Category: Economics

Charismatic Prophets of Technological and Organizational Innovation

(p. C7) Walter Isaacson’s last book was the best-selling biography of Steve Jobs –the charismatic business genius of Apple Computer and one of the beatified icons of modern technology and entrepreneurship. Mr. Isaacson’s fine new book, “The Innovators,” is a serial biography of the large number of ingenious scientists and engineers who, you might say, led up to Jobs and his Apple co-founder Steve Wozniak –“forerunners” who, over the past century or so, produced the transistor, the microchip and microprocessor, the programmable computer and its software, the personal computer, and the graphic interface.
. . .
Mr. Isaacson’s heart is with the engineers: the wizards of coding, the artists in electrons, silicon, copper, networks and mice. But “The Innovators” also gives space to the revolutionary work done with men as well as mice: experiments in the organizational forms in which creativity might be encouraged and expressed; in the aesthetic design of personal computers, phones and graphical fonts; in predicting and creating what consumers did not yet know they wanted; and in the advertising and marketing campaigns that make them want those things. Not the least of the revolutionaries’ inventions was their own role as our culture’s charismatic prophets, uniquely positioned to pronounce on which way history was going and then to assemble the capital, the motivated workers and the cheering audiences that helped them make it go that way.

For the full review, see:
ALEXANDRA KIMBALL. “The Best Way to Predict the Future.” The Wall Street Journal (Sat., Oct. 4, 2014): C9.
(Note: ellipsis added. The first word of the title in the print version was “They.” Above, I have corrected the typo.)
(Note: the online version of the review has the date Oct. 3, 2014, and has the title “Book Review: ‘The Innovators’ by Walter Isaacson.”)

The book under review is:
Isaacson, Walter. The Innovators: How a Group of Inventors, Hackers, Geniuses, and Geeks Created the Digital Revolution. New York: Simon & Schuster, 2014.

The Washing Machine Is a Great Bulwark of Women’s Liberation

(p. C9) If the past is foreign country because they do things differently there, we’re lucky to have such a knowledgeable cicerone as Ruth Goodman.
. . .
“I like to put time and effort into studying the objects and tools that people made and used, and I like to try methods and approaches out for myself,” she writes in “How to Be a Victorian.” This sounds straightforward enough but hardly hints at the leaps of imaginative empathy the author is so good at: When she visits a museum to examine a Victorian farm worker’s wool coat, for example, she sees both the husband “who sweated and left stains on his clothes, who physically felt the cold” and the wife who “spent hours carefully and neatly sewing up the tear.”
Ms. Goodman observes that the wife’s technique for repair matches one taught in working-class textbooks, a fact that raises questions in her mind. “How widespread was such needlework education, and was it likely to have been women who carried out such repairs?” she wonders. “If it takes me over an hour to do the work, would my Victorian forebears have been quicker? When would they have fitted such a chore into their day?” That little rip in the man’s coat, it turns out, is like a tiny window into “the great sweeps of political and economic life” that in turn “bring us back to the personal.” Trade disruptions in textiles during the American Civil War, for instance, “pushed up the price of the labourer’s coat, making that repair more necessary.”
. . .
Many, many things about daily life are far better now: “My own historical laundry experiences have led me to see the powered washing machine as one of the great bulwarks of women’s liberation, an invention that can sit alongside contraception and the vote.”

For the full review, see:
ALEXANDRA KIMBALL. “Living Like a Queen; You might get used to using soot to brush your teeth. But steel corsets? Never.” The Wall Street Journal (Sat., Oct. 4, 2014): C9.
(Note: ellipses added.)
(Note: the online version of the review has the date Oct. 3, 2014, and has the title “Book Review: ‘How to Be a Victorian” by Ruth Goodman; You might get used to using soot to brush your teeth. But steel corsets? Never.”)

The book under review is:
Goodman, Ruth. How to Be a Victorian: A Dawn-to-Dusk Guide to Victorian Life. New York: Liveright Publishing Corporation, 2014.

Most Venture Capital Firms Do Not Back “Ambitious, Long-Shot Projects”

(p. B4) Successful venture capitalism is about managing risk, so partners at most VC firms invest in businesses they think will become viable, or at least worthy of an acquisition, in the shortest time possible.
That doesn’t leave much appetite among VCs for startups working on ambitious, long-shot projects, the sort that require basic research, and that’s a shame.

