ellipses added.)
(Note: the online version of the story has the date August 31, 2020, and has the title “Rejecting Censorship of His Book, a French Star Economist Stands Up to China.”)
The book Thomas Piketty is defending against communist Chinese censorship is:
Piketty, Thomas. Capital and Ideology. Translated by Arthur Goldhammer. Cambridge, MA: Belknap Press, 2020.
“Publicly Held Companies Will Play the Political Game”
(p. A11) Mr. Chitester was probably the only PBS or NPR station manager who didn’t believe public radio and television should receive subsidies from American taxpayers. But he had a skill in short supply among the pro-capitalist intellectual class: He knew how to popularize free-market ideas, which many thought couldn’t be done on television.
He confesses that he isn’t sure he’d even heard of Friedman when Wallis put the two in touch. But Mr. Chitester says he devoured Friedman’s 1962 book, “Capitalism and Freedom,” and went to meet Milton and his wife, fellow economist and collaborator, Rose, at their San Francisco apartment.
An hour into the conversation, Mr. Chitester brought up a section in the book where Friedman talks about the responsibility of business—also the theme of Friedman’s famous 1970 New York Times essay, “The Social Responsibility of Business Is to Increase Its Profits.” Mr. Chitester described his dilemma: “I said to Milton, based on your philosophy, I shouldn’t be asking companies for money, and if they take your advice, they’re not going to give me any.”
“Bob, don’t worry about it,” Friedman reassured him. “Businessmen don’t like me anyway.” The economist elaborated. “He said private owners—those who own their own companies—they will be sympathetic. But corporations and publicly held companies will play the political game.” In other word, they’d be shy about supporting such a project lest it hurt them when seeking government funding.
. . .
. . . [Chitester] offers two suggestions for those dreaming about doing what he did.
“First,” he says, “you have to be a storyteller. Think of the people that have had meteoric rises to celebrity. They’ve been excellent storytellers. Free-market preachers if you will.”
. . .
. . . [second] to hopefully get people to think at least initially that I’m a nice person,” he says. “Because if they don’t think I’m a nice person, there’s nothing on the face of the earth I can do that will likely persuade them to listen to what I have to say.”
For the full interview, see:
(Note: ellipses, and bracketed words, added.)
(Note: the online version of the interview has the date Oct. 30, 2020, and has the same title as the print version.)
The Friedman book mentioned in the passage quoted above is:
Friedman, Milton. Capitalism and Freedom. Chicago: The University of Chicago Press, 1962.
Bystanders Catch Children Jumping from Burning Apartment
The story below is an example of the main message of Amanda Ripley’s The Unthinkable. That message is that often in emergencies, effective aid depends on willing, competent bystanders because there is not enough time to wait the for standard “first-responders” to arrive.
(p. A12) As a plume of thick black smoke billowed from their burning apartment, a 10-year-old boy dangled a younger child from an open third-floor window, grasping on to the back of his shirt. The apartment’s balcony was engulfed in flames, and the two children appeared trapped.
Then, as onlookers screamed, the older boy dropped the younger one, age 3, into the arms of a group of adults 30 feet below. They caught him.
Moments later, the older boy lowered himself out of the window and jumped into the outstretched arms of those standing below. Both children were unharmed.
. . .
Two of the six adults who appeared to have participated in the rescue broke their arms, according to French news reports. All have been hailed as heroes.
. . .
It is not the first time that a dramatic rescue of a child dangling from an apartment has been caught on camera in France. In May 2018, Mamoudou Gassama, a 22-year-old Malian man, scaled four floors of a Paris building to save a toddler hanging from a balcony.
For the full story, see:
(Note: ellipses added.)
(Note: the online version of the story has the date July 23, 2018, and has the title “Crowd Catches 2 French Children Who Leapt From Burning Apartment.”)
The book I mention above is:
Ripley, Amanda. The Unthinkable: Who Survives When Disaster Strikes – and Why. New York: Crown Publishers, 2008.
Mathematical Disciplines Need the “Re-injection” of “Empirical Ideas”
(p. C4) Mathematicians have faced a similar choice between pure and applied work for millennia. In his 1940 book “A Mathematician’s Apology,” G.H. Hardy made a hard-core case for purity: “But is not the position of an ordinary applied mathematician in some ways a little pathetic?…‘Imaginary’ universes are so much more beautiful than this stupidly constructed ‘real’ one.”
On the other hand, John von Neumann rebuked purity in his 1947 essay “The Mathematician”: “As a mathematical discipline travels far from its empirical source…it is beset with very grave dangers. It becomes more and more purely aestheticizing,…whenever this stage is reached, the only remedy seems to me to be the rejuvenating return to the source: the re-injection of more or less directly empirical ideas.”
I think von Neumann has the better of this argument. In his own career, he used his mathematical talents to pioneer fields like game theory and computer science, leaving a titanic legacy, practical as well as intellectual.
For the full commentary, see:
(Note: ellipses in original.)
(Note: the online version of the commentary has the date October 29, 2020, and has the same title as the online version.)
