Category: Entrepreneurship

Charles Morris Uncovered “Tantalizing Nuggets” on Innovation and Entrepreneurship

In researching my Openness to Creative Destruction, I found two of Charles Morris’s books very useful, providing thought-provoking analysis and compelling examples. The two were The Dawn of Innovation and The Tycoons.

(p. A24) Charles R. Morris, a former government official, banker and self-taught historian of economics who as a prolific, iconoclastic author challenged conventional political and economic pieties, died on Monday [December 13, 2021] in Hampton, N.H.

. . .

Mr. Morris wrote his signature first book, “The Cost of Good Intentions: New York City and the Liberal Experiment” (1980), after serving as director of welfare programs under Mayor John V. Lindsay and as secretary of social and health services in Washington State.

The book was a trenchant Emperor’s New Clothes analysis of how the Lindsay administration’s unfettered investment in social welfare programs to ward off civil unrest had delivered the city to the brink of bankruptcy, and it pigeonholed Mr. Morris as a neoconservative.

But as a law school graduate with no formal training in economics, he defied facile labeling.

While his 15 nonfiction books often revisited well-trodden topics — including the Great Depression, the nation’s tycoons, the cost of health care, the Cold War arms race and the political evolution of the Roman Catholic church — he injected them with revealing details, provocative insights and fluid narratives.

“The Cost of Good Intentions” (1981) was less a screed about liberal profligacy as it was an expression of disappointment that benevolent officials had become wedded to programs that didn’t work. He concluded that the best and the brightest in the government, as well as complicit players on the outside, had figured that if a day of reckoning ever came, it would not be on their watch.

. . .

He would . . . belie Thomas Carlyle’s characterization of economics as “the dismal science” by injecting tantalizing nuggets.

Reviewing Mr. Morris’s “A Time of Passion: America 1960-1980” (1984) for The Times Book Review, Michael Kinsley wrote that “some of the most vivid moments in this book come when he stops the rush of history to describe incidents from his own time as a poverty-program and prison administrator.”

“He truly has been ‘mugged by reality,’ in Irving Kristol’s famous definition of a neoconservative,” Mr. Kinsley added, but concluded, “Overall, his book radiates a generosity and good will that set it apart from the typically sour neoconservative creed.”

. . .

“I think we’re heading for the mother of all crashes,” Mr. Morris wrote his publisher, Peter Osnos, the founder of PublicAffairs books, early in 2007, adding, “It will happen in summer of 2008, I think.”

Mr. Osnos recalled that after the book was published, “George Soros and Paul Volcker called me and asked, ‘Who is this Morris, and how did he get this so right, so early?’”

For the full obituary, see:

Sam Roberts. “Charles R. Morris, Author Who Disputed Economic Dogma, Dies at 82.” The New York Times (Wednesday, December 15, 2021): A24.

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

(Note: the online version of the obituary was updated Dec. 15, 2021, and has the title “Charles R. Morris, Iconoclastic Author on Economics, Dies at 82.”)

The books by Morris that I found especially useful were:

Morris, Charles R. The Dawn of Innovation: The First American Industrial Revolution. Philadelphia, PA: PublicAffairs, 2012.

Morris, Charles R. The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy. New York: Times Books, 2005.

Entrepreneurial Bystander Identifies Stranger’s Cancerous Mole and Saves His Life

(p. B9) Nadia Popovici kept shifting her eyes from the hockey game to the back of Brian Hamilton’s neck.

Mr. Hamilton, an assistant equipment manager for the Vancouver Canucks, had a small mole there. It measured about two centimeters and was irregularly shaped and red-brown in color — possible characteristics of a cancerous mole, signs that Ms. Popovici had learned to spot while volunteering at hospitals as a nursing assistant.

Maybe he already knew? But if so, why was the mole still there? She concluded that Mr. Hamilton did not know.

“I need to tell him,” Ms. Popovici, 22, told her parents at the Oct. 23 [2021] N.H.L. game between the Canucks and the Seattle Kraken at the Climate Pledge Arena in Seattle.

