Economics – Page 186 – artdiamondblog.com

“Dematerialization” Means More Goods from Fewer Resources

(p. C4) Economic growth is a form of deflation. If the cost of, say, computing power goes down, then the users of computing power acquire more of it for less–and thus attain a higher standard of living. One thing that makes such deflation possible is dematerialization, the reduction in the quantity of stuff needed to produce a product. An iPhone, for example, weighs 1/100th and costs 1/10th as much as an Osborne Executive computer did in 1982, but it has 150 times the processing speed and 100,000 times the memory.
Dematerialization is occurring with all sorts of products. Banking has shrunk to a handful of electrons moving on a cellphone, as have maps, encyclopedias, cameras, books, card games, music, records and letters–none of which now need to occupy physical space of their own. And it’s happening to food, too. In recent decades, wheat straw has shrunk as grain production has grown, because breeders have persuaded the plant to devote more of its energy to making the thing that we value most. Future dematerialization includes the possibility of synthetic meat–produced in a lab without brains, legs or guts.
Dematerialization is one of the reasons that Peter Diamandis and Steven Kotler give for the future’s being “better than you think” in their new book, “Abundance.”

For the full commentary, see:
MATT RIDLEY. “MIND & MATTER; The Future Is So Bright, it’s Dematerializing.” The Wall Street Journal (Sat., February 25, 2012): C4.

The book mentioned by Ridley is:
Diamandis, Peter H., and Steven Kotler. Abundance: The Future Is Better Than You Think. New York: Free Press, 2012.

“Mind-Your-Own-Business Cowboy Libertarianism”

“Gov. Matt Mead at a meeting in the Capitol in Cheyenne. A portrait of his grandfather Clifford P. Hansen, a former governor, hangs behind him.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A15) If Washington is broken and unable to lead — as millions of Americans believe, according to polls — then who is left to fill the void? Mr. Mead’s answer: States functional enough to soldier on through a time of dystopian crisis should be given the room to run. Whether they are led by conservatives or liberals does not matter so much, he said, as the ability to get things done.

“There certainly have to be national policies, and national rules and regulations — I understand that,” Mr. Mead, 49, a Republican and former prosecutor, said in an interview in his office here. “But I am in part a states’ rights guy because I think we can do so many things better.”
Better or not, Wyoming’s way — always idiosyncratic in the windblown, rural grain that mixes mind-your-own-business cowboy libertarianism and fiscal penny-pinching — is getting its moment in the spotlight.

For the full story, see:

KIRK JOHNSON. “STATEHOUSE JOURNAL; Idiosyncrasy Runs Deep in the Soil of Wyoming.” The New York Times (Fri., November 25, 2011): A15.
(Note: the online version of the story is dated November 24, 2011.)

Benefits of Driverless Cars Justify Changing Liability Laws

“The car is driven by a computer that steers, starts and stops itself. A 360 degrees laser scanner on top of the car, a GPS system and other sensors monitor the surrounding traffic.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p A13) Expect innovations that change the nature of driving more than anything since the end of the hand-crank engine–so long as the legal and regulatory systems don’t strangle new digital technologies before they can roll off the assembly line.
. . .
Mr. Ford outlined a future of what the auto industry calls “semiautonomous driving technology,” meaning increasingly self-driving cars. Over the next few years, cars will automatically be able to maintain safe distances, using networks of sensors, V-to-V (vehicle-to-vehicle) communications and real-time tracking of driving conditions fed into each car’s navigation system.
This will limit the human error that accounts for 90% of accidents. Radar-based cruise control will stop cars from hitting each other, with cars by 2025 driving themselves in tight formations Mr. Ford describes as “platoons,” cutting congestion as the space between cars is reduced safely.
. . .
Over the next decade, cars could finally become true automobiles. Our laws will have to be updated for a new relationship between people and cars, but the benefits will be significant: fewer traffic accidents and fewer gridlocked roads–and, perhaps best of all, young people will be in self-driving cars, not teenager-driven cars.

For the full commentary, see:
L. GORDON CROVITZ. “INFORMATION AGE; The Car of the Future Will Drive You; A truly auto-mobile is coming if liability laws don’t stop it.” The Wall Street Journal (Mon., March 5, 2012): A13.
(Note: ellipses added.)

“A Greek, an Italian and a Spaniard Walk into a Bar”

(p. A15) A joke making the rounds: A Greek, an Italian and a Spaniard walk into a bar. Each orders a drink. Who pays? The German.

For the full commentary, see:
DAVID WESSEL. “CAPITAL; For Europe, a Lehman Moment.” The Wall Street Journal (Thurs., December 1, 2011): A15.

