Capitalism – Page 13 – artdiamondblog.com

In the Gilded Age Moguls Cleaned Up Their Own Mess and the Economy Was Not Hurt

Source of book image: online version of the WSJ review quoted and cited below.

(p. A13) Takeover wars seem to have lost their sizzle. What happened to the battles of corporate goliaths? Where have they gone, those swaggering deal makers? “Harriman vs. Hill” is a corporate dust-up that takes us back to the beginning of the 20th century, when tycoons who traveled by private rail merrily raided each other’s empires while the world around them cringed.
. . .
Mr. Haeg conveys a vivid picture of the Gilded Age in splendor and in turmoil. Champagne still flowed in Peacock Alley in the Waldorf-Astoria, but fistfights erupted on the floor of the exchange, and a young trader named Bernard Baruch skirted disaster with the help of an inside tip, then perfectly legal. There were scant rules governing stock trading, the author reminds us–no taxes, either. “If you won in the market, you kept it all.”
In that era, moguls were left to clean up their own mess. . . .
. . .
Though hardly a cheerleader, Mr. Haeg is admiring of his cast, nostalgic for the laissez-faire world they inhabited. Observing that the economy wasn’t upset by the stock market’s mayhem, he concludes that, “in a perverse way, the market had worked.”

For the full review, see:
ROGER LOWENSTEIN. “BOOKSHELF; When Titans Tie the Knot; Businessmen of a century ago didn’t place ‘competition’ on a revered pedestal. Merger and monopoly were considered preferable.” The Wall Street Journal (Fri., Feb. 14, 2014): A13.
(Note: ellipses added.)
(Note: the online version of the review has the date Feb. 13, 2014, and has the title “BOOKSHELF; Book Review: ‘Harriman vs. Hill,’ by Larry Haeg; Businessmen of a century ago didn’t place ‘competition’ on a revered pedestal. Merger and monopoly were considered preferable.”)

The book under review is:
Haeg, Larry. Harriman Vs. Hill: Wall Street’s Great Railroad War. Minneapolis, MN: University of Minnesota Press, 2013.

Better Policies Explain Why Poland Prospers More than Ukraine

“Yaroslav Rushchyshyn, a garment manufacturer, wants to end penalties when his company reports a financial loss.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. B1) LVIV, Ukraine — Every kind of business in this restless pro-European stronghold near the border with Poland has an idea about how to make Ukraine like its more prosperous neighbor.

For Yaroslav Rushchyshyn, founder of a garment manufacturer, it is abolishing bizarre regulations that have had inspectors threatening fines for his handling of fabric remnants and for reporting financial losses.
For Andrew Pavliv, who runs a technology company, it is modernizing a rigid education system to help nurture entrepreneurs.
For Natalia Smutok, an executive at a company that makes color charts for paint and cosmetics, it meant starting an antibribery campaign, even though she is 36 weeks pregnant.
. . .
(p. B10) Victor Halchynsky, a former journalist who is now a spokesman for the Ukrainian unit of a Polish bank, said the divergence of the two countries was a source of frustration.
“It’s painful because we know it’s only happened because of policy,” he said, adding that while both countries had started the reform process, Poland “finished it.”
Ukraine has been held back by a number of policies. Steep energy subsidies have kept consumption high and left the country dependent on Russian gas, draining state coffers. Mr. Pavliv said the state university system, which he called “pure, pure Soviet,” was too inflexible to set up a training program for project managers, or to allow executives without specific certifications to teach courses. An agriculture industry once a Soviet breadbasket has been hurt by antiquated rules, including restrictions on land sales. Aggressive tax police have been used to shake down businesses.

For the full story, see:
DANNY HAKIM. “A Blueprint for Ukraine.” The New York Times (Fri., MARCH 14, 2014): B1 & B10.
(Note: ellipsis added.)
(Note: the online version of the story has the date MARCH 13, 2014.)

“Andrew Pavliv, who runs a technology company, wants to help turn Lviv into a little Ukrainian Silicon Valley.” Source of caption and photo: online version of the NYT article quoted and cited above.