Ms. Popovici typed a message on her phone and waited for the game to end. After waving several times, she finally drew Mr. Hamilton’s attention, and placed her phone against the plexiglass.

“The mole on the back of your neck is possibly cancerous. Please go see a doctor!” the message read, with the words “mole,” “cancer” and “doctor” colored bright red.

Mr. Hamilton said he looked at the message, rubbed the back of his neck and kept walking, thinking, “Well, that’s weird.”

. . .

Indeed, Ms. Popovici was correct, and she had just saved his life.

. . .

Specifically, doctors later told him, it was type-2 malignant melanoma, a type of skin cancer that, because it was detected early, could be easily removed and treated.

For the full story, see:

Eduardo Medina. “Discovering Cancerous Mole From Stands, She Saves a Life.” The New York Times (Tuesday, January 4, 2022): B9.

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

(Note: the online version of the story was updated Jan. 4, 2022, and has the title “Hockey Fan Spots Cancerous Mole at Game and Delivers a Lifesaving Note.”)

“Intolerance Leads Not to Progress, but Stagnation”

(p. C10) . . . this past year I revisited the works of Friedrich Hayek, the great 20th-century expositor of classical liberalism. His most sweeping work is “The Constitution of Liberty”—a legal history as much as a defense of freedom—which includes a timely case for tolerance. We cannot foresee the particulars of human progress, which means “we shall never get the benefits of freedom, never obtain those unforeseeable developments for which it provides the opportunity,” if freedom “is not also granted where the uses made of it by some do not seem desirable.” Thus intolerance leads not to progress, but stagnation.

For the full review, see:

Raymond Kethledge. “12 Months of Reading; Raymond Kethledge.” The Wall Street Journal (Saturday, Dec. 11, 2021): C10.

(Note: ellipsis added.)

(Note: the online version of the review has the date December 10, 2021, and has the title “Who Read What: Business Leaders Share Their Favorite Books of 2021.”)

The book praised by Kethledge is:

Hayek, Friedrich A. The Constitution of Liberty. Reprint ed. Chicago: University of Chicago Press, 2011.

At the University of Austin, the Intellectually Diverse Will Discuss, Rather Than Censor, “Provocative Questions”

(p. A16) A group of scholars and activists are planning to establish a new university dedicated to free speech, alarmed, they said, “by the illiberalism and censoriousness prevalent in America’s most prestigious universities.”

The university, to be known as the University of Austin, or UATX for short, will have a soft start next summer with “Forbidden Courses,” a noncredit program that its founders say will offer a “spirited discussion about the most provocative questions that often lead to censorship or self-censorship in many universities.”

The university then plans to expand to master’s programs and, in several years, to undergraduate courses.

. . .

The prospective university’s board of advisers features some of the most prominent iconoclasts in the country, including Lawrence H. Summers, the former Harvard president; Steven Pinker, a Harvard linguist and psychologist; David Mamet, the playwright; and Glenn Loury, an economist at Brown.

. . .

“I think new models for a university are important,” Dr. Pinker said, “because current universities are locked into a strange business model: exorbitant tuition, a mushrooming bureaucracy, and obscure admissions policies that are neither meritocratic nor egalitarian, combined with plummeting intellectual diversity and tolerance for open inquiry (which is, after all, a university’s raison d’être).”

For the full story, see:

Anemona Hartocollis. “Organizers Plan New University They Say Will Defend Free Speech.” The New York Times (Tuesday, November 9, 2021): A16.

(Note: ellipses added.)

(Note: the online version of the story has the date Nov. 8, 2021, and has the title “They Say Colleges Are Censorious. So They Are Starting a New One.”)

Louise Slade Was “Well Compensated” for Her Role in 47 Kraft Patents

(p. B7) Louise Slade, a groundbreaking food scientist whose work you can thank for soft-from-the-freezer ice cream, extra-chewy cookies and potato chips that retain their satisfying crunch despite being baked and not fried, died on Oct. 7 [2021] in Morristown, N.J.