“Being Able to Work on a Great Project”

(p. 133) Recruiting was brisk; the magnet for talent was not the pay, generally mediocre, but rather the allure of taking part in the first fully computer-animated feature film. “Disney gave us a very modest budget [$17.5 million] for Toy Story,” Guggenheim said. “Although that budget went up progressively over time, it didn’t afford for very high salaries, unfortunately. We tried to make the other working conditions better. Just the enthusiasm of being able to work on a great project is as often as not what attracts artists and animators.”

Source:
Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.
(Note: italics and brackets in original.)
(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)

Quantum Computers May Revolutionize Nanotechnology and Drug Design

“Scott Aaronson.” Source of caption and photo: online version of the NYT commentary quoted and cited below.

(p. D5) When people hear that I work on quantum computing — one of the most radical proposals for the future of computation — their first question is usually, “So when can I expect a working quantum computer on my desk?” Often they bring up breathless news reports about commercial quantum computers right around the corner. After I explain the strained relationship between those reports and reality, they ask: “Then when? In 10 years? Twenty?”

Unfortunately, this is sort of like asking Charles Babbage, who drew up the first blueprints for a general-purpose computer in the 1830s, whether his contraption would be hitting store shelves by the 1840s or the 1850s. Could Babbage have foreseen the specific technologies — the vacuum tube and transistor — that would make his vision a reality more than a century later? Today’s quantum computing researchers are in a similar bind. They have a compelling blueprint for a new type of computer, one that could, in seconds, solve certain problems that would probably take eons for today’s fastest supercomputers. But some of the required construction materials don’t yet exist.
. . .
While code-breaking understandably grabs the headlines, it’s the more humdrum application of quantum computers — simulating quantum physics and chemistry — that has the potential to revolutionize fields from nanotechnology to drug design.
. . .
Like fusion power, practical quantum computers are a tantalizing possibility that the 21st century may or may not bring — depending on the jagged course not only of science and technology, but of politics and economics.

For the full commentary, see:
SCOTT AARONSON. “ESSAY; Quantum Computing Promises New Insights, Not Just Supermachines.” The New York Times (Tues., December 6, 2011): D5.
(Note: ellipses added.)
(Note: the online version of the commentary is dated December 5, 2011.)

Innovative Entrepreneurs Need to Be Able to Fire People

(p. 116) Jobs met with the remaining employees soon after the layoffs and brought his reality distortion field with him. “You’re seeing your friends packing their stuff up and pushing it out to their cars,” Phillips remembered, “and yet somehow he had convinced you that that was the greatest possible thing that could happen.”
Within the Silicon Valley community, the talk was not of the way Jobs had handled his former employees at Pixar, but of his having kept Pixar going at all. It seemed to make little sense from a business point of view. For all his bravado about RenderMan, his motivation was likely a matter of status as much as economics. After his rise and fall at Apple, the onus was on him either to create another success story or to leave his peers to conclude that the first one had been a quirk of fate.
“It wasn’t really working,” Smith said of Pixar’s early years. “In fact, that’s being kind of gentle. We should have failed. But it seemed to me that Steve just would not suffer a defeat. He couldn’t sustain it.”

Source:
Price, David A. The Pixar Touch: The Making of a Company. New York: Alfred A. Knopf, 2008.
(Note: italics in original.)
(Note: my strong impression is that the pagination is the same for the 2008 hardback and the 2009 paperback editions, except for part of the epilogue, which is revised and expanded in the paperback. I believe the passage above has the same page number in both editions.)

Lower Grades for Male Spectators When Their Team Wins

(p. C4) Big-time college-football teams may build school spirit, but they also hurt the grades of male students in the bleachers–at least when the teams are winning, a study suggests.

Economists at the University of Oregon tracked the grades of students there (athletes on all teams excluded) from 1999 through 2007, mapping them against the record of the Ducks, whose fortunes varied from season to season.

For the full story, see:
Christopher Shea. “Week in Ideas: Education Dumbed Down by Football.” The Wall Street Journal (Sat., December 24, 2011): C4.

Paper summarized:
Lindo, Jason M., Isaac D. Swensen, and Glen R. Waddell. “Are Big-Time Sports a Threat to Student Achievement?” NBER Working Paper # 17677, December 2011.

Simple Heuristics Can Work Better than Complex Formulas

(p. C4) Most business people and physicians privately admit that many of their decisions are based on intuition rather than on detailed cost-benefit analysis. In public, of course, it’s different. To stand up in court and say you made a decision based on what your thumb or gut told you is to invite damages. So both business people and doctors go to some lengths to suppress or disguise the role that intuition plays in their work.
Prof. Gerd Gigerenzer, the director of the Max Planck Institute for Human Development in Berlin, thinks that instead they should boast about using heuristics. In articles and books over the past five years, Dr. Gigerenzer has developed the startling claim that intuition makes our decisions not just quicker but better.
. . .
The economist Harry Markowitz won the Nobel prize for designing a complex mathematical formula for picking fund managers. Yet when he retired, he himself, like most people, used a simpler heuristic that generally works better: He divided his retirement funds equally among a number of fund managers.
A few years ago, a Michigan hospital saw that doctors, concerned with liability, were sending too many patients with chest pains straight to the coronary-care unit, where they both cost the hospital more and ran higher risks of infection if they were not suffering a heart attack. The hospital introduced a complex logistical model to sift patients more efficiently, but the doctors hated it and went back to defensive decision-making.
As an alternative, Dr. Gigerenzer and his colleagues came up with a “fast-and-frugal” tree that asked the doctors just three sequential yes-no questions about each patient’s electrocardiographs and other data. Compared with both the complex logistical model and the defensive status quo, this heuristic helped the doctors to send more patients to the coronary-care unit who belonged there and fewer who did not.