Amazon’s User Reviews Increase Rationality of Consumer Choices

Source of book image: http://2.bp.blogspot.com/-dNUZ_u-GWSk/UpqE0zmFQQI/AAAAAAAAAko/Z8uisfEjgRc/s1600/Absolute+Value+cover.png

(p. 3) You are no longer the sucker you used to be.

So suggests continuing research from the Stanford Graduate School of Business into the challenges marketers face in reaching consumers in the digital age. As you might suspect, the research shows that a wealth of online product information and user reviews is causing a fundamental shift in how consumers make decisions.
As consumers rely more on one another, the power of marketers is being undermined, said Itamar Simonson, a Stanford marketing professor and the lead researcher.
. . .
To get the full impact of the findings, you first have to know the conclusions of a similar experiment decades ago by Dr. Simonson, . . . . . . .
The researchers found that when study subjects had only two choices, most chose the less expensive camera with fewer features. But when given three choices, most chose the middle one. Dr. Simonson called it “the compromise effect” — the idea that consumers will gravitate to the middle of the options presented to them.
. . .
Flash forward to the new experiment. It was similar to the first, except that consumers could have a glimpse at Amazon. That made a huge difference. When given three camera options, consumers didn’t gravitate en masse to the midprice version. Rather, the least expensive one kept its share and the middle one lost more to the most expensive one.
“The compromise effect was gone,” said Dr. Simonson, or, rather, he nearly exclaimed the absence of the effect, underscoring his surprise at the findings. They are to be published next month in “Absolute Value,” a book by Dr. Simonson and Emanuel Rosen.
Today, products are being evaluated more on their “absolute value, their quality,” Dr. Simonson said. Brand names mean less.

For the full story, see:
MATT RICHTEL. “APPLIED SCIENCE; There’s Power in All Those User Reviews.” The New York Times, SundayBusiness Section (Sun., December 8, 2013): 3.
(Note: ellipses added.)
(Note: the online version of the article has the date December 7, 2013.)

The new research is reported in:
Simonson, Itamar, and Emanuel Rosen. Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information. New York: HarperBusiness, 2014.

Portland Government Stops Girl from Selling Mistletoe to Pay for Braces

In Portland, the government is stopping an 11 year old girl from selling mistletoe to raise money for her braces. Here is a link to the KATU local Portland ABC news station video report: http://www.katu.com/news/local/11-year-old-told-not-to-sell-mistletoe-but-begging-is-fine-234014261.html?tab=video&c=y It also has been posted to YouTube at: http://www.youtube.com/watch?v=Vj4caXi0wdw

Entrepreneurial Spirit Values “Voyaging into the Unknown”

“Edmund Phelps, winner of the 2006 Nobel Prize for economics.” Source of caption and photo: online version of the WSJ review quoted and cited below.

(p. C7) Edmund Phelps’s “Mass Flourishing” could easily be retitled “Contra-Corporatism,” for at its heart this fine book is an attack on that increasingly common “third way” between capitalism and socialism. Mr. Phelps cogently argues that America’s current economic woes reflect a reduction in the innovative dynamism that generates economic success and personal satisfaction. He places little hope in the Democratic Party, which “voices a new corporatism well beyond Franklin Roosevelt’s New Deal or Lyndon Johnson’s Great Society,” or in Republicans in the thrall of “traditional values,” who see “the good economy as mercantile capitalism plus social protection and social insurance.” He instead yearns for legislative solons who “could usefully ask of every bill and regulatory directive: How would it impact the dynamism of our economy?”
. . .
The book eloquently discusses the culture of innovation, which can refer to both an entrepreneurial mind-set and the cultural achievements during an age of change. He sees modern capitalism as profoundly humanist, imbued with “a spirit that views the prospect of unanticipated consequences that may come with voyaging into the unknown as a valued part of experience and not a drawback.”
. . .
In . . . [the] new corporatism, the state protects both organized labor and politically connected companies. and the state has acquired a “panoply of new roles,” from regulations “aimed at shielding companies or workforces from competition” to lawsuits that “add to the diversion of income from earners to those receiving compensation or indemnification.” It is as if “every person in a society is a signatory to an implicit contract” in which “no person may be harmed by others without receiving compensation.” But protection against all conceivable harm also means protection against almost all change–and this is the death knell of dynamism and innovation.
. . .
But what is to be done? The author wants governments that are “aware of the importance of the role played by dynamism in a modern-capitalist economy,” and he disparages both current political camps. He has a number of thoughtful ideas about financial-sector reform. He is no libertarian and even proposes a “national bank specializing in extending credit or equity capital to start-up firms”–not my favorite idea.