. . .

It has been said that cooking is an art but baking is a science, and perhaps no one understood that adage better than Dr. Slade, whose research focused on how to keep dough, bread, cookies and crackers tasting delicious even after weeks on a grocery store shelf.

. . .

Dr. Slade’s great insight, which she developed over some 25 years as a scientist at General Foods and Kraft, was to consider food not as a combination of discrete ingredients but as a system of interacting molecules. By understanding those interactions, one could build predictive models for how, for example, to tweak a bread recipe to make it stay fresh longer without chemical preservatives.

“She was the only person I knew who could swim among the molecules and understand them at their most fundamental level,” Hamed Faridi, the executive director of the McCormick Science Institute, said in an interview. “Her strength was her impressive knowledge of how those molecules interact to create flavor and texture.”

. . .

“A lot of what Louise established was how to make products consistent and stable without putting in a lot of additives consumers don’t want,” Todd Abraham, who worked with Dr. Slade at Kraft, said in an interview.

Dr. Slade provided not just a framework for answering those challenges but also a voluminous amount of research: She and Dr. Levine, who worked together for much of their professional careers, published some 260 papers and received 47 patents. She once estimated that the patents she received for her corporate employers were worth more than $1 billion.

. . .

She also began to work with the Monell Chemical Senses Center, an independent research institution in Philadelphia that studies taste and smell; she eventually joined its board.

Personally frugal and well compensated for her corporate work, Dr. Slade became one of Monell’s chief donors, giving more than $2 million in her lifetime, Dr. Gary Beauchamp, the center’s emeritus director, said.

For the full obituary, see:

Clay Risen. “Louise Slade, Scientist Who Ensured Your Goodies Stay Good, Is Dead at 74.” The New York Times (Monday, November 1, 2021): B7.

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

(Note: the online version of the obituary was updated Nov. 1, 2021, and has the title “Louise Slade, Scientist Who Studied the Molecules in Food, Dies at 74.”)

Pharmaceutical Entrepreneur Solomon Got Rich by Finding a Drug to Help His Son

(p. A19) Howard Solomon was building the pharmaceutical company Forest Laboratories, not by manufacturing drugs but by licensing them. In his search for deals in the United States and Europe, he learned about citalopram, a Danish antidepressant. He did not license it, though, believing the U.S. market was saturated with drugs to treat depression.

Then, in 1994, a family crisis intervened: His older son, the writer Andrew Solomon, had fallen into a deep depression. Mr. Solomon moved Andrew into his apartment on the Upper East Side of Manhattan and took weeks off from work to take care of him; . . . .

. . .

After two types of antidepressants were unable to help Andrew, a third did. His experience persuaded his father to make the deal a few years later for citalopram, which, under the name Celexa, became a billion-dollar drug for Forest Labs in the class of selective serotonin reuptake inhibitors, along with Prozac, Zoloft and Paxil.

. . .

Forest Labs was transformed by licensing Celexa from H. Lundbeck, the Danish company that developed it. But Lundbeck’s chief executive, Erik Sprunk-Jansen, was initially reluctant to speak to Mr. Solomon because licensing deals with some other U.S. companies had unraveled.

“Howard flew to Denmark to meet with him,” Phil Satow, a former executive vice president of Forest Labs, said in a phone interview. “Both were lovers of ballet, which became the common chord between them, and they developed a strong relationship.”

Celexa’s sales grew quickly, peaking at nearly $1.5 billion in 2003. Forest Labs then licensed Lexapro, an upgraded version of Celexa, which first reached $2 billion in sales in 2007.

. . .

His desire to work into his 80s was, he said, inspired by the example of Giuseppe Verdi.

“Growing up, he’d talk about Verdi writing ‘Falstaff’ in his 80s,” Andrew Solomon said. “‘Imagine that,’ he’d say, ‘in his 80s, he wrote some of the greatest music ever written.’ That was the path he hoped to follow.”