The John von Neumann essay mentioned above is:
Neumann, John von. “The Mathematician.” In Works of the Mind, edited by Robert B. Heywood. Chicago: University of Chicago Press, 1947, pp. 180-96.
Apple Will Make Its Own Mac Processor Chips
In similar stories told in books by Grove and by Christensen and Raynor, technology firms work better when large, if components require careful design to work well together. When components become standardized and interchangeable, technology firms work better when smaller, buying components from specialized component suppliers. Deciding what is best at any moment requires uncertain judgement, and can change over time. In the passages quoted below, it appears that Apple thinks better performance can be achieved by integrating a key component back within the firm.
(p. B4) Apple Inc. built its gadget empire by outsourcing production to a vast ecosystem of chip makers and other component specialists. Under Chief Executive Tim Cook, it is taking a lot of that business back.
The company, which released its first iPhone processor in 2010, said Monday [June 22, 2020] it plans to ship Macs later this year with custom chips, a move that ends a 15-year technology partnership with Intel Corp. Apple said the custom-designed chips are more efficient and offer higher-performance graphics.
. . .
The strategy springs from Apple’s philosophy—fostered by its late co-founder Steve Jobs—that owning core technologies provides a competitive edge. Customized chips and sensors can help its iPhone, iPads and Macs leapfrog rivals in battery performance and features. It also can protect Apple from Chinese rivals that buy universally available parts.
. . .
The initiative—called insourcing by some suppliers and analysts—can give Apple a two-year jump on competitors in device performance because Apple can plan how multiple chips work together to limit power consumption and free up space inside iPhones and iPads for other components, analysts said.
It also reduces potential leaks of its product plans.
For the full story, see:
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story was updated June 24, 2020, and has the title “Apple Is the Newest Chip Giant in Town.”)
The Grove book mentioned above is:
Grove, Andrew S. Only the Paranoid Survive: How to Exploit the Crisis Points That Challenge Every Company. New York: Bantam Books, 1999.
The Christensen and Raynor book mentioned above is:
Christensen, Clayton M., and Michael E. Raynor. The Innovator’s Solution: Creating and Sustaining Successful Growth. Boston, MA: Harvard Business School Press, 2003.
Jim Collins Book “Had a Huge Influence” on Reed Hastings’s Creation of Netflix
(p. 6) The Netflix founder and co-chief executive, whose new book is ‘No Rules Rules,’ reads with his mind more than his heart: ‘I generally turn more to television and film for emotional nourishment.’
. . .
What’s your favorite book no one else has heard of?
Probably “Beyond Entrepreneurship,” by Jim Collins and William C. Lazier. It’s not nearly as well known as Collins’s “Good to Great” or “Built to Last” in the pantheon of influential business books. But it came out in the early 1990s, right around the time I was starting my first company, Pure Software. It had a huge influence on how I thought about that business and, later, what I aspired to create at Netflix. Collins and other business authors whose books I benefited from are a big reason I decided to write a book of my own, to try to pay it forward to other entrepreneurs in the same way those other authors have. Years from now, it would be great if someone who found “No Rules Rules” useful today writes their own book improving on it..
. . .
What do you plan to read next?
“Shoe Dog,” the memoir by Phil Knight, who created Nike — and yes, we’re also adapting it for Netflix.
For the full interview, see:
“By the Book; Reed Hastings.” The New York Times Book Review (Sunday, September 27, 2020): 6.
(Note: the online version of the interview has the date Sept. 24, 2020, and has the title “By the Book; Reed Hastings, the Founder of Netflix, Keeps His Library in His Pocket.” The first sentence quoted above, and the questions, are by the New York Times interviewer, who is not identified in either the print or the online versions. The rest is by Reed Hastings. The first sentence quoted above is in the print, but not the online, version.)
Reed Hastings’s book mentioned above is:
Hastings, Reed, and Erin Meyer. No Rules Rules: Netflix and the Culture of Reinvention. New York: Penguin Press, 2020.
Jim Collins’s co-authored book mentioned above is:
Collins, James C., and William C. Lazier. Beyond Entrepreneurship: Turning Your Business into an Enduring Great Company. Paramus, NJ: Prentice Hall, 1992.
Phil Knight’s memoir mentioned above is:
Knight, Phil. Shoe Dog: A Memoir by the Creator of Nike. New York: Scribner, 2016.
Young Doctor “Taken Aback” by Deaths Under Nationalized Medicine
(p. 26) Westaby’s book will be a balm to the hearts of curmudgeons everywhere. Sidestepping the contemporary hand-wringing about the lack of empathy in medicine, Westaby, a British surgeon, positions empathy as a threat to the surgical career: “Heart surgery,” he writes, “needs to be an impersonal, technical exercise.”
. . .
The deaths that truly madden him are those that could have been prevented by available technologies not then funded by the British National Health Service (N.H.S.), his employer.
. . .
As a young doctor who imagines nationalized medicine as a way toward comprehensive care for all my patients, I was taken aback.
For the full review, see:
(Note: the online version of the review has the date June 27, 2017, and has the title “SHORTLIST; Four Timely Memoirs from the Halls of Medicine.”)
