Boston Brahmins Invested in Western Industrialization

(p. A13) One of history’s ironies is that, even though New England birthed the abolition movement, many of Boston’s most prominent families offered less than total support for freeing the slaves. Their prosperity required a steady supply of cotton to feed New England’s growing textile industry. Even after slavery ended in 1865, wealthy Bostonians were reluctant to abandon their traditional business. Henry Lee Higginson, 30 years old and freshly discharged from the Union Army, bought with his partners a 5,000-acre plantation in Georgia with the goal of turning a profit by growing cotton. But the 60 former slaves living on the plantation thought the wages and terms offered to be grossly inadequate; the land they had worked in chains for generations, they believed, should belong to them. The enterprise soon collapsed.

As similar episodes played out across the South, Boston’s business elites looked for new places to invest their money. “They began to reenvision American capitalist development, not in modifying and salvaging the arrangements of earlier decades but in a far more ambitious program of continental industrialization,” Noam Maggor writes in “Brahmin Capitalism.” “They retreated from cotton and moved into a host of groundbreaking ventures in the Great American West—mining, stockyards, and railroads.”

. . .

Especially representative of the Bostonians’ transformative influence was Higginson’s next enterprise. Far removed from Georgian cotton, his interests landed on a copper mine in northern Michigan’s remote Keweenaw Peninsula. Copper had been discovered there 20 years earlier, but extraction had been small-scale and labor intensive; the high cost per unit meant that mining was profitable only for veins that contained at least 40% copper. In a short time, high-yield mines in the area began to show signs of depletion. But with Higginson’s capital—alongside investments from other Brahmins—large-scale copper extraction could take place as a continuous operation, making mining profitable on belts that contained only 2%-4% copper. In this way, Higginson’s Eastern capital transformed Western mining and launched a career that would make him one of Boston’s leading financiers.

For the full review, see:

John Steele Gordon. “BOOKSHELF; Enterprising Bostonians; Contrary to stereotype, the Brahmins of New England crisscrossed the continent and took bold risks in search of higher yields.” The Wall Street Journal (Monday, June 26, 2017): A13.

(Note: ellipsis added.)

(Note: the online version of the review has the date June 25, 2017, and has the same title as the print version.)

The book under review is:

Maggor, Noam. Brahmin Capitalism: Frontiers of Wealth and Populism in America’s First Gilded Age. Cambridge, MA: Harvard University Press, 2017.

A.I. Needs Human Beings to Collect Right Data and Write Sound Algorithms

(p. A1) SEATTLE — The company called One Concern has all the characteristics of a buzzy and promising Silicon Valley start-up: young founders from Stanford, tens of millions of dollars in venture capital and a board with prominent names.

Its particular niche is disaster response. And it markets a way to use artificial intelligence to address one of the most vexing issues facing emergency responders in disasters: figuring out where people need help in time to save them.

. . .

But when T.J. McDonald, who works for Seattle’s office of emergency management, reviewed a simulated earthquake on the company’s damage prediction platform, he spotted problems. A popular big-box store was grayed out on the web-based map, meaning there was no analysis of the conditions there, and shoppers and workers who might be in danger would not receive immediate help if rescuers relied on One Concern’s results.

“If that Costco collapses in the middle of the day, there’s going to be a lot of people who are hurt,” he said.

The error? The simulation, the company acknowledged, missed many commercial areas because damage calculations relied largely on residential census data.

For the full story, see:

Sheri Fink. “A Tech Answer To Disaster Aid Is Falling Short.” The New York Times (Saturday, Aug. 10, 2019): A1 & A14.

(Note: ellipsis added.)

(Note: the online version of the story has the date Aug. 9, 2019, and has the title “This High-Tech Solution to Disaster Response May Be Too Good to Be True.”)

Evidence That Patents Do Not Holdup Innovation

(p. A17) The trade war has highlighted the competitive advantage of reliable patent rights in driving innovation, prompting a bipartisan effort in Congress to strengthen patents.

. . .

Yet the FTC doesn’t seem to have received the message. It continues to push regulatory policies and undertake enforcement actions based on the story that bad actors licensing their patents somehow are stopping companies from making new innovative products and are harming consumers with higher prices. This idea that “patent holdup” raises prices and stifles innovation is based entirely on an academic theory first proposed in the Texas Law Review in 2007 by professors Mark Lemley and Carl Shapiro.

In contrast to the theory, extensive empirical research since 2007 has failed to find any of the predicted harms of stifled innovation or higher prices, and has in fact found the opposite. “An Empirical Examination of Patent Holdup,” published in 2015, found that industries like smartphone design with patents on foundational technologies have the fastest quality-adjusted price reductions in consumer products. A 2016 George Mason Law Review study also found consistent reductions in consumer prices, increased research-and-development spending, and incredibly fast technological innovation driven by patent licensing of key technologies in the smartphone industry.

For the full commentary, see:

Adam Mossoff. “The FTC Joins Huawei on a Misguided Troll Hunt; The commission’s lawsuit against Qualcomm threatens to undermine American innovation.” The Wall Street Journal (Saturday, Jan. 27, 2019): A17.

(Note: ellipsis added.)

(Note: the online version of the commentary has the same date and title as the print version.)

