Economics – Page 58 – artdiamondblog.com

Build a Better Chalk and a South Korean Will Beat a Path to Your Door

A cliché usually credited to Emerson says that ‘if you build a better mousetrap, the world will beat a path to your door.’ Many, including Peter Thiel in his co-authored Zero to One, argue that the inventor of the better mousetrap needs some marketing to let the world know that her mousetrap is better. I think Thiel is mainly right, but the story quoted below suggests that sometimes the cliché may be true.

(p. A12) The bright-white sticks drop one by one into the whir and clatter of a weatherworn piece of machinery, where they are stamped with the most celebrated name in chalk: Hagoromo.

. . .

Of the thick grayish mass that emerges, four ingredients are known: calcium carbonate, clay, glue and oyster shells. The other three are a secret. In a video posted to YouTube about the chalk, an American fan offers a guess as to one of them: angel tears.

Hagoromo chalk is a cult favorite of elite academics, artists and others around the world who praise it for its silky feel, vibrant colors, scant dust and nearly unbreakable quality. Mathematicians in particular are prone to waxing poetic about it, and buying it in bulk. The YouTube video, produced by Great Big Story, has been viewed more than 18 million times.

Despite its renown, Hagoromo is still produced on a relatively small scale, using custom-made equipment, much of it run by two laborers who are identical twins — a throwback in a high-tech era where interactive displays are replacing chalkboards.

. . .

In 2014, Takayasu Watanabe, the grandson of the company’s founder, announced that Hagoromo would halt production, partly because of the industry’s declining fortunes and partly because of his own ill health. . . .

As Mr. Watanabe was preparing to shut it down, he received a visit from Shin Hyeong-seok, who had been importing the chalk to South Korea for nearly 10 years. Mr. Shin sold the chalk through the company he started, Sejong Mall, named after King Sejong the Great, who in the 15th century created Hangeul, the Korean writing system.

Mr. Shin had discovered the chalk years before in Japan while investigating the workings of cram schools. . . .

“I went into the teachers’ lounge and remember being mesmerized by the fluorescent-colored chalks,” he said. “And when I started writing with one, I could not put it down.”

On his trip to see Mr. Watanabe, Mr. Shin presented what he called a “crazy idea.” He, a teacher and importer with no manufacturing experience, would take over production of the chalk in South Korea. Mr. Watanabe laughed.

But Mr. Shin kept pressing. “My pitch to him was that there are many things in the world that will disappear one day, but the best-quality item should be the last to do so,” Mr. Shin said.

. . .

Takako Iwata, the second of Mr. Watanabe’s three daughters, who served as interpreter for Mr. Shin and her father, . . . said she wasn’t exactly sure how Hagoromo had become so beloved outside Japan. “I guess people who came to Japan just kept on bringing the chalk back to their home countries,” she said. “When my father was still running the company, he did not know about this huge following.”

That changed a bit, though, in his company’s final months, when he received a flood of orders, including from American professors who hoped to buy supplies large enough to last 10 years or more.

David Eisenbud, the director of the Mathematical Sciences Research Institute at the University of California, Berkeley, said he had bought enough to last the rest of his life.

Dr. Eisenbud is a key figure in the chalk’s popularization in the United States. He was first introduced to it years ago during a visit to the University of Tokyo. “Everything about the chalk was exquisite,” he said. “I thought, ‘Chalk is chalk,’ but I was wrong.”

He later persuaded an acquaintance to import the chalk into the United States. (Mr. Shin now sells it to American buyers through Amazon.)

Yujiro Kawamata, a Japanese mathematician who introduced Hagoromo to Dr. Eisenbud, marveled at the turn of events.

“I happened to tell Eisenbud about the chalk, which was just a tool that was a part of my everyday life, and now the whole world knows about it,” Dr. Kawamata said.

For the full story, see:

Hikari Hida and Jean Chung. “How a Beloved Chalk Bridged a Bitter Divide to Survive.” The New York Times (Wednesday, November 18, 2020): A12.