For the full commentary, see:
CHRISTOPHER MIMS. “KEYWORDS; Our Last Great Hope: Venture Capital.” The Wall Street Journal (Tues., Oct. 21, 2014): B1 & B4.
(Note: italics in original.)
(Note: the online version of the commentary has the date Oct. 20, 2014, and the title “KEYWORDS; Humanity’s Last Great Hope: Venture Capitalists.”)

“What Valuable Company Is Nobody Building?”

(p. A15) Peter Thiel is larger than life even for a Silicon Valley billionaire. He co-founded PayPal, was the first investor in Facebook , and funded LinkedIn, Spotify, SpaceX and Airbnb. Now he has written a much-needed explanation of the information economy, masquerading as a breezy how-to book for entrepreneurs. “Zero to One: Notes on Startups, or How to Build the Future” is based on lectures Mr. Thiel gave at Stanford.
He hopes more entrepreneurs will focus on big ideas for health, energy and transportation; his venture firm’s tag line is “They promised us flying cars and all we got was 140 characters,” a reference to Twitter. His explanation of innovation is also a primer on how free markets work. He encourages entrepreneurs to ask: “What valuable company is nobody building?”

For the full commentary, see:
L. GORDON CROVITZ. “INFORMATION AGE; Three Cheers for ‘Creative Monopolies’.” The Wall Street Journal (Mon., Oct. 13, 2014): A15.
(Note: the online version of the commentary has the date Oct. 12, 2014.)

The book praised in the passage quoted above is:
Thiel, Peter, and Blake Masters. Zero to One: Notes on Startups, or How to Build the Future. New York: Crown Business, 2014.

Economic Hope Cures Terrorism

(p. C1) As the U.S. moves into a new theater of the war on terror, it will miss its best chance to beat back Islamic State and other radical groups in the Middle East if it doesn’t deploy a crucial but little-used weapon: an aggressive agenda for economic empowerment. Right now, all we hear about are airstrikes and military maneuvers–which is to be expected when facing down thugs bent on mayhem and destruction.
But if the goal is not only to degrade what President Barack Obama rightly calls Islamic State’s “network of death” but to make it impossible for radical leaders to recruit terrorists in the first place, the West must learn a simple lesson: Economic hope is the only way to win the battle for the constituencies on which terrorist groups feed.
I know something about this. A generation ago, much of Latin America was in turmoil. By 1990, a Marxist-Leninist terrorist organization called Sendero Luminoso, or Shining Path, had seized control of most of my home country, Peru, where I served as the president’s principal adviser. Fashionable opinion held that the people rebelling were the impoverished or underemployed wage slaves of Latin America, that capitalism couldn’t work outside the West and that Latin cultures didn’t really understand market economics.
The conventional wisdom proved to be wrong, however. Reforms in Peru gave indigenous entrepreneurs and farmers control over their assets and a new, more accessible legal framework in which to run businesses, make contracts and borrow–spurring an unprecedented rise in living standards.

For the full commentary, see:
HERNANDO DE SOTO. “The Capitalist Cure for Terrorism; Military might alone won’t defeat Islamic State and its ilk. The U.S. needs to promote economic empowerment and entrepreneurship to give the Arab world another path.” The Wall Street Journal (Sat., Oct. 11, 2014): C1-C2.
(Note: italics in original.)
(Note: the online version of the commentary has the date Oct. 10, 2014, and the title “The Capitalist Cure for Terrorism; Military might alone won’t defeat Islamic State and its ilk. The U.S. needs to promote economic empowerment.”)

Soto’s masterpiece is:
Soto, Hernando de. The Other Path: The Invisible Revolution in the Third World. New York: Basic Books, 1989.

Churchill Was More than an Epiphenomenon

(p. C2) It is easy to see why so many historians and historiographers have taken the Tolstoyan line, that the story of humanity isn’t the story of great people and shining deeds. It has been fashionable to say that those so-called great men and women are just epiphenomena, meretricious bubbles on the vast tides of social history. The real story, on this view, is about deep economic forces, technological advances, changes in the price of sorghum, the overwhelming weight of an infinite number of mundane human actions.
The story of Winston Churchill is a pretty withering retort to all that malarkey.

For the full essay, see:
BORIS JOHNSON. “He Still Stands Alone.” The Wall Street Journal (Sat., Nov. 8, 2014): C1-C2.
(Note: the online version of the essay has the date Nov. 7, 2014, and has the title “Churchill Still Stands Alone.”)

The passage quoted above is related to Johnson’s book:
Johnson, Boris. The Churchill Factor: How One Man Made History. New York: Riverhead, 2014.