For the full review, see:
EDWARD GLAESER. “How to Unleash the Economy.” The Wall Street Journal (Sat., Oct. 19, 2013): C7.
(Note: ellipses, and bracketed word, added.)
(Note: the online version of the review has the date Oct. 18, 2013, and has the title “BOOKSHELF; Book Review: ‘Mass Flourishing’ by Edmund Phelps; Innovative dynamism is the key to economic success and personal satisfaction, a Nobel-winner argues.”)

The book under review is:
Phelps, Edmund S. Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change. Princeton, New Jersey: Princeton University Press, 2013.

Source of book image: http://blogs.reuters.com/great-debate/files/2013/08/Mass-Flourishing-cover.jpg

Entrepreneur Arik Achmon Stood Down Powerful Union to Keep His Company Alive

Source of book image: http://www.seraphicpress.com/wp-content/uploads/2013/10/like-dreamers.jpg

(p. C2) Mr. Halevi, an American immigrant who has worked as a journalist and analyst in Jerusalem for 30 years, has created a textured, beautifully written narrative by focusing on seven men — and they are all men — . . . , who served in the paratroop brigade that conquered the Old City of Jerusalem in the 1967 war.
. . .
. . . , the men Mr. Halevi has chosen are compelling. One is Arik Achmon, a secular liberal from a kibbutz who helped transform Israel’s failing statist economy into a thriving capitalist one. Mr. Achmon helped found the first private domestic airline in Israel. The story of how he stood down the once-powerful Histadrut trade union federation to keep his company alive illustrates the enormous changes that Israeli society has undergone in the past three decades.

For the full review, see:
ETHAN BRONNER. “BOOKS OF THE TIMES; 7 Paratroopers and Paths They Took Through an Israel at a Crossroads.” The New York Times (Thurs., September 26, 2013): C2.
(Note: ellipses added.)
(Note: the online version of the review has the date September 25, 2013.)

The book under review is:
Halevi, Yossi Klein. Like Dreamers: The Story of the Israeli Paratroopers Who Reunited Jerusalem and Divided a Nation. New York: HarperCollins, 2013.

“Yossi Klein Halevi.” Source of caption and photo: online version of the NYT review quoted and cited above.

Brazilian Entrepreneur Inspired by “The Men Who Built America”

The co-founder of the Havan chain, Luciano Hang, arrives at the chain’s flagship store, which is in Brusque, Brazil. Source of photo: online version of the NYT article quoted and cited below.

(p. 6) “My philosophy is pro-capitalism, so of course the best symbols for this come from the United States,” said Mr. Hang, who flies around Brazil on a Learjet to visit the nearly 60 stores in his chain, called Havan. “I tell people that we’re about freedom: the freedom to stay open when we choose, the freedom to work for us and the freedom to shop,” he added. “I know this can be controversial, but I think those who disagree with my approach are few and far between.”
. . .
The son of textile factory workers, descended from German and Italian immigrants, Mr. Hang said he admired European culture but preferred the United States. He said he was inspired by a show on the History Channel, “The Men Who Built America,” about industrial titans like John D. Rockefeller and Cornelius Vanderbilt.
“I couldn’t sleep after I saw that program,” he said.
His business model is partly based on Walmart, whose small-town origins he admires, as well as its method of turning economies of scale into low prices.

