Economics – Page 204 – artdiamondblog.com

Whittle “Struggled for Years to Get Funding and Time to Pursue His Idea”

“When Britain Ruled The Skies: A De Havilland Comet under construction in Belfast in 1954.” Source of caption and photo: online version of the WSJ review quoted and cited below.

(p. C8) Frank Whittle, the brilliant British military pilot and engineer who began patenting jet designs in 1930, struggled for years to get funding and time to pursue his idea. Even after World War II, when a competing Nazi design showed what fighter jets could achieve in battle, U.S. airlines were slow to see jets’ potential for passenger travel.

It took another Brit, airplane designer Geoffrey de Havilland, to awaken postwar America’s aviation behemoths. While Lockheed and Douglas were still churning out rumbling, low-flying propeller planes, De Havilland’s jet-powered Comet began breaking records in 1952. Only after seeing Comets scorch the stratosphere at 500 miles an hour did Howard Hughes want jetliners for TWA and Juan Trippe get interested for Pan Am.
Among American plane makers, it was a military contractor that had struggled in the prewar passenger-plane market–Boeing–that first took up the jetliner challenge. In retrospect, the outcome seems obvious. The Boeing 707 inspired the term “jet set.” Boeing’s iconic 747 “Jumbo Jet” opened jet-setting to the masses.
But in 1952, that outcome was far from obvious. Mr. Verhovek zeroes in on the mid-1950s, when Comets first seemed to own the world and then started plunging from the sky in pieces. The Comet’s fatal design flaw–the result of an insufficient appreciation of the danger of metal fatigue–holds resonance today as both Boeing and Airbus struggle to master the next generation of jetliner materials, composites of carbon fiber and plastic.
. . .
Although “Jet Age” inevitably centers on technology, Mr. Verhovek wisely focuses as well on the outsize personalities behind world-changing innovations. There’s Mr. De Havilland, a manic depressive who was so dedicated to aviation that he kept going after two of his three sons died testing his planes. Mr. Whittle, we learn, sniffed Benzedrine to stay awake, popped tranquilizers to sleep and shriveled to just 127 pounds while developing the jet engine. And Boeing chief executive Bill Allen, a meticulous lawyer, bet the company on passenger jets when not a single U.S. airline wanted one.

For the full review, see:
DANIEL MICHAELS. “Shrinking the World; How jetliners commercialized air travel–stewardesses and all.” The Wall Street Journal (Sat., October 9, 2010): C8.
(Note: ellipsis added.)

The book under review is:
Verhovek, Sam Howe. Jet Age: The Comet, the 707, and the Race to Shrink the World. New York: Avery, 2010.

Coke’s Patent Law Motivated by Belief that Creative Craftsmen Were Source of Britain’s Prosperity

William Rosen discusses the genesis and significance of the world’s first patent law:

(p. 52) The Statute became law in 1624. The immediate impact was barely noticeable, like a pebble rolling down a gradual slope at the top of a snow-covered mountain. For decades, fewer than six patents were awarded annually, though still more in Britain than anywhere else. It was seventy-five years after the Statute was first drafted, on Monday, July 25, 1698, before an anonymous clerk in the employ of the Great Seal Patent Office on Southampton Row, three blocks from the present–day site of the British Museum, granted patent number 356: Thomas Savery’s “new Invention for Raiseing of Water and occasioning Motion to all Sorts of Mill Work by the lmpellent Force of Fire.”