(Note: ellipses added.)

(Note: the online version of the story has the date Nov. 17, 2020, and has the title “A Ride on the Assembly Line With the World’s Most Famous Chalk.”)

PayPal entrepreneur Peter Thiel’s co-authored book mentioned above is:

Thiel, Peter, and Blake Masters. Zero to One: Notes on Startups, or How to Build the Future. New York: Crown Business, 2014.

A.I. Lacks Common Sense: “A Broad and Often Unspoken Understanding of How the World Works”

(p. A15) Journalists like to punctuate stories about the risks of artificial intelligence—particularly long-term, humanity-threatening risks—with images of the Terminator. The idea is that unchecked robots will rise up and kill us all.

. . .

Melanie Mitchell, a computer scientist at Portland State University, is in the too-soon-to-worry camp. “My own opinion is that too much attention has been given to the risks from superintelligent AI,” she writes in “Artificial Intelligence,” “and far too little to deep learning’s lack of reliability and transparency and its vulnerability to attacks.”

. . .

Object-recognition software, for instance, can track pedestrians, detect tumors and sort photo libraries. But it doesn’t understand the content the way we do. Its obtuseness becomes sharply apparent in so-called adversarial attacks, in which only minimal changes to an image (or a sound or text file) can fool an AI into misidentifying it. Such attacks even transfer to the real world. A stop sign with a few innocuous stickers becomes a speed-limit sign.

The researchers first elucidating such vulnerabilities in neural networks—machine-learning programs inspired by the brain’s wiring—called them an “intriguing property.” Ms. Mitchell writes, “Calling this an ‘intriguing property’ of neural networks is a little like calling a hole in the hull of a fancy cruise liner a ‘thought-provoking facet’ of the ship.”

Ultimately, these systems lack common sense, a broad and often unspoken understanding of how the world works. Common sense, in turn, might require embodied experience in the world, plus the ability to abstract from it and form analogies. Much of Ms. Mitchell’s academic work concerns helping AI form analogies. It hasn’t progressed far. (No fault of hers.)

For the full review, see:

Matthew Hutson. “BOOKSHELF; Learn Like a Machine.” The Wall Street Journal (Wednesday, November 20, 2019): A15.

(Note: ellipses added.)

(Note: the online version of the review has the date November 19, 2019, and has the title “BOOKSHELF; ‘Human Compatible’ and ‘Artificial Intelligence’ Review: Learn Like a Machine.”)

The book under review is:

Mitchell, Melanie. Artificial Intelligence: A Guide for Thinking Humans. New York: Farrar, Straus, and Giroux, 2019.

“When I Knew More Thank Hayek” AIER YouTube Video

The American Institute for Economic Research (AIER) premiered on Mon., Jan. 4, 2020, a neat YouTube video they created based on a shortened version of my article “When I Knew More Than Hayek.” [Hayek, Covid & The Use of Knowledge in Society | Kate Wand via @youtube] #Hayek #localknowledge

To Force Gaffney to Retire at Age 65, They Only Let Him Teach Intro Courses; So He Taught Intro Courses Until Age 89

(p. B11) Professor Gaffney died at 96 on July 16 at Loma Linda University Medical Center, not far from the University of California, Riverside, where he taught economics for 37 years. . . .

Taxing land is less intrusive than taxing income or estates, Professor Gaffney taught, drawing on Henry George’s influential 1879 book, “Progress and Poverty: An Inquiry Into the Cause of Industrial Depressions and of Increase of Want With Increase of Wealth: The Remedy,” reportedly the best-selling popular book in America in the 1890s.

. . .

The idea that land creates a natural economic surplus that can be taxed with minimal economic damage has drawn supporters from across the political spectrum.

Winston Churchill declared in 1910 that the “land monopoly is not the only monopoly, but it is by far the greatest of monopolies — it is a perpetual monopoly, and it is the mother of all other forms of monopoly.”

The economist Milton Friedman, another conservative, called the land-value tax “the least bad tax.”