For the full obituary, see:

Richard Sandomir. “Howard Solomon, 94, Whose Business Feats Were Personal, Is Dead.” The New York Times (Wednesday, January 19, 2022): A19.

(Note: ellipses added.)

(Note: the online version of the obituary was updated Jan. 18, 2022, and has the title “Howard Solomon, 94, Dies; His Business Success Had a Personal Connection.”)

Boeing Maximized Short-Term Profits Instead of Long-Term Quality (and Profits)

(p. A19) Boeing remains one of America’s leading manufacturers, but it is reduced in reputation as well as equity. The “fall” that Mr. Robison’s subtitle alludes to is the corrosion of a culture that had emphasized quality.

. . .

Mr. Robison is upset that Boeing followed the unremarkable philosophy of the Business Roundtable (recently revised under woke pressure) that the first duty of any company is to its shareholders. He says that Boeing focused on metrics that “tend to favor investors over employees and customers.” This is an easy but misworded critique. In the long term, the interests of shareholders and customers are aligned. A manufacturer that disregards either customers or employees will eventually not have profits to distribute.

In fact, Boeing forgot that its long-term success depended on its reputation for superior engineering. Executives like Alan Mulally, project leader in the 1990s for the costly but highly successful Boeing 777, were passed over for the top job. The corporate metamorphosis was accelerated by the 1997 merger with rival McDonnell Douglas. The executive suite was colonized by such figures as McDonnell’s Harry Stonecipher, a Jack Welch protégé who was explicit about changing the culture. His intent, he said, was to run Boeing “like a business rather than a great engineering firm.” Increasingly that meant doing whatever it took to hike the share price. Phil Condit, the CEO who orchestrated the merger, pushed his managers to quintuple the stock in five years, which suggested that his eye was on Wall Street and not on the planes.

. . .

Test flights showed a tendency for the MAX to pitch up. Designers corrected the problem on the cheap, with software that pushed the nose down. Somewhat perilously, a single sensor measuring the angle of the wings against oncoming air could force the plane into a downward trajectory. An optional cockpit indicator—alerting pilots that the sensor might be faulty—was not included on cheaper models. And the sensors, which sat outside the plane, were vulnerable to bird strikes or improper installation.

. . .

. . ., the FAA, as Mr. Robison shows, was compromised by years of having adapted its regulatory role to promote manufacturers. Even after the first plane went down, it kept the MAX flying—despite an agency analysis predicting more crashes.

For the full review, see:

Roger Lowenstein. “BOOKSHELF; Downward Trajectory.” The Wall Street Journal (Monday, Nov. 29, 2021): A19.

(Note: ellipses added.)

(Note: the online version of the review has the date November 28, 2021, and has the title “BOOKSHELF; ‘Flying Blind’ Review: Downward Trajectory.”)

The book under review is:

Robison, Peter. Flying Blind: The 737 MAX Tragedy and the Fall of Boeing. New York: Doubleday, 2021.

Applying Coase Theorem to Refute the Externality Argument Used to Defend Covid-19 Mandates and Lockdowns

(p. A17) The online Merriam-Webster dictionary defines “anti-vaxxer” as “a person who opposes the use of vaccines or regulations mandating vaccination.” Where does that leave us? We both strongly favor vaccination against Covid-19; one of us (Mr. Hooper) has spent years working and consulting for vaccine manufacturers. But we strongly oppose government vaccine mandates. If you’re crazy about Hondas but don’t think the government should force everyone to buy a Honda, are you “anti-Honda”?

. . .

. . ., early in the pandemic the Food and Drug Administration used its coercive power to discourage the development of diagnostic tests for Covid-19. The FDA required private labs wanting to develop tests to submit special paperwork to get approval that it had never required for other diagnostic tests. That, in combination with the CDC’s claims that it had enough testing capacity, meant that testing necessitated the use of a CDC test later determined to be so defective that it found the coronavirus in laboratory-grade water.