Both the case law and the legislation under which the application was granted had been written by Edward Coke. Both were imperfect, as indeed was Savery’s own engine. The law was vague enough (and Savery’s grant wide-ranging enough; it essentially covered all ways for “Raiseing of Water” by fire) that Thomas Newcomen was compelled to form a partnership with a man whose machine scarcely resembled his own. But it is not too much to claim that Coke’s pen had as decisive an impact on the evolution of steam power as any of Newcomen’s tools. Though he spent most of his life as something of a sycophant to Elizabeth and James, Coke’s philosophical and temperamental affinity for ordinary Englishmen, particularly the nation’s artisans, compelled him to act, time and again, in their interests even when, as with his advocacy of the 1628 Petition of Right (an inspiration for the U.S. Bill of Rights) it landed him in the King’s prisons. He became the greatest advocate for England’s craftsmen, secure in the belief that they, not her landed gentry or her merchants, were the nation’s source of prosperity. By understanding that it was England’s duty, and–perhaps even more important–in England’s interest, to promote the creative labors of her creative laborers, he anticipated an economic philosophy far more modern than he probably understood, and if he grew rich in the service of the nation, he also, with his creation of the world’s first durable patent law, returned the favor.

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.
(Note: italics in original.)

Neurosurgeons Treating Dogs is Mutually Beneficial to Dogs and Humans

(p. D3) An operation commonly performed to remove brain tumors from the pituitary glands of humans is now available to dogs, thanks to a collaboration between a neurosurgeon and some veterinarians in Los Angeles. And that is turning out to be good for humans.

So far, nine dogs and one cat that otherwise would have died have been treated successfully.
. . .
What Dr. Mamelak has gained from teaching the procedure to veterinarians is access to tissue samples from the treated dogs. That’s significant because Cushing’s afflicts only one in a million humans, making it a difficult disease to study. By contrast, it afflicts about 100,000 dogs a year in the United States. The canine tissue samples are enabling him and his colleagues to develop drugs to one day treat Cushing’s disease in both humans and dogs.
“We have a full loop,” he said. “We’re using a human procedure in animals, and using their tissue to study the disease.”

For the full story, see:
SINDYA N. BHANOO. “Observatory; They Fetch, They Roll Over, They Aid Tumor Research.” The New York Times, Science Times Section (Tues., October 26, 2010): D3.
(Note: ellipsIs added.)
(Note: the online version of the article is dated October 22 (sic), 2010.)

When Inventors Could Get Patents that Were Durable and Enforceable, “the World Started to Change”

(p. 50) . . . Coke, who had . . . been made Lord Chief Justice of’ England, drafted the 1623 “Act concerning Monopolies and Dispensations with penall Lawes and the Forfeyture thereof,” or, as it has become known, the Statute on Monopolies. The Act was designed to promote the interests of artisans, and eliminate all traces of monopolies.

With a single, and critical, exception. Section 6 of the Statute, which forbade every other form of monopoly, carved out one area in which an exclusive franchise could still be granted: Patents could still be awarded to the person who introduced the invention to the realm–to the “first and true inventor.”
This was a very big deal indeed, though not because it represented the first time inventors received patents. The Venetian Republic was offering some form of patent protection by 1471, and in 1593, the Netherlands’ States-General awarded a patent to Mathys Siverts, for a new (and unnamed) navigational instrument. And, of course, Englishmen like John of Utynam had been receiving patents for inventions ever since Henry VI. The difference between Coke’s statute and the customs in place before and elsewhere is that it was a law, with all that implied for its durability and its enforceability. Once only inventors could receive patents, the world started to change.

Source:
Rosen, William. The Most Powerful Idea in the World: A Story of Steam, Industry, and Invention. New York: Random House, 2010.
(Note: italics in original; ellipses added.)

Ice Entrepreneur Gorrie Died Dispirited for Lack of Funds

Source of book image:
http://ecx.images-amazon.com/images/I/51E2APGW55L._SS500_.jpg

(p. 241) In May of the following year [i.e., in May 1851] Gorrie obtained a patent for the first ice-making machine.
. . .
But he was unable to find adequate backing, and in 1855 he died, a broken and dispirited man.

Source:
Burke, James. Connections. New York, NY: Little, Brown, and Co., 1978.
(Note: ellipsis and bracketed information added.)

Some Hispanics Support Arizona Immigration Law

“Shayne Sotelo opposes Arizona’s new immigration law, while her husband, Efrain, supports it.” Source of caption and photo: online version of the NYT article quoted and cited below.