And Tony Blair, the former British prime minister and Labour Party leader, urged a land-only tax as a “fairer and more rational system of property taxation.”

The idea has never been widely embraced by lawmakers, though. Only about 20 communities in Pennsylvania impose a version of the land-value tax concept. It has also been applied in parts of Australia and Taiwan.

. . .

Mason Gaffney enrolled at Harvard University in 1941. Drafted in 1944, he was commissioned a lieutenant in the Army Air Forces and served in radio communications in New Guinea and the Philippines until 1946.

Returning to civilian life, he transferred to Reed College in Oregon to complete his bachelor’s degree, unhappy that his professors at Harvard knew little of Henry George’s work. He then moved to the University of California, Berkeley, to get his doctorate.

. . .

He started teaching at the University of California, Riverside, in 1976. He once said in an interview that as he was about to turn 65 he was pressured to retire. He refused, he said, and was told he had to teach Econ 101.

“I was delighted,” he said. “I got a chance to indoctrinate students about economic theories so they weren’t stunted by the standard neoclassical texts.”

He retired in 2013, at 89.

For the full obituary, see:

David Cay Johnston. “Mason Gaffney, 96, Economics Professor Who Argued for Taxing Only Land, Not Buildings.” The New York Times (Thursday, July 30, 2020): B11.

(Note: ellipses added.)

(Note: the online version of the obituary has the date July 26, and has the title “Mason Gaffney, Who Argued for Taxing Only Land, Dies at 96.”)

The influential book by Henry George mentioned above is:

George, Henry. Progress and Poverty. 5th ed. New York: D. Appleton and Company, 1881.

U.A.W. Spends $60,000 on Leaders’ Cigar Expenses

(p. B1) On a single day in December 2015, Gary Jones, who resigned last month as president of the United Automobile Workers, spent more than $13,000 of the union’s money at a cigar store in Arizona. His purchases included a dozen $268 boxes of Ashton Double Magnums and a dozen boxes of Ashton Monarchs at $274.50 each. “Hi Gary, Thank you & Happy New Year,” read a handwritten note from the store.

The purchases, documented by a federal complaint filed against a union leader in September, were part of more than $60,000 in cigars and cigar paraphernalia that Mr. Jones and other U.A.W. officials expensed to the union between 2014 and 2018. And the cigar purchases were in turn just a small portion of the roughly $1 million in union money that court filings say U.A.W. officials spent on golf outings, four-figure din-(p. B2)ners and monthslong villa rentals during regular retreats in Palm Springs, Calif., and elsewhere.

The scandal comes on top of an investigation into company and union officials’ improper use of millions of dollars from a joint Fiat Chrysler-U.A.W. training center. Mr. Jones’s predecessor as president, Dennis Williams, is accused of encouraging the use of Fiat Chrysler funds meant for worker education as a way to pay for the extravagant spending in Palm Springs and other places.

For the full story, see:

Noam Scheiber and Neal E. Boudette. “Living the High Life On the Workers’ Dime.” The New York Times (Thursday, December 26, 2019): B1-B2.

(Note: the online version of the story has the same date as the print version, and has the title “Behind a U.A.W. Crisis: Lavish Meals and Luxury Villas.”)

Piketty Stands Up to Chinese Communist Censorship

(p. A11) PARIS — With his in-depth critique of Western capitalism, detailed in a 700-page book that enjoyed record sales in 2014, France’s rock-star economist Thomas Piketty was well regarded by Chinese leaders.

That was until he turned his attention to China.

Mr. Piketty said Monday that his follow-up book, “Capital and Ideology,” which broadens his study of the rise of economic inequality to non-Western countries such as China and India, is unlikely to be published in mainland China because he refused requests from Chinese publishers to cut parts of it.

“For the time being, there will be no book in China,” said Mr. Piketty, one of the most high-profile academics to stand up to China, calling the requests “ridiculous” and equating them with censorship.

“They shouldn’t be afraid of a book like that, it’s a sign of weakness,” Mr. Piketty said in a phone interview.

. . .