For the full commentary, see:
By MATT RIDLEY. “MIND & MATTER; All Hail the Hunch–and Damn the Details.” The Wall Street Journal (Sat., December 24, 2011): C4.
(Note: ellipsis added.)

A couple of Gigerenzer’s relevant books are:
Gigerenzer, Gerd. Gut Feelings: The Intelligence of the Unconscious. New York: Penguin Books, 2007.
Gigerenzer, Gerd. Rationality for Mortals: How People Cope with Uncertainty. New York: Oxford University Press, USA, 2008.

Internet Companies Respect the Value of Your Time

“Arvind Jain, a Google engineer, pointed out the loading speed of individual elements of a website on a test application used to check efficiency, at Google offices in Mountain View, Calif.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. A1) Wait a second.

No, that’s too long.
Remember when you were willing to wait a few seconds for a computer to respond to a click on a Web site or a tap on a keyboard? These days, even 400 milliseconds — literally the blink of an eye — is too long, as Google engineers have discovered. That barely perceptible delay causes people to search less.
“Subconsciously, you don’t like to wait,” said Arvind Jain, a Google engineer who is the company’s resident speed maestro. “Every millisecond matters.”
Google and other tech companies are on a new quest for speed, challenging the likes of Mr. Jain to make fast go faster. The reason is that data-hungry smartphones and tablets are creating frustrating digital traffic jams, as people download maps, video clips of sports highlights, news updates or recommendations for nearby restaurants. The competition to be the quickest is fierce.
People will visit a Web site less often if it is slower than a close competitor by more than 250 milliseconds (a millisecond is a thousandth of a second).
“Two hundred fifty milliseconds, either slower or faster, is close to the magic number now for competitive advantage on the Web,” said Harry Shum, a computer scientist and speed specialist at Microsoft.
. . .
(p. A3) The need for speed itself seems to be accelerating. In the early 1960s, the two professors at Dartmouth College who invented the BASIC programming language, John Kemeny and Thomas Kurtz, set up a network in which many students could tap into a single, large computer from keyboard terminals.
“We found,” they observed, “that any response time that averages more than 10 seconds destroys the illusion of having one’s own computer.”
In 2009, a study by Forrester Research found that online shoppers expected pages to load in two seconds or fewer — and at three seconds, a large share abandon the site. Only three years earlier a similar Forrester study found the average expectations for page load times were four seconds or fewer.
The two-second rule is still often cited as a standard for Web commerce sites. Yet experts in human-computer interaction say that rule is outdated. “The old two-second guideline has long been surpassed on the racetrack of Web expectations,” said Eric Horvitz, a scientist at Microsoft’s research labs.

For the full story, see:
STEVE LOHR. “For Impatient Web Users, an Eye Blink Is Just Too Long to Wait.” The New York Times (Thurs., March 1, 2012): A1 & A3.
(Note: ellipsis added.)
(Note: the online version of the article is dated February 29, 2012.)

Source of graph: online version of the NYT article quoted and cited above.

Upper Class “Have Lost the Confidence to Preach What They Practice”

Source of book image:
http://4.bp.blogspot.com/-K9jKNHD0vwE/Tzn4yKgEtII/AAAAAAAAC8Q/2wZqk1Hl1V4/s1600/murray-coming-apart.jpg

(p. 9) The problem, Murray argues, is not that members of the new upper class eat French cheese or vote for Barack Obama. It is that they have lost the confidence to preach what they practice, adopting instead a creed of “ecumenical niceness.” They work, marry and raise children, but they refuse to insist that the rest of the country do so, too. “The belief that being a good American involved behaving in certain kinds of ways, and that the nation itself relied upon a certain kind of people in order to succeed, had begun to fade and has not revived,” Murray writes.

For the full review, see:
NICHOLAS CONFESSORE. “Tramps Like Them; Charles Murray Argues that the White Working Class Is No Longer a Virtuous Silent Majority.” The New York Times Book Review (Sun., February 12, 2012): 9.
(Note: the online version of the review has the date February 10, 2012 and has the title “Tramps Like Them; Charles Murray Examines the White Working Class in ‘Coming Apart’.”)