With voluntary approaches, we get the benefit of millions of people around the world actively trying to solve problems and make our lives better. We get high-quality vaccines from BioNTech/ Pfizer, Johnson & Johnson and Moderna, instead of the suspect vaccines from the governments of Cuba and Russia. We get good diagnostic tests from Thermo Fisher Scientific instead of the defective CDC one. We get promising therapeutics such as Pfizer’s Paxlovid and Merck’s molnupiravir.

. . .

The supposed trump card of those who favor coercion is externalities: One person’s behavior can put another at risk. But that’s only half the story. The other half is that we choose how much risk we accept. If some customers at a store exhibit risky behavior, then we can vaccinate, wear masks, keep our distance, shop at quieter times, or avoid the store.

Economists understand how one person can impose a cost on another. But it takes two to tango, and it’s generally more efficient if the person who can change his behavior with the lower cost changes how he behaves. In other words, to perform a proper evaluation of policies to deal with externalities, we must consider the responses available to both parties. Many people, including economists, ignore this insight.

For the full commentary, see:

David R. Henderson and Charles L. Hooper. “Coercion Made the Pandemic Worse.” The Wall Street Journal (Tuesday, December 28, 2021): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date December 27, 2021, and has the same title as the print version.)

Entrepreneurs Re-Purpose Old High-Ceiling Mills as Well-Ventilated Restaurants That Reduce Virus Spread

(p. B7) On a typical evening at the Wool Factory, a renovated textile mill in Charlottesville, Va., guests savor local wine and hors d’oeuvres in a spacious courtyard decorated with festive string lights. Between bites and sips, their eyes might gaze at the factory, a 100-year-old red brick building where as many as 200 workers once made military uniforms, but which now houses a fine-dining restaurant, a brewery and an event space.

. . .

The Wool Factory is part of a larger effort by developers to convert grain, textile and water mills that came of age during the Industrial Revolution.

. . .

“They’re incredible spaces to be in, with 15-foot-high ceilings and huge windows with great views, which makes them a desirable place to develop,” Catherine De Almeida, an assistant professor in the College of Built Environments at the University of Washington in Seattle.

. . . the ample open space makes them easy to configure and attract guests who want to socially distance during the pandemic.

. . .

Terra Nova recently transformed a 19th-century flour and cotton mill into the $25 million Whitehall Mill, which attracts diners to its 190-seat oyster farm and seafood restaurant, True Chesapeake Oyster Company. Its 200-seat food emporium, Whitehall Market, features eight tenants, including a cheese seller, Firefly Farms Market and a nationally renowned pastry vendor, Crust by Mack.

When Whitehall Mill’s events venue couldn’t open last year because of the pandemic, the developer could use that space to allocate an additional 75 seats for the restaurants, bringing in more business at a time when they were forced to operate in a limited capacity, Mr. Tufaro said. Guests cautious about indoor dining can sit in the mill’s substantial outdoor space, with 125 patio seats between the restaurant and market.

“I think it’s partly the attraction for the old that inspires people,” Mr. Tufaro said. “The other is, it turns out, they’re very adaptable to new uses.”

For the full story, see:

Julekha Dash. “Turning Old Mills Into Vibrant Destinations.” The New York Times (Wednesday, December 22, 2021): B7.

(Note: ellipses added.)

(Note: the online version of the story has the date Dec. 21, 2021, and has the title “Renovated Mills Offer a Perk in the Age of Social Distancing: Space.”)

Mars Can Be Terraformed to Reduce Costs of Colonization

(p. D5) Since joining NASA in 1980, Jim Green has seen it all. He has helped the space agency understand Earth’s magnetic field, explore the outer solar system and search for life on Mars. As the new year arrived on Saturday, he bade farewell to the agency.

Over the past four decades, which includes 12 years as the director of NASA’s planetary science division and the last three years as its chief scientist, he has shaped much of NASA’s scientific inquiry, overseeing missions across the solar system and contributing to more than 100 scientific papers across a range of topics. While specializing in Earth’s magnetic field and plasma waves early in his career, he went on to diversify his research portfolio.