For the full story, see:
SIMON ROMERO. “Reshaping Brazil’s Retail Scene, Inspired by Vegas and Vanderbilt.” The New York Times, First Section (Sun., September 15, 2013): 6.
(Note: ellipsis added.)
(Note: the online version of the story has the date September 14, 2013.)

Among 1890s Wall Street Elite, “It Was Fashionable to Be Anti-Semitic”

Source of book image: online version of the WSJ review quoted and cited below.

(p. A11) J.P. Morgan may well have been the most powerful banker who ever lived. Certainly he was the most powerful American banker. But the banking world that he and his firm dominated was a short-lived one, lasting only from the 1890s to the Depression of the 1930s. Susie J. Pak explores Morgan’s world, especially its social aspects, in “Gentlemen Bankers,” and the exploration is very interesting indeed.
. . .
In Wall Street at the time, there were two groups of private banking firms; those with Jewish partners and those with gentile ones. And while they did business together, often forming syndicates to handle large underwritings, they led separate social lives. They belonged to different clubs, stayed at different hotels and resorts. They didn’t attend the weddings of one another’s children. The reason, of course, was anti-Semitism. But as Ms. Pak notes, it had nothing to do with the ancient, religiously motivated anti-Semitism typical in Europe. This latter-day anti-Semitism was essentially social in character: To be blunt, it was fashionable to be anti-Semitic.
In earlier decades of the 19th century, affluent Jews had mingled socially with their gentile neighbors. They had been among the founding members of such old-line clubs as the Union Club (est. 1836) and the Union League Club (1863). Jesse Seligman, a partner in the well-regarded Jewish banking firm of J. & W. Seligman, was vice president of the Union League Club in 1893. But when he put his son up for membership that year, he was rejected. “Those who voted against him,” a biographer of the Seligman family wrote, “said they had nothing against him personally; they objected to his race.” His stunned father resigned from the club. He died the next year, aged 66; some said the incident contributed to his death.

For the full review, see:
JOHN STEELE GORDON. “BOOKSHELF; Book Review: ‘Gentlemen Bankers’ by Susie J. Pak; In the age of J.P. Morgan, the sons of Jewish bankers attended Ivy League colleges, but were excluded from the myriad social and athletic organizations.” The Wall Street Journal (Fri, August 30, 2013): A11.
(Note: ellipsis added.)
(Note: the online version of the review has the date August 29, 2013, and has the title “BOOKSHELF; Book Review: ‘Gentlemen Bankers’ by Susie J. Pak; In the age of J.P. Morgan, the sons of Jewish bankers attended Ivy League colleges, but were excluded from the myriad social and athletic organizations.”)

The book under review, is:
Pak, Susie J. Gentlemen Bankers: The World of J.P. Morgan, Harvard Studies in Business History. Cambridge, MA: Harvard University Press, 2013.

Philosopher Herbert Spencer Defended Capitalism in America

Source of book image: online version of the WSJ review quoted and cited below.

Spencer was sometimes a much better philosopher than the modern caricature portrays, a caricature exemplified by the review quoted below and, perhaps, by the book reviewed. I would like to look at this book sometime, because there may be some interesting history in it—though I am not optimistic about the book’s economic assumptions, or its account of Spencer’s philosophy.

(p. A11) Herbert Spencer, the 19th-century British philosopher, is remembered today as the forbidding — almost forbidden — father of “Social Darwinism,” a school of thought declaring that the fittest prosper in a free marketplace and the human race is gradually improved because only the strong survive. In Barry Werth’s satisfying “Banquet at Delmonico’s,” Spencer is also a querulous 62-year-old celibate whose 1882 American tour culminates in a feast to which are invited the “mostly Republican men of science, religion, business, and government” who shared and spread the Spencerian creed.