The book under review is:
Westaby, Stephen. Open Heart: A Cardiac Surgeon’s Stories of Life and Death on the Operating Table. New York: Basic Books, 2017.
Robots That Can Grip Donuts Cannot Grip Asparagus
Distinguished MIT labor economist David Autor, who I reference in my book Openness to Creative Destruction: Sustaining Innovative Dynamism, was a co-chair of the MIT Work of the Future Task Force that wrote the report discussed in the article quoted below.
(p. B3) L. Rafael Reif, the president of Massachusetts Institute of Technology, delivered an intellectual call to arms to the university’s faculty in November 2017: Help generate insights into how advancing technology has changed and will change the work force, and what policies would create opportunity for more Americans in the digital economy.
That issue, he wrote, is the “defining challenge of our time.”
Three years later, the task force assembled to address it is publishing its wide-ranging conclusions. The 92-page report, “The Work of the Future: Building Better Jobs in an Age of Intelligent Machines,” was released on Tuesday [November 17, 2020].
. . .
Technology has always replaced some jobs, created new ones and changed others. The question is whether things will be different this time as robots and artificial intelligence quickly take over for humans on factory floors and in offices.
The M.I.T. researchers concluded that the change would be more evolutionary than revolutionary. In fact, they wrote, “we anticipate that in the next two decades, industrialized countries will have more job openings than workers to fill them.”
That judgment is informed by field research in several industries and sectors including insurance, health care, driverless vehicles, logistics and warehouses, advanced manufacturing, and small and medium-size manufacturers.
. . .
Despite advances, robots simply don’t have the flexibility and dexterity of human workers. Today’s robots learn from data and repetition. They can be remarkably adept at a certain task, but only that one. The report cited a fine-tuned gripping robot that could pluck a glazed doughnut and carefully place it in a box, with its shiny glaze undisturbed.
“But that gripper only works on doughnuts,” the report said. “It can’t pick up a clump of asparagus or a car tire.”
The cost and operational expertise required will also slow the widespread adoption of robots.
For the full story, see:
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date Nov. 17, 2020, and has the title “Don’t Fear the Robots, and Other Lessons From a Study of the Digital Economy.”)
The MIT report discussed above is:
My book mentioned above is:
Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.
Dolly Parton Sings and Donates with “Effective Sympathy”
The above is an “embed” from a YouTube video posted by singer (and English Professor) Ryan Cordell. The lyrics were written by Gretchen McCulloch and the tune is from Dolly Parton’s “Jolene.” The YouTube URL is: https://www.youtube.com/watch?v=cCwNQtnI64I
In my book Openness to Creative Destruction: Sustaining Innovative Dynamism, I write about “effective sympathy” which I describe as “actions taken by sympathetic observers that actually save or improve the lives of those who are suffering” (p. 110). I admire Dolly Parton for donating copies of The Little Engine That Could to poor children. I also admire Dolly Parton for donating a million dollars to help start research on the Moderna vaccine for Covid-19. Dolly Parton knows how to practice effective sympathy.
(p. 12) She wrote “I Will Always Love You” and “Jolene” on the same day and built a theme park around herself. She has given memorable onscreen performances as a wisecracking hairstylist and harassed secretary. She even helped bring about the creation of “Buffy the Vampire Slayer.”
Now, Dolly Parton’s fans are crediting her with saving the world from the coronavirus. It’s an exaggerated, tongue-in-cheek claim, to be sure. But for legions of admirers, Ms. Parton’s donation this spring to Vanderbilt University Medical Center, which worked with the drugmaker Moderna to develop a coronavirus vaccine, was another example of how her generosity and philanthropy have made her one of the world’s most beloved artists.
. . .
“Her money helped us develop the test that we used to first show that the Moderna vaccine was giving people a good immune response that might protect them,” Dr. Denison said on Tuesday.
Ms. Parton told the BBC on Tuesday [November 17, 2020] that she was excited to hear her contribution provided a “little seed money that will hopefully grow into something great and help to heal this world.”
. . .
On Monday [November 16, 2020], after Moderna announced that early trials of the vaccine showed a 94.5 percent effectiveness rate, fans reacted rapturously.
. . .
Ryan Cordell, an associate professor of English at Northeastern University in Boston, filmed himself singing a song about the vaccine to the tune of “Jolene.”
For the full story, see:
(Note: ellipses, and bracketed dates, added.)
(Note: the online version of the story has the date Nov. 17, 2020, and has the title “Dolly Parton: Singer, Songwriter, Pandemic Savior?” The online version says that the title of the New York print version was “Dolly: Country Music Legend, Songwriter, Pandemic Hero” and its page number was 8. The title of my National print version was “Dolly: A Star of Country, a Songwriter, a Virus Hero” and its page number was 12.)
My book mentioned above is:
Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.
The use of The Little Engine That Could to encourage entrepreneurial perseverance is analyzed in:
Yandle, Bruce. “I Think I Can! Does the Little Engine That Could Matter?” Journal of Private Enterprise 26, no. 2 (Spring 2011): 127-42.