The requested cuts include parts that point out the “extremely rapid rise of inequality” in China, to levels comparable to those seen in the United States. Others highlight issues like China’s lack of an inheritance tax, which Mr. Piketty says results in a significant concentration of wealth.

“It is truly paradoxical that a country led by a Communist Party, which proclaims its adherence to ‘socialism with Chinese characteristics,’ could make such a choice,” Mr. Piketty wrote in a paragraph that he said Citic Press asked to be cut.

. . .

Among the requested cuts were sections critical of the Chinese government, which Mr. Piketty wrote, “has yet to demonstrate its superiority over Western electoral democracy.”

The appearance of Mr. Piketty’s book comes as China has been confronted with an unprecedented economic slowdown. A trade war with the United States and the effects of the coronavirus crisis have brought China’s nearly half-century-long run of growth to an end.

Mr. Piketty said that censoring his book “seems to illustrate the growing nervousness of the Chinese regime and their refusal of an open debate on the different economic and political systems.”

. . .

“If they’re afraid of a book like this, what are they going to do with the demonstrators in Hong Kong or one day in Beijing or Shanghai, as it will eventually happen?” Mr. Piketty asked.

For the full story, see:

Constant Méheut. “Rejecting Censorship of His Book, French Economist Stands Up to China.” The New York Times (Tuesday, September 1, 2020): A11.

(Note: ellipses added.)

(Note: the online version of the story has the date August 31, 2020, and has the title “Rejecting Censorship of His Book, a French Star Economist Stands Up to China.”)

The book Thomas Piketty is defending against communist Chinese censorship is:

Piketty, Thomas. Capital and Ideology. Translated by Arthur Goldhammer. Cambridge, MA: Belknap Press, 2020.

Epidemic Showed Limits of China’s “Government-Driven, Top-Down Solutions”

(p. B1) WULONGQIAO, China — A devastating disease spreading from China has wiped out roughly one-quarter of the world’s pigs, reshaping farming and hitting the diets and pocketbooks of consumers around the globe.

China’s unsuccessful efforts to stop the disease may have hastened the spread — creating problems that could bedevil Beijing and global agriculture for years to come.

. . .

The epidemic shows the limits of China’s emphasis on government-driven, top-down solutions to major problems, sometimes at the expense of the practical. It has also laid bare the struggle of a (p. B6) country of 1.4 billion people to feed itself.

. . .

When the swine fever began to spread 16 months ago, the Ministry of Agriculture told the country’s local governments to cull all pigs in herds if there was even one sick animal, and to compensate the farmers. The ministry authorized local governments to pay up to $115 for the largest pigs, a cap later raised to $170. Before the epidemic, however, many pigs sold for $250 or more apiece, particularly breeding sows, according to government data. With the epidemic, the price has soared to $600 or more.

To get that partial reimbursement, many farmers had to deal with tightfisted local officials. The ministry said it would reimburse local governments only for between 40 percent and 80 percent of their costs. Local governments also had to provide proof, often including laboratory tests, that pigs died of African swine fever and not some other ailment.

As a result, culling has been slow. Official data show only 1.2 million pigs, or less than 0.3 percent of the country’s herds, have been culled. It is not clear where the rest of the country’s vanished herds went, but food experts say many were likely butchered and turned into food. That would worsen the spread, because the disease can lurk in meat for months.

For the full story, see:

Keith Bradsher and Ailin Tang. “China Flubs Effort to Halt Lethal Turn of Pig Illness.” The New York Times (Thursday, December 26, 2019): B1 & B6.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 17, 2019, and has the title “China Responds Slowly, and a Pig Disease Becomes a Lethal Epidemic.”)

With Race-Based College Admissions “Everyone Is at Each Other’s Throat”

(p. A3) Richard Alvarez, a senior of Mexican heritage, is waiting to hear from the University of Chicago. He said his school has spent years educating students about race, but now that the college crunch has arrived that sensitivity training “has gone out the window.”