The 2016 George Mason Law Review study, mentioned above, is:

Mallinson, Keith. “Don’t Fix What Isn’t Broken: The Extraordinary Record of Innovation and Success in the Cellular Industry under Existing Licensing Practices.” George Mason Law Review 23, no. 4 (Summer 2016): 967-1006.

The 2015 paper mentioned above, is:

Galetovic, Alexander, Stephen Haber, and Ross Levine. “An Empirical Examination of Patent Holdup.” Journal of Competition Law and Economics 11, no. 3 (Sept. 2015): 549-78.

A related 2017 paper, is:

Galetovic, Alexander, and Stephen Haber. “The Fallacies of Patent-Holdup Theory.” Journal of Competition Law and Economics 13, no. 1 (March 2017): 1-44.

“Charging Scooters Is a Great Job for Independent-Minded Entrepreneurs”

(p. 1B) Downtown Omaha resident Rob Luhrs spends his early mornings and late nights hunting for scooters.

Luhrs, 41, is a “juicer” of Lime scooters (“Lime juicer” — get it?) who charges scooters and then sets them out again around town. He said he makes about $60 a day, seven days a week, doing the work. During the College World Series, he said, he was making between $80 and $90 a day.

Luhrs also is an instructor of Brazilian jiu-jitsu and a part-time real estate broker who works for a grocery delivery service. But he said he hopes to make charging scooters his primary source of income.

(p. 2B) “I want to work when I want to,” he said. “When I want to take a day off, I don’t want anybody complaining about it, and if I work extra hard, I want to get paid more. I can’t just go apply to somewhere and get that job.”

. . .

Luhrs said charging scooters is a great job for “independent-minded entrepreneurs.”

“For me personally, I’m willing to spend time during the day picking up scooters and make it a full-time gig,” he said. “I see other people out there, during the daytime, picking up scooters, so I know that they’re trying to make it a full-time gig, too.”

For the full story, see:

Adam Cole. “Lime ‘Juicer’ Doesn’t Feel Squeezed by Late Hours Charging Scooters.” Omaha World-Herald (Thursday, Jul 4, 2019): 1B-2B.

(Note: ellipsis added.)

(Note: the online version of the story has the date Jul 3, 2019, and has the title “Unorthodox working hours don’t steer Lime ‘juicer’ away from job charging scooters in Omaha.”)

Patenting a Better Vacuum Tube as Semiconductors Emerge

After his disappointing improved-vacuum-tube invention (see below), Kates did not give up. He went on to make important contributions in coordinating traffic lights to ease traffic flows.

(p. A9) When he demonstrated a computer tic-tac-toe game called Bertie the Brain in 1950, Josef Kates thought he was on the verge of making a fortune. The game, introduced at the Canadian National Exhibition, featured streamlined vacuum tubes invented by the Austrian-born Dr. Kates, who came to Canada in the 1940s as a refugee from Nazism. He hoped the tubes would revolutionize computing.

His timing was off. The rise of semiconductors was about to render vacuum tubes obsolete as computer components. “I got the patent, but the patent was useless,” he said in an oral history. “Okay, so on goes the world.”

For the full obituary, see:

James R. Hagerty. “Refugee Crunched Data to Unsnarl Traffic Jams.” The Wall Street Journal (Saturday, July 28, 2018): A9.

(Note: the online version of the obituary has the date July 27, 2018, and has the title “Josef Kates Found Ways to Unsnarl Traffic and Solve Business Problems With Computers.”)

Entrepreneurs Pooled Savings to Found Garmin

(p. B16) Gary Burrell, who with a fellow engineer founded Garmin, the navigational device company whose products can direct pilots in fog, prevent hikers from getting lost and help insomniacs track their sleep, died on June 12 [2019] at his home in Spring Hill, Kan.

. . .

Mr. Burrell (pronounced burr-ELL) was vice president of engineering for King Radio, an avionics company that made navigational devices, when he recruited Dr. Min H. Kao from Magnavox, another defense contractor. Dr. Kao had been instrumental in developing a GPS receiver for aircraft.

At the time, the government was opening up its Global Positioning System for civilian use, and the two men saw possibilities. Continue reading “Entrepreneurs Pooled Savings to Found Garmin”

High Palladium Prices Incentivize More Mining and Search for Substitutes

(p. B13) Palladium prices are at their highest level in nearly two decades, as investors bet that rising global growth will buoy automobile production and stoke demand for the rare metal.

. . .

Longer term, the auto industry may consider switching to platinum in gasoline engines if the price of palladium continues to climb, some market participants said.

Shree Kargutkar, portfolio manager at Sprott Asset Management, said he thinks platinum provides a better long-term value alternative to palladium given palladium’s sharp rise.

Still, changes in the automotive industry don’t pose an immediate threat to the rally, he said. Those shifts and mining companies’ efforts to bring more areas of supply on line to capitalize on higher prices are likely to take years.

“We’re not at a point where the palladium bulls have something to worry about,” he said.

For the full story, see:

Ira Iosebashvili and Amrith Ramkumar. “Palladium Soars on Hopes for Growth.” The Wall Street Journal (Tuesday, Oct. 24, 2017): B13.

(Note: ellipsis added.)

(Note: the online version of the story has the date Oct. 23, 2017, and the title “Palladium Prices Soar in Sign of Global Growth and Auto Demand.” Where there are minor differences in wording, the passages quoted above follow the online version.)