Category: Economics of Technology

Amazon Workers Can Flourish Without Unions

(p. A1) Amazon workers at a giant warehouse in Alabama voted decisively against forming a union on Friday, squashing the most significant organizing drive in the internet giant’s history and dealing a crushing blow to labor and Democrats when conditions appeared ripe for them to make advances.

Workers cast 1,798 votes against a union, giving Amazon enough to emphatically defeat the effort. Ballots in favor of a union trailed at 738, fewer than 30 percent of the votes tallied, according to federal officials.

. . .

(p. A17) William and Lavonette Stokes, who started work at the Bessemer warehouse in July, said the union had failed to convince them how it could improve their working conditions. Amazon already provides good benefits, relatively high pay that starts at $15 an hour and opportunities to advance, said the couple, who have five children.

“Amazon is the only job I know where they pay your health insurance from Day 1,” Ms. Stokes, 52, said. She added that she had been turned off by how organizers tried to cast the union drive as an extension of the Black Lives Matter movement because most of the workers are Black.

“This was not an African-American issue,’’ said Ms. Stokes, who is Black. “I feel you can work there comfortably without being harassed.”

In a news conference organized by Amazon on Friday, Mr. Stokes and other workers said they had concerns that they wanted the company to address, like better training and anti-bias coaching for managers.

“We just feel like we can do it without the union,” he said. “Why pay the union to do what we can do ourselves?”

For the full story, see:

Karen Weise and Michael Corkery. “Major Setback to Labor As Amazon Employees Reject Unionization Bid.” The New York Times (Saturday, April 10, 2021): A1 & A17.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 9, 2021, and has the title “Amazon Workers Vote Down Union Drive at Alabama Warehouse.”)

Clean-Energy Requires More Transmission Lines Which Requires More Use of Eminent Domain to Seize Private Property

(p. B12) President Biden’s infrastructure plan proposes some tried-and-trusted methods to spur clean-energy development such as a 10-year extension of existing tax credits for solar and wind energy. More interestingly, it introduces an investment tax credit for high-voltage transmission lines.

. . .

The administration is certainly looking in the right direction: To reach President Biden’s net-zero emissions goal by 2050, the U.S. will need to expand electricity transmission systems by 60% by 2030 and may need to triple it by 2050, according to research published by Princeton University in December [2020]. That is because renewable energy-rich places such as the windiest regions aren’t necessarily close to population centers, where electricity demand is.

While the clean-energy industry probably won’t complain about a new subsidy, the tax-credit proposal is a bit of a head scratcher given that the real roadblocks to transmission lines have to do with permitting, much of which is in the hands of state and local authorities.

A shift toward e-commerce should push up productivity by eliminating workers needed in bricks-and-mortar stores, Mr. Gordon said. Videoconferencing should also help, though the public-transit sector could offset some of the gains because buses and rail transit will carry fewer riders, he said.

“For most transmission we need in the country, it’s not a cost issue or an access-to-capital issue, although transmission can be delayed because of cost allocation debates,” said George Bilicic, global head of power, energy and infrastructure at Lazard.

. . .

The proposed plan also calls for a so-called Grid Deployment Authority within the Energy Department to “better leverage existing rights of way” along roads and railways. That would be a good first step, though eminent domain—the power of the government to take private property and convert it for public use—remains largely within state regulators’ hands. While the Federal Energy Regulatory Commission has authority to grant natural-gas pipelines the right of eminent domain under the Natural Gas Act, there is no equivalent authority for electricity transmission under the Federal Power Act and little momentum in Congress to grant that provision.

For the full commentary, see:

Jinjoo Lee. “Productivity Looks Ready to Pick Up.” The Wall Street Journal Tuesday, April 6, 2021): B12.

(Note: ellipses, and bracketed year, added.)

(Note: the online version of the commentary has the date April 4, 2021, and has the title “Biden’s Grid Proposal May Be a Square Peg in a Round Hole.”)

The Princeton research mentioned above is:

Larson, Eric, Chris Greig, Jesse Jenkins, Erin Mayfield, Andrew Pascale, Chuan Zhang, Joshua Drossman, Robert Williams, Steve Pacala, Robert Socolowi, Ejeong Baik, Rich Birdsey, Rick Duke, Ryan Jones, Ben Haley, Emily Leslie, Keith Paustian, and Amy Swan. “Net-Zero America: Potential Pathways, Infrastructure, and Impacts, Interim Report.” Princeton, NJ: Princeton University, Dec. 15, 2020.