. . .

Ahead of a December [2021] meeting of the American Geophysical Union in New Orleans, Dr. Green spoke about some of this wide-ranging work and the search for life in the solar system. Below are edited and condensed excerpts from our interview.

. . .

    You’ve previously suggested it might be possible to terraform Mars by placing a giant magnetic shield between the planet and the sun, which would stop the sun from stripping its atmosphere, allowing the planet to trap more heat and warm its climate to make it habitable. Is that really doable?

Yeah, it’s doable. Stop the stripping, and the pressure is going to increase. Mars is going to start terraforming itself. That’s what we want: the planet to participate in this any way it can. When the pressure goes up, the temperature goes up.

The first level of terraforming is at 60 millibars, a factor of 10 from where we are now. That’s called the Armstrong limit, where your blood doesn’t boil if you walked out on the surface. If you didn’t need a spacesuit, you could have much more flexibility and mobility. The higher temperature and pressure enable you to begin the process of growing plants in the soils.

There are several scenarios on how to do the magnetic shield. I’m trying to get a paper out I’ve been working on for about two years. It’s not going to be well received. The planetary community does not like the idea of terraforming anything. But you know. I think we can change Venus, too, with a physical shield that reflects light. We create a shield, and the whole temperature starts going down.

For the full story, see:

Jonathan O’Callaghan, interviewer. “Inhabiting Mars? He Calls It ‘Doable.’” The New York Times (Tuesday, January 4, 2022): D5.

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

(Note: the online version of the story has the date Jan. 2, 2021, and has the title “NASA’s Retiring Top Scientist Says We Can Terraform Mars and Maybe Venus, Too.” The first three paragraphs, and the block-indented sentence and question, are by the interviewer Jonathan O’Callaghan. The answer after the question is by Jim Green.)

Butterworth Made “Steady Forward Progress” an “Ingenious” Business Model for Tractor Success

(p. A15) The story of Ford’s dream of perfecting an affordable, all-purpose tractor—or, as Ford later imagined it, a gasoline-powered “automobile plow”—is seldom told. Neil Dahlstrom’s “Tractor Wars” tells it well.

. . .

By 1918 there were many competitors in America’s great tractor pull. Most were small or mid-sized firms, including the Gas Traction Co. of Minneapolis, and the Moline (Ill.) Plow Co. and the Waterloo (Iowa) Gasoline Engine Co. Two ultimately broke out of the pack with loud, gas-guzzling chugs.

. . .

Early attempts by International Harvester to develop a gas-powered tractor were only moderately successful, but in 1920 its engineers made a breakthrough, converting the two front wheels into “traction wheels,” moving the engine from the rear to the middle, and adding three reverse speeds. All of this, plus enhancements to compatible cultivating attachments, made Harvester’s Farmall tractor competitive with the Fordson.

Ford’s other chief rival was the John Deere Co. Its earliest claim to fame was becoming the “world’s largest manufacturer of steel plows.” The company shifted course in 1907 when William Butterworth, the son-in-law of Charles Deere, took control. According to Mr. Dahlstrom, Butterworth was “cautious with the family money that still financed the company, pushing for long-term gains in a cyclical, low-margin, weather-dependent business.” While some outsiders “mistook Butterworth’s preference for steady forward progress as indecision,” his business model turned out to be ingenious.

. . .

Mr. Dahlstrom, to his credit, has written a superb history of the tractor and this long-forgotten period of capitalism in U.S. agriculture.

For the full review, see:

Michael Taube. “BOOKSHELF; American Power Pull.” The Wall Street Journal (Thursday, December 30, 2021): A15.

(Note: the online version of the review has the date December 29, 2021, and has the title “BOOKSHELF; ‘Tractor Wars’ Review: American Power Pull.”)

The book under review is:

Dahlstrom, Neil. Tractor Wars: John Deere, Henry Ford, International Harvester, and the Birth of Modern Agriculture. Dallas, TX: Matt Holt Books, 2022.