“Everyone is at each other’s throat,” he said. “White students have this thing that brown and black students unfairly get into schools over them.”

For the full story, see:

Douglas Belkin. “Identity Box Vexes College Applicants.” The Wall Street Journal (Tuesday, December 24, 2019): A3.

(Note: the online version of the story has the date December 23, 2019, and has the title “The Most Agonizing Question on a College Application: What’s Your Race?”)

For California Electricity Regulator: “Safety Is Not a Glamorous Thing”

(p. A1) PG&E’s collapse has exposed the California Public Utilities Commission’s failure to hold the utility accountable on safety. The CPUC (p. A12) for years focused attention elsewhere, on setting rates and pushing for cleaner power.

Now, the agency tasked with regulating utility safety is struggling to refocus on the issue while also grappling with its failure to prevent the state’s second electricity crisis in two decades.

. . .

From the early 2000s, the commission’s focus was on setting rates and implementing Sacramento’s renewable-energy goals. Starting in 2002, three consecutive governors, two Democrats and a Republican, signed bills ratcheting up the percentage of wind and solar power utilities had to buy.

These mandates required investor-owned utilities such as PG&E to change their mix of generation, effectively phasing out burning coal and lowering reliance on natural gas while signing contracts to buy electricity from new solar and wind farms. The CPUC oversaw these deals, as well as figuring out how to integrate thousands of new rooftop solar installations.

“Was there a considerable amount of resources placed on policy? Yeah, there was,” says Timothy Alan Simon, a commissioner between 2007 and 2012 and now a utilities consultant. “It’s a challenge to balance between the safety aspects and the need for policy deliberation.”

Michael Peevey, a former Southern California Edison president, and CPUC president between 2002 and 2014, was a vocal champion of renewable-energy policies. Now retired, he says the regulator was large enough to focus on safety and renewables simultaneously but that it was tough to get Sacramento lawmakers excited about funding safety.

When compared with eliminating coal and adding solar energy, he says, “Safety is not a glamorous thing.”

For the full story, see:

Ruth Simon. “PG&E Regulators Failed to Stop Crisis.” The Wall Street Journal (Saturday, December 9, 2019): A1 & A12.

(Note: ellipsis added.)

(Note: the online version of the story has the date December 8, 2019, and has the title “‘Safety Is Not a Glamorous Thing’: How PG&E Regulators Failed to Stop Wildfire Crisis.”)

“Publicly Held Companies Will Play the Political Game”

(p. A11) Mr. Chitester was probably the only PBS or NPR station manager who didn’t believe public radio and television should receive subsidies from American taxpayers. But he had a skill in short supply among the pro-capitalist intellectual class: He knew how to popularize free-market ideas, which many thought couldn’t be done on television.

He confesses that he isn’t sure he’d even heard of Friedman when Wallis put the two in touch. But Mr. Chitester says he devoured Friedman’s 1962 book, “Capitalism and Freedom,” and went to meet Milton and his wife, fellow economist and collaborator, Rose, at their San Francisco apartment.

An hour into the conversation, Mr. Chitester brought up a section in the book where Friedman talks about the responsibility of business—also the theme of Friedman’s famous 1970 New York Times essay, “The Social Responsibility of Business Is to Increase Its Profits.” Mr. Chitester described his dilemma: “I said to Milton, based on your philosophy, I shouldn’t be asking companies for money, and if they take your advice, they’re not going to give me any.”

“Bob, don’t worry about it,” Friedman reassured him. “Businessmen don’t like me anyway.” The economist elaborated. “He said private owners—those who own their own companies—they will be sympathetic. But corporations and publicly held companies will play the political game.” In other word, they’d be shy about supporting such a project lest it hurt them when seeking government funding.

. . .

. . . [Chitester] offers two suggestions for those dreaming about doing what he did.

“First,” he says, “you have to be a storyteller. Think of the people that have had meteoric rises to celebrity. They’ve been excellent storytellers. Free-market preachers if you will.”

. . .