Chinese Chip Central Planning Creates “Stunning Absurdities That Defy Logic and Common Sense”

(p. B1) Liu Fengfeng had more than a decade under his belt at one of the world’s most prominent technology companies before he realized where the real gold rush in China was taking place.

Computer chips are the brains and souls of all the electronics the country’s factories crank out. Yet they are mostly designed and produced overseas. China’s government is lavishing money upon anyone who can help change that.

. . .

(p. B2) In a way, China is hoping to achieve the same kind of liftoff that helped it progress from making plastic toys to crafting solar panels.

With semiconductors, though, “the model starts to break down a little bit,” said Jay Goldberg, a tech industry consultant and former Qualcomm executive. The technology is eye-wateringly expensive to develop, and established players have spent decades accumulating know-how. Europe, Mr. Goldberg noted, once had many “incredible” chip companies. Japan’s chip makers are leaders in certain specialized products, but few would call them bold innovators.

“My point is, there is a ladder — China’s moving up it,” Mr. Goldberg said. But it’s “unclear which outcome they go to.”

. . .

At a top-level meeting on the economy last week, the Communist Party’s leaders enshrined technological self-reliance as one of the country’s “Five Fundamentals” for economic development.

Complete self-sufficiency in chips, however, would mean recreating every part of the lengthy supply chains for some of the most complex technology on earth — a mission that would seem to lead, if not to madness, at least to waste.

. . .

“Up until very recently — this year — the goal had been: With state backing, move up the value chain, specialize where China has a comparative advantage, but don’t really try and fall down the rabbit hole of trying to build everything yourself,” said Jimmy Goodrich, the vice president for global policy at the Semiconductor Industry Association, a group that represents American chip companies.

Now, “it’s very clear that Xi Jinping is calling for a redundant domestic supply chain,” Mr. Goodrich said. “And so the rules of economics, comparative advantage and the supply-chain efficiencies have basically been thrown out the door.”

The government is conscious of the dangers. State-run news outlets have amply covered the recent semiconductor flameouts. The message to other upstarts: Don’t mess it up.

When the state broadcaster China Central Television visited one stalled project in the eastern city of Huai’an recently, it found dozens of giant machines idling on the factory floor, many of them still sheathed in plastic.

“There have been some stunning absurdities that defy logic and common sense,” China Economic Weekly said.

. . .

“There is definitely a bubble in China,” he said. “But you can’t overgeneralize.”

. . .

“Something is bound to accumulate, whether it’s equipment, talent or factories, right?” Mr. Liu said. “If not you or the other guy, then it will be someone else who ends up using it. I think this might be the government’s logic.”

For the full story, see:

Raymond Zhong and Cao Li. “China’s Frenzy to Master Chip Manufacturing.” The New York Times (Monday, December 28, 2020): B1-B2.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 24, 2020, and has the title “With Money, and Waste, China Fights for Chip Independence.”)

Etsy and Shopify Platforms Enabled Many Small Businesses to Survive the Pandemic

(p. B4) While the year has been a struggle for small businesses, some companies that host their transactions have been soaring.

Shares in Etsy Inc. and Shopify Inc., whose e-commerce platforms primarily cater to small businesses, have surged during the pandemic. Etsy has more than quadrupled this year, while Shopify has tripled.

. . .

For many small-business owners, the technology platforms have served as a lifeline as their companies shift to a focus on online sales.

Matthew Cummings owns a glass-blowing company that makes custom beer glasses in Knoxville, Tenn. He has been on Etsy since 2012, but didn’t move fully online until the pandemic hit and he had to close the doors of his bricks-and-mortar store. He said his Etsy sales are about 10 times higher this year.

Mr. Cummings said that his sales on Etsy have helped him cover his business expenses and that he was able to come out of 2020 with a profit because of his online store. He plans on selling through the platform after the pandemic, with his business now reaching as far as Australia. He has seen a new wave of repeat customers seeking to complete sets of his custom beer glasses.

. . .

One type of sale that might not last beyond the pandemic is masks.

Etsy reported that masks accounted for 11% of overall gross-merchandise sales in the third quarter.