(p. 28) PHOENIX — Arizona’s immigration law, which politicians have debated in the Legislature, lawyers have sparred over in the courtroom and advocates have shouted about on the street, has found its way up a driveway in central Phoenix, through the front door and right onto the Sotelo family’s kitchen table.
. . .
That such a divisive social issue would divide some families is not surprising. But what makes the Sotelos stand out is that they are both Latinos, he a Mexican immigrant who was born in the northern state of Chihuahua and she a descendant of Spanish immigrants who grew up in Colorado.
While polls show that a vast majority of Latinos nationwide side with Mrs. Sotelo in opposing Arizona’s law, that opposition is not uniform. “All Latinos are not opposed to this law — that’s too simplistic,” said Cecilia Menjivar, an Arizona State University sociologist. There are other Mr. Sotelos out there, including an Arizona state legislator, Representative Steve B. Montenegro, a Republican who immigrated from El Salvador and became the only Latino lawmaker to vote in favor of the bill.
. . .
[Mr. Sotelo] thinks his adopted state has been unfairly maligned since the law passed. “I’m a Hispanic, and I don’t have any issues walking the streets,” he said. “They make it seem like the police or sheriff are out there checking everyone’s papers, and that’s not so.”

For the full story, see:
MARC LACEY. “One Family’s Debate Shows Arizona Law Divides Latinos, Too.” The New York Times, First Section (Sun., October 31, 2010): 28.
(Note: ellipses added; bracketed name added to replace “He.”)
(Note: the online version of the article is dated October 30, 2010 and has the title “Arizona Immigration Law Divides Latinos, Too.”)

“The Roiling World of Opera More Appealingly Straightforward than the Roiling World of Academe”

At left, Richard Gill as Harvard economist. At right, Richard “Gill as Frère Laurent, one of his numerous singing roles he preformed at the Met.” Source of part of caption, and of photos: online version of the NYT obituary quoted and cited below.

(p. B19) Richard T. Gill, in all statistical probability the only Harvard economist to sing 86 performances with the Metropolitan Opera, died on Monday in Providence, R.I. He was 82.
. . .
Mr. Gill, a longtime Harvard faculty member who wrote many widely used economics textbooks, did not undertake serious vocal training (which he began as an anti-smoking regimen) until he was nearly 40. At the time, he had seen perhaps 10 operas and rarely listened to classical music.
. . .
In some respects, he later said, Mr. Gill found the roiling world of opera more appealingly straightforward than the roiling world of academe.
“Performing is a great reality test,” he told Newsweek in 1975. “There’s no tenure in it and the feedback is much less complicated than you get in academia. When you go out on that stage, you put your life on the line.”

For the full obituary, see:
MARGALIT FOX. “Richard T. Gill, Economist and Opera Singer, Dies at 82.” The New York Times (Thurs., October 28, 2010): B19.
(Note: ellipses added.)

Steven Johnson Ignores Role of Market in Enabling Innovation

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

Steven Johnson’s The Ghost Map is one of my favorite books. I also enjoyed his The Invention of Air. I have not yet read his Where Good Ideas Come From. Based on the review quoted below, I do not expect to be as enthused about the new book.
I have read elsewhere that Johnson criticizes patents. If all would-be innovators were independently wealthy then innovation without patents might work. But William Rosen in The Most Powerful Idea in the World has recently shown that patents financed a key group of craftsmen who otherwise would not have been able to create the steam engines that powered the industrial revolution.
The issues are difficult and important—I will write more in a month or two after I have had a chance to read Johnson’s book.

(p. A21) Mr. Johnson thinks that the adjacent possible explains why cities foster much more innovation than small towns: Cities abound with serendipitous connections. Industries, he says, may tend to cluster for the same reason. A lone company in the middle of nowhere has only the mental resources of its employees to fall back on. When there are hundreds of companies around, with workers more likely to change jobs, ideas can cross-fertilize.