Consumers Cannot Count on Regulators for Safety

(p. A1) WASHINGTON — The nation’s top auto regulator faced withering criticism across Capitol Hill on Tuesday over its failure to identify a deadly defect in General Motors cars — even as its top official tried again and again to shift the blame back to the automaker.
Hours after a House committee released a scathing report about the agency’s yearslong failure to spot the ignition-stalling defect that has now been linked to 19 deaths, a Senate subcommittee hearing turned angry and tense. Lawmakers from both parties accused the agency, the National Highway Traffic Safety Administration, of overlooking evidence that could have saved lives and of deferring to the auto industry rather than standing up to it.
The agency was “more interested in singing ‘Kumbaya’ with the manufacturers than being a cop on the beat,” said Senator Claire McCaskill, the subcommittee’s chairwoman, in sharp questioning reminiscent of her interrogation of G.M.’s chief executive, Mary T. Barra, in a hearing before the same panel in the spring.
. . .
(p. B2) “You want to obfuscate responsibility, rather than take responsibility,” Ms. McCaskill, a Missouri Democrat, said, her voice rising. “We’ve all said shame on G.M.” She added, “You’ve got to take some responsibility that this isn’t being handled correctly.”
. . .
Watching from a seat just behind Mr. Friedman [deputy administrator of the N.H.T.S.A.] was Laura Christian, the birth mother of Amber Rose, a teenager who was killed in 2005 when her Cobalt ran off the road, into a tree, and the air bags did not deploy.
As Mr. Friedman continued to speak, Ms. Christian said she could feel herself getting flushed and increasingly upset over the agency’s lack of remorse.
“It was extremely frustrating to hear David Friedman go on about how his agency was this wonderful thing,” she said. “All along they missed the glaringly obviously defects.”

For the full story, see:
HILARY STOUT and AARON M. KESSLER. “Congress Castigates Auto Regulator Over a Deadly G.M. Defect.” The New York Times (Weds., SEPT. 17, 2014): A1 & B2.
(Note: ellipses, and bracketed words, added.)
(Note: the online version of the story has the date SEPT. 16, 2014, and has the title “Senators Take Auto Agency to Task Over G.M. Recall.” In the Midwest edition that I receive, this article started on p. A1; according to the indexes, and the online edition, in the New York edition, the article started on p. B1.)

Lippmann Attacked FDR’s Socialist National Industrial Recovery Act

(p. A13) . . . Duke economic historian Craufurd D. Goodwin employs the writings of the once-famous newspaper columnist Walter Lippmann to describe the fervid U.S. debates that began with the 1929 stock-market crash.
. . .
Lippmann established his intellectual credentials in the 1920s, writing several well-received books. They included “Public Opinion,” which excoriated the press for sloppy coverage of government policies and actions. The book is often seen as a call for top-down rule by experts, but Mr. Goodwin argues that Lippmann had something else in mind–that he was eager for expert opinion and “reasoned study” to be widely disseminated so that self-government would be more fully informed and the citizenry less easily manipulated.
. . .
At first, Lippmann embraced the Keynesian argument that government could ameliorate downswings in business cycles through deficit spending, but he later had second thoughts about economic engineering and became more attuned to the free-market ideas of Friedrich Hayek, whom he knew and consulted.   . . .    Lippmann attacked as ill-conceived the most ambitious New Deal brainstorm, the 1933 National Industrial Recovery Act, which attempted to organize all business and industry into cartels to boost prices.

For the full review, see:
GEORGE MELLOAN. “BOOKSHELF; The Umpire of American Public Debate; Certain that a return of investment confidence would restore prosperity, Lippmann criticized those that blamed Wall Street for the malaise.” The Wall Street Journal (Tues., Oct. 14, 2014): A13.
(Note: ellipses added.)
(Note: the online version of the review has the date Oct. 13, 2014, and has the title “BOOKSHELF; Walter Lippmann: Umpire of American Public Debate; Certain that a return of investment confidence would restore prosperity, Lippmann criticized those that blamed Wall Street for the malaise.”)

The book under review, is:
Goodwin, Craufurd D. Walter Lippmann: Public Economist. Cambridge, MA: Harvard University Press, 2014.