For the full story, see:

Amber Burton. “Sales Platforms Etsy, Shopify Thrive From Small Businesses.” The Wall Street Journal (Thursday, Dec 24, 2020): B4.

(Note: ellipses added.)

(Note: the online version of the story has the date December 23, 2020, and has the title “Etsy and Shopify Buoyed as Covid-19 Boosts Online Sales.”)

Pfizer Refused Federal Subsidy so They Could “Liberate” Their “Scientists From Any Bureaucracy”

In September [2020], the CEO of Pfizer, Albert Bourla, appeared on CBS News’s “Face the Nation,” where he was asked about not accepting government funding for development.

“The reason why I did it was because I wanted to liberate our scientists from any bureaucracy,” Bourla explained. “When you get money from someone that always comes with strings. They want to see how we are going to progress, what type of moves you are going to do. They want reports. I didn’t want to have any of that. I wanted them — basically I gave them an open checkbook so that they can worry only about scientific challenges, not anything else.”

“And also,” he added, “I wanted to keep Pfizer out of politics, by the way.”

For the full story, see:

Philip Bump. “No, Pfizer’s Apparent Vaccine Success Is Not a Function of Trump’s ‘Operation Warp Speed.” The Washington Post (online posted Monday, November 9, 2020).

(Note: bracketed year added.)

Bernie Sanders Is Uncomfortable that Twitter Censored Trump

Do you think there is truth to the critique that liberals have become too censorious and too willing to use their cultural and corporate and political power to censor or suppress ideas and products that offend them?

Look, you have a former president in Trump, who was a racist, a sexist, a xenophobe, a pathological liar, an authoritarian, somebody who doesn’t believe in the rule of law. This is a bad-news guy. But if you’re asking me, do I feel particularly comfortable that the then-president of the United States could not express his views on Twitter? I don’t feel comfortable about that.

Now, I don’t know what the answer is. Do you want hate speech and conspiracy theories traveling all over this country? No. Do you want the internet to be used for authoritarian purposes and an insurrection, if you like? No, you don’t. So how do you balance that? I don’t know, but it is an issue that we have got to be thinking about. Because yesterday it was Donald Trump who was banned, and tomorrow, it could be somebody else who has a very different point of view.

I don’t like giving that much power to a handful of high-tech people. But the devil is obviously in the details, and it’s something we’re going to have to think long and hard on.

For the whole interview, see:

Klein, Ezra, interviewer. “An Unusually Optimistic Conversation With Bernie Sanders; The Vermont senator discusses the Rescue Act, cancel culture, the filibuster and more.” The Ezra Klein Show, on the New York Times web site. (Tuesday, March 23rd, 2021).

(Note: the first sentence question is by interviewer Ezra Klein. The following answer is by Senator Bernie Sanders.)

Vaccine Immunity, Plus Natural Immunity from Getting Covid-19, Equals Herd Immunity Soon

The author of the passages I quote below is a surgeon and professor at the Johns Hopkins School of Medicine and has authored The Price We Pay, which I recently read. It is a disturbing, eye-opening, excellent account of why the costs of drugs are high and rising.

(p. A17) Anthony Fauci has been saying that the country needs to vaccinate 70% to 85% of the population to reach herd immunity from Covid-19. But he inexplicably ignores natural immunity. If you account for previous infections, herd immunity is likely close at hand.

. . .

Dr. Fauci’s vaccination-only path to herd immunity has significantly influenced the national conversation. KNBC-TV in Los Angeles has a county-by-county vaccine tracker showing a bar graph of the percentage of Californians vaccinated, with the zone 70% to 85% labeled “herd immunity.” Currently, it’s at 26%. The false construct does create a greater urgency for everyone to get vaccinated. But it also creates false justification for continued excessive restrictions on freedom. And it raises the possibility that authorities are misallocating the limited vaccine supply by failing to direct it toward people without natural antibodies.

. . .

Some experts claim they don’t talk about natural immunity because we shouldn’t trust it. But a recent Public Health England study found that less than 1% of 6,614 healthcare workers who had Covid-19 developed a reinfection within five months—even though many of them work with Covid patients. Other experts believe natural immunity is powerful. “Natural immunity after Covid-19 infection is likely lifelong, extrapolating from data on other coronaviruses that cause severe illness, SARS and MERS,” says Monica Gandhi, an infectious-disease physician and professor at the University of California.