Applying Darwinian insights about evolution to political, economic and social life — though he did not himself use the term “Social Darwinism” — Spencer concluded that vigorous competition and unfettered capitalism conduced to the betterment of society. He predicted that the American, raised in liberty, would evolve into “a finer type of man than has hitherto existed,” dazzling the world with “the highest form of government” and “a civilization grander than any the world has known.”
. . .
The public clamor over the visit of a dyspeptic foreign philosopher to these shores was partly due to the indefatigable promotion of Edward Livingston Youmans, Spencer’s chief American proselytizer, who called his beau ideal the most original thinker in the history of mankind. Youmans is among the several critics and apostles of Spencer and Darwin whose profiles Mr. Werth skillfully interweaves in this Gilded Age tapestry.

For the full review, see:
BILL KAUFFMAN. “BOOKSHELF; Darwin in the New World; When the father of Social Darwinism came to America, the place where the fittest were supposed to thrive.” The Wall Street Journal (Fri., January 9, 2009): A11.
(Note: ellipsis added; italics in original.)

The book under review is:
Werth, Barry. Banquet at Delmonico’s: Great Minds, the Gilded Age, and the Triumph of Evolution in America. New York: Random House, 2009.

For a more balanced account of Spencer, see the first review below for the mostly good in Spencer, and the second review below for the mostly bad in Spencer:
Diamond, Arthur M., Jr. “Spencer’s Tragedy: Review of Herbert Spencer’s The Principles of Ethics.” Modern Age 24, no. 4 (Fall 1980): 419-421.
Diamond, Arthur M., Jr. “The State of Spencer: Review of Herbert Spencer’s The Man Versus the State.” Modern Age 28, nos. 2-3 (Spring/Summer 1984): 286-288.

iPhone: “A Gleaming World of Innovation and Opportunity, of Capitalism Behaving Well”

“The theft of electronic devices like iPhones has fueled a rise in subway crime this year, the police say. In the past, New Yorkers were mugged, sometimes killed, for bomber jackets, Cazal glasses and Air Jordan sneakers.” Source of caption: print version of the NYT article quoted and cited below. Source of photo: online version of the NYT article quoted and cited below.

(p.24) The current spate of iPhone thefts feels, if anything, more poignant than disruptive. Apple products have always read as cooler than their rivals’ because their design suggests a gleaming world of innovation and opportunity, of capitalism behaving well — a world that seems ever diminishing, ever less accessible to the struggling and young.

Unlike the sneakers and glasses that caused such a fury in the ’80s and ’90s, iPhones didn’t originate in the celebrity system. They come with a democratic ethos (if not the analogous price tag); BlackBerrys are for suits, but even a child can work an iPhone. Wasn’t everyone supposed to have a shot?

For the full story, see:
GINIA BELLAFANTE. “BIG CITY; Easy to Use and Easy to Steal, a Status Object Inches Out of Reach.” The New York Times, First Section (Sun., October 30, 2011): 24.
(Note: the first paragraph quoted above is from the print version, rather than from the somewhat different online version. The second quoted paragraph is the same in both versions.)
(Note: the online version of the story has the date October 28, 2011, and has the slightly different title “BIG CITY; Easy to Use, or Steal, but Inching Out of Reach.”)

Cuban Government Employees “Are Known for Surly Service, Inefficiency, Absenteeism and Pilfering”

(p. A10) However small, . . . , the private sector is changing the work culture on an island where state employees earn meager salaries and are known for surly service, inefficiency, absenteeism and pilfering.
Sergio Alba Marín, who for years managed the restaurants of a state-owned hotel and now owns a popular fast-food restaurant, said he was very strict with his employees and would not employ workers trained by the state.
“They have too many vices — stealing, for one,” said Mr. Alba, who was marching with his 25 employees and two large banners emblazoned with the name of his restaurant, La Pachanga. “You can’t change that mentality.”
“Even if you could, I don’t have time,” he added. “I have a business to run.”

For the full story, see:
VICTORIA BURNETT. “HAVANA JOURNAL; Amid Fealty to Socialism, a Nod to Capitalism.” The New York Times (Thurs., May 2, 2013): A6 & A10.
(Note: ellipsis added.)
(Note: the online version of the story has the date May 1, 2013.)