The author outlines other factors that make innovation work: the tolerance of failure, as in Thomas Edison’s inexorable process-of-elimination approach to finding a workable light-bulb filament; the way that ideas from one field can be transformed in another; and the power of information platforms to connect disparate data and research. “Where Good Ideas Come From” is filled with fascinating, if sometimes tangential, anecdotes from the history of entrepreneurship and scientific discovery. The result is that the book often seems less a grand theory of innovation than a collection of stories and theories about creativity that Steven Johnson happens to find interesting.
It turns out that Mr. Johnson himself has a big idea, but it’s not a particularly incisive one: He proposes that competition and market forces are less important to innovation than openness and inspiration. The book includes a list of history’s most important innovations and divides them along two axes: whether the inventor was working alone or in a network; and whether he was working for a market reward or for some other reason. Market-led innovations, it turns out, are in the minority.

For the full review, see:
MEGAN MCARDLE. “Serendipitous Connections; Innovation occurs when ideas from different people bang against each other.” The Wall Street Journal (Tues., OCTOBER 5, 2010): A21.

Increase in Equality of Happiness Between Blacks and Whites

(p. B1) White Americans don’t report being any more satisfied with their lives than they did in the 1970s, various surveys show. Black Americans do, and significantly so.

Betsey Stevenson and Justin Wolfers, the University of Pennsylvania economists who did the study, point out that self-reported measures of happiness usually shift at a glacial pace. The share of whites, for example, telling pollsters in recent years that they are ”not too happy” — as opposed to ”pretty happy” or ”very happy” — has been about 10 percent. It was also 10 percent in the 1970s.
Yet the share of blacks saying they are not too happy has dropped noticeably, to about 20 (p. B12) percent in surveys over the last decade, from 24 percent in the 1970s. All in all, Mr. Wolfers calls the changes to blacks’ answers, ”one of the most dramatic gains in the happiness data that you’ll see.”

For the full commentary, see:
DAVID LEONHARDT. “ECONOMIC SCENE; For Blacks, Progress In Happiness.” The New York Times (Weds., September 15, 2010): B1 & B12.

The working paper referred to in the commentary is:
Stevenson, Betsey, and Justin Wolfers. “Subjective and Objective Indicators of Racial Progress.” May 12, 2010.

If You Think Life Was Better in the Past, “Say One Single Word: Dentistry”

(p. 2) In general, life is better than it ever has been, and if you think that, in the past, there was some golden age of pleasure and plenty to which you would, if you were able, transport yourself, let me say one single word: “dentistry.”

Source:
O’Rourke, P. J. All the Trouble in the World: The Lighter Side of Overpopulation, Famine, Ecological Disaster, Ethnic Hatred, Plague, and Poverty. paperback ed. New York: Atlantic Monthly Press, 1994.

Chinese Government Fines BYD and Seizes BYD Factory Site

“BYD Chairman Wang Chuanfu, left, at a celebration last month in Shenzhen city with Berkshire Hathaway’s Charles Munger, center, and Warren Buffett.” Source of caption and photo: online version of the WSJ article quoted and cited below.

(p. B3) BEIJING–China’s central government ordered BYD Co. to surrender land in a zoning dispute, a decision that is likely to slow the Chinese battery and auto maker’s push to expand in the nation’s growing auto market.

China’s Ministry of Land and Resources also hit BYD with a 2.95 million yuan ($442,000) fine, the ministry said on its website Wednesday. The ministry confiscated 121 acres of land in the central Chinese city of Xian, where BYD executives said the company has been building a car assembly plant. BYD had hoped to start production at the complex as early as next year.
The ministry said zoning for the land was “illegally adjusted” to industrial use from agricultural use but didn’t elaborate. The decision comes as some government officials have shown concern about excess capacity in the auto industry.
. . .
Mid American Energy Holdings Co., a unit of Warren Buffett’s Berkshire Hathaway Inc., owns 10% of BYD.

For the full story, see:
NORIHIKO SHIROUZU. “China Deals a Setback to BYD.” The Wall Street Journal (Thurs., OCTOBER 14, 2010): B3.
(Note: ellipsis added.)
(Note: the online version of the article has the title “Beijing Halts Construction of BYD Auto Plant.”)