For the full commentary, see:

Marty Makary. “Herd Immunity Is Near, Despite Fauci’s Denial.” The Wall Street Journal (Thursday, March 25, 2021): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date March 24, 2021, and has the same title as the print version.)

The Makary book praised above is:

Makary, Marty. The Price We Pay: What Broke American Health Care–and How to Fix It. New York: Bloomsbury Publishing, 2019.

Cancelled Slate Podcaster “Heartsick” That Ideas Cannot Be Debated and Words Cannot Be Spoken

(p. B5) The online publication Slate has suspended a well-known podcast host after he debated with colleagues over whether people who are not Black should be able to quote a racial slur in some contexts.

. . .

Mr. Pesca explored the argument over the use of the slur in a 2019 podcast about a Black security guard who was fired for using it. In one recording of the episode, Mr. Pesca said, he used the term while quoting the man, but asked his producer to make a version without the term. After consultation with his producers and his supervisor, who objected to his quotation of the slur, they decided to go with the version without it, he said.

“The version of the story with the offensive word never aired, and this is how I think the editorial process should go,” Mr. Pesca said in the interview.

No action was taken against him after a human resources investigation into his quotation of the slur, Mr. Pesca said. He said he had apologized to the producers involved.

. . .

Mr. Pesca, who has worked at Slate for seven years, said he was “heartsick” over hurting his colleagues but added, “I hate the idea of things that are beyond debate and things that cannot be said.”

Jacob Weisberg, Slate’s former chairman and editor in chief, who left the company for the podcast start-up Pushkin in 2018, called Mr. Pesca “a huge talent and a fair-minded journalist.”

“I don’t think he did anything that merits discipline or consequences, and I think it’s an example of a kind of overreaction and a lack of judgment and perspective that is unfortunately spreading,” Mr. Weisberg said.

For the full story, see:

Katie Robertson and Ben Smith. “Podcast Host Suspended After Debate Over Slur.” The New York Times (Weds., February 24, 2021): B5.

(Note: ellipses added.)

(Note: the online version of the story has the date Feb. 22, 2021, and has the title “Slate Suspends Podcast Host After Debate Over Racial Slur.”)

Clubhouse Tests the Market for Live Unfiltered Talk

(p. B1) Clubhouse and other audio-based social networks are attracting users with a simple appeal: hearing another human voice.

. . .

(p. B4) Clubhouse could be successful in building paid features because of its air of exclusivity—an invitation is required to join, but easy to procure—and the high-profile names coming to converse on the platform, including Facebook Chief Executive Officer Mark Zuckerberg, Tesla Inc. CEO Elon Musk, actor Lindsay Lohan and Brad Parscale, one-time campaign manager for former President Donald Trump.

. . .  Mr. Musk’s appearance had in part helped drive an influx of China-based users to Clubhouse, where they participated in a rare outpouring of free debate on topics that are taboo in China, until Beijing’s censors this week appeared to cut off access to the app.

Any Clubhouse user can create a virtual room with designated speakers to discuss any topic, for example the merits of bitcoin, startup-building advice, stand-up comedy, or recovery from childhood trauma. Poetry readings, bedtime serenades and guided meditation are on offer. A number of the conversations are about Clubhouse itself, with users dissecting the app, lamenting its shortcomings and complaining about other users.

Tech executives have questioned the staying power of an app with so few guardrails for the length and quality of conversation and no way to filter out idle chatter.

. . .

As with seemingly all online communities, the challenge of moderation looms. Live audio is tougher to moderate than text or images, . . .

For the full story, see:

Heather Somerville. “Social Networks With A Voice Draw Users.” The Wall Street Journal (Friday, Feb 12, 2021): B1 & B4.

(Note: ellipses added.)

(Note: the online version of the story has the date February 11, 2021, and has the title “Clubhouse Wins Over Hollywood, Tech, Even Elon Musk. Are You Next?”)

Evolution of 5G Will Likely Not Favor China

In the passage of the commentary quoted below “RAN equipment” stands for “radio access network equipment” which is key hardware in the latest 5G broadband technology.

(p. C3) Huawei’s first generation of 5G RAN base stations is a modified version of the older 4G infrastructure that yields faster speeds. The ultimate promise of 5G is an ubiquitous network customized to user needs. Trillions of devices and applications—known as the Internet of Things—using 5G technology will offer new solutions for everything from autonomous vehicles to industrial production management to remote surgery. But the drivers of 5G’s evolution will be semiconductors, software systems and cloud computing—areas in which the U.S., not Huawei or any other Chinese company, is the world leader.