. . . [second] to hopefully get people to think at least initially that I’m a nice person,” he says. “Because if they don’t think I’m a nice person, there’s nothing on the face of the earth I can do that will likely persuade them to listen to what I have to say.”

For the full interview, see:

William McGurn, interviewer. “THE WEEKEND INTERVIEW; The Man Who Made Milton Friedman a Star.” The Wall Street Journal (Saturday, Oct 31, 2020): A11.

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

(Note: the online version of the interview has the date Oct. 30, 2020, and has the same title as the print version.)

The Friedman book mentioned in the passage quoted above is:

Friedman, Milton. Capitalism and Freedom. Chicago: The University of Chicago Press, 1962.

Workers with Criminal Records Pay for Their Second Chance with Greater Loyalty and Harder Work

(p. B1) CINCINNATI—While some companies try to attract and keep employees with yoga classes and lavish cafeterias, Nehemiah Manufacturing Co.’s perks include a social-service team and an attorney.

When two consumer-product veterans started Nehemiah a decade ago, their idea was to create more opportunities in a struggling part of Cincinnati. Increasingly, that meant hiring people who had a particularly hard time finding jobs: those with criminal backgrounds.

Now, workers with criminal records make up around 80% of the company’s about 180 employees—and Nehemiah has learned that offering a job to people trying to turn their lives around is just half the battle.

“We are investing in our employees in order to retain them,” said Richard Palmer, president of Nehemiah, whose brands include Boogie Wipes, Saline Soothers and other consumer products. “It’s no different than tech companies bringing in lunch and a foosball table.”

In one of the tightest labor markets in decades, more employers are willing to give ex-convicts a chance, trying to marry business needs and good intentions. Even large American companies are rethinking whether their responsibilities extend beyond their shareholders. JPMorgan Chase & Co. Chief Executive James Dimon said in October [1999] that the bank would step up efforts to recruit people with criminal backgrounds.

Hiring people with a criminal past can pay big dividends for companies, such as closer community ties and a loyal workforce. But keeping them on the job can be a struggle.

. . .

(p. B6) Since its first days, Nehemiah has become more deliberate about identifying candidates who are likely to be good, reliable employees and has developed a more formal system for providing them with support.

Today, Nehemiah’s annual turnover stands at roughly 15%, well below the 38.5% average for consumer-products companies, as reported by Mercer’s 2019 U.S. Turnover Survey. Nehemiah says it had operating income of $5.7 million on sales of $59.4 million in 2018.

. . .

“We found that the population we were hiring who had criminal backgrounds were our most loyal people,” said Mr. Palmer. “When we were looking for people to work overtime, come in on Saturday or go that extra mile, it was the second-chance population that was saying, ‘I’m in.’”

. . .

At Nehemiah, having a criminal past carries less of a stigma because so many workers have been incarcerated.

. . .

. . ., Nehemiah’s approach . . . means it can spot potential other employers might overlook. When Rayshun Holt came to Nehemiah roughly two years ago, Ms. Merida said he immediately stood out as someone the company wanted.

Mr. Holt, 40, spent two decades in prison after fatally shooting a friend when he was 15 during what he describes as a scuffle over a gun. While in prison, Mr. Holt reconnected to his faith, started taking classes and began coaching other prisoners on how to turn their lives around.

Released in 2016 with $96 in his pocket, he said, “I was filled with hope and overwhelmed by fear.” His first job was in a fast-food restaurant specializing in chicken fingers. “I was the oldest person there and the most enthusiastic. It was the first time in my life I was earning an honest check,” he said.

But he struggled to find steady work with decent pay. Nehemiah hired him as a second-shift supervisor at $19 an hour.

Ms. Merida said she was impressed by Mr. Holt’s passion, humility and sincerity when he told his life story, how he knew the streets but had already taken steps to turn his life around. “I knew this was a born leader who could really have a profound impact on our employees,” said Ms. Merida. “He could show them that no matter how bad it is, your life isn’t over.”

Mr. Holt now works as the company’s commercialization coordinator, responsible for taking new products and product improvements from concept to market.