Esther Dyson Sees a Lot of Silicon Valley as Just Motivated to Make Money

(p. C11) The U.S. Commerce Department recently said that it plans to relinquish its oversight of Icann, handing that task to an international body of some kind. The details are still being worked out, but Ms. Dyson hopes that governments won’t be the new regulators. . . .
For now, she thinks there are many Silicon Valley Internet companies with inflated market values. “There is the desire to make money that motivates a lot of that in Silicon Valley, and yes, I think it’s totally a bubble,” she says. “It’s not like the last bubble in that there are a lot of real companies there [now], but there are a lot of unreal companies and…many of them will disappear.” She thinks too many people are starting similar companies. “You have people being CEOs of teeny little things who would be much better as marketing managers of someone else’s company,” she says.
And though her work often takes her to California, she’s happy to stay in New York. These days, she finds Silicon Valley “very fashionable,” she says, “and I don’t really like fashion.”

For the full interview, see:
ALEXANDRA WOLFE, interviewer. “WEEKEND CONFIDENTIAL; Esther Dyson’s Healthy Investments; The investor is hoping to produce better health through technology with a new nonprofit.” The Wall Street Journal (Sat., May 3, 2014): C11.
(Note: first ellipsis added; second ellipsis in original.)
(Note: the online version of the interview has the date May 2, 2014, and has the title “WEEKEND CONFIDENTIAL; Esther Dyson’s Healthy Investments; The investor is hoping to produce better health through technology with a new nonprofit.”)

Einthoven Tried to Share Prize Money with His Assistant

(p. 194) One event that occurred after Einthoven received the Nobel Prize in Physiology or Medicine in 1924 speaks volumes about his integrity. In the construction of his string galvanometer and laboratory experiments over many years, Einthoven was rather clumsy with his hands and relied very much on the collaboration of his chief assistant K. F. L. van der Woerdt. Years later, when he received the $40,000 in Nobel Prize money, Einthoven wished to share it with his assistant but soon learned that the man had died. He sought out the man’s two surviving sisters, who were living in genteel poverty in a kind of almshouse. He journeyed there by train and gave them half of the award money.

Source:
Meyers, Morton A. Happy Accidents: Serendipity in Modern Medical Breakthroughs. New York: Arcade Publishing, 2007.

When Pirates Were More Enlightened than Most Governments

(p. A11) While slaves were oppressed by the social order, Mr. Rediker argues, pirates on the high seas were remaking it. An estimated 2,500 buccaneers prowled the Atlantic and the Caribbean at any given time during the first half of the 18th century. The great majority were former merchant seamen, or deserters from the Royal Navy. They were aged between 14 and 50, though most were in their 20s. Married men were not welcome for fear that they might desert and compromise an entire pirate crew.
Here, Mr. Rediker suggests, egalitarianism was being practiced at sea half a century before it became a catch-cry of the French Revolution. And, he adds, there was a striking uniformity of rules and customs on all pirate vessels. At the start of each voyage, or whenever a new captain was chosen, a wide-ranging social compact would be drawn up listing rights and responsibilities. The articles would allocate authority, deal with the distribution of plunder, and set the rules of punishment to enforce discipline. Booty was usually allocated according to skills and duties–the captain might be given two shares; gunners, boatswains, mates, carpenters and medics one and a half shares; and the rest of the crew a share each. In times of battle, the crew gave the captain unquestioned authority whether fighting, chasing or being chased. What perhaps set the pirates most apart from their former colleagues in the Merchant Navy and the Royal Navy was punishment. The lash, for example, was rarely used. Fighting was not allowed on board and disputes between crew had to be settled ashore by sword or pistol. This brought an unusual degree of harmony to the pirate ship. Incorrigible trouble makers were unceremoniously dumped and left behind on deserted islands. Vengeance was also freely taken upon captives, and woe betide any ship’s captain who had tyrannized and abused his crew.

For the full review, see:
MICHAEL FATHERS. “BOOKSHELF; Motley Crew at the Helm; Egalitarianism was being acted out at sea by pirates half a century before it became a catch-cry of the French Revolution. The Wall Street Journal (Fri., Aug. 22, 2014): A11.
(Note: ellipsis in original.)
(Note: the online version of the review has the date Aug. 21, 2014, and has the title “BOOKSHELF; Book Review: ‘Outlaws of the Atlantic’ by Marcus Rediker; Egalitarianism was being acted out at sea by pirates half a century before it became a catch-cry of the French Revolution.”)

Book under review:
Rediker, Marcus. Outlaws of the Atlantic: Sailors, Pirates, and Motley Crews in the Age of Sail. Boston, MA: Beacon Press, 2014.