Instead of being intimidated by Huawei, U.S. foreign policy makers should recognize the Chinese company’s situation, which is akin to the dominance that IBM enjoyed during the age of mainframe computing. IBM’s massive scale and proprietary standards and software made it hard for competitors to match its offerings. Only in the 1970s and ’80s, when Japan massively subsidized new competitors like NEC, did IBM falter. But the true decline of IBM and its Japanese competitors came with the rise of the internet. The web’s transparent standards enabled many new firms to “plug and play.” Semiconductors, software and desktop computing eventually led to the apps on your smartphone at a fraction of the cost of such functions 30 years ago.

Today, 5G is at a similar moment. A new generation of technological standards for 5G would allow specialist suppliers—like the Microsofts and Intels of the internet era—to compete against Huawei, Ericsson, Nokia and Samsung. Control via the old RAN infrastructure will be diminished by control via cloud computing and software, which plays to a key U.S. strength. Introducing these standards will take concerted action from U.S. firms, along with targeted U.S. government support, such as the adoption of procurement requirements to embody these new rules.

For the full commentary, see:

Peter Cowhey and Susan Shirk. “The Danger of Exaggerating China’s Technological Prowess.” The Wall Street Journal (Saturday, Jan 9, 2021): C3.

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

(Note: the online version of the commentary has the date January 8, 2021, and has the same title as the print version.)

The commentary quoted above is related to the report:

Cowhey, Peter, Chair. “Meeting the China Challenge: A New American Strategy for Technology Competition.” San Diego, CA: UC San Diego School of Global Policy and Strategy, Nov. 16, 2020.

Abramson “Was Too Busy Surfing” to Patent Wireless Networking

I argue that patents enable funding for poor inventors or inventors who aspire to big expensive breakthroughs. If you have independent means (like a professorship in Hawaii) and mainly aspire to surf, you can afford to ignore patents.

(p. B11) Professor Abramson has been called the father of wireless networking. But it was a shared paternity. The project included graduate students and several faculty members, notably Frank Kuo, a former Bell Labs scientist who came to the University of Hawaii in 1966, the same year Professor Abramson arrived.

His deepest expertise was in communication theory, the subject of his Ph.D. thesis at Stanford University. The fundamental design ideas behind ALOHAnet were his. In a 2018 oral history interview for the Computer History Museum, Professor Kuo recalled, “Norm was the theory and I was the implementer, and so we worked together pretty well.”

. . .

That the ALOHAnet technology became so widely used was partly because Professor Abramson and his team had shared it freely and welcomed other scientists to Hawaii.

“We had done no patenting, and ALOHA was published in scientific papers,” putting their work in the public domain, Professor Abramson said in the oral history, adding: “And that was fine with me. I was too busy surfing to worry about that sort of thing.”

. . .

Some of the data-networking techniques developed by Professor Abramson and his Hawaii team proved valuable not only in wireless communications but also in wired networks. One heir to his work was Robert Metcalfe, who in 1973 was a young computer scientist working at Xerox PARC, a Silicon Valley research laboratory that had become a fount of personal computer innovations.

Mr. Metcalfe was working on how to enable personal computers to share data over wired office networks. He had read a 1970 paper, written by Professor Abramson, describing ALOHAnet’s method for transmitting and resending data over a network.

“Norm kindly invited me to spend a month with him at the University of Hawaii to study ALOHAnet,” Mr. Metcalfe recalled in an email.

Mr. Metcalfe and his colleagues at Xerox PARC adopted and tweaked the ALOHAnet technology in creating Ethernet office networking. Later, Mr. Metcalfe founded an Ethernet company, 3Com, which thrived as the personal computer industry grew.

“Norm, thank you,” Mr. Metcalfe concluded in his email. “Aloha!”

For the full obituary, see:

Steve Lohr. “Norman Abramson, a Pioneer Behind Wireless Networking, Is Dead at 88.” The New York Times (Saturday, December 12, 2020): B11.

(Note: ellipses added.)

(Note: the online version of the obituary has the date Dec. 11, 2020, and has the title “Norman Abramson, Pioneer Behind Wireless Networks, Dies at 88.”)